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contracting officer upon the following terms and conditions:

a. Computation of amounts. (1) Unless a smaller amount is requested, each progress payment shall be:

(a) 75 percent of the amount of the contractor's total costs incurred under this contract plus

(b) The amount of the progress payments made by the contractor to its subcontractors as provided in paragraph j below; all less the sum of previous progress payments.

(2) The contractor's total costs shall be reasonable, allocable to this contract, and consistent with sound and generally accepted accounting principles and practices. However, such costs shall not include:

(a) Any costs incurred by subcontractors or suppliers, or,

(b) Any payments or amounts payable to subcontractors or suppliers, except for completed work (including partial deliveries) to which the contractor has acquired title, and except for amounts paid or payable under cost-reimbursement or time and material subcontracts for work to which the contractor has acquired title, or

(c) Costs ordinarily capitalized and subject to depreciation or amortization except for the properly depreciated or amortized portion of such costs.

(3) The amount of unliquidated progress payments shall not exceed the lesser of:

(a) 75 percent of the costs mentioned in a(1)(a) above, plus any unliquidated progress payments mentioned in a(1) (b) above, both of which are applicable only to the supplies and services not yet delivered and invoiced to and accepted by the Government,

or

(b) 75 percent of the total contract price of supplies and services not yet delivered and invoiced to and accepted by the Government, less unliquidated advance payments.

(4) The aggregate amount of progress payments made shall not exceed 75 percent of the total contract price.

(5) If at any time a progress payment or the unliquidated progress payments exceed the amount permitted by this paragraph a, the contractor shall pay the amount of such excess to the Government upon demand.

b. Liquidation. Except as may be provided in a clause in this contract entitled "Termination for Convenience of the Government," all progress payments shall be liquidated by deducting from any payment under this contract, other than advance or progress, the amount of unliquidated progress payments, or 75 percent of the gross amount invoiced, whichever is less. Repayment to the Government required by a retroactive price reduction will be made after recalculating liquidations and payments on past invoices at the reduced prices and adjusting the unliquidated progress payments accordingly.

c. Reduction or suspension. The contracting officer may reduce or suspend progress payments, or liquidate them at a rate higher

than the percentage stated in paragraph b above, or both, whenever he finds upon substantial evidence that the contractor:

(1) Has failed to comply with any material requirement of this contract,

(2) Has so failed to make progress, or is in such unsatisfactory financial condition, as to endanger performance of this contract, (3) Has allocated inventory to this contract substantially exceeding reasonable requirements,

(4) Is delinquent in payment of the costs of performance of this contract in the ordinary course of business,

(5) Has so failed to make progress that the unliquidated progress payments exceed the fair value of the work accomplished on the undelivered portion of this contract, or

(6) Is realizing less profit than the estimated profit used for establishing a liquidation percentage in paragraph b, if that liquidation percentage is less than the percentage stated in paragraph a(1).

d. Title. When any progress payment is made under this contract, title to all parts; materials; inventories; work in process; nondurable (1.e., noncapital) tools, jigs, dies, fixtures, molds, patterns, taps, gauges, test equipment, and other similar manufacturing alds; and drawings and technical data (to the extent delivery thereof to the Government is required by other provisions of this contract); theretofore acquired or produced by the contractor and allocated or properly chargeable to this contract under sound and generally accepted accounting principles and practices shall forthwith vest in the Government; and title to all like property thereafter acquired or produced by the contractor and allocated or properly chargeable to this contract as aforesaid shall forthwith vest in the Government upon said acquisition, production or allocation. Notwithstanding that title to property is in the Government through the operation of this clause, the handling and disposition of such property shall be determined by the applicable provisions of this contract such as the default clause and paragraph h of this clause, and any applicable "Termination for Convenience of the Government" clause. Current production scrap may be sold by the contractor without approval of the contracting officer and the proceeds shall be credited against the costs of contract performance. With the consent of the contracting officer and on terms approved by him, the contractor may acquire or dispose of property to which title is vested in the Government pursuant to this clause, and in that event, the costs allocable to the property so transferred from this contract shall be eliminated from the costs of contract performance and the contractor shall repay to the Government (by cash or credit memorandum) an amount equal to the unliquidated progress payments allocable to the property so transferred. Upon completion of performance of all the obligations of the contractor under this contract,

including liquidation of all progress payments hereunder, title to all property (or the proceeds thereof) which had not been delivered to and accepted by the Government under this contract or which had not been incorporated in supplies delivered to and accepted by the Government under this contract and to which title has vested in the Government under this clause shall vest in the contractor. The provisions of this contract referring to or defining liability for Government-furnished property shall not apply to property to which the Government shall have acquired title solely by virtue of the provisions of this clause.

e. Risk of loss. Except to the extent that the Government shall have otherwise expressly assumed the risk of loss of property, title to which vests in the Government pursuant to this clause, in the event of the loss, theft or destruction of or damage to any such property before its delivery to and acceptance by the Government, the contractor shall bear the risk of loss and shall repay the Government an amount equal to the unliquidated progress payments based on costs allocable to such lost, stolen, destroyed or damaged property.

1. Control of costs and property. The contractor shall maintain an accounting system and controls adequate for the proper administration of this clause.

g. Reports access to records. Insofar as pertinent to the administration of this clause, the contractor will:

(1) Furnish promptly such relevant reports, certificates, financial statements, and other information as may be reasonably requested by the contracting officer, and

(2) Give the Government reasonable opportunity to examine and verify its books, records and accounts.

h. Special provisions regarding default. If this contract is terminated pursuant to the clause entitled "Default,"

(1) The contractor shall, upon demand, pay to the Government the amount of unliquidated progress payments, and

(2) With respect to all property of which the Government elects not to require delivery under the clause entitled "Default," title shall vest in the contractor upon full liquidation of progress payments, and the Government shall be liable for no payment except as provided by the "Default" clause.

1. Reservation of rights. The rights and remedies of the Government provided in this clause shall not be exclusive, and are in addition to any other rights and remedies provided by law or under this contract. No payment, or vesting of title pursuant to this clause, shall excuse the contractor from performance of its obligations under this contract, nor constitute a waiver of any of the rights and remedies of the parties under this contract. No delay or failure of the Government in exercising any right, power, or privilege under this clause shall affect

any such right, power or privilege, nor shall any single or partial exercise thereof preclude or impair any further exercise thereof or the exercise of any other right, power or privilege of the Government.

J. Progress payments to subcontractors. (1) The amount mentioned in paragraph a(1) (b) above shall be the sum of:

(a) All the progress payments made by the contractor to his subcontractors and remaining unliquidated, and

(b) Unpaid billings for progress payments to subcontractors which have been approved for current payment in the ordinary course of business, when under subcontracts which conform to subparagraph (2) below.

(2) Subcontracts on which progress payments to subcontractors may be included in the base for progress payments pursuant to paragraph a. of this clause shall contain subcontract progress payment provisions which:

(a) Are substantially similar to and as favorable to the Government 88 this "Progress Payments" clause (and no more favorable to the subcontractor than this clause is to the contractor), and

(b) Make all rights of the subcontractor with respect to all property to which the Government has title under the subcontract subordinate to the rights of the Government to require delivery of such property to it in the event of default by the contractor under this contract or in the event of the bankruptcy or insolvency of the

subcontractor.

(3) The Government agrees that any proceeds received by it from property to which it has acquired title by virtue of such provisions in any subcontract shall be applied to reduce the amount of unliquidated progress payments made by the Government to the contractor under this contract. In the event the contractor fully liquidates such progress payments made by the Government to it hereunder and there are progress payments to any subcontractors which are unliquidated, the contractor shall be subrogated to all the Government's rights by virtue of such provisions in the subcontract or subcontracts involved as if all such rights had been thereupon assigned and transferred to the contractor.

(4) The billings described in J(1) (b) above shall be paid promptly by the contractor in the ordinary course of business, not later than a reasonable time after payment of equivalent amounts by the Government to the contractor.

k. Method of invoicing. All invoices for progress payments on contracts containing the Progress Payment clause shall be supported by Form 4737, Contractor's Request for Progress Payment, and any other supporting information that may be reasonably required.

[27 F.R. 3884, Apr. 24, 1962, as amended at 27 F.R. 4281, May 4, 1962]

Subpart N Rule Making Procedures of the Post Office Department § 201.200 Rule making.

(a) There are numerous statutes administered by the Post Office Department which contain specific provisions authorizing or directing the Postmaster General to issue rules and regulations to implement such statutes. Other statutes, by inference, vest the Postmaster General with authority to issue such rules and regulations as may be necessary for the proper administration of such statutes. Such rules and regulations have the force and effect of law.

(b) The provisions of the Federal Register Act (49 Stat. 500; 44 U. S. C., ch. 8B), and of the regulations issued thereunder (1 CFR Chapter I) governing the issuance of rules and regulations are observed. Rules and regulations of the Post Office Department are drafted by the General Counsel with the assistance of his staff. Such rules and regulations are based upon legislation and upon changes suggested by the various officers of the Post Office Department. The rules and regulations are submitted to the Postmaster General, and upon being approved, are filed with the Federal Register Division of The National Archives for publication in the FEDERAL REGISTER. Rules dealing with organization and delegation of authority, substantive rules, and rules of procedure will be separately stated pursuant to the requirements of section 3 (a) of the Administrative Procedure Act (5 U. S. C. 1002).

(c) There is no requirement in the laws administered by the Post Office Department for the giving of notice of, or for the hearing on, proposed rules or regulations. The provisions of section 4 of the Administrative Procedure Act (5 U.S. C. 1003) will be complied with in the promulgation of substantive rules which do not come within the exceptions set forth in the said section.

(d) Petitions by interested persons for the issuance, amendment, or repeal of a rule or regulation of the Post Office Department may be submitted to the General Counsel, Post Office Department, Washington 25, D.C. Such petitions will be considered by the General Counsel and by the officers of the Post Office Department. The petitioner will be notified of any denial of such petition,

and, where considered appropriate, of any other action taken in connection therewith.

(R.S. 161, as amended; 5 U.S.C. 22, 39 U.S.C. 309, 501) [26 F.R. 11666, Dec. 6, 1961] Subpart O-Procedure To Adjudicate

Claims for Personal Injury or Property Damage Arising Out of the Operation of the Postal Service

AUTHORITY: The provisions of this Subpart O issued under R.S. 161, as amended; 5 U.S.C. 22, 39 U.S.C. 309, 501.

SOURCE: The provisions of this Subpart O appear at 26 F.R. 11668, Dec. 6, 1961, unless otherwise noted. Redesignated at 26 F.R. 12776, Dec. 30, 1961.

§ 201.250 Character and limit of claims.

(a) Proceedings to adjudicate claims for personal injury or property damage arising out of the operation of the postal service, under the provisions of the Federal Tort Claims Act (28 U. S. C. 2672 et seq.) and the Deficiency Appropriation Act of June 16, 1921, as amended (39 U.S.C. 2409).

(b) Claims for damage to or loss of property or on account of personal injury or death caused by the negligent or wrongful act or omission of an employee of the Department acting within the scope of his employment under circumstances where the United States, if a private person, would be liable to the claimant for such damage, loss, injury, or death in accordance with the law of the place where the act or omission occurred. The authority of the Department to award compensation under this act is limited to claims not exceeding $2,500. Where loss or damage occurs. without negligence on the part of the Government employee involved, the maximum compensation which the Department may pay is $500.

§ 201.251 Time limit for filing.

The statutory period of limitation under 28 U.S.C. 2672, et seq., is two years. The maximum amount for which claim may be filed under 39 U.S.C. 2409 is $500. The maximum amount for which an administrative claim may be filed under 28 U.S.C. 2672, et seq., is $2,500. § 201.252 Place of filing.

Written claim is usually filed with the postmaster of the office within the delivery limits of which the accident happened, but may be filed with any officer

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Each claim filed must be supported as follows: (a) In cases of property damage, by an itemized, receipted bill or bills covering the repairs to the private property or the replacement of property destroyed, and limited to such items of repair or replacement as were necessitated by reason of the damage incurred in the specific accident giving rise to the claim or, if repairs have not yet been made, at least two itemized, signed statements or estimates by reliable disinterested concerns; or where property is not economically reparable, or is lost or destroyed, statements as to the original cost of the property, the date of purchase, and the value of the property, both before and after the accident, which statements should be by disinterested, competent persons, preferably reputable dealers or officers familiar with the type of property damaged, or by two or more competitive bidders, whose bids should be certified as just and correct; the testimony of any available witnesses which the claimant desires considered in the adjudication of such claim; and in cases where the property is covered by insurance-e. g. collision insurance on a carthe claimant must state what insurance is carried, the name and location of the company, whether he has filed claim with that company, and what action the insurance company has taken or will take with respect to such claim. Claims from insurance companies as subrogees must be executed by their proper claims officers and must be supported with subrogation receipts evidencing the payments made to their assured; (b) in cases of personal injury, by doctors' bills, hospi

tal bills, nursing bills, bills covering dental or optical services, a sworn statement from the claimant's employer establishing the amount of time and the compensation lost by reason of the accident, a statement from the attending physician showing the nature and extent of the injuries and the treatment thereof, the degree of permanent or partial disability, if any, the prognosis, and the period of hospitalization or incapacitation; also the sworn statements of any available witnesses. The evidence specifically described in this section may be supplemented by any other documentary evidence which would be helpful to the Department in adjudicating claims. Claimants shall be required to submit to physical examinations by competent doctors employed or retained by the Government whenever they are requested to do so.

§ 201.256 Adjudication and settlement of claims.

In any case where the General Counsel, upon consideration of all the evidence submitted, finds that compensation is due a claimant under either of these acts, payment will be made by the Post Office Department and in due course a settlement warrant will be forwarded to the claimant. Where an attorney has assisted in the prosecution of his claim, the attorney's name will be included in the award.

§ 201.257 Review of adjudications.

The approval and acceptance of adjudication of any claim made by the General Counsel constitutes final action in a case so far as the Department is concerned, and there is no way by which review thereof in the Department may be obtained. If 8 claim filed under the Federal Tort Claims Act is disallowed, or if the claimant is unwilling to accept the amount awarded, or if the claimant wishes to withdraw the claim from consideration by the Department before final disposition, resort may be had to the United States Courts for relief. Conditions under which relief may be sought in the courts will be found in 28 U. S. C. 2675 and other pertinent sections of the Code referred to therein. Where such suit is brought, the pertinent provisions of Title 28, United States Code, should be examined by the claimant in order that its specific conditions may properly be complied with.

Sec.

211.1 211.2

SUBCHAPTER C-INTERNATIONAL MAIL

PART 211-POSTAL UNIONS

Universal Postal Union.

Postal Union of the Americas and Spain.

INTERPRETATIONS

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the Postal Union of the Americas and Spain is as follows:

(a) These Conventions are entered into pursuant to section 372 of Title 5, United States Code (Revised Sept. 2, 1960, now 39 U.S. Code section 505) and are agreements between nations. They impose burdens and confer benefits upon nations as such, and are designed to settle relations between sovereign states. Nothing in the several Conventions requires steamship companies to carry mail. Nothing therein states what rights or benefits steamship companies will have if they do carry mail. Any obligation to carry mail, and the rights and benefits in relation to such transportation, are determined by the domestic laws of the countries whose flags fly, and of the countries at whose ports they touch.

In

(b) Absent the "free transit" provisions of the several Conventions, it is clear an American steamship company which carries mail at the request of a foreign government would have to look to that government for payment. such a situation, if the foreign government declined to make payment, the steamship company would have no legal right to look to the United States for payment. At most, the steamship company could ask the State Department to make diplomatic representations. Even under the "free transit" provisions of the several Conventions, the signatory nation requesting and receiving the mail service is primarily responsible for payment. The flag country is only secondarily liable. United Fruit Co. v. U.S., 103 Ct. Cls. 303; id. 112 Ct. Cls. 519.

(c) Even when the United States was a party to the "free transit" provisions of the several Conventions, the United States did not agree it would compensate U.S.-flag vessels which carried mail of other signatories. It merely promised to the other signatories that such transportation would be performed free of charge to them. The obligation of the United States to compensate its vessels in such instances is a secondary one and is dependent upon whether the signatory asking and receiving the mail service would be legally obligated, under its own domestic laws, to compensate the steamship companies for this service. See MooreMcCormack Lines, Inc. v. U.S., 119 Ct.

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