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47QSMD20R0001 Refresh: 0009 Section III A. Terms and Conditions Related to Schedule Contract Administration <br />(6) Notwithstanding paragraphs (a)(4) and (5) above, the Government may at any time require the <br />Contractor to remedy by correction or replacement, without cost to the Government, any failure <br />by the Contractor to comply with the requirements of this contract, if the failure is due to <br />(i) Fraud, lack of good faith, or willful misconduct on the part of the Contractor's <br />managerial personnel; or <br />(ii) The conduct of one or more of the Contractor's employees selected or retained by the <br />Contractor after any of the Contractor's managerial personnel has reasonable grounds to <br />believe that the employee is habitually careless or unqualified. <br />(7) This clause applies in the same manner and to the same extent to corrected or replacement <br />materials or services as to materials and services originally delivered under this contract. <br />(8) The Contractor has no obligation or liability under this contract to correct or replace materials <br />and services that at time of delivery do not meet contract requirements, except as provided in this <br />clause or as may be otherwise specified in the contract. <br />(9) Unless otherwise specified in the contract, the Contractor's obligation to correct or replace <br />Government -furnished property shall be governed by the clause pertaining to Government <br />property- <br />(b) Assignment. The Contractor or its assignee may assign its rights to receive payment due as a result <br />of perfonnance of this contract to a bank, trust company, or other financing institution, including any <br />Federal lending agency in accordance with the Assignment of Claims Act (31 U.S.C. 3727). However, <br />when a third party makes payment (e.g., use of the Governmentwide commercial purchase card), the <br />Contractor may not assign its rights to receive payment under this contract. <br />(c) Changes. Changes in the terms and conditions of this contract may be made only by written <br />agreement of the parties. <br />(d) Disputes. This contract is subject to 41 U.S.C. chanter 71, Contract Disputes. Failure of the parties <br />to this contract to reach agreement on any request for equitable adjustment, claim, appeal or action <br />arising under or relating to this contract shall be a dispute to be resolved in accordance with the clause <br />at FAR 52.233-11 Disputes, which is incorporated herein by reference. The Contractor shall proceed <br />diligently with performance of this contract, pending final resolution of any dispute arising under the <br />contract. <br />(e) Definitions. <br />(1) The clause at FAR 52.202-1, Definitions, is incorporated herein by reference. As used in this <br />clause <br />(i) Direct materials means those materials that enter directly into the end product, or that <br />are used or consumed directly in connection with the furnishing of the end product or <br />service. <br />(ii) Hourly rate means the rate(s) prescribed in the contract for payment for labor that <br />meets the labor category qualifications of a labor category specified in the contract that <br />are <br />(A) Performed by the contractor; <br />(B) Performed by the subcontractors; or <br />(C) Transferred between divisions, subsidiaries, or affiliates of the contractor <br />under a common control. <br />Page: 88 of 141 <br />