As prescribed at 27.206-2, insert the following clause: In
solicitations and contracts with an incentive fee arrangement,
change 'price' to 'target cost and target profit' wherever it appears.
REFUND OF ROYALTIES (APR 1984)
(a) The contract price includes certain amounts for royalties
payable by the Contractor or subcontractors or both, which amounts
have been reported to the Contracting Officer.
(b) The term 'royalties' as used in this clause refers to any
costs or charges in the nature of royalties, license fees, patent or
license amortization costs, or the like, for the use of or for rights
in patents and patent applications in connection with performing this
contract or any subcontract hereunder.
(c) The Contractor shall furnish to the Contracting Officer,
before final payment under this contract, a statement of royalties
paid or required to be paid in connection with performing this
contract and subcontracts hereunder together with the reasons.
(d) The Contractor will be compensated for royalties reported
under paragraph (c) above, only to the extent that such royalties
were included in the contract price and are determined by the
Contracting Officer to be properly chargeable to the Government and
allocable to the contract. To the extent that any royalties that
are included in the contract price are not in fact paid by the
Contractor or are determined by the Contracting Officer not to be
properly chargeable to the Government and allocable to the contract,
the contract price shall be reduced. Repayment or credit to the
Government shall be made as the Contracting Officer directs.
(e) If, at any time within 3 years after final payment under this
contract, the Contractor for any reason is relieved in whole or in
part from the payment of the royalties included in the final
contract price as adjusted pursuant to paragraph (d) above, the
Contractor shall promptly notify the Contracting Officer of that
fact and shall reimburse the Government in a corresponding amount.
(f) The substance of this clause, including this paragraph (f),
shall be included in any subcontract in which the amount of
royalties reported during negotiation of the subcontract exceeds $250.
(End of clause)
(V 7-104.8(b) 1968 FEB)
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