The following profit reduction clause is required in all competitively awarded new contracts over $100,000 when a Competitive Information Certificate is required prior to award.
Profit Reduction for Illegal or Improper Activity
(a) The government, at its election, may reduce the contract price by the amount of any anticipated profit determined as set forth in paragraph (b) of this section; if
(1) A person or business entity is convicted for violating 18 U.S.C. 201-224 (bribery, graft, and conflicts of interest), 18 U.S.C. 371 (conspiracy), 18 U.S.C. 641 (theft of public money, property, or records), 18 U.S.C. 1001 (false statements), 18 U.S.C. 1341 (fraud), 18 U.S.C. 1343 (fraud by wire) for any act in connection with or related to the obtaining of this contract; or
(2) The Secretary of Defense, or his designee, determines that the Competitive Information Certificate submitted by the offeror in connection with award of this contract
(i) Was materially false at the time it was filed, or
(ii) Notwithstanding the offeror's best knowledge and belief, was materially incomplete or inaccurate. Prior to making such a determination, the Secretary or his designee, shall provide to the contractor a written statement of the action being considered and the basis therefor. The contractor shall have not less than 30 calendar days after receipt to submit in person, in writing, or through a representative, information and argument in opposition to the proposed reduction. The Secretary or his designee may, upon good cause shown, determine to reduce the contract price by less than the amount of any profit determined under paragraph (b) of this section.
(b) The amount of anticipated profits referred to in Sec. 173.3(a) shall be:
(1) In the case of a cost-plus-fixed-fee contract, the amount of the fee specified in the contract at the time of award;
(2) In the case of fixed-price-incentive-profit or cost-plus-incentive-fee contract, the amount of the target profit or fee specified in the contract at the time of award; or
(3) In the case of a firm-fixed-price contract, the amount of anticipated profit determined by the contracting officer, after notice to the contractor and opportunity to comment, from records or documents in existence prior to the date of the award of the contract.
(c) The rights and remedies of the government provided in this cluase shall not be exclusive and are in addition to any other rights and remedies provided by law or under this contract. Sec. Appendix to Part 173--List of Contractors for Whom Certification Is
Required Armtec, Incorporated, 410 Highway 19 South, Palatka, FL 32077Cubic Corporation, 9333 Balboa Avenue, San Diego, CA 92123 as to
contracts originating in the following division:Cubic Defense Systems, Incorporated, San Diego, CAExecutive Resource Associates, 2011 Crystal Drive, suite 813, Arlington, VA 22202Hazeltine Corporation, 500 Commack Road, Commack, NY 11725 and all
divisions and subsidiaries as follows:Hazeltine Corporation, Electro-Acoustic Division, 115 Bay State Drive, Braintree, MA 02184Hazeltine Corporation, Government Systems & Products Division, Cuba Hill Road, Greenlawn, NY 11740Hazeltine Research, Incorporated, 188 Industrial Drive, Elmhurst, IL 60126Kane Paper Corporation, 2365 Milburn Avenue, Baldwin, NY 11510Litton Data Systems, Incorporated, 8000 Woodley Ave., Van Nuys, CA 91408Loral Defense Systems Akron, 1210 Massillon Rd., Akron, OH 44315McDonnel Douglas Corporation, Banshee Rd., P.O. Box 516, St. Louis, MO
63166 as to contracts originating in the following division:McDonnell Aircraft Company, St. Louis, MONorthrop Corporation, Ventura Division, 1515 Rancho Conejo Boulevard, Newbury Park, CA 91320Teledyne Electronics, 649 Lawrence Drive, Newbury Park, CA 91320 Unisys Corporation, One Unisys Place, Detroit, MI 48232, as to contracts
originating in the following divisions or subsidiaries:Unisys Corporation, Defense Systems Division, 3333 Pilot Knob Road, Eagan, MNUnisys Corporation, Defense Systems Division, Neil Armstrong Boulevard, Eagan, MNUnisys Shipboard & Ground Systems Group, Marquis Avenue, Great Neck, NY 11020United Technologies Corporation, UT Bldg., Hartford, CT 06101 as to
contracts originating in the following divisions or
subsidiaries:Norden Systems, IncorporatedPratt & WhitneyVarian Associates, Incorporated, 611 Hansen Way, Palo Alto, CA as to
contracts originating in the following division:*Continental Electronics Manufacturing Company, Dallas, TX---------------------------------------------------------------------------
*Firm suspended as of July 6, 1988.--------------------------------------------------------------------------- Whittaker Corporation (Lee Telecommunications Corporation (LTC), Route 1, Farmington, AR 72730)Zubier Enterprises, 6201 Pine Street, Harrisburg, PA.
SUBCHAPTER H_CLOSURES AND REALIGNMENT