Example Contract Template

Contract Terms and Conditions

Table of Contents

Terms and Conditions......................................................................................................................................................2

I. Contract Terms and Conditions ..........................................................................................................................2
1. Limitation of Government Liability ...........................................................................................................2
2. Contract Definitization ...............................................................................................................................2
3. Restrictions on Certain Foreign Purchases .................................................................................................2
4. Subcontracts for Commercial Items ...........................................................................................................3
II. Appendix ...........................................................................................................................................................3
1. Time of Delivery .........................................................................................................................................3

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 Example Contract Template

Terms and Conditions

I. Contract Terms and Conditions

1. Limitation of Government Liability

(a) In performing this contract, the Contractor is not authorized to make expenditures or incur obligations exceeding
[@ Agreement Amount (Transaction Currency) @] [@ Transaction Currency @].
(b) The maximum amount for which the Government shall be liable if this contract is terminated is [@ Agreement
Amount (Transaction Currency) @] [@ Transaction Currency @].

2. Contract Definitization
(a) A [@ Contract Type @] [insert specific type of contract] definitive contract is contemplated. The Contractor
agrees to begin promptly negotiating with the Contracting Officer the terms of a definitive contract that will include
(1) all clauses required by the Federal Acquisition Regulation (FAR) on the date of execution of the letter contract,
(2) all clauses required by law on the date of execution of the definitive contract, and (3) any other mutually
agreeable clauses, terms, and conditions. The Contractor agrees to submit a [@ Contract Type @] [insert specific
type of proposal; e.g., fixed-price or cost-and-fee] proposal and cost or pricing data supporting its proposal.
(b) The schedule for definitizing this contract is [insert target date for definitization of the contract and dates for
submission of proposal, beginning of negotiations, and, if appropriate, submission of make-or-buy and
subcontracting plans and cost or pricing data]:
(c) If agreement on a definitive contract to supersede this letter contract is not reached by the target date in
paragraph (b) of this section, or within any extension of it granted by the Contracting Officer, the Contracting
Officer may, with the approval of the head of the contracting activity, determine a reasonable price or fee in
accordance with Subpart 15.4 and Part 31 of the FAR, subject to Contractor appeal as provided in the Disputes
clause. In any event, the Contractor shall proceed with completion of the contract, subject only to the Limitation of
Government Liability clause.
(1) After the Contracting Officer's determination of price or fee, the contract shall be governed by-
(i) All clauses required by the FAR on the date of execution of this letter contract for either
fixed-price or cost-reimbursement contracts, as determined by the Contracting Officer under
this paragraph (c);
(ii) All clauses required by law as of the date of the Contracting Officer's determination; and
(iii) Any other clauses, terms, and conditions mutually agreed upon.
(2) To the extent consistent with paragraph (c)(1) of this section, all clauses, terms, and conditions
included in this letter contract shall continue in effect, except those that by their nature apply only to a
letter contract.

3. Restrictions on Certain Foreign Purchases

(a) Except as authorized by the Office of Foreign Assets Control (OFAC) in the Department of the Treasury, the
Contractor shall not acquire, for use in the performance of this contract, any supplies or services if any proclamation,

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Executive order, or statute administered by OFAC, or if OFAC's implementing regulations at 31 CFR chapter V,
would prohibit such a transaction by a person subject to the jurisdiction of the United States.
(b) Except as authorized by OFAC, most transactions involving Cuba, Iran, Libya, and Sudan are prohibited, as are
most imports from North Korea, into the United States or its outlying areas. Lists of entities and individuals subject
to economic sanctions are included in OFAC's List of Specially Designated Nationals and Blocked Persons at
http://www.epls.gov/TerList1.html. More information about these restrictions, as well as updates, is available in the
OFAC's regulations at 31 CFR chapter V and/or on OFAC's website at http://www.treas.gov/ofac.
(c) The Contractor shall insert this clause, including this paragraph (c), in all subcontracts.

4. Subcontracts for Commercial Items

(a) Definitions. As used in this clause- "Commercial item" has the meaning contained in the clause at 52.202-1,
Definitions. "Subcontract" includes a transfer of commercial items between divisions, subsidiaries, or affiliates of
the Contractor or subcontractor at any tier.
(b) To the maximum extent practicable, the Contractor shall incorporate, and require its subcontractors at all tiers to
incorporate, commercial items or nondevelopmental items as components of items to be supplied under this contract.
(c)(1) The Contractor shall insert the following clauses in subcontracts for commercial items:
(i) 52.219-8, Utilization of Small Business Concerns (Oct 2000) (15 U.S.C. 637(d)(2) and (3)),
in all subcontracts that offer further subcontracting opportunities. If the subcontract (except
subcontracts to small business concerns) exceeds $500,000 ($1,000,000 for construction of any
public facility), the subcontractor must include 52.219-8 in lower tier subcontracts that offer
subcontracting opportunities.
(ii) 52.222-26, Equal Opportunity (Apr 2002) (E.O. 11246).
iii) 52.222-35, Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era,
and Other Eligible Veterans (Dec 2001) (38 U.S.C. 4212(a));
(iv) 52.222-36, Affirmative Action for Workers with Disabilities (June 1998) (29 U.S.C. 793).
(v) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Apr 2003) (46
U.S.C. Appx 1241 and 10 U.S.C. 2631) (flow down required in accordance with paragraph (d)
of FAR clause 52.247-64).
(2) While not required, the Contractor may flow down to subcontracts for commercial items a minimal
number of additional clauses necessary to satisfy its contractual obligations.
(d) The Contractor shall include the terms of this clause, including this paragraph (d), in subcontracts awarded under
this contract.

II. Appendix

1. Time of Delivery
(a) The Government requires delivery to be made according to the following schedule:
Name Description Due Responsible Party
Prototype 01/03/2004 Supplier
Organization
Insurance Certificate Due 30 days after Supplier

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Purchase Order Signed Organization

The Government will evaluate equally, as regards time of delivery, offers that propose delivery of each quantity
within the applicable delivery period specified above. Offers that propose delivery that will not clearly fall within
the applicable required delivery period specified above, will be considered nonresponsive and rejected. The
Government reserves the right to award under either the required delivery schedule or the proposed delivery
schedule, when an offeror offers an earlier delivery schedule than required above. If the offeror proposes no other
delivery schedule, the required delivery schedule above will apply.
(b) Attention is directed to the Contract Award provision of the solicitation that provides that a written award or
acceptance of offer mailed, or otherwise furnished to the successful offeror, results in a binding contract. The
Government will mail or otherwise furnish to the offeror an award or notice of award not later than the day award is
dated. Therefore, the offeror should compute the time available for performance beginning with the actual date of
award, rather than the date the written notice of award is received from the Contracting Officer through the ordinary
mails. However, the Government will evaluate an offer that proposes delivery based on the Contractor's date of
receipt of the contract or notice of award by adding (1) five calendar days for delivery of the award through the
ordinary mails, or (2) one working day if the solicitation states that the contract or notice of award will be
transmitted electronically. (The term "working day" excludes weekends and U.S. Federal holidays.) If, as so
computed, the offered delivery date is later than the required delivery date, the offer will be considered
nonresponsive and rejected.

Signatures

Buyer Supplier

(Authorized Representative Signature) (Authorized Representative Signature)

Name Name

(Title) (Title)

(Date) (Date)

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