(b) All subcontracts made in accordance with the provisions of this agree

ment.

(c) Rental actually paid by the Contractor, at rates not to exceed those mentioned in the schedule of rental rates hereto attached, for construction plant in sound and workable condition, such as pumps, derricks, concrete mixers, boilers, clam-shell or other buckets, electric motors, electric drills, electric hammers, electric hoists, steam shovels, locomotive cranes, power saws, engineers' levels and transits, and such other equipment as may be necessary for the proper and economical prosecution of the work.

Rental to the Contractor for such construction plant or parts thereof, as it may own and furnish, at the rates mentioned in the schedule of rental rates hereto attached, except as hereinafter set forth. When such construction plant or any part thereof shall arrive at the site of the work the Contractor shall file with the Contracting Officer a schedule setting forth the fair valuation at that time of each part of such construction plant. Such valuation shall be deemed final, unless the Contracting Officer shall, within five days after the machinery has been set up and is working, modify or change such valuation, in which event the valuation so made by the Contracting Officer shall be deemed final. When and if the total rental paid to the Contractor for any such part shall equal the valuation thereof, no further rental therefor shall be paid to the Contractor, and title thereto shall vest in the United States. At the completion of the work the Constructing Officer may at his option purchase for the United States any part of such construction plant then owned by the Contractor by paying to the Contractor the difference between the valuation of such part or parts and the total rentals theretofore paid therefor. Rates of rental as substitutes for such scheduled rental rates may be agreed upon in writing between the Contractor and the Contracting Officer, such rates to be in conformity with rates of rental charged in the particular territory in which the work covered by this contract is to be performed. If the Contracting Officer shall furnish or supply any such equipment, the Contractor shall not be allowed any rental therefor and shall receive no fee for the use of such equipment.

(d) Loading and unloading such construction plant, the transportation thereof to and from the place or places where it is to be used in connection with said work subject to the provisions hereinafter set forth, the installation and dismantling thereof, and ordinary repairs and replacements during its use in the said work.

(e) Transportation and expenses to and from the work of the necessary field forces for the economical and successful prosecution of the work, procuring labor and expediting the production and transportation of material and equipment.

(f) Salaries of resident engineers, superintendents, timekeepers, foremen, and other employees at the field offices of the Contractor in connection with said work. In case the full time of any field employee of the Contractor is not applied to said work but is divided between said work and other work, his salary shall be included in this item only in proportion to the actual time applied to this work.

(g) Buildings and equipment required for necessary field offices, commissary, and hospital and the cost of maintaining and operating said offices, commissary, and hospital, including such minor expenses as telegrams, telephone service, expressage, postage, etc.

(h) Such bonds, fire, liability, and other insurance as the Contracting Officer may approve or require; and such losses and expenses, not compensated by insurance or otherwise, as are found and certified by the Contracting Officer to have been actually sustained (including settlements made with the written consent and approval of the Contracting Officer) by the Contractor in connection with said work, and to have clearly resulted from causes other than the fault or neglect of the Contractor. Such losses and expenses shall not be included in the cost of the work for the purpose of determining the Contractor's fee. The cost of reconstructing and replacing any of the work destroyed or damaged shall be included in the cost of the work for the purpose of reimbursement to the Contractor, but not for the purpose of determining the Contractor's fee, except as hereinafter provided.

(i) Permit fees, deposits, royalties, and other similar items of expense incidental to the execution of this contract, and necessarily incurred. Expenditures under this item must be approved in advance by the Contracting Officer.

(j) Such proportion of the transportation traveling and hotel expenses of officers, engineers, and other employees of the Contractor as is actually incurred in connection with this work.

(k) Such other items as should in the opinion of the Contracting Officer be included in the cost of the work. When such an item is allowed by the Contracting Officer, it shall be specifically certified as being allowed under this paragraph.

The United States reserves the right to pay directly to common carriers any or all freight charges on material of all kinds, and machinery, furnished under this contract, and certified by the Contracting Officer as being for installation or for consumption in the course of the work hereunder; the Contractor shall be reimbursed for such freight charges of this character as it shall pay and as shall be specifically certified by the Contracting Officer; but the Contractor shall have no fee based on such expenditures. Freight charges paid by the Contractor for transportation of construction equipment, construction plant, tools, and supplies of every character, shall be treated as part of the cost of the work upon which the Contractor's fee shall be based; provided that charges for transportation of such construction equipment, construction plant, and tools over distances in excess of 500 miles shall require the special approval of the Contracting Officer.

No salaries of the Contractor's Executive Officers, no part of the expense incurred in conducting the Contractor's main office, or regularly established branch office, and no overhead expenses of any kind, except as specifically listed above, shall be included in the cost of the work; nor shall any interest on capital employed or on borrowed money be included in the cost of the work.

The Contractor shall take advantage to the extent of its ability of all discounts available, and when unable to take such advantage shall promptly notify the Contreting Officer of its inability and its reasons therefor.

All revenue from the operations of the commissary, hospital, or other facilities or from rebates, refunds, etc., shall be accounted for by the Contractor and applied in reduction of the cost of the work.

ARTICLE III.

Determination of fee.-As full compensation for the services of the Contractor, including profit and all general overhead expense, except as herein specifically provided, the Contracting Officer shall pay to the Contractor in the manner hereinafter prescribed a fee to be determined at the time of completion of the work from the following schedule, except as hereinafter otherwise provided:

If the cost of the work is under $100,000, a fee of ten per cent (10%) of such cost.

If the cost of the work is over $100,000 and under $125,000, a fee of $10,000. If the cost of the work is over $125,000 and under $250,000, a fee of eight per cent (8%) of such cost.

If the cost of the work is over $250,000 and under $266.666.67, a fee of $20,000. If the cost of the work is over $266,666.67 and under $500,000, a fee of seven and one-half per cent (74%) of such cost.

If the cost of the work is over $500,000 and under $535,714.29, a fee of $37,500. If the cost of the work is over $535.714.29 and under $3,000,000, a fee of seven per cent (7%) of such cost.

If the cost of the work is over $3,000,000 and under $3,500,000, a fee of $210,000.

If the cost of the work is over $3,500,000 a fee of six per cent (6%) of such cost.

Provided, however, that the fee upon such part of the cost of the work as is represented by payments to subcontractors, under subdivision (b) above, shall In each of the above contingencies be five per cent (5%) and no more of the amount of such part of the cost.

The cost of materials purchased or furnished by the Contracting Officer for said work, exclusive of all freight charges thereon, shall be included in the cost of the work for the purpose of reckoning such fee to the Contractor, but for no other purpose.

The fee for reconstructing and replacing any of the work destroyed or damaged shall be such percentage of the cost thereof, not exceeding seven per cent (7%), as the Contracting Officer may determine.

The total fee to the Contractor hereunder shall in no event exceed the sum of $250.000,00, anything in this agreement to the contrary notwithstanding.

ARTICLE IV.

Payments. On or about the seventh day of each month the Contracting Officer and the Contractor shall prepare a statement showing as completely as possible: (1) The cost of the work up to and including the last day of the previous month, (2) the cost of the materials furnished by the Contracting Officer up to and including such last day, and (3) an amount equal to three and one-half per cent (33%), except as herein otherwise provided, of the sum of (1) and (2) on account of the Contractor's fee; and the Contractor at such time shall deliver to the Contracting Officer original signed pay rolls for labor, original invoices for materials purchased, and all other original papers not theretofore delivered supporting expenditures claimed by the Contractor to be included in the cost of the work. If there be any item or items entering into such statement upon which the Contractor and the Contracting Officer can not agree, the decision of the Contracting Officer as to such disputed item or items shall govern. The Contracting Officer shall then pay to the Contractor on or about the ninth day of each month the cost of the work mentioned in (1) and the fee mentioned in (3) of such statement, less all previous payments. When the statement above mentioned includes any work of reconstructing and replacing work destroyed or damaged, the payment on account of the fee in (3) for such reconstruction and replacement work shall be computed at such rate, not exceeding three and one-half per cent (34%), as the Contracting Officer may determine. The statement so made and all payments made thereon shall be final and binding upon both parties hereto, except as provided in Article XIV hereof. The Contracting Officer may also make payments at more frequent intervals for the purpose of enabling the Contractor to take advantage of discounts at intervals between the dates above mentioned or for other lawful purposes. Upon final completion of said work the Contracting Officer shall pay to the Contractor the unpaid balance on the cost of the work and of the fee as determined under Articles II and III hereof.

ARTICLE V.

Inspection and audit.-The Contracting Officer shall at all times be afforded proper facilities for inspection of the work and shall at all times have access to the premises, to the work and material, and to all books, records, correspondence, instruction, plans, drawings, receipts, vouchers, and memoranda of every description of the Contractor pertaining to said work; and the Contractor shall preserve for a period of two years after its completion or cessation of work under this contract all the books, records, and other papers just mentioned. Any duly authorized representative of the Contractor shall be accorded the privilege of examining the books, records, and papers of the Contracting Officer relating to said work for the purpose of checking up and verifying the cost of said work. The system of accounting to be employed by the Contractor shall be such as is satisfactory to the Contracting Officer.

If at any time the Contracting Officer shall find that bills for labor, material, or other bills legitimately incurred by the Contractor hereunder are not promptly paid by the Contractor, the Contracting Officer may, in his discretion, refuse to make further payments to the Contractor until all such obligations past due shall have been paid. Should the Contractor neglect or refuse to pay such bills within five days after notice from the Contracting Officer so to do, then the Contracting Officer shall have the right to pay such bills directly, in which event such direct payments shall not be included in the cost of the work.

ARTICLE VI.

Special requirements.-The Contractor hereby agrees that it will:

(a) Begin the work herein specified at the earliest time practicable and diligently proceed so that such work may be completed at the earliest possible date.

(b) Promptly pay for all labor, material, or other service rendered.

(c) Procure, and thereafter maintain, such insurance in such forms and in such amounts and for such periods of time as the Contracting Officer may approve or require.

(d) Procure all necessary permits and licenses and obey and abide by all laws, regulations, and ordinances and other rules applying to such work of the United States of America, of the State or Territory wherein such work is done, of any subdivision thereof, or of any duly constituted public authority.

(e) Unless this provision is waived by the Contracting Officer, insert in every contract made by it for the furnishing to it of services, materials, supplies, machinery, and equipment, or the use thereof, for the purposes of the work hereunder, a provision that such contract is assignable to the United States; will make all such contracts in its own name and will not bind or purport to bind the United States or the Contracting Officer thereunder.

(f) In every subcontract made in accordance with the provisions hereof, require the subcontractor to agree to comply with all the undertakings and obligations of the Contractor herein, excepting such as do not apply to such subcontractor's work.

(g) At all times keep at the site of the work a duly appointed representative who shall receive and execute on the part of the Contractor such notices, directions, and instructions as the Contracting Officer may desire to give.

(h) At all times use its best efforts in all its acts hereunder to protect and subserve the interest of the Contracting Officer and the United States.

ARTICLE VII.

Right to terminate contract.-Should the Contractor at any time refuse, neglect, or fail in any respect to prosecute the work with promptness and diligence or default in the performance of any of the agreements herein contained, the Contracting Officer may, at his option, after five days' written notice to the Contractor, terminate this contract and may enter upon the premises and take possession, for the purpose of completing said work, of all materials, tools, equipment, and appliances, and all options, privileges, and rights, and may complete, or employ any other person or persons to complete, said work. In case of such termination of the contract, the Contracting Officer shall pay to the Contractor such amounts of money on account of the unpaid balance of the cost of the work and of the fee as will result in fully rimbursing the Contractor for the cost of the work up to the time of such termination plus a fee computed thereon at the rate or rates for monthly payments set forth in Article IV hereof; and the Contracting Officer shall also pay to the Contractor compensation, either by purchase or rental at the election of the Contracting Officer, for any equipment retained, such compensation, in the event of rental, to be in accordance with paragraph (c) of Article II, and in the event of purchase to be based upon the valuation determined by the Contracting Officer as of the time of his taking such possession. The Contractor hereby agrees that such payments when made shall constitute full settlement of all claims of the Contractor against the Contracting Officer and the United States or either of them for money claimed to be due to the Contractor for any reason whatsoever. In case of such termination of the contract the Contracting Officer shall further assume and become liable for all such obligations, commitments, and unliquidated claims as the Contractor may have theretofore in good faith undertaken or incurred in connection with said work, and the Contractor shall, as a condition of receiving the payments mentioned in this article, execute and deliver all such papers and take all such steps as the Contracting Officer may require for the purpose of fully vesting in him the rights and benefits of the Contractor under such obligations or commitments. When the Contracting Officer shall have performed the duties incumbent upon him under the provisions of this article the Contracting Officer shall thereafter be entirely released and discharged of and from any and all demands, actions, or claims of any kind on the part of the Contractor hereunder or on account hereof.

ARTICLE VIII.

Abandonment of work by Contracting Officer.—If conditions should arise which in the opinion of the Contracting Officer make it advisable or necessary to cease work under this contract, the Contracting Officer may abandon the work and terminate this contract. In such case the Contracting Officer shall assume and become liable for all such obligations, commitments, and unliquidated claims as the Contractor may have theretofore, in good faith, undertaken or incurred in connection with said work; and the Contractor shall, as a condition of receiving the payments mentioned in this article, execute and deliver all such papers, and take such steps as the Contracting Officer may require for the purpose of fully vesting in him the rights and benefits of the Contractor under such obligations or commitments. The Contracting Officer shall pay to the Contractor such an amount of money on account of the unpaid balance of the cost of the work and of the fee as will result in the Contractor receiving full reimbursement for the cost of the work up to the time of such abandon

ment, plus a fee to be computed in the following manner: To the cost of the work up to the time of such abandonment shall be added the amount of the contractual obligations or commitments assumed by the Contracting Officer, and such total shall be treated as the cost of the work, upon which the fee shall be computed in accordance with the provisions of Article III hereof. When the Contracting Officer shall have performed the duties incumbent upon him under the provisions of this article, the Contracting Officer and the United States shall thereafter be entirely released and discharged of and from any and all demands, actions, or claims of any kind on the part of the Contractor hereunder or on account hereof.

ARTICLE IX.

Bond. The Contractor shall prior to commencing the said work furnish a bond, with sureties satisfactory to the Contracting Officer, in the sum of two hundred fifty thousand ($250,000.00) dollars, conditioned upon its full and faithful performance of all the terms, conditions, and provisions of this contract, and upon its prompt payment of all bills for labor, material, or other service furnished to the Contractor.

ARTICLE X.

Convict labor.-No person or persons shall be employed in the performance of this contract who are undergoing sentence of imprisonment at hard labor imposed by the courts of any of the several States, Territories, or municipalities having criminal jurisdiction.

ARTICLE XI.

Hours and conditions of labor.—No laborer or mechanic doing any part of the work contemplated by this contract, in the employ of the Contractor, or any subcontractor contracting for any part of said work contemplated, shall be required or permitted to work more than eight (8) hours in any one calendar day upon such work, such prohibition being in accordance with the act approved June 19, 1912, limiting the hours of daily service of mechanics and laborers on work under contracts to which the United States is a party. For each violation of the requirements of this article a penalty of five dollars ($5.00) shall be imposed upon the Contractor for each laborer or mechanic for every calendar day in which said employee is required or permitted to labor more than eight (8) hours upon said work, and all penalties thus imposed shall be withheld for the use and benefit of the United States; provided, that this paragraph shall not be enforced nor shall any penalty be exacted in case such violation shall occur while there is in effect any valid Executive order suspending the provisions of said act approved June 19, 1912, or waiving the provisions and stipulations thereof with respect to either this contract or any class of contracts in which this contract shall be included, or when the violation shall be due to any extraordinary events or conditions of manufacture, or to any emergency caused by fire. famine, or flood, by danger to life or property, or by other extraordinary events or conditions on account of which, by subsequent Executive order. such past violation shall have been excused.

In the event of any dispute with reference to wages, hours, or other conlitions appertaining to said work between the Contractor or any subcontractor and labor employed by him on said work, the Contractor or subcontractor shall immediately notify the Contracting Officer of the existence of such dispute and the reasons therefor. The Contracting Officer may, at his opinion, instruct the Contractor or subcontractor involved in such dispute as to the method or steps which the Contractor or subcontractor should follow with reference thereto, and the Contractor or subcontractor shall thereupon comply with such instructions.

ARTICLE XII.

Right to transfer or sublet.-Neither this contract nor any interest therein shall be assigned or transferred. The Contractor shall not enter into any subcontract for any part of the work herein specified without the consent and approval in writing of the Contracting Officer. In case of such assignment, iransfer, or subletting without the consent and approval, in writing, of the Contracting Officer, the Contracting Officer may refuse to carry out this contract either with the transferror or transferee, but all rights of action for any breach of this contract by the Contractor are reserved to the United States.