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intended to cover reimbursement to the contractor for a proper proportion of such payments required during the period of joint occupancy of the plant by the British Government and the contractor while the former is finishing and the latter commencing work under their respective rifle contracts, the proportion to be determined with regard to the extent of the respective occupancy from time to time by each.
In witness whereof the respective parties hereto have hereunto set their hands and seals the day and year first above written. Signed and sealed in the presence of Wm. B. WALLACE, Jr.
REMINGTON ARMS Co.,
By WILLIAM E. COREY, President.
UNITED STATES OF AMERICA,
By WILLIAM CROZIER,
Contracting Officer. Attest:
CONTRACT FOR THE MANUFACTURE OF RIFLES.
Contract of two parties made and concluded this 12th day of July, A. D. 1917, by and between the Remington Arms Co., a corporation organized under the laws of the State of Delaware, by William E. Corey, president, party of the first part (hereinafter called the contractor), and the United States of America, represented by William Crozier, brigadier general, Chief of Ordnance, United States Army (hereinafter referred to as the contracting officer), acting by authority of the Secretary of War, party of the second part:
Whereas a national emergency exists and the United States is not able with the facilities at its disposal to furnish a sufficient supply of rifles for arming its troops;
And whereas the Congress having declared by joint resolution approved April 6, 1917, that war exists between the United States and Germany, the President hereby places with the Remington Arms Co. of Delaware as an order, under the provisions of section 120 of an act making further and more effectual provision for the national defense and for other purposes, approved June 3, 1916, the requirement that it comply with the contract hereinafter set forth, to manufacture 475,000 rifles, complete in all respects, in accordance with drawings and specifications hereto attached and in substantial conformity to the sample rifle corresponding to such drawings and specifications, identified by the parties hereto at the time of the execution of this agreement;
Now, therefore, this contract witnesseth that the said parties have mutually agreed and by these presents do mutually covenant and agree to and with each other, as follows:
Article 1. The contracting officer will arrange with the British Government for the continued use by the contractor, for the purpose of manufacturing rifles under this agreement, of the machinery, tools, equipment, and appliances which will, at the time of the completion of the manufacture of rifles for the British Government by the contractor, under the terms of a certain written agreement bearing date December 30, 1916, become the property of the British Government under the terms of the aforesaid agreement between the contractor and that Government. The contracting officer will secure to the contractor the right to the use thereof without cost or charge, or liability for, use of, damage to, or loss or destruction thereof.
Article 2. The contractor will make the necessary outlays in advance, and manufacture and supply in conformity with the aforesaid drawings and specifications, including duly authorized changes therein, 475,000 rifles, and such spare parts as may be required by the contracting officer during the period in which rifles are manufactured hereunder, and will supply said rifles packed for shipment at the contractor's works.
Article 3. The manufacture of said rifles (the word “rifle" as used in this contract being intended to include everything covered by the drawings and speci
fications above referred to) shall conform in all respects to and with said draw. ings and specifications, including duly authorized changes therein, all of which are to be deemed and taken as forming a part of this contract with like operation and effect as if the same were incorporated herein. The contracting officer is expressly authorized from time to time, by notice in writing to the contractor, to make such changes in the drawings and specifications and such additions thereto as he may deem adyisable.
Article 4. (a) The contracting officer may arrange to secure and to supply to the contractor for use in the manufacture hereunder the material, raw and in course of manufacture, on hand at the plant of the contractor as property of the British Government.
(b) The contracting officer may purchase and supply to the contractor any part of or all material, appliances, equipment, or other personal property of whatsoever nature required for the manufacture of said rifles.
(c) The contractor will from time to time, except as otherwise provided, purchase or contract for the purchase of all materials, tools, equipment, or other personal property of whatsoever nature required for the manufacture of said rifles, and upon such terms as appear to the contractor to be reasonable.
(d) The contractor may supply or furnish for use in such manufacture at the option of the contracting officer all materials, tools, equipment, or other personal property of whatsoever nature of a consumable character required for the manufacture of said rifles owned by it and not purchased for use in the manufacture of rifles hereunder, and that in case the contractor shall so furnish such material, tools, equipment, or other personal property, the book value of the same at the time furnished shall be treated as an expenditure of the contractor in the performance of this contract and considered as a part of the cost of manufacture.
(e) Immediately upon the execution of this contract the parties hereto shall confer for the purpose of determining what material will be required to complete this contract, taking into consideration the material referred to in subtitles (a), (b), (c), and (d) of article 4 of this contract, with a view to providing for such material as may be necessary to cover the entire requirements under this contract.
Article 5. The materials to be used in the manufacture of these rifles shall be of quality and characteristics acceptable for the various purposes for which they may be used, and shall conform to the specifications forming a part of this contract. The materials and workmanship used and applied in the manufaeture of these rifles in details and finish in all their parts shall be of the prescribed quality and shall, from the beginning to the end of the work, be subject to the inspection of the contracting officer, who may appoint suitable inspectors to whom the contractor shall furnish such samples of said materials and such information as to quality thereof and the manner of using the same, as may be required, and also any assistance such inspectors may require in de termining the character of workmanship applied, and the quality of the materials, either used or intended for use in the manufacture of the rifles, and that the inspectors may, with the approval of the contracting officer, peremptorily reject any unfit workmanship or material or forbid the use thereof. The inspectors shall at all times during the progress of the work have full access thereto, and the contractor shall furnish them with full facilities for the inspection and superintendence of the same.
Article 6. When and to the extent requested by the contracting officer, the contractor will procure such liability insurance and such insurance in addition to that regularly carried by the contractor, as may be lawfully procured, against loss or damage to property.
No deduction from any payment to be made to the contractor hereunder shall be made because of depreciation or loss of or destruction or damage done to the machinery, tools, equipment, appliances, materials, or supplies furnished by the Government for use in such manufacture, nor for any loss, destruction, or damage done to any raw material, manufactured material, material in process of manufacture, rifles in process of manufacture, manufactured rifles, or any other personal property at any time acquired by the contractor under the terms of this agreement for use in the manufacture of the rifles, whether such damage or destruction be occasioned by fire, food, storm, riot, vandalism, any acts of God, acts of war, or other casualties, and whether while such property is at the plant or in course of transportation.
Article 7. Unless prevented by strikes, the work under this contract shall be prosecuted at all times with the utmost vigor and dispatch, without interruption for any cause within the control of the contractor, and the number and class of men engaged on the contract and hours of work, subject to the limitations imposed by law, shall be subject to the approval and direction of the contracting officer.
Article 8. 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 be permitted to work more than eight 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 $5 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 hours upon said work, and all penalties thus imposed shall be withheld for the use and benefit of the United States: Provided, That this article shall not be enforced nor shall any penalty be enaeted in case such violation shall occur while there is in effect any 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 was due to any extraordinary event 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.
This contract is subject to the Executive order issued by the President on March 24, 1917, under authority contained in the naval appropriation act approved March 4, 1917, suspending the provisions of the act approved June 19, 1912, during the pending emergency and until further orders.
Article 9. *
Article 10. This contract shall not, nor shall any interest therein, be trans, ferred by the contractor to any other person or persons, and in the performance of this contract no person sball be employed that is under sentence of imprisonment at hard labor.
Article 11. No Member of or Delegate to Congress or Resident Commissioner, nor any person belonging to or employed in the military service of the United States, is, or shall be, admitted to any share or part of this contract, or to any benefit that may arise therefrom, but under the provisions of section 116 of the act of Congress approved March 4, 1909 (35 Stats., 1109), this stipulation shall not apply, or be construed to apply, to any contract made with an incorporated company for its general benefit.
Article 12. The price to be paid for the rifles to be manufactured and furnished in accordance with this contract, including authorized changes therein, shall be the actual cost, plus 10 per cent for profit. For the purpose of this contract actual cost shall be generally as defined in the revenue bill approved September 8, 1916, section 302, in so far as the requirements of said revenue bill are applicable to and not inconsistent herewith. The accounts and records of the contractors appertaining to this work shall be open at all times to the contracting officer and his representatives, and such statements and returns relative to the expenditures shall be made as are directed by the contracting officer. No change shall be required in the present methods and principles of keeping costs, provided the contracting officer finds them adequate for the determination of actual costs. All information obtained from the contractor's accounts and records shall be treated as confidential.
The actual cost shall include the following, and items similar thereto in principle, it being intended that the contractor shall be fully reimbursed for expenditures actually made in good faith in the performance of this contract:
(a) The cost of materials, supplies, labor, special appliances, jigs, tools, fixtures, and gauges made by and for the contractor entering into or in good faith purchased, made, supplied, or acquired for use in the manufacture of the rifles, and other direct charges, such as insurance on rifles, etc.
(0) A proper proportion of running expenses, including ordinary rentals, cost of repairs and maintenance, light, heat, power, insurance, management, salaries, and other indirect charges.
(c) A reasonable rate of interest on a proper proportion of the investment in plant, facilities, inventory, and working capital not owned or provided hy the Government.
(d) A proper proportion of taxes of all kinds paid or accrued with respect. to the business or property.
(e) A proper proportion of physical losses actually sustained in conneetion with the business, including losses from fire, flood, storm, riot, vandalism, any acts of God, acts of war, or other casualties, and not compensated for by insurance or otherwise, and a proper proportion of a reasonable allowance for losses and damages resulting from displacement or from delay in work contracted for prior to the date of this contract caused by or contributed to by work under emergency conditions performed by the contractor for the contracting officer; also, all losses actually sustained in the conduct of the business of manufacturing such rifles on account of death of and personal injury to employees or others to the extent that the same shall not be compensated for by insurance or otherwise.
(1) A reasonable allowance, according to the conditions, for the depreciation of values of plant and property.
Article 13. It is understood that the premises and plant of the contractor which will be employed in the manufacture of the rifles are occupied under the lease dated December 30, 1916, of the Baldwin Locomotive Works, a copy of which is hereto attached. Payments which will be required to be made by the contractor to the Baldwin Locomotive Works upon such lease accruing for the period of time which will elapse from the termination of manufacture of rifles for the British Government under contract dated December 30, 1916, to the date of the removal, under the terms of this contract, by the Government, of the materials, appliances, equipment, or other personal property belonging to or removable by it at the termination of this contract, are to be reimbursed and paid the contractor as ordinary rentals within the meaning of the language employed in subparagraph (b) of article 12 hereof.
Article 14. The contractor shall use every endeavor to obtain the materials, equipment, appurtenances, supplies, etc., under this contract at the lowest possible prices, and shall in no case pay higher prices than required by the existing market conditions nor higher prices than are or would be paid for similar materials, etc., purchased at the same time and under like circumstances and conditions for other work in progress in the plant. Specifications and guaranties of all materials, machinery, and equipment, and the agreements under which such are purchased, shall be subject to the approval of the contracting officer, and orders, prices, and awards shall be subject to the approval of the compensation board.
Article 15. Payments shall be made by the contracting officer monthly within 15 days after submission of bills to cover the approved actual cost for the previous month, as defined under items (it) to (f), inclusive, of article 12. together with a sum equal to 10 per cent thereof.
In the event that for any cause not due to the default of the contractor, the partial payments herein provided for shall cease, the contractor shall have the right to discontinue work upon the said rifles and shall be relieved of its liability for such discontinuance of work under the contract without prejudice to any of its rights hereunder.
Payments shall be made upon bills, in quadruplicate, certified by the proper authority, in such manner as shall be directed by the contracting officer, whose final approval of all bills thus certified shall be necessary before payment thereof. All payments under this contract shall be made to the contractor or its order.
Article 16. When a payment is to be made under this contract, as a condition precedent thereto, the contracting officer may, in his discretion, require evidence satisfactory to him, to be furnished by the contractor, showing what, if any, liens or rights in rem of any kind against said rifles, machinery, equipment, or material on hand for use in the manufacture thereof, have been or can be acquired for or on account of any work done or any machinery, equipment, or material already incorporated as a part of said rifles, or on hand for that purpose; but it is hereby further stipulated, covenanted, and agreed by the contractor for itself and on its own account, and for and on account of all persons, firms, associations, and corporations furnishing labr and materials for said rifles, and this contract is upon the express condition that no liens or rights in rem of any kind shall lie or attach upon or against said rifles, machinery, or
equipment, or the materials therefor, or any part thereof, or of either, for or on account of any work done upon or about said rifles, machinery, equipment, or material, or of any material furnished therefor or in connection therewith, nor for or on account of any other cause or thing or of any claim or demand of any kind, except the claims of the Government: Provided, however. That inasmuch as the contractor is not advised as to patents which may be in force governing the manufacture of the rifles covered by this agreement, the Government agrees to hold the contractor harmless against all damages, costs, or other expenses arising from claims for infringment against the contractor due to the manufacture of rifles hereunder.
Article 17. For the determination of the actual cost as defined above a “compensation board” composed of not more than six nor less than three officers of the Army shall be appointed by the contracting officer. This board shall ascertain, estimate, and determine the actual cost in accordance with article 12 hereof, and the decision of said board or a majority thereof shall be binding on both parties to this contract, subject to the approval of the contracting officer. Wherever possible it will lay down in advance the methods to be followed in estimating and determining the actual cost, and where this can not be done it will act within three months of the date of the receipt thereof on any claim submitted by the contractor. It will determine the methods to be followed by the contractor in preparing bills and by the inspectors in certifying to them and will determine the items which must be referred for its decision.
Article 18. Within 90 days from the termination of this contract the contracting officer shall cause to be removed from the plant of the contractor all materials, appliances, equipment or other personal property of whatsoever nature belonging to the Government or for which it may be responsible, such removal to be effected without working any substantial or unnecessary damage to the building or promises of the contractor, and during such occupancy of its plant after the termination of this contract the contractor shall receive a rental on the basis heretofore provided. All or any materials, supplies, or other property purchased or acquired for use in the manufacture of rifles, the cost of which shall have been or must be reimbursed by the Government and which shall remain on hand unused or unconsumed shall become the poperty of the Government and be removed by it under this article.
Article 19. The contracting officer may cancel this contract at any time in respect of further performance thereof by notice in writing to the contractor, but in case of cancellation the contractor shall receive full reimbursement on account of all expenditures therefore made or liabilities incurred up to the date of such cancellation to make up the “ actual cost" as defined in article 12 of this contract to such “actual cost” there shall be added 10 per cent for profit.
Article 20. If any doubts or disputes arise ts to the meaning of anything in the contract, drawings, or specifications, or if any discrepancy appears between said drawings and specifications and this contract, the matter shall be referred at once to the Chief of Ordnance, United States Army, for determination. If, however, the contractor shall feel aggrieved at any decision of the Chief of Ordnance, he shall have the right to submit the same to the Secretary of War, whose decision shall be final.
In witness whereof the respective parties hereto have hereunto set their hands and seals the day and year first above written. Signed and sealed in the presence ofWm. B. WALLACE, Jr.
REMINGTON ARMS COMPANY,
By WILLIAM E. COREY, President. Attest:
Wm. B. DICKSON, Secretary.
By WILLIAM CROZIER,
Contracting Officer. Attest:
NATHAN HAZEN. .