RIX Industries Flow Downs

7/31/2025

Description:

CONTRACT SPECIFIC SUPPLEMENT FOR N00024-24-2106 CVN 75 RCOH AP

Clause:

1. QUALITY REQUIREMENTS FOR SOURCING CERTAIN PERVASIVE COMMODITIES. (back to top)A. Approved supplier sources from which Seller shall procure pervasive commodities can be accessed here:http://supplier.huntingtoningalls.com/sourcing/res_technical.html. Mandatory source requirements areprovided below.B. Seller shall provide all required certifications, test reports, and/or other non-hardware deliverables as specifiedin the Order.C. Seller shall flow down the substance of this provision to all subcontractors for the procurement of any materialscovered under this provision, and shall require its subcontractors to flow down the substance of this provisionto any sub-tier providing materials covered by this provision.D. If Seller submits a Vendor Information Request (“VIR”) to Buyer requesting use of a supplier source other thanthose listed at the link above, the Seller shall provide the following objective quality evidence (“OQE”) in supportof the VIR:i. Documentation that Seller’s proposed supplier source is capable of attaining and maintaining a qualitysystem that is acceptable to the Buyer in accordance with the Order requirements (e.g., a copy of thesource’s quality manual and applicable work instructions);ii. All inspections, tests, and/or certifications that demonstrate the furnished material/service is in fullcompliance with all Order requirements, including any inspection data with inspection results supporting thecertificate of conformance. For foundries that produce 70/30 copper nickel castings, additional testingrequirements stated herein at (F)(iii) apply;iii. Audit documentation of proposed supplier sources including, but not limited to:a. A completed checklist of audit elements based on contract requirements,b. An audit report indicating the level of compliance found during the audit, andc. Any corrective action reports related to the non-conformance documented during the audit withrequired follow-up actions and completion of those actions.iv. Any records of the proposed supplier source’s performance for a period of one year; andv. Any records of surveillance of the proposed supplier source’s product quality activities to assure satisfactoryperformance and compliance to the Order requirements.E. Seller’s use of an approved supplier source does not relieve Seller of its responsibility to ensure that alltechnical, service, and Order requirements are met in performance of this Order.F. Mandatory Source Requirements. The Seller and its subcontractors shall ensure that Level I, Copper Nickel 70/30castings (CuNi), Butt Weld and Socket Weld pipe fittings, and submarine forging products are obtained only fromBuyer approved sources as listed by commodity. All material procured from supplier sources shall be compliantwith the material control and traceability requirements of the Order. Approval is provided for the suppliersource, supplier number, and location identified as listed by commodity. If a location is not listed, that locationis not approved.i. Level I (MC-I or CM-I) Source Suppliers. The Seller shall perform on-site audits of supplier sources of Level Imaterial unless one of the following applies:a. The supplier source is a Buyer-approved Level I source supplier (i.e. EB or HII-NNS);b. The starting material is sample tested (one sample per heat/lot) after receipt for both chemistry andmechanical properties by a test lab, other than the supplier source or mill, and compared to theapplicable specification for acceptance;c. The process requires the finished product to be subsequently tested for chemistry and mechanicalproperties, by a test lab other than the supplier source or mill and compared to the applicablespecification for acceptance;CONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 3 of 22d. Material or product in inventory purchased prior to 3/29/10 is sample tested (one sample perheat/lot) for chemistry by a test lab other than the supplier source or mill and compared to theapplicable specification for acceptance.Note: Test reports showing the quantitative results of tests noted in b, c, and d above as applicable arerequired to be submitted with the certification package.ii. Level I Fastener Source Suppliers and Distributors. Supplier sources for Level I Fasteners (MC-I or CM-I) shallmeet the requirements identified and can be accessed at:http://supplier.huntingtoningalls.com/sourcing/res_technical.htmliii. Foundries Approved to Produce 70/30 Copper Nickel (CuNi). In addition to testing required elsewhere in thisOrder, Seller shall invoke the following requirements on orders for CuNi 70/30 castings from a foundryapproved by Buyer:a. For each heat, the foundry shall analyze and provide a chemical composition test report from an “A”(beginning of pour) and “B” (end of furnace charge pour) chemistry test coupon. Test reports andchemistry coupons shall be identified as “A” and “B” in addition to the heat number traceability;b. Mechanical test bars shall be poured no sooner than 50% through the furnace charge pour;c. The foundry or sub-tier subcontractor shall maintain, for a period of at least seven years, the “A”and “B” chemistry coupons and the mechanical test specimens, and their respective test results asOQE, subject to audit and further analysis by the Buyer. Buyer shall be notified prior to dispositionof any records and specimens;d. Buyer’s products may be poured in the same heat; however, the heat shall be unique to Buyer. Noother customer’s product shall be included in the heat; ande. Chemistry and mechanical test report submittal shall be in accordance with the requirementscontained elsewhere in this Order. Unless specified elsewhere in the Order, the “B” couponchemistry test results shall be submitted.iv. Butt Weld and Socket Weld Fitting Suppliers. Supplier Sources for Butt Weld and Socket Weld pipe fittingsshall meet the requirements identified and can be accessed at:http://supplier.huntingtoningalls.com/sourcing/res_technical.html.v. Submarine Forgings (EB2678). Supplier sources for forgings or forgings used in an assembly shall meet therequirements identified and can be accessed at:http://supplier.huntingtoningalls.com/sourcing/res_technical.html.vi.2. TRANSMISSION ABROAD OF NAVAL NUCLEAR PROPULSION INFORMATION. (back to top)A. This provision applies only if, during the performance of this Order, Seller will have access to Naval NuclearPropulsion Information (“NNPI”) as defined in OPNAVINST N9210.3. All defined terms in this provision shallhave the same meaning as those terms are defined in Part I of SBF P9152 (https://hii.com/wpcontent/uploads/2024/11/SBFP9152). Seller shall review OPNAVINST N9210.3 and DoD Pamphlet 5230.25PHand indicate willingness to abide by the applicable requirements of those publications by signing Form NN9540.A signed Form NN9540 is required for:i. Access to NNPI by the Seller, whether at the Seller’s facility or Newport News Shipbuilding; orii. Unescorted access to Newport News Shipbuilding’s premises; oriii. Access to the Newport News Shipbuilding computer network.B. If Seller has Foreign Nationals and/or Representatives of a Foreign Interest who work within or have access to itspremises, Seller shall have a Technology Access Control Plan which:CONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 4 of 22i. Denies Foreign Nationals, Representatives of a Foreign Interest, and unauthorized U.S. Citizens and/or U.S.Nationals access to NNPI; andii. Restricts access to NNPI and/or Technical Data only to U.S. Citizens and U.S. Nationals who have a need-toknow.C. Seller shall not disclose NNPI to Foreign Nationals. U.S. Citizens and U.S. Nationals representing a foreigngovernment, foreign private interest or other Foreign Nationals, are considered to be included in the definitionof Foreign Nationals for industrial security purposes and the purpose of the restrictions contained in thisprovision.D. Disclosure of Restricted Data as defined in the Atomic Energy Act of 1954 as amended, relating to the NavalNuclear Propulsion Program to employees of Seller granted Limited Clearances under the provisions of32CFR117, National Industrial Security Program Operating Manual (NISPOM) is denied.E. Any issue or release of NNPI beyond parties with a need to know and necessary for the performance of thisOrder, whether or not ordered through an administrative or judicial tribunal, shall be brought to the attention ofBuyer.F. Buyer shall be immediately notified of any litigation, subpoenas, or requests which either seek or may result inthe release of NNPI. If a court or administrative order makes immediate review by Buyer impractical, Seller willtake all necessary steps to notify the court or administrative body of the Navy's interest in controlling therelease of such information through review and concurrence in any release.G. In addition to the requirements of this provision 3, the Seller shall comply with all other requirements relative toNaval Nuclear Propulsion Information (NNPI) wherever located in this Order.H. Seller agrees to insert this “Transmission Abroad of Naval Nuclear Propulsion Information” clause including thisparagraph I in all of its subcontracts issued under this Order.3. ADDITIONAL SECURITY REQUIREMENTS. (back to top) In addition to complying with any other securityrequirements contained in this Order, Seller shall not disclose “Restricted Data” as defined in the Atomic Energy Actof 1954 as amended, relating to Navy Nuclear Propulsion Program to employees who have been granted Limited(interim) Clearances except under the provisions of 32CFR117, National Industrial Security Program OperatingManual (NISPOM).4. MANUFACTURE OF REPAIR PARTS. (back to top)A. If:i. The Seller is providing a ship component or equipment; andii. The Order specification, by reference to a Military Specification or otherwise, specifies repair parts or stockcomponents (collectively “repair parts”), andiii. The Seller intends the manufacturing of the ship component or equipment to be outside the United Statesor Canada;iv. Then Seller agrees that, in addition to any other data required by this Order, Seller shall furnish sufficientdata so that the repair parts can be produced in the United States or Canada.B. The requirements of this provision shall not apply if Seller has made arrangements satisfactory to the Buyer andapproved by the Government for the manufacturing of repair parts in the United States or Canada. For thepurposes of this provision, the term “sufficient data” means detail drawings and other technical informationsufficiently extensive in detail to show design, construction, dimensions, and operation or function,manufacturing methods or processes, treatment or chemical composition of materials, plant layout, and tooling.Seller shall provide all data in English and according to the United States system of weights and measures.C. All drawings for components, assemblies, subassemblies and parts protected by U.S. patents shall contain aprominent notation to that effect fully identifying the patent or patents involved, and bearing the number of thiscontract. Unless Seller has made arrangements satisfactory to the Buyer and approved by the Government forthe manufacturing of repair parts in the United States or Canada, Seller shall grant to the United StatesCONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 5 of 22Government for a period of seven (7) years, Government Purpose Rights as defined in the clause of this Orderentitled Rights in Technical Data – Non Commercial Items (DFARS 252.227-7013).5. VENDOR INFORMATION REQUEST. (back to top)A. Seller shall make no changes to the requirements of the Order without the prior written consent of the Buyer.Seller may submit requests for changes to the specifications or plans only on Buyer's Vendor InformationRequest (VIR) Form, No. NN3409. Changes that affect the price or delivery schedule or both shall only be madethrough written modification of this Order. A dispositioned VIR applies only to the item for which it issubmitted; the resolution may not be extended to any other item under the same or another Order withoutBuyer's explicit written consent. Notwithstanding the foregoing, if complete details for the manufacture of acomponent are not provided by the Buyer or its customer, Seller shall have internal corrective action authorityfor updating or changing piece part drawings or for resolving departures from Seller's piece part drawings orinternal procedures without VIR submittal to the Buyer ONLY if the corrective action does not depart from oraffect in any manner the following:i. Order, Appendices, Terms and Conditions, requirements, including listed specification effectivity dates;ii. Material specification requirements;iii. Drawings or procedures issued by or subject to approval by the Buyer or its customer;iv. Safety, reliability, interchangeability, form, fit, or function of the component or component parts; orv. Shock or vibration integrity of qualified designs.B. Any corrective action taken as a result of Seller's internal review and disposition shall meet sound engineeringprinciples, and records of all corrective actions must be maintained and made available to Buyer or its customerupon request. Copies of approved VIRs shall be sent with the material.6. SHIPPING AND LABELING INSTRUCTIONS. (back to top) Unless otherwise provided in the Order, Seller shall shipmaterial to: Huntington Ingalls Incorporated, Main Distribution Center, 2175 Aluminum Avenue, Bldg. 872,Hampton, VA 23661. Seller shall clearly mark each shipping package, container label and all shipping documentswith the Order number (P. O. #XXXXXXXXXX), the item number, the Newport News Part number (if applicable),Seller’s invoice number, and the release number (if applicable). For container labels, Seller shall provide thefollowing additional information: Shipper's name and address; Consignee Name; number of packages; gross and netweight and number of pieces per carton. Sellers shall go to the routing guide at:http://supplier.huntingtoningalls.com for complete shipping instructions. Use the carrier in the guide for theshipping location. The Buyer’s routing requirements shall flow down to the Seller’s suppliers. In those instanceswhen the Seller’s supplier must ship to the Buyer, the sub-supplier must contract the NNS Traffic Office atNNSTrafficOffice@hii-nns.com or (800) 426-1910 for assistance.7. FREIGHT CHARGES. (back to top) Unless otherwise specified in this Order, the Buyer will pay freight charges andinsurance, and Seller shall ship to Buyer on a freight collect basis using Buyer's preferred carrier. Buyer will notaccept C.O.D. shipments unless expressly provided for in the Order. If the buyer does accept C.O.D. shipments andthe freight cost is $200 or more, the seller shall ensure a copy of the freight bill from the freight carrier is provided asback up documentation when the invoice is submitted to Accounts Payable. If the freight bill is not submitted withthe invoice, the entire invoice will be rejected and the Seller will need to resubmit the invoice with the properdocumentation.8. DOMESTIC BARGE SHIPMENTS. (back to top) Seller shall notify the Traffic Section of Buyer at 1-800-426-1910 atleast 30 calendar days prior to shipment by domestic barge.9. HEAVY MATERIAL. (back to top) Seller shall mark DELIVER ON FLAT BED TRAILER when shipping single articles thatexceed 4,000 pounds or that do not adapt to safe unloading with a standard forklift truck.CONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 6 of 2210. PACKING AND CRATING. (back to top) Seller shall, when practicable, ship in packages or loose pieces for unloadingby a standard 4,000-pound forklift truck. Unless otherwise provided in the Order, Seller's price includes all chargesfor packing and crating.11. VALUE DECLARATION. (back to top) Seller shall not insure for excess value via any mode of transportation. Forshipments at Buyer's risk in which freight rates are based on released value Seller shall declare the lowest value onthe bill of lading. For shipments at Buyer's risk via domestic air freight, air freight forwarder, and Parcel Post, Sellershall insert the notation NVD (no value declared).12. DELIVERY. (back to top) These requirements are in addition to those contained in the “Delivery, Title” clause in the“General Provisions for Orders under U.S. Government Contracts.” All deliveries shall be strictly in accordance withthe applicable quantities and schedules set forth in this Order. Unless otherwise specified in this Order, Seller shallnot:A. Make partial shipments of individual line items; orB. Make shipments more than 90 days in advance.13. SUBCONTRACTING. (back to top) No subcontract at any tier placed under this Order shall provide for payment on acost-plus-a-percentage-of-cost basis, and any fee payable under cost-reimbursement type subcontracts shall notexceed the fee limitations in paragraph 15.404-4(c)(4)(i) of the Federal Acquisition Regulation (FAR).14. COMPLIANCE WITH WORKSITE RULES. (back to top) (applicable only if Seller will be performing work on Buyer’sproperty, a worksite under Buyer’s control, or a third party’s worksite in connection with performance under thisOrder)A. While on Buyer’s property/worksite, Seller shall comply with all of Buyer's safety and security rules andregulations to include, but not limited to, the requirements of Buyer’s “Contractor EH&S Resource Manual”which is available under Supplier Resources at this web site:http://supplier.huntingtoningalls.com/sourcing/Contractor_Safety/index.html.B. If required, Seller will obtain a background check, at Seller’s expense, for all employees as outlined athttps://supplier.huntingtoningalls.com/sourcing/AccessNNS.html. Background checks shall be obtained throughhttps://www.hireright.com/microsites/huntington-ingalls-incorporated/.C. If Seller will perform Production Work on Buyer’s Newport News, Virginia, property, or at other locations ifinformed by Buyer that Seller must be “safety qualified” to perform the work, Seller must subscribe toISNetworld. If Seller is not a current ISN subscriber, Seller can sign up here: Sign Up | ISNetworld. “ProductionWork” is defined as operations that involve hazards to personnel, including but not limited to construction,demolition, “hot work,” work in enclosed and confined spaces, blasting, painting, material handling, workingwith hazardous materials or equipment, efforts in direct support of Buyer’s Production Work, and similaroperations.D. If in performance of this order Seller performs work at a third party’s worksite, Seller shall comply with all rulesand regulations of that worksite, including safety and health rules and procedures, and the use of requiredpersonal protective equipment. Seller guarantees strict compliance by all its employees, agents and lower tiersubcontractors while on the third party’s premises.E. In addition to any other remedies Buyer may be entitled to, Buyer may, without notice and an opportunity tocure:i. Terminate this Order for default if Seller fails to comply with any part of provision 17; orii. Expel from Buyer’s property/work site, any employee, subcontractor or agent of Seller found violating anypart of provision 17.F. Access by non-U.S. citizens to Buyer's property/worksite is prohibited unless approved in writing by Buyer.CONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 7 of 2215. TRAVEL COSTS. (back to top) In any instance for which Seller is invoicing Buyer separately for travel costs, Sellershall comply with the following:A. Seller will obtain Buyer’s prior written approval before engaging in travel under this Order unless the travel isdirected in writing by Buyer. Seller’s request will fully disclose all facts regarding the proposed trip, including,but not limited to: the employee(s) involved, the purpose of the trip and destination, the dates, and theproposed mode(s) of transportation.B. Costs incurred by Seller personnel on travel (“Travel Costs”) must comply with the Federal AcquisitionRegulations (“FAR”) including, but not limited to, FAR 31.205-46. Buyer will not be liable to Seller for any travelcosts incurred in connection with travel not pre-approved or directed by Buyer in accordance with paragraph A.i. Applicable GSA Rates. Seller shall invoice for lodging, meals, and incidental expenses based on the maximumper diem rate for the locality of travel specified in the Federal Travel Regulations, prescribed by the GeneralServices Administration (“GSA”), for travel in the contiguous United States. The applicable GSA rate is basedon the per night geographic location of lodging. GSA rates for the day of return are based on the locality ofthe preceding night’s lodging. Lodging location must be in the same city in which work is being performed orin a location that has lower per diem than the work location. If Seller’s employees are conducting work on aship check in international waters the meal per diem rate will be based on the standard rate for country ofthe port of departure.ii. Airfare Costs. Buyer will not be liable to Seller for airfare costs in excess of the lowest priced airfare availableto Seller during normal business hours (“Lowest Fare”). Buyer may reimburse Seller for airfare in excess ofthe Lowest Fare when it meets an exception stated in FAR 31.205-46(b). If requested by Buyer, Seller willprovide documentation supporting Seller’s selection of the Lowest Fare.iii. Vehicle Transportation.(a) Seller Employee Personally Owned Vehicles. Buyer will reimburse Seller at the prevailing InternalRevenue Service standard mileage rates for employees using their personally owned vehicles for work inconnection with the Order. Seller shall provide documentation from Google Maps, or another mapservice, showing the start and stop location, route map, and the number of miles for the trip. If the startlocation cannot be provided due to employee confidentially, the Seller shall provide the start city, zipcode and state.(b) Rental Car Costs. Buyer will reimburse Seller for a full size or smaller vehicle only. Seller shall not invoicefor luxury cars or sport utility vehicles. Rental car gas tanks shall be refilled upon return of the vehicle.(c) Fines. Seller shall be responsible for all fines for traffic or parking violations. Buyer will not reimbursethese as travel costs or otherwise.iv. Tips. Tips for meals, baggage handling, and maids will be included in the meal and lodging cost and subjectto the prevailing GSA per diem meal and lodging rate. Tips for transportation and taxis required for businesspurposes are not included in, or subject to, the per diem caps. Buyer will reimburse Seller for reasonableamounts for such tips provided they are adequately explained in Seller’s expense report.v. Alcohol. Buyer will not reimburse costs for alcoholic beverages consumed during meals or otherwise whileon travel.C. Submission of Travel Expensesi. Seller will itemize all travel expenses utilizing the NNS Travel Expense Form located athttps://supplier.huntingtoningalls.com/sourcing/accounts_payable.html for which it will be claimingreimbursement. Seller shall include a copy of receipts for air or rail transportation, lodging, and car rentalsregardless of the amount. Gasoline purchased for rental vehicles require a receipt if in excess of $75.00.ii. Failure to provide the required receipts and NNS Travel Expense form will result in non-payment of invoiceuntil all documentation is received. If the Seller does not itemize all travel expenses on the invoice and/orprovide the required receipts, the entire invoice will be rejected and the Seller will need to resubmit withthe necessary documentation.CONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 8 of 22iii. The Seller will only include travel related expenses on the invoice. Related material, labor, and other costsshould be included on a separate invoice.iv. The Seller will ensure timely submittal for travel related expenses by invoicing costs within one month ofincurring the cost. Failure to submit travel expenses within this time frame may result in non-payment ofexpenses.v. The requirements in this section apply to costs incident to travel for temporary job assignments, i.e.assignments to a work location for a period of less than 12 months. Buyer will not reimburse Seller for costsincident to travel for assignments more than 12 months unless specifically identified by Seller and agreed toin writing by Buyer prior to the travel’s occurring.16. WARRANTIES (COST-REIMBURSEMENT ORDERS). (back to top) Paragraph C of the “Warranty” clause is changed toread as follows: For all deficiencies that arise during the warranty period, Seller shall promptly remedy thedeficiency for no additional fee. If Seller fails to remedy the deficiency within a reasonable time after having beennotified of the deficiency, Buyer may, at its option, remedy the deficiency by contract or otherwise and charge to theSeller any increased costs or make an equitable reduction in any fixed fee paid or payable under the Order.17. INVOICE PROCESSING. (back to top) Unless Seller is part of Buyer's Invoiceless Payment System, Seller shall email aPDF version of all invoices showing the Order number and Order Item Number to the Huntington IngallsIncorporated email address on the first page of this Order. If Buyer does not fully pay Seller's original invoicebecause of a performance deficiency, Seller must submit a new invoice for any remaining amounts due after Sellercorrects the deficiency that caused the partial payment. The Seller shall ensure the purchase order line item isclearly referenced on each item being invoiced. The Seller shall also ensure the invoice is submitted in the same unitof measure as the purchase order. If the purchase order line items are not referenced and the unit of measure isdifferent from the purchase order, the entire invoice will be rejected and the Seller will need to resubmit the invoicewith the proper criteria. If the invoice is for a down payment/milestone payment, the invoice must be submittedwith the wavier of lien, insurance papers and Application for Partial Payment and Certification of MilestoneCompletion and Incurred Cost Form (NN9626). If these documents are not submitted with the invoice, the entireinvoice will be reject and the Seller will need to resubmit the invoice with the proper documentation.18. GOVERNMENT TITLE (COST-REIMBURSEMENT AND TIME-AND-MATERIALS ORDERS). (back to top)A. Title to all property purchased by Seller from a vendor for which Seller is entitled to be reimbursed as a directitem of cost under this Order shall pass to and vests in the Government upon the vendor's delivery of suchproperty to Seller. Title to all other property, the cost of which is reimbursable to Seller, shall pass to and vestin the Government upon:i. Issuance of the property for use in Order performance;ii. Commencement of processing of the property for use in Order performance; oriii. Reimbursement of the cost of the property pursuant to the terms of this Order, whichever occurs first.B. Upon the Government’s acquiring title to property under this provision, the provisions of the BUYER ORGOVERNMENT PROPERTY provision contained in the “General Provisions for Orders under U.S. GovernmentContracts” shall apply to such property.19. PAYMENTS FOR TIME-AND-MATERIALS/LABOR-HOUR ORDERS. (back to top) Buyer will pay Seller as follows uponthe submission of proper invoices:A. Hourly rate.CONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 9 of 22i. The amounts shall be computed by multiplying the appropriate hourly rates prescribed in this Order by thenumber of direct labor hours performed. The rates shall include wages, indirect costs, general andadministrative expense, and profit. Fractional parts of an hour shall be payable on a prorated basis. Unlessotherwise specified, invoices may be submitted once each month to Buyer. Seller shall substantiate invoicesby evidence of actual payment and by individual daily job timecards, or other substantiation approved byBuyer.ii. Buyer may unilaterally issue a modification requiring the Seller to withhold amounts from its billings until areserve is set aside in an amount that the Buyer considers necessary to protect the Buyer's interests. Buyermay require a withhold of 5 percent of the amounts due under this provision, but the total amount withheldfor this Order shall not exceed $50,000. The amounts withheld shall be retained until final payment underthis Order.iii. Unless otherwise specified, the hourly rates in the Order shall not be varied by virtue of Seller havingperformed work on an overtime basis. If no overtime rates are provided in this Order and overtime work isapproved in advance by the Buyer, overtime rates shall be negotiated. Failure to agree upon these overtimerates shall be treated as a dispute under the Disputes provision. If this Order provides rates for overtime,the premium portion of those rates will be reimbursable only to the extent the overtime is approved by theBuyer.B. Materials and subcontracts (if specified in this Order).i. Buyer will determine allowable costs of direct materials in accordance with Subpart 31.2 of the FederalAcquisition Regulation (FAR) in effect on the date of this Order. Direct materials, as used in this provision,are those materials that enter directly into the end product, or that are used or consumed directly inconnection with the furnishing of the end product or service.ii. Seller may include reasonable and allocable material handling costs in the charge for material to the extentthey are clearly excluded from the hourly rate. Material handling costs are comprised of indirect costs,including, when appropriate, general and administrative expense allocated to direct materials in accordancewith the Seller’s usual accounting practices consistent with Subpart 31.2 of the FAR. Seller shall not chargeBuyer for profit or fee on materials on time and material/labor-hour orders.iii. Buyer will reimburse Seller for supplies and services purchased directly for this Order when Seller has madepayments of cash, checks, or other forms of payment for these purchased supplies or services; or will makethese payments determined due in accordance with the terms and conditions of a subcontract or invoice.iv. Buyer will not reimburse Seller for any costs arising from the letting, administration, or supervision ofperformance of the subcontract, if the costs are included in the hourly rates payable under this provision.v. Seller shall give credit to Buyer for cash and trade discounts, rebates, scrap, commissions, and otheramounts that have accrued to the benefit of Seller, or would have accrued except for the fault or neglect ofSeller.vi. If the nature of the work to be performed requires Seller to furnish material that Seller regularly sells to thegeneral public in the normal course of business, the price to be paid for such material, notwithstanding theother requirements of this provision, shall be on the basis of an established catalog or list price, in effectwhen the material is furnished, less all applicable discounts to the Buyer, provided that in no event shallsuch price be in excess of the Seller’s sales price to its most favored customer for the same item in likequantity, or the current market price, whichever is lower.C. Total Cost. It is estimated that the total cost to Buyer for the performance of this Order shall not exceed theceiling price set forth in the Order and the Seller agrees to use its best efforts to perform the work specified inthis Order and all obligations under this Order within such ceiling price. If at any time Seller has reason tobelieve that the hourly rate payments and material costs that will accrue in performing this Order in the nextsucceeding 30 days, if added to all other payments and costs previously accrued, will exceed 75 percent of theCONTRACT SPECIFIC SUPPLEMENT FOR N0024-24-2106 CVN 75 RCOH AP(Rev 07/31/2025)Page 10 of 22ceiling price in this Order, Seller shall notify Buyer giving a revised estimate of the total price to the Buyer forperforming this Order with supporting reasons and documentation.D. Ceiling price. Buyer shall not be obligated to pay Seller any amount in excess of the ceiling price in this Order,and Seller shall not be obligated to continue performance if to do so would exceed the ceiling price set forth inthis Order, unless and until Buyer shall have notified Seller in writing that the ceiling price has been increase