As prescribed in 5391.102(g), insert the following clause in Section I.
INDUCTION AT RISK (AFMC) (APR 2001)
The government and the contractor agree that, in the sole exercise of the contractor's business judgment, the contractor may choose to induct reparable assets into the contractor's repair process in advance of receipt of a funded delivery order and Materiel Release Order (MRO). It is recognized by both parties that the purpose of the funded delivery order is to establish estimated quantities for each National Stock Number (NSN) and provide a vehicle that the contractor shall use to bill against. However, the contractor shall not bill for nor will the government pay for any repaired items until the government directs shipment via a MRO. The MRO shall be passed to the contractor from D035A (Materiel Manager Wholesale Requisition Process) through G009 (Government Furnished Materiel Transaction Reporting System). This is the contractor's authority to ship and bill against the funded delivery order. It is expressly recognized by the contractor that:
(1) Any such induction in advance of receipt of a funded delivery order and MRO is at the contractor's own risk and for the contractor's benefit;
(2) The contractor shall not submit an invoice for the specific item, and the government will have no obligation to pay the contractor until the government issues the MRO authorizing shipment; and
(3) If the contract is terminated and the government has not issued a MRO for the items that the contractor had inducted into the repair process, the contractor shall return all reparable assets (inducted or not) without any charge to the government for costs associated with repairs to such items.
(4) The contractor shall not be entitled to a claim against the government for not issuing a MRO.
(5) Assuming the contract has not been terminated, in the last quarter of the contract, the government agrees to either repair the quantities on the funded delivery order or pay the contractor up to 75% of those inducted items.
(End of Clause)
