CLAUSE H.15 – CAP ON LIABILITY
(a) The Parties have agreed that the Contractor’s liability, for certain obligations it has assumed under this contract, shall be limited as set forth in paragraph (b) below. These limitations or caps shall only apply to obligations the Contractor has assumed pursuant to the following clauses:
(1) The Section I Clause entitled “DEAR 970.5245-1 – Property, ”paragraph (f)(1)(i)(C);
(2) The Section I Clause entitled “DEAR 970.5228-1 – Insurance–Litigation and Claims,” paragraph (f); with respect to prudent business judgment only; and
(3) The Section I Clause entitled “DEAR 970.5228-1 – Insurance–Litigation and Claims”, paragraph (g)(2); except for punitive damages resulting from the willful misconduct or lack of good faith on the part of the Contractor’s managerial personnel as defined in the Section I Clause entitled “DEAR 970.5245-1 – Property.”
(b) Unless otherwise prohibited by law or regulation, the Contractor shall be liable each fiscal year for an amount not-to-exceed 1.25 times the maximum performance fee available for that fiscal year. The annual cap which will apply shall be based on the fiscal year in which the Contractor’s act or failure to act was the proximate cause of the liability assumed by the Contractor. In the event the Contractor’s act or failure to act overlaps more than one (1) fiscal year, the limitation will be the annual limitation for the last fiscal year in which the Contractor’s act or failure to act occurred. If the Contractor’s cumulative obligations for a fiscal year equal the amount of the annual limitation of liability, the Contractor shall have no further responsibility for the costs of the liabilities it has assumed for that fiscal year pursuant to (a)(1) through (3) above.