Alaska Region Research Vessel (ARRV) · ARRV Contract General Provisions – Rev. A – 16 February 2009 SECTION 101 DEFINITIONS AND TERMS 101-1.01 General 5 10 15 20 25 Wherever

Alaska Region Research Vessel (ARRV)

Shipyard Contract

General Provisions

Revision - A

16 February, 2009

ARRV Contract General Provisions - Revision History

Section Rev Description Date Approvedall - New issue for Final Design Review 9/19/08 JAH A Changes from FDR 2/16/09 JAH

ARRV Contract General Provisions – Rev. A – 16 February 2009

TABLE OF CONTENTS

SECTION 101 DEFINITIONS AND TERMS

101-1.01 General.............................................................................................................. 101-1 101-1.02 Abbreviations.................................................................................................... 101-1 101-1.03 Definitions ........................................................................................................ 101-3

SECTION 102 NOT USED

SECTION 103 EXECUTION OF CONTRACT

103-1.01 Not Used ........................................................................................................... 103-1 103-1.02 Not Used ........................................................................................................... 103-1 103-1.03 Not Used ........................................................................................................... 103-1 103-1.04 Bonds ................................................................................................................ 103-1 103-1.05 Security Interest ................................................................................................ 103-2 103-1.06 Not Used ........................................................................................................... 103-2 103-1.07 Not Used ........................................................................................................... 103-2 103-1.08 Oral Statements................................................................................................. 103-2 103-1.09 Material Guarantee............................................................................................ 103-2

SECTION 104 SCOPE OF WORK

104-1.01 Scope and Intent of Contract............................................................................. 104-1 104-1.02 Change Orders .................................................................................................. 104-2 104-1.03 Not Used ........................................................................................................... 104-6 104-1.04 Not Used ........................................................................................................... 104-6 104-1.05 Final Clean-up................................................................................................... 104-6 104-1.06 Delays and Extensions of Time for Delays....................................................... 104-6 104-1.07 Intellectual Property.......................................................................................... 104-6

SECTION 105 CONTROL OF WORK

105-1.01 Authority of the COAR..................................................................................... 105-1 105-1.02 Schedule of Deliverables and Review and Approval of Work ......................... 105-1 105-1.03 Conformity with Contract ................................................................................. 105-3 105-1.04 Coordination and Order of Precedence of Contract Documents....................... 105-4 105-1.05 Cooperation by Contractor................................................................................ 105-5 105-1.06 Not Used ........................................................................................................... 105-5 105-1.07 Cooperation with Other Contractors, Suppliers, Vendors and UAF Crew ....... 105-5 105-1.08 Not Used ........................................................................................................... 105-6 105-1.09 Duties of UAF’s Inspectors .............................................................................. 105-6 105-1.10 Quality Assurance and Inspection of Work at Construction Site...................... 105-6 105-1.11 Removal of Unacceptable and Unauthorized Work.......................................... 105-9 105-1.12 Not Used ........................................................................................................... 105-9 105-1.13 Not Used ........................................................................................................... 105-9 105-1.14 Partial Acceptance ............................................................................................ 105-9 105-1.15 Delivery Acceptance......................................................................................... 105-9 105-1.16 Post Delivery Pier-Side Period ....................................................................... 105-12 105-1.17 Final Acceptance and Contract Completion ................................................... 105-12 105-1.18 Disputes and Claims Resolution ..................................................................... 105-12 105-1.19 Contractor and Subcontractor Books and Records ......................................... 105-15

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105-1.20 Guarantee/Warranty........................................................................................ 105-16 105-1.21 Workmanship.................................................................................................. 105-17 105-1.22 Start-up Conference ........................................................................................ 105-18 105-1.23 Management Reviews..................................................................................... 105-18 105-1.24 Progress Meetings........................................................................................... 105-19 105-1.25 Photographs of Progress and Major Events .................................................... 105-20 105-1.26 Ceremonies ..................................................................................................... 105-20

SECTION 106 CONTROL OF MATERIAL

106-1.01 Material Specification and Quality Requirements ............................................ 106-1 106-1.02 Buy American ................................................................................................... 106-1 106-1.03 Samples ............................................................................................................. 106-2 106-1.04 Tests and Inspections at Place of Manufacture, Production or Shipment ......... 106-2 106-1.05 Material Certification........................................................................................ 106-3 106-1.06 Protection and Storage of Material ................................................................... 106-4 106-1.07 UAF-Furnished Material................................................................................... 106-4 106-1.08 “Or Equal” Material .......................................................................................... 106-4

SECTION 107 LEGAL RELATIONS AND RESPONSIBILITY TO PUBLIC

107-1.01 Laws to be Observed......................................................................................... 107-1 107-1.02 Permits, Licenses and Taxes ............................................................................. 107-1 107-1.03 Patented Devices, Materials and Processes....................................................... 107-1 107-1.04 Equal Employment Opportunity Responsibilities............................................. 107-2 107-1.05 Federal Aid Provisions...................................................................................... 107-6 107-1.06 Health, Safety and Environmental (HSE) Provisions ....................................... 107-7 107-1.07 Assignment ....................................................................................................... 107-8 107-1.08 Not Used ........................................................................................................... 107-8 107-1.09 Restrictions on Contractors Sales to the Government....................................... 107-8 107-1.10 Not Used ........................................................................................................... 107-8 107-1.11 Protection and Restoration of Property............................................................. 107-8 107-1.12 Not Used ........................................................................................................... 107-9 107-1.13 Indemnification, Responsibility for Property, and Insurance ........................... 107-9 107-1.14 Alaska Statue Title 36..................................................................................... 107-11 107-1.15 Contractor’s Responsibility for Work............................................................. 107-11 107-1.16 Subcontracting ................................................................................................ 107-11 107-1.17 Copeland (Anti-Kickback) Act ....................................................................... 107-12 107-1.18 Personal Liability of Public Officials.............................................................. 107-12 107-1.19 No Waiver of Legal Rights ............................................................................. 107-12 107-1.20 Gratuity and Conflict of Interest ..................................................................... 107-12 107-1.21 Not Used ......................................................................................................... 107-13 107-1.22 Joint Ventures ................................................................................................. 107-13 107-1.23 Other Prohibited Interests ............................................................................... 107-13 107-1.24 Utilization Of Small Business, Minority-Owned, Woman-Owned, And 107-13 Economically Disadvantaged Small Business Concerns And Labor Surplus Area Firms 107-1.25 Clean Air And Water 107-13

SECTION 108 PROSECUTION AND PROGRESS

108-1.01 Subletting of Contract ....................................................................................... 108-1 108-1.02 Notice to Proceed.............................................................................................. 108-1 108-1.03 Prosecution and Progress .................................................................................. 108-1

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108-1.04 Not Used ........................................................................................................... 108-2 108-1.05 Character of Workers, Methods and Equipment............................................... 108-2 108-1.06 Time .................................................................................................................. 108-3 108-1.07 Failure to Deliver on Time................................................................................ 108-5 108-1.08 Default of Contractor ........................................................................................ 108-6 108-1.09 Termination of Work for UAF’s Convenience ................................................. 108-8 108-1.10 Termination for National Emergencies........................................................... 108-10

SECTION 109 MEASUREMENT AND PAYMENT

109-1.01 General.............................................................................................................. 109-1 109-1.02 Not Used ........................................................................................................... 109-1 109-1.03 Scope of Payment ............................................................................................. 109-1 109-1.04 Not Used ........................................................................................................... 109-1 109-1.05 Compensation for Extra Work .......................................................................... 109-1 109-1.06 Progress Payment.............................................................................................. 109-4 109-1.07 Payment for Material on Hand.......................................................................... 109-6 109-1.08 Final Acceptance and Final Payment................................................................ 109-7 109-1.09 Incentive and Disincentive for Weight Control ................................................ 109-8

SECTION 110 SCHEDULE SPECIFICATION

110-1.01 General.............................................................................................................. 110-1 110-1.02 Not Used ........................................................................................................... 110-2 110-1.03 UAF Schedule Requirements............................................................................ 110-2 110-1.04 Schedule Updates.............................................................................................. 110-3 110-1.05 Schedule Revisions ........................................................................................... 110-4 110-1.06 Time Impact Analysis ....................................................................................... 110-4

ATTACHMENT 1 ARRV Owner Furnished Equipment List

ATTACHMENT 2 ARRV Contract Deliverable List

ATTACHMENT 3 ARRV Contract Specifications (separate volume), 18 September 2008

ATTACHMENT 4 Contract Drawings (separate volume), 18 September 2008

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SECTION 101

DEFINITIONS AND TERMS

101-1.01 General

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Wherever in the contract documents the following abbreviations and terms, or pronouns in place of them, are used, the intent and meaning shall be interpreted as set forth below.

Terms not defined below shall have their ordinary accepted meanings within the context in which they are used. Words which have a well-known technical or trade meaning when used to describe work or materials shall be interpreted in accordance with such meaning. However, in the event of conflict between a meaning conferred by a usage of trade or ordinary understanding, and an interpretation of a term by any public agency charged with interpreting a term for purposes of any law or regulation, the University of Alaska Fairbanks interpretation will control.

The titles and headings of the sections, subsections and subparts herein are intended for convenience of reference and shall not be considered as having bearing on their interpretation. Working titles which have a masculine gender, such as “workman” and “flagman” and the pronouns and adjectives “he,” “his,” and “him” are utilized in the contract documents for the sake of brevity, and are intended to refer to persons of either sex.

When a publication is referred to in the contract, it shall refer to the most recent date of issue prior to the date of solicitation for the project unless the issue as of a specific date or year is specified.

In order to avoid cumbersome and confusing repetition of expressions in the contract documents, it is provided that whenever anything is, or is to be, done, if, as, or, when, or where “contemplated, required, determined, directed, specified, authorized, ordered, given, designated, indicated, considered necessary, permitted, reserved, suspended, established, approval, approved, disapproved, acceptable, unacceptable, suitable, unsuitable, accepted, satisfactory, unsatisfactory, sufficient, insufficient, rejected, or condemned,” it shall be understood as if the expression were followed by the words “by the COAR” or “to the COAR.”

101-1.02 Abbreviations

Wherever the following abbreviations are used in the contract documents, they are to be construed the same as the respective expression represented: 30

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ABS American Bureau of Shipping

ACLA Alaska Compiled Laws Annotated

ADA Americans with Disabilities Act

AGMA American Gear Manufacturers’ Association

AISI American Iron & Steel Institute

AMCA Air Movement and Control Association

ANSI American National Standard Institute

ARRV Alaska Regional Research Vessel

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AS Alaska Statutes (http://www.legis.state.ak.us/folhome.htm)

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ASHRAE American Society of Heating, Refrigeration and Air Conditioning Engineers

ASME American Society of Mechanical Engineers

ASTM American Society for Testing & Materials

AWS American Welding Society

CASPPR Canadian Arctic Shipping Pollution Prevention Regulations.

CFR Code of Federal Regulations

COAR Contracting Officer’s Authorized Representative

DCAA Defense Contract Audit Agency

DEMA Diesel Engine Manufacturers’ Association

FCC Federal Communication Commission

FDA Food and Drug Administration

HSE Health, Safety and Environmental

IEEE Institute of Electrical and Electronic Engineers

IACS International Association of Classification Societies

IES Illuminating Engineering Society

IMO International Maritime Organization (also IMCO)

ISO International Standards Organization

ISSC International Ship Structures Congress

MARAD U.S. Maritime Administration

MSC Marine Safety Center, USCG Headquarters

MSS Manufacturers’ Standardization Society of the Valves and Fittings Industry

NEC National Electrical Code

NEMA National Electrical Manufacturers’ Association

NFPA National Fire Protection Agency

NSF National Science Foundation

NTP Notice to Proceed

NVIC Navigation and Vessel Inspection Circular, USCG

OSHA Occupational Safety and Health Administration

QA Quality Assurance

SAE Society of Automotive Engineers

SLA Session Laws of Alaska

SNAME Society of Naval Architects and Marine Engineers

SOLAS International Conventions for the Safety of Life at Sea

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SSPC Steel Structures Painting Council

UAF University of Alaska Fairbanks

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UL Underwriters Laboratory

USC United States Code

USCG United States Coast Guard

USPHS United States Public Health Service

USSG United States Steel Gauge

WHO World Health Organization

101-1.03 Definitions

Addenda. Clarifications, corrections or changes to the contract documents issued graphically or in writing by UAF after the advertisement.

Advertisement. The public announcement, as required by law, inviting proposals for work to be performed or materials to be furnished. 85

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Appeals Officer. Chief Procurement Officer of UAF

Approval. See Subsection 105-1.02.

Approval of Contract. The execution of the required contract documents by both parties.

At the Contractor’s Expense. “At the Contractor’s expense” means that the Contractor will receive no amounts in addition to the Contract price and will not be entitled to adjustment of the Contract price or adjustment of time.

Award. The acceptance by UAF of the successful proposal. The award is effective upon execution of the contract by the Contracting Officer.

Contractor Weight Estimate. See Specification Section 096 and Subsection 109-1.09

Bid. The term bid may be used to refer to the offerors cost proposal.

Bid Bond. The security furnished with a proposal to guarantee that the Bidder will enter into the contract if his proposal is accepted.

Bidder. An individual, firm, corporation, or any acceptable combination thereof, or joint venture submitting a proposal for the advertised work.

Calendar Day. Every day shown on the calendar beginning and ending at midnight, local time.

Certified Payroll. Certified payroll shall consist of name, social security number, and address of each employee, his or her correct classification, hourly rates of wages paid, daily and weekly number of hours worked, deductions made and actual wages paid. Certified payroll shall conform to the requirements as outlined in Required Contract Provisions Federal Aid Construction Contracts.

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Change Order. A written order by UAF covering changes to the contract, within its general scope, and establishing the basis of payment and time adjustment, if any, for the work affected. For further definition, see Subsection 104-1.02.

Composite Straight Time Hourly Rate. The current hourly rate established, based on direct salary cost, fringe benefits, general overhead and profits. Fringe benefits include, but are not limited to, FICA, employment security, life insurance, medical and dental insurance, and pension and profit sharing.

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Construction Time. See Subsection 108-1.06.

Contingent Sum Pay Item. When the price schedule contains a Contingent Sum Pay Item, the work covered shall be performed upon written order of the COAR and payment shall be made as provided for in the order.

Contract. The written agreement between UAF and the Contractor setting forth the obligations of the parties thereunder, including, but not limited to, the performance of the work, furnishing of labor, provision of materials, and the basis of payment. For further definition, see Subsection 104-1.01.

Contract Specifications. The specifications contained in the contract as Sections 000 through 700.

Contract Drawings. The drawings contained in the contract and listed in Specifications Section 000.

Contract Performance Allowance. That part of the contract price allocated to the final execution and fulfillment of the warranty period and performance obligations of the contract.

Contract Plans. See contract drawings.

Contracting Officer. The individual so designated on the Contract. The Contracting Officer is the person authorized by UAF to enter into and administer the contract on behalf of UAF. He or she has authority to make findings, determinations and decisions with respect to the contract and, when necessary or convenient, to modify or terminate the contract.

Contracting Officer’s Authorized Representative (COAR). The representative of UAF, designated in writing by the Contracting Officer, who is authorized to act on the Contracting Officer’s behalf in the on-site administration of the contract.

Contract Manager. Designated by the COAR and Contracting Officer to perform administrative efforts related to this contract.

Contractor. The individual, partnership, firm, corporation, or any acceptable combination thereof, contracting with UAF for performance of prescribed work, acting directly or through agents and employees.

Days. Unless otherwise noted, any reference to “days” shall be interpreted as “calendar days.”

Defect. Another term for deficiency.

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Deficiency. Any characteristic of the work that is not in accordance with the requirements of the contract, or failure of the vessel to operate or perform in accordance with the requirements of the contract.

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Delivery. The written acceptance by UAF of the vessel from the Contractor, with attendant transfer of custody of the vessel from the Contractor to UAF.

Design. The graphic depictions, specifications, calculations, working drawings and studies necessary to plan and construct all forms and functions of the subject vessel. Design includes, but is not limited to, all necessary engineering, plans and drawings.

Directive. A written communication to the Contractor from the COAR enforcing or interpreting a contract requirement or ordering commencement or suspension of an item of work.

Dispose. Scrap or throw away off the vessel, in a manner conforming with applicable law, as unwanted material.

Equipment. All machinery together with the necessary supplies for upkeep and main-tenance, and also tools and any apparatus necessary for the proper construction and acceptable completion of the work.

Extra work. An item of work not provided for in the contract as awarded but found essential by the COAR for the satisfactory completion of the contract within its intended scope.

Fit. Item installed by the Contractor in space allocated and/or templated from the vessel.

Furnish. To supply or produce and deliver to the construction site and to unload and unpack ready for assembly, installation, testing, and start-up.

Good Marine Quality. Constructed of materials suitable for service in a marine environment, including moisture, sea spray, extremes of temperature and other hazards of the marine environment, and designed and constructed to perform its intended function under environmental conditions plus the dynamic motions and cyclic loads imparted in a marine environment. The item shall further be designed and constructed for ease and safety of operation under dynamic conditions and shall require minimum maintenance.

Good Shipbuilding Practice. The term “good shipbuilding practice” refers to those soundly conceived and engineered details, plans, and practices which have proven to be effective and reliable in the commercial maritime industry for seaworthy vessels, which will meet the details and performance requirements of the contract, and/or which are required to obtain and/or maintain ABS and USCG certifications. However, approval by the ABS and/or USCG does not imply acceptance by UAF, nor does it necessarily mean “good shipbuilding practice.”

Immediate Efficient Use. A state of readiness by which the vessel is available for service at that time and in an efficient or normal operating condition.

Inspector. The COAR’s authorized representative assigned to make inspections of contract performance.

Install. To make ready on board the vessel for UAF to use, including assembly, erection, placing, anchoring, applying, shaping to dimension, finishing, curing, and cleaning.

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Machinery. All electrical, mechanical, hydraulic, or air or gas powered mechanisms on the vessel, with or without moving parts, which convert or use energy to perform any function or convey any information, sound, image or control. 185

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Material. All physical substances, components, or instrumentalities of whatever composition necessary to fully construct the subject vessel, whether or not incorporated into the final form of the vessel.

Minimum Requirements. The requirements of UAF in the Contract.

Notice of Intent to Award. The written notice by UAF announcing the apparent successful Bidder and establishing UAF’s intent to award the contract when all required conditions are met.

Notice to Proceed. Written notice to the Contractor to begin the work and establishing the date on which the count of time begins.

Or Equal. An item of material approved in accordance with Subsection 106-1.08 for substitution in place of a brand name item specified in the Contract Specifications and/or Contract Drawings.

Owner. The term “owner” is generally not used in this contract. UAF will act on behalf of NSF to procure and operate the ARRV. NSF is the legal owner of the vessel. UAF is used where the term “owner” may typically appear in other shipyard contracts. The exception is the term Owner Furnished Equipment (OFE), which is retained for clarity.

UAF Representative. Except where UAF unambiguously delegates representation to a specific person or entity, which delegation may be limited in scope, in a writing that is addressed to and conveyed to the Contractor by UAF, reference to the UAF Representative shall mean the Contracting Officer’s Authorized Representative (COAR).

Payment Bond. The security furnished by the Contractor and his surety to guarantee pay-ment of the debts covered by the bond.

Performance Allowance. Amounts withheld by UAF from progress payments as provided by the contract and/or statute to assure Contractor performance. Interest on retainage is paid starting thirty days from the time of the COAR’s approval of the final pay estimate after completion of the warranty period at the rate of four percent per annum.

Performance Bond. The security furnished by the Contractor and his surety to guarantee performance and completion of the work in accordance with the contract.

Plans or Drawings. The plans, drawings and supplemental drawings or reproductions thereof, which show the location, character, dimensions, and details of the work to be done.

Progress Estimate. The Contractor’s periodic itemized estimate of progress for actual work completed, the basis for progress payments.

Project. The vessel, together with all appurtenances, the design to be provided therefore, and construction to be performed thereon under the contract.

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Project Schedule. The Contractor-produced and UAF approved cost and resource loaded schedule for the entire project inclusive of the schedule submitted with qualifications materials and all approved updates. All other schedules for the project are subdivisions of the Project Schedule. The Project Schedule is the Contractor’s committed plan to complete all work within the contract time. The completed Project Schedule shall define the operations required to bring the entire work to final acceptance by the contract completion date.

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Proposal. The offer of a prospective Contractor (Bidder), on the prescribed forms, to perform and complete the work at the prices quoted.

Proposal Guaranty. The security furnished with a proposal to guarantee that the Bidder will enter into a contract if his proposal is accepted by UAF.

Provide. When used with reference to the Contractor’s duty, “provide” means to design (see definition), to purchase, to manufacture, to produce, as appropriate, and to install in an acceptable and satisfactory working manner, and to supply all materials, equipment, tools and labor to perform specified work.

Regulatory Body. Any international or governmental agency, organization, or convention having regulatory jurisdiction over any element of the contracted work. For purposes of this contract, ABS and various organizations which promulgate standards which are incorporated by reference in the contract shall also be considered regulatory bodies.

Request for Proposal (RFP). The advertisement requesting cost proposals for all materials and work encompassed in the project.

Shipyard. See Contractor

Special Provisions. Additions and revisions to the General Provisions. No special provisions exist with respect to the RFP, although special provisions may be added by change order or by supplemental agreement.

Subcontractor. Subcontractor is such an organization or person supplying goods and/or services to Contractor, in partial fulfillment of Contractor’s obligations to UAF in accordance with this contract, in response to one or more purchase orders issued by the Contractor.

Superintendent. The Contractor’s authorized representative in responsible charge of the work, who shall receive and execute orders and directions of the COAR. The Contractor shall at all times have a Superintendent, designated in writing by the Contractor to UAF, or person acting as a Superintendent in the absence of a regular Superintendent, which person shall be available during each working day to communicate with the COAR.

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Supplier/Vendor. Supplier/vendor is such an organization or person supplying goods and/or services to Contractor, in partial fulfillment of Contractor’s obligations to UAF in accordance with this contract, in response to one or more purchase orders issued by the Contractor.

Surety. A corporation, partnership or individual, other than the Contractor, executing a bond furnished by the Contractor.

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Ton. Where the term “ton” is used without further definition as to “short” or “long” ton, it shall be construed to mean the “long ton” unit of weight in the U.S. Customary System equal to 2,240 pounds.

Vessel. The Alaska Region Research Vessel. 260

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Waiver. A dispensation, obtained from a regulatory body, which exempts or releases the Contractor from its obligation to conform to the standard written requirements of the regulatory body. The scope of the term “waiver” does not prohibit acceptance of regulatory body-approved alternative or equivalency compliance methods allowed by the rules or regulations enforced by the regulatory body.

Warranty Bond. The security furnished by the Contractor and its surety to guarantee performance of the warranty obligations in accordance with the contract.

Work. Work shall mean the furnishing of all design (including engineering), labor, materials, equipment, and other incidentals necessary or convenient to the successful completion of the project and the carrying out of all the duties and obligations imposed by the contract.

Work Packages. The summary of work activities used for scheduling and progress payments. See Subsections 109-1.06 and 110-1.03

Work Order. A written order issued by the COAR effecting a minor change in the work not involving an adjustment to the contract sum or an extension of the contract time.

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ARRV Contract General Provisions

SECTION 102

NOT USED

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SECTION 103

EXECUTION OF CONTRACT

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103-1.02 Not Used 5

103-1.03 Not Used

103-1.04 Bonds

The Contractor shall furnish Performance, Payment and Warranty Bonds on forms provided by the UAF before a Notice to Proceed will be issued. The UAF may, at its sole discretion, terminate the contract if the Contractor fails to submit the required bonds within 10 days of UAF Notice of Intent to Award.

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The amount of the Performance Bond shall be 15% of the contract price for ship construction and options. The amount of the Payment Bond shall be 15% of the contract price for ship construction and options. Thirty (30) days after Delivery Acceptance by the UAF of the ARRV, the Performance and Payment Bonds for the ARRV shall be released, less any offsets for corrections of any deficiencies and payments which have been identified. A Warranty Bond for the ARRV in the amount of 5% of the contract price shall be in effect from Delivery Acceptance until all guarantee and warranty obligations under this contract shall have been satisfied or final payment, whichever is later. Payment bonds and security assets shall not be released until all liens are satisfied. The surety of each bond may be either:

1) a corporation or partnership which has a Certificate of Authority as required by AS 21.09; or

2) two responsible individual sureties approved by the Contracting Officer.

Individual sureties shall provide security by one, or a combination, of the following methods:

A. Escrow account in the name of the UAF. Acceptable securities would include, but not necessarily be limited to: cash, treasury notes, bearer instruments having a specific value or money market certificates.

B. First deed of trust, with the UAF designated as beneficiary, against the unencumbered value of real property or an agreement by a second party, including deeds of trust, mortgage, lien or judgment interests, to subrogate their interests to that of the UAF in the real property which has been offered by the individual surety. A title insurance policy, with the UAF as a named beneficiary, and a current (within 3 months) professional appraisal or assessed valuation will be required to ascertain the true value of the property offered as collateral. If buildings or other valued improvements are involved then fire and casualty insurance with the UAF as a named insured and in limits and coverage acceptable to the Contracting Officer shall be required. The appraiser shall acknowledge

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in writing that the appraisal is prepared for the benefit of the UAF and the UAF has the right to rely on its contents. This Deed must be recorded in the recording office where the property is located.

The Contracting Officer or his designee may, at his option, notify the surety of any potential default or liability.

If the surety on any bond furnished in connection with this contract is declared bankrupt or becomes insolvent or its right to do business is terminated in any state where any part of the project is located or it ceases to meet the requirements above or otherwise becomes unacceptable to UAF, or if any such surety fails to furnish reports as to his financial condition as requested by UAF, the contractor shall within five days thereafter substitute another bond and surety, both of which must be acceptable to UAF. An individual surety may be replaced by a corporate surety during the course of the contract period. If the surety desires to dispose of the collateral posted, UAF may, at its option, accept substitute collateral.

103-1.05 Security Interest

The Contractor agrees that the UAF shall have the right to document security interest in all material and equipment for the vessels. 55

103-1.06 Not Used

103-1.07 Not Used

103-1.08 Oral Statements

No oral statements of any person whomsoever shall in any manner or degree modify or otherwise affect the terms of this contract. 60

103-1.09 Material Guarantee

The Contractor will be required to furnish, during contract performance, a complete statement of the origin, composition, and manufacture of materials to be used in the construction of the vessel, together with samples in certain instances, which may be subjected to the tests provided for in the contract documents to determine their quality, compliance and fitness for the work. Any false assertion provided in response to any such requirement shall be subject to the provisions of A.S. 36.30.687 or any successor thereto, or any other statute regarding misrepresentations that may be adopted with application to the UAF.

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SECTION 104

SCOPE OF WORK

104-1.01 Scope and Intent of Contract

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This Contract includes: The General Provisions; the Specifications; the Contract Drawings; Appendix A – List of Owner Furnished Equipment; the Contractor’s quote as approved in conjunction with contract award; the Notice to Proceed; the qualifications provided in the shipyard selection process; all statutes, rules, regulations, codes, and/or standards incorporated by reference; all addenda, work orders, change orders that are required to complete the design and construction of the work in an acceptable manner; all of which constitute one instrument.

The Contractor is to provide certain design elements needed to support production as specified in the contract, together with the detailed working drawings and engineering review required during the design verification and transfer process, and construction and completion of every detail of the work described in the contract documents. The Contractor shall furnish all facilities, labor, materials, equipment, tools, services, power, transportation, and supplies required to complete the work in accordance with the terms of the Contract.

The requirements cited in regulatory body publications must be met in order to obtain the regulatory body approvals and certifications required by the Contract. These requirements are not in general repeated in the Contract. The Contract does not address peculiar requirements that may be imposed by the regulatory bodies relative to the engineering and construction details and methods selected by the Contractor for this particular vessel, though conformance with all such requirements is required within the scope of this Contract.

All regulatory requirements delineated in the publications of the various regulatory bodies, including, but not limited to, CFRs, ABS, and NVIC Rules, shall be met as stated in the publications.

Human error or other cause could result in the preparation by UAF or the Contractor of plans and specifications that do not include necessary details of the work. Therefore, the omission of any details or materials which would be detrimental to the performance, safety, seaworthiness, or ser-viceability of the vessel, the inclusion of which is generally accepted to be in keeping with good shipbuilding practice, shall be corrected by the Contractor to the satisfaction of the COAR through inclusion of such details and materials at the Contractor’s expense.

The Contractor agrees and warrants, by entering into this Contract, that every aspect of work associated with the accomplishment of this work, including, but not limited to, attendant detail design, construction, materials and deliverables, will conform in every material respect to the Contract, and to applicable regulatory requirements, and that any deficiency will be corrected in a timely fashion at the Contractor’s expense.

The Contractor agrees and warrants that any information relied upon by the Contractor, including, but not limited to, information originating or received from UAF and/or consultants or representatives of UAF, has been independently confirmed by the Contractor as both accurate and appropriate for whatever use the Contractor makes of the information. Receipt by the Contractor of information from any source shall not relieve the Contractor of the duty of furnishing complete engineering and construction conforming in every respect to the Contract.

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The scope of work associated with the term “design,” as used throughout the contract documents, shall be broadly interpreted to be inclusive of the associated engineering, calculations, studies, and other related work necessary to effect a thorough preparation for production. The scope of the term “material” shall be broadly interpreted to include the vessel’s “equipment,” except where a clear distinction is made between “material” and “equipment” in a particular clause, or group of clauses, for purposes of clarity of intent. Refer to Section 101 for general definitions.

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Work and materials shall not be deemed to have been called for under the Contract simply because they were included in a submission for a progress payment or were included in a progress payment.

104-1.02 Change Orders

UAF reserves the right to make, at any time, in accordance with this section, changes in the requirements, specifications, drawings, character, or quantities of work as may be necessary or desirable for completion of the project. Such increases or decreases and alterations shall not invalidate the contract nor release the surety, and the Contractor agrees to accept and perform the work as altered, under the conditions stated in the original contract.

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This section shall not apply to determine amounts of money or time due to resolve requests

for compensation or extension of contract time initiated pursuant to the provisions of Subsection 105-1.18, Disputes and Claims Resolution. However, this section may apply to the merits of a position taken by a party regarding the existence of entitlement in a dispute as opposed to resolution of the amount of money or time due. Disputes as to the equity of unilateral decisions by UAF made pursuant to this section may be resolved through Subsection 105-1.18.

Change documents shall be in writing in a format to be agreed upon by the Contractor and the COAR, shall include an estimate of the input of the change(s) to the weight and center of gravity of the vessel, and shall contain a description of the work to be performed or deleted, the specific requirements or specifications to be changed, the materials to be used, construction requirements, the method of measurement, basis of payment, dollar value or estimated dollar value of the change, and any adjustment in contract schedule. Change documents will provide for the COAR’s and Contractor’s signature and acceptance or acknowledgment of receipt. Accepted change documents shall be deemed to include and provide full compensation to the Contractor for all impact, delay, or other direct and/or indirect costs associated with the change. When the Contractor agrees to perform work under the terms of a change document, he waives and releases all claims for any and all additional costs or time resulting from the change.

A. Change Orders. Change orders shall cover alterations to requirements, specifications, or items of work which appear in the contract as modified by previous change documents, the addition of items of work that are within the general scope of the contract, and the deletion of contract items. 80

Proposed Change Orders. Upon written request from the COAR for an estimate of actual cost as described in this paragraph and/or for an analysis by the Contractor of a change’s impact on the schedule, the Contractor shall provide a cost estimate and/or schedule analysis, as pertinent, in no more than ten (10) calendar days. If the Contractor can reasonably provide such an estimate or analysis in fewer than ten (10) calendar days, the Contractor is obliged to do so. Any additional compensation or extension of contract time to the Contractor associated with a change shall be reduced by any costs or time attributable to the Contractor’s failure to timely provide the cost estimate and/or schedule analysis addressed in this paragraph.

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Before a change document is processed for approval, the COAR and Contractor shall

mutually review the proposed change to identify the scope of work and the time necessary to plan and estimate the work. When no established price for the change order work exists, UAF may require the Contractor to submit an estimate of actual cost to the Contractor, segregating profit, overhead and material cost mark-up, regarding the proposed work. The Contractor will be required to substantiate the estimate of actual cost with a complete cost breakdown. The breakdown shall include, but not be limited to, the items listed in the Schedule of Values. Crew and craft productivity rates for the work are also to be included in the breakdown along with a historical basis for the productivity rates. The productivity rates, if possible, will be based on similar work under the contract. All change orders shall include an estimate of the impact of the change(s) to the weight and center of gravity of the vessel. The Contractor is required, as part of the estimate, to address any adverse impact that could prevent the vessel from performing and meeting its/their stated mission and operating profile as a result of the proposed change order. The weight and center of gravity estimate must be provided with each submittal of any change order, along with the suggested application of weight margin (design, build, changes, service life, etc.). Change order weight and application of margin shall be agreed to prior to approval. When the change order is approved by UAF, the weight and center of gravity estimate is fixed, and any change thereafter is to the account of the Contractor. The impact(s) of change orders to the weight and center of gravity shall be included and individually summarized in each weight and center of gravity update provided by the Contractor.

The Contractor shall certify that the data submitted is, to his best knowledge and belief, accurate, complete, and current as of the time of its submission and that such data will continue to be accurate and complete during the performance of the work covered under the proposed change document. UAF shall in no way be bound to make payment based on the estimate.

Mutually Agreed Change Orders. The Contractor accepts proposed change orders by: (1) endorsing the proposed change order; (2) providing a separate written acceptance; and/or (3) by not protesting the change order as provided for in

120 Protest Procedures included in this Subsection. A

change order accepted by the Contractor, or not protested as provided in this Subsection, shall be full payment and final settlement of all claims for adjustment of price or time and for all costs of any kind, including costs of delays, disruptions and impacts of any nature related to any work either covered or affected by the change. By accepting or not protesting a change order as provided for in the

125 Protest Procedures below, the Contractor also waives any additional entitlement to an adjustment

in price or time and accepts from UAF any other written order (including directions, instructions, interpretations, and determinations).

130 Drafts of proposed change orders may be presented to the Contractor for consideration prior to approval by the COAR. If the Contractor signifies his acceptance of the terms and conditions of such proposed change order by endorsing such document without alteration, and the COAR subsequently approves the change order, the change order shall be deemed accepted.

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Unilateral Change Orders. UAF and the Contractor agree to exercise reasonable efforts to reach a negotiated agreement for change order work. If an adjustment in compensation or time cannot be agreed upon by UAF and the Contractor, the COAR may issue a unilateral change order and direct the Contractor to proceed with work using, at UAF’s discretion, one of the following options for compensation:

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1. The COAR may issue a unilateral change order and establish a basis for payment using composite labor rates and an estimate of the labor and materials. If the Contractor disagrees with the change order, the Contractor may seek relief under the terms of Subsection 105-1.18, Disputes and Claims Resolution.

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2. The COAR may issue a unilateral change order that orders the work done on a time and

materials basis as described in Subsection 109-1.05, Compensation for Extra Work.

The COAR will specify in writing in the unilateral change order the maximum period of time during which the Contractor is authorized to perform the change order work. The Contractor shall keep complete records of the cost of the work performed under change orders or waive his right to an adjustment of the contract price or time for any change order work for which he fails to keep such records.

Should the Contractor disagree with any conditions set forth in a unilateral change order, he shall submit a written protest to the COAR as provided for below. By failing to comply with the required protest procedures, the Contractor waives its right to an adjustment of the contract price or time.

B. Reservation of Claim Rights in Change Documents. If the Contractor provides a change document, which reserves any claim for any additional costs or time resulting from the change, such reservation shall be a nullity and of no effect unless the COAR agrees to the reservation and signs the change document subsequent to the addition of the reservation. In any dispute, the burden of proof is on the Contractor regarding the timing of the COAR’s agreement and signature.

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The Contractor agrees that if the Contractor attempts to reserve, upon execution of a change document, any claim for additional costs or time resulting from the change, the Contractor shall be required to submit a written protest to the COAR in the manner and within the time provided for in the Protest Procedures below, or the Contractor’s claim will be conclusively waived. 170

A change order approved by the COAR wherein the Contractor adds a reservation that the COAR does not subsequently agree to and sign will be considered to be an executed change order, and the reservation shall be null and void, unless the Contractor timely complies with the Protest Procedures below. 175

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For purposes of Subsection 105-1.18, Disputes and Claims Resolution, the phrase “the

COAR agrees to the reservation” and like language does not mean that the COAR does or must agree to the Contractor’s position, but only that resolution of the merits of Contractor’s position is deferred by agreement.

C. Protest Procedures. If the Contractor disagrees with anything required in a change document, or any written order, direction, instruction, interpretation or determination by the COAR, the Contractor shall immediately give a signed written notice of protest to the COAR before doing the work. The notice shall be delivered to the COAR within seven (7) days of the occurrence of the event giving rise to the protest. For purposes of this Article, “occurrence” means when the Contractor knows, or in its diligent prosecution of the work should have known, of the event giving rise to the protest. The Contractor shall not be entitled to any form of equitable adjustment for any occurrence of events or costs that occurred more than seven (7) days before the Contractor’s written notice to UAF. The written notice of protest shall contain the following information:

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1. The date of the protested action; and

2. The general nature and circumstances which caused the protest. 195

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The Contractor shall supplement the written notice of protest within thirty (30) days with a

written statement providing the following:

1. A full discussion of the circumstances which caused the protest, including, names of persons involved, time, duration and nature of the work involved, and a review of the Contract Documents referenced to support the protest;

2. The estimated dollar cost broken down by the cost components allowed under Subsection 109-1.05, Compensation for Extra Work, including such costs for Subcontractors, if any, of the protested work and how that estimate was determined; and

3. An analysis of the progress schedule showing the schedule change or disruption if the Contractor is asserting a schedule change or disruption.

The Contractor shall supplement the information required above upon request by UAF.

Throughout any protested work, the Contractor shall keep complete, detailed and contemporaneous records of costs incurred and schedule impact in the performance of the protested work. The Contractor shall permit UAF access to these and any other records needed for evaluating the protest, at any time.

UAF will evaluate all protests provided the procedures in this Subsection are followed. If the COAR determines that a protest is valid, UAF will make an equitable adjustment in accordance with Subsection 109-1.05, Compensation for Extra Work. Extensions of time will be evaluated in accordance with 108-1.06, Time. No adjustment will be made for an invalid protest. UAF shall provide a response to a protest within twenty-one (21) days of receipt of any supplemental information provided by the Contractor under this Subsection.

If UAF determines that the protest is invalid, that determination, with an explanation, shall be provided in writing to the Contractor. If the Contractor does not accept UAF’s determination, the Contractor shall comply with the requirements of Subsection 105-1.18, Disputes and Claims Resolution.

The failure of the Contractor to initiate, pursue and evidence its protest in accordance with all of the terms of this Subsection (including the Contractor's duty to maintain records and disclose all relevant information to UAF) shall be deemed a waiver of its right to any equitable adjustment in the contract price and/or time.

Notwithstanding any protest and appeal, the Contractor shall proceed promptly with the work as directed by the COAR.

Composite Rates. The composite skilled and unskilled labor rates offered in the Contractor’s cost proposal shall be the rates charged for all negotiated changed orders issued under this Contract.

240 These rates will not control determinations of entitlement regarding disputes resolved under

Section 105-1.18, Disputes and Claims Resolution. The method of developing these composite rates

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including the determination of labor mix, fringe benefits, general overhead, profit and the definition of direct and indirect labor shall be consistent with the methodology used in development of price of the overall project. 245

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These rates shall compare reasonably with the lowest prevailing rates charged to other ship

owners and are to be supported by the current DCAA audit results, if available. These rates are subject to UAF audit and they will be adjusted if the audit discloses factual inaccuracies or that any rate is too high. Composite rates provided for in this paragraph are not rates to which UAF is bound in pricing change orders that either UAF or the Contractor does not agree upon fully.

104-1.03 Not Used

104-1.04 Not Used

255 104-1.05 Final Clean-up

The Contractor shall perform fumigation or other effective treatment, as necessary, for elimination of fungi, insects, and vermin.

Immediately prior to the Delivery Acceptance (see Subsection 105-1.15), all surfaces which require cleaning as a result of use or other cause shall be washed, dusted, polished, vacuumed, and/or disinfected, as applicable to the surface, so as to be thoroughly clean, new, undamaged, and fit for customer service, throughout the vessel.

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104-1.06 Delays and Extensions of Time for Delays

See Subsection 108-1.06.

104-1.07 Intellectual Property 265

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All rights including but not limited to, copyrights to plans and specifications, drawings, and designs, whether common law or allowed by statute are hereby assigned by the Contractor to UAF, who shall retain for itself or return such rights to NSF pursuant to the terms of Cooperative Agreement No. OCE-0749590.

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SECTION 105

CONTROL OF WORK

105-1.01 Authority of the COAR

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The COAR will decide all questions that may arise as to the quality and acceptability of materials furnished and work performed, and as to the rate of progress of the work; all questions which may arise as to the interpretation of the contract documents; and all questions as to the acceptable fulfillment of the contract on the part of the Contractor. Work and materials approved by ABS or USCG as part of required classification or certification and not subject to additional contract requirements will be accepted by the UAF.

In extraordinary circumstances, the COAR, with the approval of the Contracting Officer, will have the authority to suspend the work wholly or in part due to the failure of the Contractor to carry out provisions of the contract; for failure to carry out orders; for conditions considered unsuitable for the prosecution of the work; or for any other condition or reason deemed to be in UAF’s interest. UAF will notify the Contractor in writing at least five days before suspending work and will cite the reason(s) for the impending suspension in the notice in order to provide time for the Contractor to remedy the issue.

The COAR may, at reasonable times, inspect that part of the plant or place of business of the Contractor or subcontractor that is related to the performance of the contract.

The COAR may audit books and records in accordance with Subsection 105-1.19.

105-1.02 Schedule of Deliverables and Review and Approval of Work

A. Schedule of Deliverables

Within 30 days after each NTP, and in coordination with the Project Schedule required by Section 110, the Contractor shall submit a schedule of deliverables for the work. The schedule shall list all drawings, analyses, reports, technical specifications, purchase technical specifications, technical publications, and other deliverables that must be developed. The schedule shall include, but not be limited to, the various deliverables cited in the Technical Specifications and other contract documents. In coordination with the Project Schedule, UAF comments will be provided, and the final shall be submitted for UAF approval no later than 45 days after NTP

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A notional schedule of deliverables is provided in Appendix B, which is based on the deliverables requested in the contract, but is not all inclusive. This notional schedule must be filled out and verified by the contractor. This may be the basis for the contractor developed Schedule of Deliverables, but changes in format or content will be considered if the overall intent of the document meets the requirements of the contract.

The schedule shall provide for various interim submittals, revisions, and a final submittal of each deliverable, and shall include columns giving the intended dates of all submittals. The quantity and timing of submittals for each deliverable shall be proposed by the Contractor in the schedule, and should appropriately consider the need for UAF endorsement of intended arrangements and other salient characteristics of the design.

The schedule shall include columns for the following entries for each listed deliverable: deliverable title, submittal number, scheduled dates of submittals, actual dates of submittals, latest

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revision (by letter), drawing size, outstanding reservations, expected release date, planned date of COAR’s response(s), status of COAR’s initial and subsequent responses (i.e., approved, rejected, approved as noted, etc.), comments as to reason for rejection, etc. The schedule shall also identify deliverables that are required to be submitted to each regulatory body for approval, review and/or information, and the expected and actual dates of such approvals.

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The schedule shall be computerized on an Excel spreadsheet program. The schedule shall be updated continuously by the Contractor and this schedule shall be included in the Contractor’s weekly Progress Report. If requested by the COAR, the Contractor will also supply the information contained in this schedule in electronic format suitable for use on the hardware and software provided by the Contractor for UAF’s use.

The schedule of deliverables shall, to the extent practicable, evenly distribute the submission of deliverables.

The Schedule shall allow at least 14 days for UAF review of each submitted deliverable. UAF will have additional time to review deliverables if the Contractor has failed to evenly distribute the submission of deliverables. When multiple submittals are delivered, the Contractor shall indicate which submittals are time sensitive.

Each schedule revision shall be clearly identified.

B. Regulatory Body Review, Approval and Certification of Work

The Contractor shall plan, coordinate and obtain all regulatory inspections (see Subsections 105-1.10 and 106-1.04) of the work, and reviews and approvals of the related drawings, specifications and other documentation, as required to obtain the required regulatory classifications and certifications of the vessel. A schedule of inspections, tests and trials requiring regulatory body observance shall be maintained in accordance with the provisions of the technical specifications.

The provisions of USCG NVIC 10-82 allow, to the extent permitted by the USCG, authorized ABS representatives to certify on behalf of the USCG that drawings and other work conform with USCG regulations without having USCG representatives separately review and stamp the work for conformance with these regulations. To the extent that the NVIC is used by the Contractor to obtain USCG approval of the design, all reviews and certifications for compliance with USCG requirements shall be performed by authorized ABS representatives.

All deliverables shall be revised to address comments provided by the regulatory bodies in conjunction with their reviews.

A registered Professional Engineer shall certify that all drawings and other design documents that are required as deliverables to UAF conform to all requirements of the regulatory bodies and the contract by affixing his/her PE stamp and signature to the documents. This certification shall be in addition to, and not in place of, the ABS and USCG certifications required by the preceding paragraph.

All fees associated with inspections, witness of material and equipment tests and certifications, reviews and approval of work, and classification and certification of the vessel by regulatory bodies shall be included within the originally contracted price of work. Costs of travel and per diem for visits to Contractor’s and manufacturers’ facilities by regulatory body agents shall be considered included in these fees.

A copy of all written communications between the Contractor or its agents and the regulatory bodies, and any attached drawings or other technical documentation included with each written communication, shall be provided to the COAR. A copy of each item of written communication, plus any attached technical documentation, from the Contractor or its agents to a

105-2


regulatory body shall be forwarded to the COAR on the day the communication is mailed or otherwise transmitted to the regulatory agency. A copy of each item of written communication, plus any attached technical documentation, from a regulatory body to the Contractor or its agents shall be provided to the COAR within two days of receipt by the Contractor or its agents. 90

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C. UAF Approval of Work

Where the words “approved” or “for approval” are used without reference to the approving authority, they shall mean “approved by UAF” and “for UAF’s approval.”

Approval of submitted work by UAF shall be solely for the purpose of conveying UAF’s determination that UAF does not object to continuing with the project based on the submitted work. In no event and under no circumstances will approval of UAF of any aspect of the Contractor’s work be a warranty that the work is complete, accurate or of sound design, or that the completed vessel, subject to inclusion of the approved work, will necessarily conform to the minimum functional, performance or technical requirements of the contract, or that the work complies with regulatory requirements. Such characteristics of the work are the Contractor’s responsibility, and any subsequent discovery of omissions or deficiencies with regard to the completeness, accuracy or soundness of the work, and/or conformance with the contract, and/or compliance with regulatory requirements, shall be remedied by the Contractor to the COAR’s satisfaction through correction of the omissions or deficiencies at the Contractor’s expense, irrespective of prior approval of the work by UAF.

“Approved” status cannot be conferred by anyone but an authorized employee of UAF, and except where explicitly prescribed by UAF otherwise in writing, shall be conferred by the COAR. UAF approval does not relieve the Contractor of securing regulatory body approvals as required herein.

Any submittal that is found to be substantially deficient upon review will be rejected and returned to the Contractor for resolution of deficiencies and resubmittal. A “rejected” determination shall void any credit which may otherwise be due the Contractor with regard to meeting a deadline for submission of the material in question.

When determined to be in the best interests of UAF, the Contracting Officer may authorize the COAR to accept deliverables, specified in writing, which have not been certified by a registered Professional Engineer.

105-1.03 Conformity with Contract

All work performed and all materials furnished shall be in conformity with the contract, as determined by the COAR. In the event the COAR finds any materials furnished, work performed or finished products that are not in conformity with any aspect of the contract, but that reasonably acceptable work has been produced and is in accordance with regulatory body requirements, he will then make a determination if such non-conforming work will be accepted and remain in place. In this event, the COAR will document the basis of acceptance by change document which will provide for an appropriate adjustment in the contract price for such work or materials as he deems necessary to conform to his determination based on engineering judgment. The COAR will not be obliged by this or any other portion of the contract to accept non-conforming work.

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The failure of UAF in any one or more instances to insist upon strict performance of any of the terms of this contract or to exercise any option herein conferred shall not be construed as a waiver or relinquishment to any extent of the right to assert or rely upon any terms or option on any future occasion.

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In the event the COAR or UAF or regulatory body inspectors find the materials or the finished product in which the materials are used or the work performed are not in conformity with the contract, or with related regulatory body requirements, and have resulted in an unacceptable or unsatisfactory product, the work or materials shall be removed and replaced or otherwise corrected by and at the expense of the Contractor. 135

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Conformity, as used in this section, means compliance with the contract requirements, regulatory body requirements, good shipbuilding practice and reasonable and customary manufacturing and construction tolerances where working tolerances are not specified. Conformity means compliance with working tolerances where working tolerances are specified. Without detracting from the complete and absolute discretion of the COAR to insist upon such tolerances as establishing conformity, the COAR may accept variations beyond such tolerances as conformity where they will not materially affect the value or utility of the work and the interests of UAF.

The Contractor shall take no advantage of any apparent error or omission in the contract documents. In the event the Contractor discovers such errors or omissions, he shall immediately notify the COAR. The COAR will then make such corrections and interpretations as may be deemed necessary for fulfilling the intent of the contract. Any adjustment by the Contractor without this determination shall be at his risk and expense.

In certain respects, the requirements of the Contract for the vessel may exceed the requirements of pertinent regulatory bodies. Such Contract requirements shall not be changed except upon written approval by the COAR.

105-1.04 Coordination and Order of Precedence of Contract Documents

The Contract Drawings and Specifications, and all supplementary documents comprising the contract as delineated in Subsection 104-1.01, are essential parts of the contract, and a requirement occurring in one is as binding as though occurring in all. They are intended to be complementary and to describe and provide for complete work. 155

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In case of discrepancy, the order of precedence of contract documents will be as follows:

A. Addenda and Change Orders

B. Contract General Provisions

C. Contract Specifications

D. Contract Drawings

E. Contract Bid Documents, including Qualifications and Proposal submittals

In case of discrepancies involving contract documents not listed above, the precedence of the documents will be decided by the COAR. Directives and written correspondence from the COAR may be used to clarify contract terms, suspend and resume work, document directions or instructions given to the Contractor, reject non-specification materials or work and initiate work on contingent items. The precedence of these directions will be decided by the COAR and in general will have precedence over the contract document addressed by the correspondence.

Nothing in documents prepared by the Contractor shall abrogate or modify any requirement of UAF delineated in the General Provisions or any other contract document prepared by UAF.

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170 In the case of dimensions, calculated dimensions shall govern over scaled dimensions.

105-1.05 Cooperation by Contractor

The Contractor will maintain a minimum of two full-sized sets of approved plans and contract documents, conformed to reflect all addenda, and change orders. The Contractor shall keep one set available on the work site at all times.

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The Contractor shall give the work the constant attention necessary to facilitate the progress thereof, and shall cooperate with the COAR, his inspectors and other Contractors in every way possible.

The Contractor shall have on the work site at all times, as his agent, a competent Superintendent or Project Manager, thoroughly experienced in the type of work being performed and capable of reading and thoroughly understanding the plans and specifications, who shall receive instructions from the COAR or his authorized representatives to the extent provided elsewhere in the contract documents. The Superintendent or Project Manager shall have full authority to supply such materials, equipment, tools, labor and incidentals as may be required. Such Superintendent or Project Manager shall be furnished irrespective of the amount of work sublet.

The Contractor shall bear the sole risk to rebuild, repair, restore, replace and to otherwise make good all damage, loss or injury to all or any portion of the vessel, and to any work or material for the contract, including change order work, on or incorporated into the vessel until the entire work has been finally accepted.

105-1.06 Not Used

105-1.07 Cooperation with Other Contractors, Suppliers, Vendors and UAF Crew 190

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At any time after the Contractor receives 67 percent of the contract price, UAF reserves the right to contract for and perform other or additional work on the vessel that is work not the subject of the contract between UAF and the shipyard (Contractor), without terminating the contract between UAF and the shipyard.

When separate contracts are let within the limits of the project vessel, each Contractor/supplier/vendor shall conduct his work so as not to interfere with or hinder the work being performed by others. Contractors working on the same vessel shall cooperate with each other. Each Contractor shall join his work with that of the others in an acceptable manner and shall perform it in proper sequence to that of the others.

Each contractor/supplier/vendor involved shall assume all liability, financial or otherwise, in connection with his contract and shall protect and hold harmless UAF from any and all damages or claims that may arise because of inconvenience, delay or loss experienced by him because of the presence and operations of other contractors.

As a condition of gaining access to the vessel, contractors performing work on the vessel under the terms of this subsection will be required to have their own insurance to cover liability associated with their work. These contractors will also be required to indemnify the shipyard of liability associated with their work.

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The ARRV crew may be actively engaged in work or training not included in this contract at times during the contract period.

105-1.08 Not Used 210

105-1.09 Duties of UAF’s Inspectors

Inspectors employed by UAF are authorized to inspect all work done and materials furnished. The inspector is not authorized to issue instructions contrary to the terms of the contract documents, or to act as foreman for the Contractor; however, the inspector shall have the authority to reject work and materials, which rejection the Contractor may refer to the COAR to be decided by the COAR.

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105-1.10 Quality Assurance and Inspection of Work at Construction Site

Nothing contained in this subsection will in any way restrict UAF’s rights under any warranty or guarantee.

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The Contractor shall submit a Quality Assurance (QA) program plan to UAF no later than 60 days after the Notice to Proceed. The QA program plan shall describe how the Contractor intends to meet the QA requirements in this section. The QA plan shall not present processes for quality that are less effective than those presented in the QA submittal in the qualification process.

The Contractor shall utilize a QA program that assures that all aspects of engineering, construction, and completion of the work comply with the requirements of the contract. The program shall ensure that the latest applicable drawings, requirements, specifications and instructions defined in the contract, as well as authorized changes, are communicated to workers and used in the work. The program shall also include sequential and well-documented inspections and tests of completed elements of work by the Contractor. The intent of these inspections and tests shall be to identify and resolve all deficiencies prior to presentation of the work to UAF for acceptance. The QA program and its implementation shall be coordinated with the inspection and test requirements of the contract; as well as the weight control program, noise control program, and other efforts required by the contract or otherwise developed by the Contractor to control the work.

The personnel assigned to the development and administration of the QA program shall have independent authority and organizational freedom to identify and evaluate quality problems and initiate and recommend timely and positive solutions.

The implementation of QA procedures by a subcontractor or vendor does not relieve the Contractor of his responsibility to assure that the supplied items fully comply with the requirements of the contract.

At a minimum, the Quality Assurance program shall make provision for the following or similar:

A. A status report shall be provided monthly by the Contractor, listing any and all documented discrepancies. Outstanding issues shall be highlighted.

B. A process utilizing a Contractor-developed standard DR form, through which UAF can communicate potential issues and problems to the Contractor. The form shall include, at a minimum:

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i. Independent tracking number ii. Date of issue initiated iii. Reference drawings/materials and revisions;

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iv. Subject; v. Requirement references; vi. Issue or problem description; vii. Signature column by COAR, or assigned representative, and date; viii. Response area for Contractor, sign off and date.

The Contractor shall be responsible for tracking and providing a disposition for all issues raised by UAF or shipyard QA.

If, during the course of the contract, modifications to the QA program are planned for any reason, the Contractor shall submit proposed changes of the QA program plan to UAF. The submission schedule shall allow 14 days for UAF review and comment prior to implementation of the proposed changes. All costs to the Contractor as a result of approved changes to the plan shall be at the Contractor’s expense.

Part of the QA program plan shall address the process of compartment close-outs. It shall describe the inspection procedures used to prepare compartments for inspection by UAF, the noting of any excepted items, the process to limit access to the spaces previously inspected, the controls to be put in place to insure that only authorized work is accomplished in the closed spaces, and the time frame for the completion of all remaining work and outfitting.

All materials and each part or detail of the work will be subject to the inspection and acceptance of UAF and approval by the regulatory body(ies). Approval by agents of the regulatory bodies is mandatory, but does not constitute final approval. Acceptance by UAF of work, materials and equipment is also required.

All materials for which shop tests and/or standards are specified shall be inspected and tested by the Contractor before incorporation into the work. Certain of these inspections and tests may be performed by, or require witness of, UAF and/or regulatory body as required by the contract or otherwise directed by the COAR or regulatory body. Any work in which untested or unaccepted materials are used without approval or written permission of the COAR is at the Contractor’s risk. Such work may be considered as unacceptable and unauthorized, and as such will not be paid for and may be subject to removal at the Contractor’s expense.

Preliminary inspection by UAF of materials and finished articles to be incorporated in the work at the Contractor’s construction site may be made, at the COAR’s discretion, at place of production, manufacture or shipment in accordance with Subsection 106-1.04. UAF’s inspection of material and workmanship for final acceptance as a whole or in part will be made at the Contractor’s construction site. UAF’s personnel, agents of UAF and regulatory body inspectors shall be allowed access to all parts of the work and shall be furnished with such information and assistance by the Contractor as required for complete and detailed inspections.

The Contractor is responsible for properly presenting completed work for acceptance inspection; for ensuring that work has been inspected by UAF and, as applicable, the regulatory bodies before the work is covered up; and for coordinating all inspections with UAF and the regulatory bodies. Work shall not be presented to UAF or the regulatory bodies until the Contractor has satisfied himself that all work is properly done and in full compliance with the contract.

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320

325

The Contractor shall give adequate notice in writing to the COAR and the applicable regulatory bodies that the work in question is complete and ready for inspection. Reasonable notice for UAF inspections to be performed during the Monday through Friday work week shall be no less than two days. Five days notice shall be given for UAF inspections to be performed on Saturdays, Sundays, holidays and any other overtime hours. Coordinating inspections to be performed by regulatory body inspectors shall be wholly the responsibility of the Contractor, and reasonable advance notice of any such inspection shall be provided to UAF. (See Subsection 106-1.04 for notice requirements regarding tests and inspections to be performed at places of manufacture, production and shipment.)

Welds shall be thoroughly cleaned and inspected prior to painting to verify that they are of acceptable quality. All weld inspection equipment and materials shall be provided by the Contractor.

Primary responsibility for proper work and quality assurance rests with the Contractor. Inspections, tests, measurements or other acts or functions performed by UAF are for the sole purpose of assisting the COAR in determining with reasonable assurance that the work, materials, equipment, rate of progress and quantities comply with the contract. Such acts or functions, and tests or approvals by others, shall in no manner be construed to relieve the Contractor from determining to his own satisfaction that he is in full compliance with the contract requirements at all times, nor to relieve him from any of the responsibility for the work assigned to him by the contract.

Work, materials and equipment not meeting the contract requirements shall be corrected, and unsuitable work and materials are to be replaced at the Contractor’s expense notwithstanding that such work or materials may have been previously inspected or that payment therefore may have been included in a progress payment.

Failure of UAF to discover work or materials not in accordance with the contract shall not be deemed as acceptance of such work or materials, nor as a waiver of the provisions of the contract. No payment shall be construed as acceptance of work or materials not in accordance with the contract, nor as agreement that work not called for by the contract was in fact called for.

Any work done or materials installed without inspection by a UAF inspector may be ordered removed for purposes of inspection and replaced at the Contractor’s expense, unless UAF inspector failed to inspect after having been given reasonable notice in accordance with the above provisions.

If UAF inspector failed to inspect after having been given reasonable notice in accordance with the above provisions, or if for any reason UAF questions the probable compliance of any work previously inspected by a UAF inspector, the Contractor shall remove or uncover such portions of the finished work as may be directed. After examination, the Contractor shall restore said portions of the work to the standard required by the contract. Should the work thus exposed or examined prove acceptable, the uncovering, or removing, and the replacing of the covering or making good of the parts removed will be paid for as extra work (see Subsection 109-1.05); but should the work so exposed or examined prove unacceptable, the uncovering, or removing, and the replacing of the covering or making good of the parts removed, will be at the Contractor’s expense.

A final Delivery Acceptance Survey of all accessible spaces will be made by UAF immediately preceding Delivery Acceptance of the vessel. (see Subsection 105-1.15).

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105-1.11 Removal of Unacceptable and Unauthorized Work 330

335

340

All work that does not conform to the contract will be considered as unacceptable work, unless determined acceptable under the provisions of Subsection 105-1.03.

Unacceptable work, whether the result of poor workmanship, use of defective, unsuitable, or unauthorized materials or equipment, or damage through carelessness or any other cause, found to exist prior to the final acceptance of the work, shall be remedied or removed immediately and replaced in an acceptable manner at the Contractor’s expense.

No work shall be done on the vessel except as required by the contract and by any directive. Work done contrary to directives, except as herein provided, or any work done without authority, will be considered as unauthorized and will not be paid for under the provisions of the contract. Work so done may be ordered removed or replaced at the Contractor’s expense.

Upon failure on the part of the Contractor to comply forthwith with any order of the COAR made under the provisions of this section, the COAR will have authority to cause unacceptable work to be remedied, or removed and replaced, unless determined acceptable under Subsection 105-1.03, and to deduct the cost from any monies due or to become due the Contractor.

105-1.12 Not Used 345

105-1.13 Not Used

105-1.14 Partial Acceptance

If at any time during the prosecution of the work the Contractor completes a usable unit or portion of the work, the occupancy of which will benefit UAF, he may request the COAR to make an inspection of that portion or unit. In the alternative, the COAR may at his own discretion inspect and accept a unit or portion of the work. If the COAR finds upon inspection that the unit has been satisfactorily completed in compliance with the contract, he may accept it as being completed. Such acceptance by the COAR, in order to be valid, must be in writing and signed by the COAR. Such partial acceptance and beneficial occupancy by UAF shall not void or alter any provisions of the contract, and shall be made only at the discretion of UAF. UAF shall in no circumstances be obliged to accept a portion of the work, even if that portion of the work is completed.

350

355

105-1.15 Delivery Acceptance

A Delivery Acceptance Survey shall be conducted after all physical work, testing and clean-up provided for under the contract is completed. The intent of the survey shall be to affirm that the construction of the vessel is complete; the form, fit and function of installed materials are satisfactory, and the vessel is clean and clear of rubbish, excess material, etc., in accordance with Subsection 104-1.05. In conjunction with the survey, the status of the compartment close-outs required by the contract shall be presented for review, with any remaining close-outs performed prior to completion of the survey.

360

365 Delivery Acceptance will occur at or near the Contractor’s construction facilities and be contingent upon the following:

A. Excepting an allowance for a small quantity of minor deficiencies (see below), all physical work shall be completed, with all requisite regulatory approvals, certifications and letters of

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compliance obtained, and with the vessel ready for service in full compliance with the contract to the satisfaction of UAF. 370

375

380

385

390

395

400

405

B. The vessel shall be thoroughly cleaned in accordance with Subsection 104-1.05 of these provisions to the satisfaction of UAF.

C. All shop and installation tests and inspections shall be completed, with results demonstrating compliance with the contract to the satisfaction of UAF.

D. The Delivery Acceptance Survey described herein shall have been completed, with the results supporting a conclusion by the COAR that the vessel is complete, clean and ready for service in compliance with the contract to the satisfaction of UAF.

E. Acceptance Trials and prerequisite tests shall have been completed, with results demonstrating compliance with the contract, and approved by UAF.

F. Completion of factory and shipboard Contractor-responsible training required prior to delivery.

G. Weight (lightship displacement) does not exceed (reference Subsection 109-1.09 and specification sections 096 and 097) 25 long tons over the approved Contractor Weight Estimate, with all construction margins included.

H. Completion of valuable fluid soundings. (Diesel oil and other valuable fluids on board the vessel at time of delivery will be paid for in accordance with the contract.)

I. Completion of a Delivery Acceptance Survey, with results supporting the conclusion that the vessel is complete, clean, free of deficiencies and ready for service in compliance with the contract to the satisfaction of UAF.

J. Provision by the Contractor of all guarantees, releases, affidavits, and other documentation re-quired by these provisions or elsewhere in the contract documents.

The survey, tests, inspections and trials referred to in subparagraphs “C” through “F” above will serve to assist UAF in making the determination as to whether the requirements of subparagraphs “A” and “B” above are fulfilled.

The conduct of Acceptance Trials and the Delivery Acceptance Survey shall be contingent upon receipt by UAF of written notice from the Contractor of presumptive completion of all physical work, testing and clean-up provided for under the contract. The Survey may, but need not, precede Acceptance Trials.

Delivery Acceptance shall be solely for the purpose of relating UAF’s determination that, if the Contractor delivers the vessel (see Subsection 105-1.16) in like condition in material, operation and performance, and corrects deficiencies which are authorized in writing by UAF to be corrected following Delivery Acceptance, the vessel as constructed and presented is acceptable to UAF.

Delivery Acceptance by UAF will not constitute acceptance by UAF of any latent defects or other deficiencies which may develop prior to completion of the warranty period. Such defects and deficiencies are the responsibility of the Contractor to correct.

During the Delivery Acceptance Survey, the Contractor shall function as the representing authority (presenting the vessel for acceptance) and UAF will function as the survey representatives of UAF and the regulatory bodies. Regulatory body representatives shall be present. Survey check-off sheets and related documentation shall be developed by the Contractor and submitted to the

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410

415

420

425

430

435

440

445

COAR for UAF approval at least 45 days prior to the scheduled date of the survey. Survey documentation shall be developed under categories (for example: deck department, stewards’ department) and under subcategories (for example: main propulsion, navigation equipment) to facilitate representation during surveys by persons knowledgeable and experienced with the surveyed category/subcategory of work and familiar with the requirements applicable to the category and subcategory. Detail provided in survey documentation must be satisfactory to the COAR.

The existence of any uncorrected deficiency affecting the safety, operation, performance or immediate efficient use of the vessel for its intended service will be sufficient cause to reject Delivery Acceptance of the vessel pending correction of the deficiency by the Contractor. The existence of a significant number of uncorrected deficiencies will likewise be a cause for rejection of the vessel until their number has been reduced to a level acceptable to UAF.

Upon completion of the Acceptance Trials and Delivery Acceptance Survey, a letter relating UAF’s determination regarding Delivery Acceptance of the vessel will be issued by the Contracting Officer or COAR. The letter will provide notice as to the extent of unsatisfactory or incomplete work which must be corrected or completed prior to Delivery Acceptance of the vessel. In connection with this notice, it must be recognized that under the terms of the contract, the Contractor is required to deliver a complete vessel that is free of all deficiencies, and that deferral of corrective work is not a waiver by UAF of its entitlement to a complete vessel that is free of deficiencies.

The date of Delivery shall constitute the date on which UAF takes custody of the vessel from the Contractor on behalf of NSF. Title to the vessel shall pass to NSF upon Delivery Acceptance. The Contractor will cooperate fully in executing any necessary title documentation. Refusal by UAF at any stage to accept the vessel shall revest title in the Contractor in the event that title has otherwise passed to UAF, and justified revocation of UAF’s acceptance of the vessel after Delivery Acceptance shall revest title to the vessel in the Contractor. UAF shall have the right to reject the vessel only where there is a material deficiency that affects the safety, operation, performance or immediate efficient use of the vessel for its intended service which the Contractor refuses to correct. The Contractor must maintain and provide proof of insurance against any loss to or damage or injury caused by the vessel during any period when title revests to the Contractor, which insurance and proof of insurance must be satisfactory to the Contracting Officer, and will be at the Contractor’s expense. UAF must be additional named insured under any such insurance.

Liquidated Damages associated with the failure to meet Delivery Acceptance of the vessel by the contract-specified date will be assessed by UAF as discussed in Subsection 108-1.07.

The Contractor shall immediately take appropriate action to correct and complete any work that is determined to be unsatisfactory or incomplete, and shall be responsible for any delay in the project associated with correcting deficiencies. The cost of such delay shall be at the Contractor’s expense.

Any work or operation of the vessel called for by the COAR in the course of inspection of previously unsatisfactory or incomplete work shall be performed at the Contractor’s expense.

105-1.16 Post Delivery Pier-Side Period

The contractor shall provide pier space for mooring the vessel at the shipyard for up to 60 days after Delivery Acceptance for purposes of UAF outfit, additional crew training, and preparation for the transit voyage to Alaska. The vessel should have access to go to sea and/or return to the pier with notice of no more than 48 hours.

450

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The pier facility must allow use of ship’s cranes and provide the following services: • four (4) shore power connections of 480V, 3 phase, 400 amps each

455

460

465

470

475

• sewage disposal service via a vessel deck connection • 4 telephone lines • potable water service via a vessel deck connection • daily garbage/trash disposal • protected wharfage with suitable water depth for the vessel’s design draft • vehicle access and two reserved vehicle parking spaces • internet services

The Owner, inspectors, surveyors, Owner’s subcontractors and the vessel’s crew shall be

granted right of access to the vessel throughout the duration of this period. Internet services shall consist of one high-speed network line (T1 or better), ported to the vessel via copper, fiber or a high speed point to point wireless link (802.11b/g). Shipyard shall also supply sufficient shoreside support to connect the ship’s network to and through any shipyard networking appliances with adequate security and privacy.

Pier-side services during the post delivery period shall be paid by means of a contract change at the cost/day rate included in the cost proposal for however many days UAF uses the pier, up to a maximum of 60 days. This cost/day rate shall be for use of the pier and all the hotel services listed in this section. If other shipyard services are requested during this period, such as forklifts or a shore-side crane, they will be paid by means of a contract change at the shipyard’s published standard commercial rates in effect at the time.

105-1.17 Final Acceptance and Contract Completion

Following completion of the guarantee/warranty periods required by Subsection 105-1.20 and all provisions stated therein and upon receipt of the executed final estimate, Contractor’s Release, settlement of all claims and proof of payment of both payroll and revenue taxes, the Contracting Officer will issue the letter of Final Acceptance releasing the Contractor from further performance under the contract subject to rights and remedies reserved in Subsection 107-1.19. Final acceptance of the work shall be withheld until the Contractor furnishes all certificates, guarantees, releases, affidavits, and other documentation required by the contract.

480

485 Final payment against the contract, including the Contract Performance Allowance cited in Subsection 109-1.06, will be made by UAF within thirty calendar days of the Contracting Officer’s issuance of a letter of Final Acceptance of the last vessel built under this contract.

105-1.18 Disputes and Claims Resolution

If the Contractor becomes aware of any act or occurrence which may form the basis of a claim by the Contractor for additional compensation or an extension of time for performance, or if any dispute arises regarding a question of fact or interpretation of the contract, the Contractor shall, within seventy-two (72) hours, provide written notice to the COAR. No claim may be processed under this Clause unless the underlying dispute was first promptly presented in writing to the COAR. A claim for additional compensation or an extension of time for performance must be submitted to the COAR within one week of the notice of claim.

490

495

If the Contractor believes additional compensation is warranted, the Contractor shall immediately begin to keep and maintain complete, accurate, and specific daily records concerning

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every detail of the potential claim including actual costs incurred. The Contractor shall give the COAR access to any such record and, when so requested, shall forthwith furnish the COAR copies thereof. Equipment costs shall be based on the Contractor’s internal rates, unless higher than actual cost, for ownership, depreciation, and operating expense and not on published rental rates. If actual costs are lower than internal rates, actual costs will control.

500

505

510

515

520

525

530

535

If an adjustment is disallowed by the COAR, the Contractor shall, within fourteen (14) days after receipt of the contract manager's disallowance of the adjustment, provide written notice to the Contracting Officer and the COAR of the Contractor's intention to file a claim under this Clause. Within twenty one (21) days after receipt of the COAR disallowance the Contractor shall presents its claim as required herein.

As used herein, "claim" means a written demand or assertion by a party to the Contract seeking, as a matter of right, the payment of money, adjustment or interpretation of the Contract terms or other relief arising under or relating to the Contract.

In presenting the claim, the claimant shall specifically include the following:

1. The factual background surrounding the claim including accurate and complete supporting data.

2. The Contract provisions that apply to the claim and under which it is made.

3. The items and quantities, if any, upon which the claim is made.

4. The specific relief requested, including the additional compensation claimed and the basis upon which it is calculated and/or the additional time requested and the basis upon which it is calculated.

5. The specific exceptions to the Contract Manager's decision. The claimant shall certify that the claim is made in good faith, that the supporting data are accurate and complete to the best of its knowledge and belief, and that the relief requested accurately reflects the equitable adjustment for which it believes the University is liable.

6. The scope of the claim or remedy applicable to it may not include costs or attorney's fees associated with the claim or dispute.

Upon receipt of a claim under this Clause, the Contracting Officer shall request all parties to submit copies of pertinent papers and Contract Documents relating to the claim within a certain time. The Contracting Officer in his discretion may require any party to submit additional information, including a summary statement of the factual and legal basis of the claim.

Upon receipt of the relevant documents, the Contracting Officer shall determine:

1. Whether there is reasonable cause to believe that the Contractor has presented a valid claim against the University for which relief may be granted. If the claim is clearly fraudulent or the Contractor makes or uses in support of its claim a misrepresentation, the Contracting Officer shall proceed in accordance with AS 36.30.687 (b) (initiate a specific finding) which may result in the Contractor forfeiting all claims and reimbursing the University for all costs, or

105-13


2. If the undisputed facts clearly support a determination that the Contract Manager's decision was correct, then the Contracting Officer may adopt the Contract Manager's decision and send written notice to the Contractor of the Contracting Officer's decision to adopt and that this constitutes the Contracting Officer's written decision under paragraph j. of this Clause and that it is a final decision unless appealed in accordance with paragraph k.

540

545

550

555

560

565

570

575

In lieu of dismissing the claim, the Contracting Officer may attempt to resolve the claim by informal conference and conciliation with the parties. Upon receipt of a settlement documents signed by the parties, the Contracting Officer shall dismiss the claim.

If the claim cannot be dismissed or resolved informally within 30 calendar days after the Contracting Officer received the relevant documents, then the Contracting Officer shall within 90 calendar days issue a written decision. The Contracting Officer shall review the facts relating to the dispute and obtain, if necessary, assistance from legal, fiscal and other advisors. The Contracting Officer shall mail the decision to the Contractor by certified mail.

If the Contracting Officer does not issue a written decision within 90 calendar days or within such longer period as may be agreed upon by the parties, then the Contractor may proceed as if an adverse decision had been received.

Any party may appeal an adverse decision of a Contracting Officer under this Clause to the Chief Procurement Officer if filed within 14 calendar days after receipt of the Contracting Officer's decision or at the expiration of 90 days in the absence of a decision. A copy of the appeal shall be sent to the Contracting Officer.

A written notice of appeal to the Chief Procurement Officer need not be in any particular form. However, it must 1) evidence a desire to have the Chief Procurement Officer review the Contracting Officer's decision, 2) list specific factual and legal errors to the Contracting Officer's decision, and 3) be signed by the appellant or his authorized representative. General assertions that the Contracting Officer's decision is contrary to law or fact are not sufficient.

Within 15 calendar days after receipt of an appeal, the Chief Procurement Officer may adopt the Contracting Officer's written decision; otherwise, the Chief Procurement Officer shall, as soon as practicable, arrange a hearing in accordance with University of Alaska regulations and AS 36.30. The Chief Procurement Officer shall notify the Contractor of his or her decision to adopt the Contracting Officer's written decision and inform the Contractor that it may appeal this ruling to the Superior Court for the State of Alaska for a trial de novo.

At the conclusion of a hearing and within 30 days thereafter, the hearing officer, if other than the Chief Procurement Officer, shall make a written recommendation to the Chief Procurement Officer including findings of fact and conclusions of law. Upon due deliberation and within 60 days of receipt of the hearing officer's recommendation, the Chief Procurement Officer shall render a decision to affirm, reverse or modify the recommendation, or take other appropriate action. The Chief Procurement Officer's decision shall be set forth in writing and must articulate the basis for the decision. In the event the Chief Procurement Officer finds against the Contractor, he or she shall notify the Contractor that it may appeal to the Superior Court for the State of Alaska in accordance with the Alaska Rules of Appellate Procedure if it does so within 30 days from receipt of the Chief Procurement Officer's adverse decision.

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The Contractor shall proceed diligently with performance of the Contract pending final resolution of any claim or request for relief and shall comply with any decision of the Contract Manager or Contracting Officer pending said final resolution.

580

105-1.19 Contractor and Subcontractor Books and Records

The Contractor, and all subcontractors, shall maintain accurate management and financial records during the course of the project from receipt of the RFP through execution of the Final Acceptance. The Contractor, and all subcontractors, will, with reasonable notice, allow UAF to review and copy any financial or other records kept by the Contractor and all subcontractors relating to the cost or pricing data submitted under Subsection 104-1.02, relevant records for claims submitted under Subsection 105-1.18 and certified payroll. One copy of every document selected by UAF for review will be at the Contractor’s and/or subcontractor’s expense.

585

590

595

600

605

610

615

620

The COAR or the COAR’s designee may, with reasonable notice, audit the applicable books and records of the Contractor relevant to this project or any subcontractor. This right to audit shall exist at all times, including, but not limited to, any period while resolution of a dispute between UAF and Contractor is pending, and as long as any Contractor or subcontractor is required to maintain books and records. Such books and records include, but are not limited to, records of the method used and accounting performed regarding the allocation of indirect and direct costs relating to the cost or pricing data submitted under Subsection 104-1.02, relevant records for claims submitted under Subsection 105-1.18, and certified payroll.

The Owner and its primary funding source may at reasonable times and places, audit the books and records of the Contractor and its subcontractors and may review the Contractor's accounting system, overhead rates, and internal control systems to the extent they relate to costs or cost principles applicable to this. The audit will be scheduled at a mutually agreeable time. The Contractor shall include the substance of this provision in all subcontracts.

In the conduct of audits or in meeting the audit requirements of the primary funding source, the Owner may require and evaluate Contractor compliance with Office of Management and Budget (OMB) Circulars A-128 or A-133 (Audits), A-87 or A-21 or A-122 (Cost Principles), A-102 or A-110 (Uniform Administrative Requirements), and A-88 (Indirect Cost Rates, Audit, and Audit Follow-up). The Contractor shall comply with all applicable audit requirements of the OMB Circulars listed in this provision.

Books and records that relate to performance of the contract or subcontract shall be maintained by the Contractor for a period of three years after the date of final payment under the prime contract and by any subcontractor for a period of three years after date of final payment under the subcontract or purchase order. If, however, any claims remain unresolved the period shall be extended until such time as all claims are settled including any final judicial appeals.

For purposes of this section, “subcontractors” include, but are not limited to, suppliers of any design services, and vendors who provide any products which are customized for use or installation on the vessel, or for which the vendor provides any installation services, whether or not the Contractor considers such a supplier or vendor a subcontractor.

One certified copy of all payroll reports shall be submitted bi-weekly to UAF. In addition, one certified copy of all payroll reports shall be submitted bi-weekly to the State Department of Labor, irrespective of applicable wage rates (State or Federal) in compliance with Alaska Statute 36.05.040, Filing Schedule of Employees, Wages Paid, and Other Information. The copy to UAF

105-15


shall be accompanied by a Statement of compliance certifying: (1) That the wage rates contained therein are not less than the current prevailing rates of pay issued by the Department of Labor in effect ten (10) days before the final date for submission of bids on this Contract or as modified every 24 months, (2) that no deductions have been made other than those permissible under the Copeland Act, (3) that the classifications set forth for each laborer or mechanic conforms with the work he or she performed, and (4) the wage rates contained therein are not less than the current prevailing rates of pay issued by the U.S. Department of Labor. The Contractor shall be responsible for the submission of certified copies of payrolls of all subcontractors.

625

105-1.20 Guarantee/Warranty 630

635

640

645

650

655

660

665

Neither Delivery Acceptance or payment, nor any provision in the contract documents, nor partial or entire use or occupancy of the vessel by UAF shall constitute an acceptance of work not done in accordance with the contract documents or relieve the Contractor of liability for faulty materials or workmanship. The Contractor shall remedy any deficiencies in the work which shall appear within 365 days (nominally 12 months) following the date of Delivery Acceptance of the vessel by UAF, unless extended as provided below. UAF will give notice of observed deficiencies with reasonable promptness to Contractor and surety.

The Contractor shall also guarantee all material and workmanship entering into the vessel and furnished by him, or any subcontractors, suppliers or vendors on his account, against defects in material or workmanship, or latent defects which may develop within 365 days (nominally 12 months) following the date of Delivery Acceptance of the vessel by UAF, unless extended as provided below. Any items of material or workmanship found defective, or found not to operate in accordance with the requirements of the contract, shall be replaced by the Contractor at the Contractor’s expense.

If, in the opinion of UAF, immediate repairs or replacements are essential to keep the vessel on its scheduled operations, these repairs will be made by UAF and back-charged to the Contractor. UAF shall give prompt notice to the Contractor that the immediate corrective action is being taken and provide clear documentation of the deficiency, the action taken and the cost attributable to the deficiency.

Where UAF’s action results in the betterment of material, the Contractor shall not be responsible for the reimbursement for the betterment. If immediate repairs are not necessary, the Contractor will be notified and given ten (10) days to examine and provide a written plan of rectification complete with a detailed time schedule, subject to the approval of the COAR. If the defects are not addressed sufficiently or a detailed rectification plan is not provided by the Contractor and approved by the COAR within this period, UAF will correct the defects and back-charge the correction costs, including labor, to the Contractor.

The guarantee/warranty period shall be extended by the time during which the vessel is not available for unrestricted service in normal operation by reason of any defects for which the Contracting Officer determines the Contractor to be responsible. However, the total guarantee/warranty period, if so extended, shall not exceed 608 days (nominally 20 months).

Between 30 and 60 days prior to expiration of the guarantee/warranty period set forth in this subsection and prior to Final Acceptance and payment on the contract, a Guarantee Survey shall be conducted for the purpose of determining remaining deficiencies to be corrected in compliance with the requirements of the guarantee. The Survey shall be made by UAF, Contractor’s representa-tive(s), and, if required, applicable regulatory agency representatives. The time and place for the

105-16


Guarantee Survey shall be at the convenience of UAF, having due consideration for the vessel schedule and commitments. All fees/expenses required by regulatory agencies and the contractor for their participation shall be borne by the Contractor.

Upon expiration of the guarantee/warranty period, all remaining product guarantees as originally obtained by the Contractor for materials and equipment from vendors and suppliers shall be assigned or reassigned to UAF.

670

675

680

685

690

For determination of underwater deficiencies, UAF, at its expense, may drydock the vessel or carry out an underwater survey, during the warranty period. UAF shall pay for the haul day, re-float day and any days required to accomplish the vessel’s normal drydocking maintenance; provided, however, that if a warranty deficiency is discovered which requires additional drydocking time, the Contractor, in addition to the cost of the correction of the warranty deficiency, shall pay for each additional drydocking lay day. If it becomes necessary to drydock the vessel solely for the correction of a warranty deficiency, the Contractor shall be liable for the entire drydocking charge required for correction of the warranty deficiency as well as the cost of remedying the warranty deficiency.

The liability of the contractor under this section shall not extend beyond the remedy of the deficiency and the repair of any damage to the vessel, its components or equipment resulting from the deficiency. Notwithstanding any other provision of this contract to the contrary, the contractor shall not be liable for any special, incidental or consequential damages arising from a guarantee deficiency. Compliance with the foregoing sentence shall not be considered liability for special, incidental or consequential damages.

This warranty shall be the sole remedy for defective workmanship or material and is expressly in lieu of all other warranties, express or implied, including any warranty of merchantability or that the vessel is fit for any particular purpose or use.

Should any disagreement arise in connection with warranty deficiencies, the Contractor may dispute any action taken by UAF in the manner set forth in, and subject to the terms of General Provisions Section 105-1.18. If no COAR is appointed by UAF, the claim or dispute shall be presented to the UAF ARRV Project Manager.

105-1.21 Workmanship

695

700

705

All workmanship shall be performed to the standards of the applicable requirements of the regulatory bodies, USCG, the Contract, or the commercial shipbuilding industry, whichever imposes the highest standard. All aspects of work, such as that, for example, relating to structure, machinery, equipment, electrical, piping, insulation, joiner, furnishings and outfit, shall be sufficient to ensure that the requisite integrity and strength are obtained, exposed surfaces are smooth, proper fit and alignment are accomplished, and stress concentrations are minimized.

Defects appearing at any stage of construction through delivery of the vessel and the subsequent warranty period shall be cause for rejection of the item or work in question even though the item or work had been previously approved as satisfactory.

There shall be no sharp edges or projections in the work which constitute a hazard to personnel, crew or contractors. Structural sections such as plates, angle, tubing or pipe and fasteners in public areas, under seating, tables, benches, fixture bases and other amenities shall be ground

105-17


smooth, covered or otherwise treated to prevent snagging, cutting, tearing, or other injury to persons or property.

See the various sections of the Contract Specifications for additional requirements.

105-1.22 Start-up Conference 710

715

720

725

As soon as is practicable, the Contractor shall schedule a Start-up conference with UAF. The conference shall be scheduled not sooner than 10 days after or any later than 21 days after the date of the NTP. At least 3 days prior to the conference, the Contractor shall submit the following to the COAR:

A. Mobilization Plan – see 109-1.06.

B. Shipyard Safety and Access – and preliminary HSE discussions topics see 107-1.06

C. Scheduling issues to be discussed, including procurement of materials and equipment, ordering of articles of special manufacture; fabrication and installation dates for piping systems, heating, ventilation and air conditioning systems, electrical installations, foundations, equipment installations, tests and trials, maintenance items, and other items of scheduled work; and proposed shipment dates for materials. Refer to 110, 109 and 105.

D. Design Verification and Transfer Plan and draft review schedule – refer to specification section 043.

E. A letter designating the Contractor’s project manager/superintendent, defining that person’s responsibility and authority, and providing a specimen of his signature.

F. A letter designating the EEO officer and that person’s responsibilities and authority.

105-1.23 Management Reviews

The Contractor shall hold and present Management Reviews to UAF and the NSF and other persons involved in project oversight. The reviews shall, at a minimum, address the following topics:

730

735

740

745

A. Status of the design transfer, detailed design and outstanding design related issues. Actions taken to resolve issues and schedules for same shall be included. UAF-responsible actions shall also be included that affect the Contractor.

B. Material status, certification, delivery schedule and other outstanding issues. Actions taken to resolve issues and schedules for same shall be included. UAF-responsible actions shall also be included that affect the Contractor.

C. Project Schedule, issues and status. Actions taken to resolve any issues shall be addressed. UAF-responsible actions that affect the Contractor shall be included.

D. Status of testing, including status of testing program, late test(s), test(s) complete, test(s) in process and upcoming test(s).

E. Class approval and certification; status and outstanding issues; actions underway to resolve any outstanding issue(s).

F. Status of HSE.

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G. Status of the Shipyard Quality Assurance process, including deficiencies found and status of outstanding deficiencies.

H. Schedule of Values, Schedule of Deliverables, and Payment (coordinated with Project Schedule).

750

755

760

I. Change order status and any outstanding contractual issues.

J. Upcoming Events (prior to next Management Review).

The Contractor shall address any UAF actions that are requested or required to resolve any issue and/or support the Contractor's efforts.

The Contractor shall prepare an agenda and submit the agenda to the UAF for review, input and comment. The UAF may comment and provide input for the agenda. UAF input will be provided within one week of receipt of the proposed agenda from the Contractor. The UAF may also request additional topics for the Management Review and the Contractor shall address those topics as part of the Management Review. Minutes of the Management Review meetings shall be prepared by the shipyard and signed by the UAF and the Contractor.

The Contractor shall convene such Management Reviews every three months. The first such Management Review meeting shall be convened within three months of the Start-Up Conference.

105-1.24 Progress Meetings

The Contractor shall schedule and conduct with UAF weekly progress meetings, starting one week after the Start-Up Conference. The Contractor shall prepare an agenda for each progress meeting, complete with current progress summaries. A copy of the agenda shall be provided to UAF not less than 24 hours prior to each scheduled meeting date.

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During these progress meetings, the Contractor shall be prepared to discuss the status of the work to date, deliverable documents, current and potential problem areas that could affect the schedule and cost, and activities including inspections scheduled for the following week.

The Contractor shall record the minutes of the progress meetings, provide copies to UAF and maintain a file of minutes. The COAR will sign acknowledging the accuracy of the minutes and may, at his discretion, provide comments or additional information to the Contractor to be appended to the minutes to resolve questions of accuracy.

105-1.25 Photographs of Progress and Major Events

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The Contractor shall submit a set of progress digital photographs illustrating the progress of work every third month (preferably just prior to Management Reviews). Photographs shall be taken in such numbers and at such angles so as to adequately depict the progress to date.

Photographs shall also be provided of major events, including ceremonial keel laying, module assembly, launch, trials, and delivery acceptance.

Each digital photograph shall be accurately dated in a camera which electronically and auto-matically dates the photograph. Each photograph shall be adequately titled to identify the location and item(s) of interest. A list of tiles and file names must be provided with all photos. All photographs shall also be submitted as jpg formatted digital pictures ranging in file size from at least 300kb to no more than 1mb.

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785

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Digital photographs of the interior of the finished vessel shall be provided. A minimum of four different digital photos of each space shall be provided (except for small lockers and similar spaces where only one is required).

Additionally, photographs of the finished vessel, taken with the vessel underway, shall be provided. The photographs shall include at least the following views:

A. Broadside (port and starboard)

B. Bow (45 degrees off centerline)

C. Stern (135 degrees off centerline)

D. Head on

E. Directly astern

F. Overhead

Eight (8) identical CDs shall be provided with each set of photos (each three months plus major events).

105-1.26 Ceremonies

Ceremony expenses are not covered by this contract. However, key events in the Project Schedule (including start of fabrication, launch and delivery acceptance) will be attended by persons that will not normally attend management reviews or progress meetings. Level of attendance at key events may be up to 100 persons for up to ½ day.

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SECTION 106

CONTROL OF MATERIAL

106-1.01 Material Specification and Quality Requirements

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The materials used on the work shall meet all requirements of the contract.

Materials to be supplied shall be identified in the Contractor-developed technical specifications and/or on drawing schedules of material and/or on drawing equipment lists. Detailed purchase technical specifications shall be provided for particular items of equipment. Materials shall be described to the extent required for ordering from suppliers, including brand name, model, type, size and similar information as applicable to the item.

Purchase order technical specifications and drawings shall not include “or equal” type citations unless approved by UAF per Subsection 106-1.08. Where necessary to provide flexibility and competition in the purchasing process, with UAF approval, alternative manufacturers may be included in the specifications and drawings.

No materials shall be ordered until after the appropriate Notice to Proceed has been authorized by the UAF in accordance with Subsection 108-1.02. Any materials ordered prior to such notice to proceed are at the Contractor’s sole risk.

All materials incorporated in the work covered by this contract are to be new, of current production, of the specified or most suitable grade of their respective kinds for the purpose, and except where otherwise specifically provided for in the contract for particular items, currently supported by spare parts in the United States of America and as required by the Contract. Where a “marine quality” grade is available for a particular material item, that grade shall be provided.

All materials shall be free from imperfections of manufacture and from defects which adversely affect appearance or serviceability.

Materials which may be hazardous to human health or the environment shall not be used under this contract. Special attention shall be paid to ensure that paints and coatings containing lead, PCB’s, and other regulated toxic substances, and asbestos-containing products, are not used.

Structural plates, shapes, bars, castings, forgings and all other materials used throughout the vessel which are subject to regulatory approval shall meet the requirements of the ABS and other regulatory bodies.

106-1.02 Buy American

This contract shall comply with the requirements of the American Recovery and Reinvestment Act of 2009. In general, steel and manufactured goods used in this project shall be produced in the United States, unless the Director of NSF determines that application of this requirement would be inconsistent with the public interest; that steel and the relevant manufactured goods are not produced in the United States in sufficient and reasonably available quantities or satisfactory quality; or, that application of this requirement will increase the cost of the overall project by more than 25%.

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106-1.03 Samples

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Samples of materials shall be submitted for approval when so directed by the COAR or indicated in the contract documents. The COAR may order such sampling at his sole discretion. Any work in which untested materials are used after such direction from the COAR, and which the COAR has not approved in writing, is subject to removal at the COAR’s direction at the Contractor’s expense.

Material samples may, at the option of the COAR or regulatory bodies, be subjected to laboratory testing beyond that normally performed by the manufacturer, to verify compliance with quality requirements. The results of the tests may be the basis for acceptance of quality of manufactured lots. Except where such testing is expressly required by the contract, the costs of laboratory testing that is requested by the COAR and beyond that normally performed by the manufacturer will be paid for by the UAF as extra work at the laboratory facilities’ invoiced price and without Contractor mark-up.

106-1.04 Tests and Inspections at Place of Manufacture, Production or Shipment

In addition to material tests and inspections that occur at the Contractor’s facilities (including requirements of Subsection 105-1.10 and specification section 092), certain items of equipment and other materials shall be inspected and/or tested at the source (place of manufacture, production or shipment) as required by the regulatory bodies and the contract, and as otherwise directed by the COAR. The COAR may order such inspections or tests as is reasonably necessary. Certain of these inspections and tests may be performed by, or require witness of, the UAF and/or regulatory body at the discretion of the COAR and regulatory bodies.

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Where inspections and tests at the place of manufacture, production or shipment are made, the following conditions shall be met. The conditions in subparagraphs “A” and “B” below shall be requirements of any contract or agreement between the Contractor and the producer, manufacturer, fabricator or supplier:

A. The UAF and regulatory body representatives shall have the cooperation and assistance of the Contractor and the producer, manufacturer, fabricator or supplier with whom the Contractor has contracted for the materials.

B. The UAF and regulatory body representatives shall have full entry at all times to such parts of the plant as may concern the production, manufacture, assembly, cleaning, painting and packaging of the materials being furnished.

C. In the case of plant facilities located within the continental United States, the COAR shall be advised of the production and/or fabrication schedule a minimum of 5 days prior to beginning work on any item requiring test or inspection. In the case of plant facilities located outside the continental United States, the COAR shall be advised of the production and/or fabrication schedule a minimum of 21 days prior to beginning work on any item requiring test or inspection. Such notifications shall include the recommended dates that the UAF representative(s) be on site to witness or perform tests and inspections.

D. Planning and coordinating conduct and witness of tests and inspections at sources of supply by regulatory body representatives shall be the responsibility of the Contractor.

All materials which are fabricated or installed without having received the required inspections and tests at the source of supply, or the required witness thereof by UAF and regulatory

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body representatives, will be considered unacceptable and may, at the COAR’s discretion, be subject to removal and correction at the Contractor’s expense.

The UAF reserves the right to retest materials which have been tested at the source of supply, after the same have been delivered and prior to incorporation into the work where, in the COAR’s opinion, suspected damage or other justification warrants such retest. The UAF reserves the right to reject all materials which, when retested, do not meet the requirements of the contract.

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106-1.05 Material Certification

Where materials are required by the contract to conform to certain standards and requirements, such as those of the USCG, ABS, ASTM, AISI, ANSI, FCC, HSC Code, USPHS, or UL, these requirements shall be clearly indicated on the Contractor’s purchase order.

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All items requiring ABS approval shall have an approval affidavit furnished to the COAR within 2 days of arrival at the shipyard.

All items requiring U.S. Coast Guard approval shall be listed in COMDTINST M16714.3 (old CG-190), “Equipment Lists,” or a USCG approval letter or certificate shall be furnished to the COAR.

A copy of the invoices for all supplied material to be incorporated into the work shall be furnished to the UAF upon receipt of the materials by the Contractor. Where required by the contract to conform to certain standards and requirements, such as those of the USCG, ASTM, AISI, ANSI, ABS, FCC, HSC Code, USPHS, or UL, affirmation by the suppliers that the supplied materials conform to these requirements shall be clearly indicated on the invoices. Where applicable, invoices are to indicate the lot number or other means of tracking and verifying that materials purchased are the same as materials tested and/or certified.

Copies of materials certifications, test reports, metal analyses, oil analyses, welding in-spections, non-destructive test data, welding procedures, and test schedules shall be provided to the COAR.

The COAR may permit the use, prior to or without sampling and testing, of certain materials or assemblies when accompanied by manufacturer’s certificate of compliance stating that such materials or assemblies fully comply with the requirements of the contract. The certificate shall be signed by the manufacturer. Each lot of such materials or assemblies delivered to the work must be accompanied by a certificate of compliance in which the lot is clearly identified.

The acceptability of usage of certificates of compliance shall be solely at the discretion of the COAR and will be considered on a case-by-case basis. The COAR may refuse permission for use of materials or assemblies on the basis of certificates of compliance.

Materials or assemblies used on the basis of certificates of compliance may be sampled and tested at any time and if found not to be in conformity with contract requirements will be subject to rejection whether in place or not.

Provision of invoices, certificates of compliance or other documentation contending that furnished materials comply with standards and other requirements applicable to the materials shall not relieve the Contractor of his responsibility to perform inspections, tests, research or other validation work necessary to ensure that the materials do in fact comply with the requirements.

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106-1.06 Protection and Storage of Material

The Contractor shall be responsible for the protection of all material intended for use and installed on board the vessel until time of acceptance of delivery of the vessel by the UAF.

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Due consideration shall be given to the nature of the item during handling and storage. Materials shall be stored out of the weather in a manner which assures the preservation of material quality and fitness for the work, except structural steel and products that are not susceptible to loss of quality and fitness for the work when exposed to the weather. Material and equipment required for electrical, electronic, communications, control, and alarm functions shall be kept in a heated and air-conditioned space, and kept between 60 and 80 degrees F. at a relative humidity of less than 50%.

Cable ends shall be sealed when not actively being used for installation.

All finished surfaces shall be protected by appropriate means. Surfaces damaged or marred shall be replaced or repaired by the Contractor to the satisfaction of the UAF at the Contractor’s expense.

The UAF may reject any material improperly stored or handled.

The COAR may require that stored materials, even though approved before storage, again be inspected prior to their use in the work. Stored materials shall be located so as to facilitate their prompt inspection.

106-1.07 Owner Furnished Material

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Certain equipment listed and described in Appendix A and the contract specifications and drawings is Owner-Furnished Equipment (OFE) to be provided to the Contractor by UAF. The Contractor shall care for the OFE at the more stringent of either the manufacturer’s instructions or as if it were the Contractor’s material. OFE shall be stowed in a lockable, properly environment-and-temperature-controlled, and dry warehouse. The Contractor shall be responsible for proper installation of OFE in accordance with all of the manufacturer’s instructions, for all testing required after the equipment arrives at the shipyard, and for assuring it is in good working order upon vessel acceptance.

106-1.08 “Or Equal” Material

Where a specific brand name and/or model is required by the contract specifications and drawings, followed by the term “or equal,” the indicated brand name shall be provided unless UAF approval of an “or equal” product is obtained. To request UAF approval of an “or equal” product, the Contractor must submit a written request to the UAF and shall be obligated to include the following in the request:

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155

A. All relevant data establishing equality or superiority of the proposed product as it relates to:

1. Performance, reliability, maintainability, durability, size, and weight characteristics;

2. Requisite regulatory body approvals;

3. Availability of parts and service;

4. Service history/records of the proposed item;

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B. Identification of any material deviations of the proposed “or equal” product from the contract specifications and drawings otherwise addressed by item “A” above. 160

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C. The warranty of the proposed item;

D. Drawings and sketches of the proposed item;

E. Names, addresses and telephone numbers of firms who have the item in similar service;

F. An analysis of the effect on vessel weight, center-of-gravity and stability, if significant;

G. A statement that no increase in the contract price or contract schedule delays will result from use of the “or equal” item. Written quotes from the “specified” and proposed “or equal” vendors shall be provided; and,

H. Other salient technical data germane to a comparative analysis.

The Contractor shall make arrangements for the UAF to view the proposed “or equal” item in use or deliver a sample to the UAF’s office.

The COAR will provide a written determination regarding the request for use of the “or equal” item. The COAR’s determination shall be considered final. For use of an “or equal” item to be considered approved, it must have the unambiguous written approval of the COAR. The COAR’s approval of an “or equal” item allows the Contractor the option of procuring the “or equal” item. In each case where the request is disapproved by the COAR, the Contractor shall provide the specified material at no extra cost to the UAF.

Use of “or equal” items and material substitution will not be considered without a written request for same or be allowed without the UAF’s written approval.

It shall be the Contractor’s responsibility to design, integrate, test and incorporate the “or equal” item in the work. All costs to the Contractor as a result of the use of the “or equal” item, over and above the cost of the originally specified brand name item, shall be at the Contractor’s expense. The Contractor shall be entitled to no extension of time associated with the use of an “or equal” product.

In cases where material items are explicitly called out by brand name in the contract specifications and drawings without the use of the “or equal” phrase; the items so specified must be provided.

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SECTION 107

LEGAL RELATIONS AND RESPONSIBILITY TO PUBLIC

107-1.01 Laws to be Observed

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The Contractor shall keep fully informed of all Federal, State and local laws, ordinances, codes and regulations, and all orders and decrees of bodies or tribunals having any jurisdiction or authority, which in any manner affect those engaged or employed on the work, or which in any way affect the conduct or content of the work. The Contractor shall at all times observe and comply with all such laws, ordinances, regulations, orders and decrees; and shall protect and indemnify UAF and its representatives against any claim or liability arising from or based on the violation of any such law, ordinance, regulation, order or decree, whether by the Contractor or his employee.

In the event that the contract confers on UAF a right or entitlement that is broader than that provided by any statute incorporated into the contract addressing the same subject, the broader right or entitlement conferred by contract shall control over the incorporated statute.

This Contract is made and entered into under and subject to all provisions of the Constitution and laws of the State of Alaska and the United States of America governing, controlling, or affecting UAF, or the operations or powers of UAF. The Contractor shall perform the Contractor's agreements and undertakings entered into pursuant to the terms of this Contract in accordance with and subject to all the provisions of the Constitution and laws of the State of Alaska and the United States of America, it being specifically understood that all are, by this reference, hereby made a part of this Contract.

107-1.02 Permits, Licenses and Taxes

The Contractor shall procure all permits and licenses, pay all charges, fees, and taxes, and give all notices necessary and incidental to the due and lawful prosecution of the work. As a condi-tion of performance of this contract, the Contractor shall pay all federal, state, and local taxes incurred by the Contractor in the performance of this contract. Proof of payment of these taxes is a condition precedent to final payment by UAF under this contract.

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If any work under the Contract is performed in such a manner or place as to cause imposition of any lien, sales tax or duty assessment, foreign or domestic, against the vessel or UAF, the Contractor will be responsible for payment of same at the Contractor’s expense.

Notwithstanding any other provision of the Contract to the contrary, the Contractor shall apply for, and obtain, a business license and a Contractor’s license, issued by the State of Alaska, pursuant to AS 08.18.011 and AS 43.70.020, within 10 (ten) days of receipt of Notice of Intent of Award the Contract.

107-1.03 Patented Devices, Materials and Processes 35

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If the Contractor employs any design, device, material, or process covered by letters of patent, trademark, or copyright, he shall provide for such use by suitable legal agreement with the patentee or owner. The Contractor and the surety shall indemnify and hold harmless UAF, any affected third party, or political subdivision from any and all claims for infringement by reason of the use of any such patented design, device, material or process, or any trademark or copyright, and

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shall indemnify UAF for any costs, expenses, and damages which it may be obliged to pay by reason of any infringement, at any time during the prosecution or after the completion of the work.

Patent Indemnity. Except as otherwise provided, the Contractor shall indemnify and hold harmless UAF, , affected third parties, its Board of Regents, and its officers and employees from liability of any nature or kind, including cost and expenses for or on account of infringement upon any United States patent (except a patent issued upon an application that is now or may hereafter be withheld from issue pursuant to a Secrecy Order under 35 U.S.C.181) arising out of performing this contract, or out of the use or disposal by or for the account of UAF of supplies furnished or work performed under this contract.

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Authorization and Consent. UAF authorizes and consents to all use and manufacture, in performing this contract or any subcontract at any tier, of any invention described in and covered by a United States patent (1) embodied in the structure or composition of any article the delivery of which is accepted by UAF under this contract or (2) used in machinery, tools, or methods whose use necessarily results from compliance by the Contractor or a subcontractor with (i) specifications or written provisions forming a part of this contract or (ii) specific written instructions given by the Contracting Officer directing the manner of performance. The entire liability to UAF for infringement of a patent of the United States shall be determined solely by the provision of the indemnity subsection of this provision, and UAF assumes liability for all other infringement to the extent of the authorization and consent herein granted.

The Contractor shall report to the Contracting Officer, promptly and in reasonable written detail, each notice or claim of patent or copyright infringement based on the performance of this contract of which the Contractor has knowledge.

In the event of any claim or suit against UAF on account of any alleged patent or copyright infringement arising out of the performance of this contract or out of the use of any supplies furnished or work or services performed under this contract, the Contractor shall furnish to UAF, when requested by the Contracting Officer, all evidence and information in possession of the Contractor pertaining to such suit or claim. Such evidence and information shall be furnished at the expense of UAF except where the Contractor has agreed to indemnify UAF.

107-1.04 Equal Employment Opportunity Responsibilities

General. Equal employment opportunity requirements not to discriminate and to take affirmative action to assure equal employment opportunity as required by Executive Order 11246 and Executive Order 11375 are set forth in these General Provisions which are imposed pursuant to Section 140 of Title 23, U.S.C., as established by Section 22 of the Federal-Aid Highway Act of 1968. The requirements set forth in these General Provisions shall constitute the specific affirmative action requirements for project activities under this contract and supplement the equal employment opportunity requirements set forth in the Contract.

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The Contractor will work with State agencies and the Federal Government in carrying out equal employment opportunity obligations and in their review of his/her activities under the contract. The Contractor and all his/her subcontractors holding subcontracts not including material suppliers, of $10,000 or more, will comply with the following minimum specific requirement activities of equal employment. The Contractor will include these requirements in every subcontract of $10,000 or more with such modification of language as is necessary to make them binding on the subcontractor.

Equal Employment Opportunity Policy. The Contractor will accept as his operating policy the following statement which is designed to further the provision of equal employment

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opportunity to all persons without regard to their race, color, religion, sex, or national origin, and to promote the full realization of equal employment opportunity through a positive continuing program:

It is the policy of this Company to assure that applicants are employed, and that employees are treated during employment, without regard to their race, religion, sex, color, or national origin. Such action shall include: employment upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship, pre-apprenticeship, and/or on-the-job training.

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Equal Employment Opportunity Officer. The Contractor will designate and make known to UAF agency contracting officers an Equal Employment Opportunity Officer (hereinafter referred to as EEO Officer) who will have the responsibility for and must be capable of effectively adminis-tering and promoting an active Contractor program of equal employment opportunity and who must be assigned adequate authority and responsibility to do so.

Dissemination of Policy. All members of the Contractor’s staff who are authorized to hire, supervise, promote, and discharge employees, or who recommend such action, or who are substantially involved in such action, will be made fully cognizant of, and will implement, the Contractor’s equal employment opportunity policy and contractual responsibilities to provide equal employment opportunity in each grade and classification of employment. To ensure that the above agreement will be met, the following actions will be taken as a minimum: 1. Periodic meetings of supervisory and personnel office employees will be conducted before the

start of work and then not less often than once each six months, at which time the Contractor’s equal employment opportunity policy and its implementation will be reviewed and explained. The meetings will be conducted by the EEO Officer or other knowledgeable company official.

2. All new supervisory or personnel office employees will be given a thorough indoctrination by the EEO Officer or other knowledgeable company official covering all major aspects of the Contractor’s equal employment opportunity obligations within thirty days following their reporting for duty with the Contractor.

3. All personnel who are engaged in direct recruitment for the project will be instructed by the EEO Officer or appropriate company official in the Contractor’s procedures for locating and hiring minority group employees.

4. In order to make the Contractor’s equal employment opportunity policy known to all employees, prospective employees and potential sources of employees, i.e., schools, employment agencies, labor unions (where appropriate), college placement officers, etc., the Contractor will take the following actions:

a. Notices and posters setting forth the Contractor’s equal employment opportunity policy will be placed in areas readily accessible to employees, applicants for employment and potential employees; and

b. The Contractor’s equal employment opportunity policy and the procedures to implement such policy will be brought to the attention of employees by means of meetings, em-ployee handbooks, or other appropriate means.

Recruitment. When advertising for employees, the Contractor will include in all advertise-ments for employees the notation: “An Equal Opportunity Employer.” All such advertisements will be published in newspapers or other publications having a large circulation among minority groups in the area from which the project work force would normally be derived.

The Contractor will, unless precluded by a valid bargaining agreement, conduct systematic and direct recruitment through public and private employee referral sources likely to yield qualified minority group applicants, including, but not limited to, state employment agencies, schools, colleges and minority group organizations. To meet this requirement, the Contractor will, through his EEO Officer, identify sources of potential minority group employees, and establish with such identified sources procedures whereby minority group applicants may be referred to the Contractor for employment consideration.

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In the event the Contractor has a valid bargaining agreement providing for exclusive hiring hall referrals, he is expected to observe the provisions of that agreement to the extent that the system permits the Contractor’s compliance with equal employment opportunity contract provisions. (The U.S. Department of Labor has held that where implementation of such agreements have the effect of discriminating against minorities or women, or obligates the Contractor to do the same, such implementation violates Executive Order 11246, as amended.)

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The Contractor will encourage his present employees to refer minority group applicants for employment by posting appropriate notice or bulletins in areas accessible to all such employees. In addition, information and procedures with regard to referring minority group applicants will be discussed with employees.

Personnel Actions. Wages, working conditions, and employee benefits shall be established and administered, and personnel actions of every type, including hiring, upgrading, promotion, transfer, demotion, layoff and termination, shall be taken without regard to race, color, religion, sex, or national origin. The following procedures shall be followed:

The Contractor will conduct periodic inspections of project sites to insure that working conditions and employee facilities do not indicate discriminatory treatment of project site personnel. The Contractor will periodically evaluate the spread of wages paid within each classification to determine any evidence of discriminatory wage practices. The Contractor will periodically review selected personnel actions in depth to determine whether there is evidence of discrimination. Where evidence is found, the Contractor will promptly take corrective action. If the review indicates the discrimination may extend actions reviewed, such corrective action shall include all affected persons. The Contractor will promptly investigate all complaints of alleged discrimination made to the Contractor in connection with his obligations under this contract, will attempt to resolve such complaints, and will take appropriate corrective action within a reasonable time. If the investi-gation indicates that the discrimination may affect persons other than the complainant, such corrective action shall include such other persons. Upon completion of each investigation, the Contractor will inform every complainant of all of his avenues of appeal.

Training and Promotion. The Contractor will assist in locating, qualifying, and increasing the skills of minority group and women employees, and applicants for employment. Consistent with the Contractor’s work force requirements and as permissible under Federal and State regulations, the Contractor shall make full use of training programs, i.e., apprenticeship and on-the-job training programs for the geographical area of contract performance. Where feasible, 25 percent of apprentices or trainees in each occupation shall be in their first year of apprenticeship or training. In the event the Training Special Provision is provided under this contract, this subparagraph will be superseded as indicated. The Contractor will advise employees and applicants for employment of available training programs and entrance requirements for each. The Contractor will periodically review the training and promotion potential of minority group and women employees and will encourage eligible employees to apply for such training and promotion.

Unions. If the Contractor relies in whole or in part upon unions as a source of employees, the Contractor will use his/her best efforts to obtain the cooperation of such unions to increase opportunities for minority groups and women within the unions, and to effect referrals by such unions of minority and female employees. Actions by the Contractor either directly or through a Contractor’s association acting as agent will include the procedures set forth below:

The Contractor will use best efforts to develop, in cooperation with the unions, joint training programs aimed toward qualifying more minority group members and women for membership in the unions and increasing the skills of minority group employees and women so that they may qualify for higher paying employment.

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The Contractor will use best efforts to incorporate an equal employment opportunity clause into each union agreement to the end that such union will be contractually bound to refer applicants without regard to their race, color, religion, sex, or national origin. The Contractor is to obtain information as to the referral practices and policies of the labor union except that to the extent such information is within the exclusive possession of the labor union and such labor union refuses to furnish such information to the Contractor, the Contractor shall so certify to UAF department and shall set forth what efforts have been made to obtain such information. In the event the union is unable to provide the Contractor with a reasonable flow of minority and women referrals within the time limit set forth in the collective bargaining agreement, the Contractor will, through independent recruitment efforts, fill the employment vacancies without regard to race, color, religion, sex, or national origin, making full efforts to obtain qualified and/or qualifiable minority group persons and women. (The U.S. Department of Labor has held that it shall be no excuse that the union with which the Contractor has a collective bargaining agreement providing for exclusive referral failed to refer minority employees.) In the event the union referral practice prevents the Contractor from meeting the obligations pursuant to Executive Order 11246, as amended, and these special provisions, such Contractor shall immediately notify UAF. Subcontracting The Contractor will use his best efforts to solicit bids from and to utilize minority group subcontractors or subcontractors with meaningful minority group and female representation among their employees. The Contractor will use his best efforts to ensure subcontractor compliance with their equal employment opportunity obligations. Records and Reports

The Contractor will keep such records as are necessary to determine compliance with the Contractor’s equal employment opportunity obligations. The records kept by the Contractor will be designed to indicate: 1. the number of minority and non-minority group members and women employed in each work

classification on the project, 2. the progress and efforts being made in cooperation with unions to increase employment

opportunities for minorities and women (applicable only to contractors who rely in whole or in part on unions as a source of their work force),

3. the progress and efforts being made in locating, hiring, training, qualifying, and upgrading minority and female employees, and

4. the progress and efforts being made in securing the services of minority group subcontractors or subcontractors with meaningful minority and female representation among their employees.

All such records must be retained for a period of three years following completion of the contract work and shall be available at reasonable times and places for inspection by authorized representatives of UAF.

The Contractors will submit an annual report to UAF each July for the duration of the project, indicating the number of minority, women, and non-minority group employees currently engaged in each work classification required by the contract work. This information is to be reported on form PR 1391. If on-the-job training is being required by “Training Special Provision,” the Contractor will be required to furnish state of Alaska Form 25A312. (04/08/83)

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230 All work which is performed in the State of Alaska shall require an Alaska Business license, participation in Alaska Workman’s Compensation Program, and compliance with AS 08.18, AS 36.10.005, AS 36.05.070 and applicable Federal, State and local regulations.

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107-1.05 Federal Aid Provisions

The United States government is paying a portion of the cost of this project; therefore the Federal laws, rules, and regulations made pursuant to such laws must be observed by the Contractor, and the work shall be subject to the inspection of the appropriate Federal agency. Such inspection shall in no sense make the Federal Government a party to this contract and will in no way interfere to the rights of either party hereunder.

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No Obligation by the Federal Government to Third Parties

1. The Contractor acknowledges and agrees that, notwithstanding any concurrence by the Federal Government in, or approval of, the solicitation or award of the underlying contract, absent the express written consent by the Federal Government, the Federal Government is not a party to this contract and shall not be subject to any obligations or liabilities to UAF, Contractor, or any other party (whether or not a party to that contract) pertaining to any matter resulting from the underlying contract.

2. The Contractor agrees to include the above clause in each subcontract financed in whole or in part with Federal assistance provided by the NSF. It is further agreed that the clause shall not be modified, except to identify the subcontractor who will be subject to its provisions.

Program Fraud and False or Fraudulent Statements or Related Acts

The Contractor acknowledges that the provisions of the Program Fraud Civil Remedies Act of 1986, as amended, 31 USC § § 3801, et seq. and U.S. DOT regulations, “Program Fraud Civil Remedies,” 49 CFR Part 31, apply to its actions pertaining to this project. Upon execution of the underlying contract, the Contractor certifies or affirms the truthfulness and accuracy of any statement it has made, it makes, it may make, or it causes to be made, pertaining to the underlying contract or the NSF assisted project for which this contract work is being performed. In addition to other penalties that may be applicable, the Contractor further acknowledges that if it makes, or causes to be made, a false, fictitious, or fraudulent claim, statement, submission, or certification, the Federal Government reserves the right to impose the penalties of the Program Fraud Civil Remedies Act of 1986 on the Contractor to the extent the Federal Government deems appropriate.

The Contractor also acknowledges that if it makes, or causes to be made, a false, fictitious, or fraudulent claim, statement, submission, or certification to the Federal Government under a contract connected with a project that is financed in whole or in part with Federal assistance originally awarded by the NSF under the authority of 49 USC § 5307, the Federal Government reserves the right to impose the penalties of 18 USC § 1001 and 49 USC § 5307(n)(1) on the Contractor, to the extent the Federal Government deems appropriate.

The Contractor agrees to include the above two clauses in each subcontract. It is further agreed that the clauses shall not be modified, except to identify the subcontractor who will be subject to the provisions.

Federal Privacy Act Requirements. The following requirements apply to the Contractor and its employees that administer any system of records on behalf of the Federal Government under any contract:

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1. The Contractor agrees to comply with, and assures the compliance of its employees with, the information restrictions and other applicable requirements of the Privacy Act of 1974, 5 USC § 552a. Among other things, the Contractor agrees to obtain the express consent of the Federal Government before the Contractor or its employees operate a system of records on behalf of the Federal Government. The Contractor understands that the requirements of the Privacy Act, including the civil and criminal penalties for violation of that act, apply to those individuals involved, and that failure to comply with the terms of the Privacy Act may result in termination of the underlying contract.

275

280

2. The Contractor also agrees to include these requirements in each subcontract.

107-1.06 Health, Safety and Environmental (HSE) Provisions

The Contractor shall provide and maintain in a neat and sanitary condition all areas of work and space occupied by his employees and State employees, and accommodations used by his employees and State employees. Conditions and accommodations shall comply with the requirements of the state and local Boards of Health, or other bodies or tribunals having jurisdiction.

285

290

295

300

305

310

315

Attention is directed to Federal, State and local laws, rules and regulations concerning construction safety and health standards. The Contractor shall not require any workers to work in surroundings or under conditions that are unsanitary, hazardous or dangerous to health or safety.

The Contractor shall provide and be solely responsible for all fire fighting protection on board the vessel as may be required by various regulatory agencies, including the local fire department and Port Authority, prior to Delivery Acceptance of the vessel by UAF. All fire watch personnel and equipment shall be provided by the Contractor. Vessel fire fighting equipment shall not be used as fire watch equipment. The Contractor shall conduct one shipboard fire drill per year, which shall be coordinated and organized with port, city and/or county fire departments. A critique of each drill, including lessons learned, shall be provided to the COAR no later than 10 days after each drill is completed.

The Contractor shall work with UAF to develop an ARRV Project HSE Plan. The plan shall incorporate all standard shipyard requirements as expressed in the contractor response to the ARRV Request for Proposal (RFP) and the requirements contained in the contract. The initial shipyard submission of the HSE Plan shall be prior to 30 days after NTP. All subsequent revisions and updates shall be approved by the contractor and UAF. If any conditions within the contractor facilities change such that the HSE Plan is impacted, the contractor shall notify UAF and issues changes to the HSE Plan

The HSE Plan shall cover all known potential safety, health and environmental issues and meet the expectations of owner, shipyard and all applicable regulatory agencies. The plan shall include, but not be limited to:

1. Fire prevention and fire plans 2. Shipyard security and project access 3. Personal protection 4. Permits to work, as implemented by the shipyard 5. Machinery operation, space restrictions 6. Hazardous materials 7. Confined space entry procedures 8. Environmental incident prevention, reporting and response.

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The HSE Plan must include identification of responsible parties, contacts, and reporting procedures. The Contractor shall designate a project safety manager. All persons working on the project will comply with the HSE requirements as agreed to in the project document. The COAR will have leadership for HSE on behalf of UAF, and the COAR will designate an everyday primary point of contact with the shipyard safety manager. UAF shall have access and be informed of all contractor HSE related meetings, reports, HSE event outcomes.

320

As required by the HSE Plan, safety training and orientation of visitors and new UAF project team members shall be accomplished by the contractor.

107-1.07 Assignment 325

Rights under this contract are not transferable, or otherwise assignable without the express prior written consent of the Contracting Officer. The Contractor shall include provisions appropriate to effectuate the purpose of this provision in all subcontracts under this contract.

107-1.08 Not Used

330 107-1.09 Restrictions on Contractors Sales to the Government

a) Except as provided in (b) below, neither this contract nor any action or inaction of the Owner shall be construed as restricting sales of any product or service by the Contractor directly to the federal government.

335 b) The prohibition in (a) above does not preclude either the Owner or the Contractor from asserting rights that are otherwise authorized by law or regulation.

c) The Contractor agrees to incorporate the substance of this provision, including this paragraph (c), in all subcontracts under this contract.

107-1.10 Not Used

340 107-1.11 Protection and Restoration of Property

The Contractor shall be responsible for all damage or injury to property of any character, resulting from any act, omission, neglect, or misconduct in his manner or method of executing the work, or at any time due to defective work or materials, during the prosecution of the work, and said responsibility will not be released until the project shall have been completed and accepted. 345

350

The Contractor shall safeguard the vessel’s machinery and electrical equipment, the use of which will be made only upon the express written approval of the COAR, and under supervision of competent, trained personnel.

To the extent of its payments, UAF shall have a security interest in all material and equipment installed on or in the vessel(s) or purchased by the Contractor for incorporation into the vessel(s). The Contractor shall fully cooperate with UAF to ensure that UAF’s interest in all such material and equipment is protected and unencumbered. Notwithstanding the foregoing, the Contractor shall bear the risk of loss for all such material and equipment until Final Acceptance.

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The Contractor shall at all times, insofar as conditions of the work permit, keep the openings of the vessel closed against the weather. Deck openings, permanent and/or temporary shall be protected by a watertight combing with a securely fastened cover.

355

During the course of the work, the Contractor shall maintain adequate heating and ventilation throughout the vessel to preclude the formation of molds and/or other deleterious substances.

107-1.12 Not Used 360

107-1.13 Indemnification, Responsibility for Property, and Insurance

IndemnificationTo the fullest extent permitted by law, the Contractor shall defend, indemnify, and hold

harmless UAF from and against any and all loss, expense, damage, claim, demand, judgment, fine, charge, lien, liability, action, cause of action, or proceedings of any kind whatsoever (whether arising on account of contract disputes, damage to or loss of property, personal injury, emotional distress, or death, or arising out of breach of contract) arising directly or indirectly in connection with the performance of the Work, whether the same arises before or after completion of the Contractor's operations or expiration of this Agreement, except for damage, loss, or injury resulting from the University's sole negligence or intent to cause property damage or personal injury. The indemnification obligation set forth herein shall not be limited by compensation, damages, or benefits payable by or under the Alaska Workers' Compensation Acts or similar acts.

365

370

375

380

385

390

395

Contractor’s duty to defend, indemnify and hold the State harmless shall include, as to all claims, demands, losses and liabilities to which it applies, the State’s personnel-related costs, reasonable attorneys’ fees, court costs, and all other claim-related expenses.

The Contractor’s duty to defend, indemnify and hold the State harmless under the above indemnification clause of this contract shall be limited to claims, actions, or liability for injuries or damages which are proximately caused prior to delivery acceptance of the vessel as defined at General Provisions Subsection 105-1.16 of this contract. Any claims, actions or liability for injuries or damages which are proximately caused after UAF acceptance of the vessel shall be resolved under comparative negligence principles of the State of Alaska to the extent that the injury, or damage was caused in whole or part by the Contractor. Responsibility for State Property

The Contractor shall assume full responsibility for and shall indemnify UAF against any and all loss or damage of whatsoever kind and nature to any and all State property, including any equipment, supplies, accessories, or parts furnished, while in the Contractor’s custody and care for storage, repairs, or services to be performed under the terms of this contract, resulting in whole or in part from the negligent acts or omissions of Contractor, any subcontractor, or any employee, agent or representative of Contractor or subcontractor. Insurance

Without limiting Contractor’s indemnification, it is agreed that Contractor shall purchase at its own expense and maintain in force at all times during the performance of services under this contract the policies of insurance as set forth herein. Where specific limits are shown, it is under-stood that they shall be the minimum acceptable limits. If the Contractor’s policy contains higher limits, UAF shall be entitled to coverage to the extent of such higher limits.

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Evidence of insurance must be furnished to the Contracting Officer prior to the award of the contract. Such evidence, executed by the carrier’s representative and issued to UAF, shall consist of a certificate of insurance or the policy declaration page with required endorsements attached thereto and must provide for a 30 day prior notice of cancellation, nonrenewal or material change.

400

405

1.

Acceptance by UAF of deficient evidence does not constitute a waiver of contract require-ments. When a certificate of insurance is furnished, it shall contain the following: “This is to certify that the policies described herein comply with all aspects of the insurance requirements of the ARRV Project”

Failure to furnish satisfactory evidence of insurance is grounds for termination of this agreement for default. The following coverage and evidence thereof is required:

Worker’s Compensation Insurance; The Contractor shall provide and maintain, for all employees of the Contractor engaged in work under this contract, Worker’s Compensation Insurance as required by the law of UAF where an employee engages in work. The Contrac-tor shall be responsible for Worker’s Compensation Insurance for any Subcontractor who directly or indirectly provides services under this contract. This coverage must include statutory coverage for states in which employees are engaging in work and employer’s liability protection is not less than $1,000,000 per person, $1,000,000 per occurrence. Coverage for all Federal Acts, including USL&H and Jones Act must be included. An endorsement providing a waiver of subrogation in favor of UAF is required.

410

415

2. Comprehensive (Commercial) General Liability Insurance; with coverage limits not less than $5,000,000 combined single limit per occurrence and annual aggregates where generally applicable and shall include premises-operations, independent contractors, prod-ucts/completed operations, broad form property damage, blanket contractual and personal injury endorsements. The Comprehensive (Commercial) General Liability Insurance Policy shall not contain a contract liability exclusion provision.

420

3. Comprehensive Automobile Liability Insurance; covering all owned, hired and non-owned vehicles with coverage limits not less than $1,000,000 combined single limit. 425

4. Ship Repairer’s Legal Liability Insurance including Demurrage with coverage limits of not less than $25 million per occurrence. All Risk Marine Builders Risk Insurance with coverage limits by the terms of the policy equal to the replacement value of the vessel under contract. Coverage is to be included for sea trials and delivery. Applicable policy deductibles will be the responsibility of the contractor. The Loss Payee will be UAF.

5.

430

435

This insurance shall be considered primary to any other liability or property insurance carried by the State of Alaska through self insurance or otherwise, and shall contain a “Cross Liability” or “Severability of Interest” clause or endorsement. UAF and NFS shall be named “Additional Insured” on all policies required above except the worker’s compensation insurance.

Insurance required under this article (107-1.13) shall provide coverage for loss of use damages. Loss of use damages shall be recoverable by UAF only where damage covered by insurance reasonably requires the vessel’s removal from service.

All policies shall contain a waiver of subrogation in favor of UAF, its employees and agents.

107-1.14 Alaska Statue Title 36 440

The provisions of Alaska Statute Title 36, Public Contracts, as amended and/or supplemented are hereby incorporated in the contract by this reference. Effective July 1, 2003, AS 36.05.045 requires the filing of a Notice of Work with the Department of Labor, payment of filing

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fees, and the filing of a Notice of Completion. The Contractor is advised that Compliance with AS 36 et seq. is mandatory with no change in the Contract sum. 445

107-1.15 Contractor’s Responsibility for Work

Until acceptance of delivery of the project vessel by the COAR, the Contractor shall have the charge and care thereof and shall take every precaution against injury or damage to any part thereof by the action of the elements, grounding, collision, or from any other cause, whether or not arising from the execution of the work. The Contractor shall rebuild, repair, restore, and make good all injuries or damages to any portion of the vessel occasioned by any cause before acceptance of vessel delivery by the COAR.

450

455

The Contractor shall provide and maintain an adequate watchman service for the entire vessel until delivery so as to protect the vessel from damage, fire, and pilferage.

In case of suspension of work from any cause, the Contractor shall be responsible for the project vessel and shall take such precautions as may be necessary to prevent damage to the vessel from the elements at his expense.

107-1.16 Subcontracting

The Contractor may utilize the services of the specialty subcontractors on those parts of the Work which, under normal contracting practices, are performed by specialty subcontractors. However, when the Contractor utilizes the services of specialty subcontractors it shall be responsible for coordinating the Work between subcontractors and between subcontractors and its own forces. The Contractor shall not let the divisions and sections of the specifications or the identification of any drawings control its division of the Work among subcontractors and/or suppliers.

460

465

470

475

The Contractor shall be as fully responsible to UAF for the acts and omissions of his subcontractors, and of the persons either directly or indirectly employed by them, as the Contractor is for the acts and omissions of persons directly employed by the Contractor.

In all subcontracts the Contractor enters into relative to the Work, the Contractor shall cause appropriate provisions to be inserted which will bind the subcontractors to the terms of this Contract, insofar as applicable to the Work of subcontractors and which will give to the Contractor the same powers that UAF may exercise over the Contractor under any provisions of the Contract.

The Contractor shall insert in all subcontracts or agreements entered into as regards the Project, the clauses contained in the Contract and such other clauses as UAF may, by written instructions, require and also a clause requiring the subcontractors to include these same provisions in any lower-tier subcontracts or agreements which they may enter into together with a clause requiring this insertion in any further subcontracts or agreements that may in turn be made.

Nothing contained in this Contract shall create any contractual relation between any subcontractor and UAF. There are no intended third party beneficiaries to this Contract.

107-1.17 Copeland (Anti-Kickback) Act

480 The Contractor shall comply with the Copeland "Anti-Kickback" Act (18 USC 874 and 40 USC 276c) and the Anti-Kickback Act of 1986 (41 USC 51-58) and Regulations of the Secretary of Labor (29 CFR, Part 3) that are herein incorporated by reference. The Contractor shall comply with

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any amendments or modifications to this Act or these regulations and shall be responsible for the submission of affidavits required of subcontractors.

107-1.18 Personal Liability of Public Officials 485

490

In carrying out any of the provisions of the contract or their duties to UAF, or in exercising any power or authority granted to them by or within the scope of the contract, there shall be no liability upon the COAR, Contracting Officer, or their authorized representatives, either personally or as officials of UAF, it being understood that in all such matters they act solely as agents and repre-sentatives of UAF.

107-1.19 No Waiver of Legal Rights

UAF shall not be precluded or estopped by any measurement, estimate or certificate made either before or after the completion and acceptance of the work and payment therefore, from showing the true amount and character of the work performed and materials furnished by the Contractor, or from showing that any measurement, estimate or certificate is untrue or is incorrectly made, or that the work or materials do not in fact conform to the contract, or are not, in fact, required by the contract. UAF shall not be precluded or estopped, notwithstanding any such measurement, estimate, or certificate and/or payment in accordance therewith, from recovering from the Contractor or any of his sureties, from either or both, such damages or remedies that UAF may be entitled to recover by reason of Contractor’s failure to comply with the terms of the contract. Neither the acceptance by UAF, or any representative of UAF, nor any payment for or acceptance of the whole or any part of the work, nor any extension of time, nor any possession taken by UAF, shall operate as a waiver of any portion of the contract or of any power herein reserved, or of any right to damag-es. A waiver by UAF of any breach of the contract shall not be held to be a waiver of any other subsequent breach.

495

500

505

107-1.20 Gratuity and Conflict of Interest

The Contractor agrees that he will not extend any loan, gratuity or gift of money of any form whatsoever to any employee of UAF, nor will he rent or purchase any equipment or materials from any employee of UAF or to the best of his knowledge from any agent of an employee of UAF. Before payment of the final estimate, the Contractor shall execute and furnish UAF an affidavit certifying that he has complied with the above provisions of the contract.

510

515

520

If UAF finds after a notice and hearing that the Contractor or any of the Contractor's agents or representatives offered or gave gratuities (in the form of entertainment, gifts or otherwise) to any official, employee or agent of UAF, the State of Alaska, or any federal agency in an attempt to secure a contract or favorable treatment in awarding, amending or making any determinations related to the performance of this contract, UAF may, by written notice to the Contractor, terminate this contract. UAF may also pursue other rights and remedies that the law or the contract provides. However, the facts on which UAF bases such findings may be reviewed in proceedings under the Disputes provision of this contract.

In the event this contract is terminated as provided above UAF may pursue the same remedies against the Contractor as it could pursue in the event of a breach of the contract by the Contractor, and any other damages to which it may be entitled by law.

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107-1.21 Not Used

107-1.22 Joint Ventures

525 Where the Contractor is a joint venture, all provisions of this Contract are binding on each entity comprising the joint venture. Each entity comprising the joint venture agrees to sign the Contract and all required bonds.

107-1.23 Other Prohibited Interests

No official of the University who is authorized to act in such capacity on behalf of the University to negotiate, make, accept, or approve, or to take part in negotiating, making, accepting, or approving any architectural, engineering, inspection, construction, or material supply contract, or any subcontract in connection with the construction of the Project, shall become directly or indirectly associated personally except in his official capacity in this Contract or in any part hereof. No officer, employee, architect, attorney, engineer, or inspector of or for the University who is authorized to act in such capacity and on behalf of the University to exercise any legislative, executive, supervisory, or other similar functions in connection with the Construction of the Project shall become directly or indirectly interested personally except in his official capacity in this Contract, or any part thereof, or in any material supply contract, subcontract, insurance contract, or in any other contract pertaining to the Project.

530

535

107-1.24 Utilization Of Small Business, Minority-Owned, Woman-Owned, And 540 Economically Disadvantaged Small Business Concerns And Labor Surplus Area Firms

In the event the Contractor subcontracts any part of the work to be performed under this contract, the Contractor agrees to make good faith efforts to utilize small business, woman-owned, minority-owned, and other economically disadvantaged small business enterprises; and labor surplus area firms. The Contractor shall include this provision, including this statement, in every subcontract.

545

107-1.25 Clean Air And Water The Contractor shall comply with all applicable standards, orders or requirements issued

under section 306 of the Clean Air Act (42 U.S.C.1857(h)), section 508 of the Clean Water Act (33 U.S.C. 1368), Executive Order 11738, and EPA regulations (40 CFR Part 15) which prohibit the use under federal contracts or grants, facilities included on the Environmental Protection Agency (EPA) List of Violating Facilities.

550

555 The Contractor warrants that any facilities to be used in the performance of this contract are

not listed on the EPA List of Violating Facilities.

The Contractor will include a provision substantially the same as this, including this paragraph in every non-exempt subcontract.

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SECTION 108

PROSECUTION AND PROGRESS

108-1.01 Subletting of Contract

5

10

15

20

25

The Contractor shall not sublet, sell, transfer, assign or otherwise dispose of the contract or contracts, or any portion thereof, or of his right, title, or interest therein, without written consent of UAF. In case such consent is given, the Contractor will be permitted to sublet a portion thereof, but shall perform with his own organization, work amounting to not less than 50 per cent of the original contract cost. Consent to sublet, assign or otherwise dispose of any portion of the contract shall not be construed to relieve the Contractor of any responsibility for the fulfillment of the contract. No subcontracts, or transfer of contract, shall in any case release the Contractor of his liability under the contract and bonds. Subcontracts which are submitted for approval shall be signed by both parties and dated in order to be considered acceptable by UAF.

All subcontracts submitted for approval must contain provisions for payment for work done by the subcontractor within seven days of receipt of payment by the prime Contractor.

The Contractor or an approved subcontractor will not be required to obtain an approved subcontract for owner-operators of hauling equipment provided they are listed on the payroll of either the Contractor or an approved subcontractor.

The Contractor shall furnish UAF with three (3) copies of any and all contracts entered by himself and a subcontractor for work to be performed in connection with the contract. Prices of subcontracted work shall be furnished by the Contractor. For purposes of computing subcontract percentages, the COAR will determine the value of the subcontracts, based on contract unit prices, or upon reasonable value, if entire items are not subcontracted.

The purchase of equipment and materials produced at and furnished from established and recognized commercial plants, together with the delivery of such materials to the site of work by means of vehicles owned and operated by such plants or by recognized commercial hauling companies, shall not be considered as subcontracting under these provisions, but may be considered as subcontracting for purposes of the exercise of any rights to review records or conduct audits by UAF.

108-1.02 Notice to Proceed 30

35

Work under this contract requires Notice to Proceed (NTP) issued by UAF. The NTP will be issued when all contingencies for, and conditions precedent to, contract award have been met. The date of signature of Notice to Proceed will be the date on which the Contractor is allowed and expected to begin the applicable work and from which date time will accrue (See Subsection 108-1.06).

108-1.03 Prosecution and Progress

The Contractor shall provide adequate materials, labor and equipment to ensure the completion of the project in accordance with all contract requirements. The work shall be performed as vigorously and as continuously as conditions may permit. The Contractor shall take into consideration and make due allowances for foreseeable delays and interruptions to the work 40

108-1


such as weather, equipment breakdowns, shipping, regulatory agency inspections and approvals. Receipt and acceptance of a schedule submitted by the Contractor shall not be construed to assign responsibility for performance or contingencies to UAF or relieve the Contractor of his responsibility to adjust his forces, equipment, and work schedules as may be necessary to insure completion of the work within prescribed time (See Subsection 108-1.06). 45

50

55

Upon substantial changes to the approved Project or on request of the COAR, the Contractor shall submit revised progress schedules and date lists in the form required. Such revised schedules or lists shall conform with the design time and construction time allocated by the contract and take into account delays which may have been encountered in the performance of the work. In submitting a revised schedule, the Contractor shall state specifically the reason for the revision and the adjust-ments made in his schedule or methods of operation to ensure completion of all work within the prescribed time and in accordance with Section 110.

Should the prosecution of the work be discontinued for any reason, the Contractor shall notify the COAR at least twenty-four (24) hours in advance of resuming operations.

The Contractor shall have a superintendent or project manager on-site at all times during design and construction with the authority to act on the Contractor’s behalf.

108-1.04 Not Used

108-1.05 Character of Workers, Methods and Equipment

The Contractor shall at all times employ sufficient labor and equipment for prosecuting the several classes of work to full completion in the manner and time required by this contract. 60

65

70

75

80

All workers and management personnel shall have sufficient skill and experience to perform properly the work assigned to them. Workers engaged in special work or skilled work shall have sufficient experience in such work and in the operation of the equipment required to perform all work properly and satisfactorily.

Any person, whether worker or superintendent, employed by the Contractor or by any subcontractor whom the COAR deems incompetent, careless, insubordinate, or otherwise objection-able, or whose continued employment on the work is deemed to be contrary to the public interest shall, at the written request of the COAR, be removed forthwith by the Contractor or subcontractor employing such person, and shall not be employed again in any portion of the work without the approval of the COAR. The COAR will notify the Contractor in writing at least five days before submitting a written request to remove any worker and will cite the reason for the impending removal in the notice.

Should the Contractor fail to remove such person or persons as required above, or fail to furnish suitable and sufficient personnel for the proper prosecution of the work, the COAR may suspend the work by written notice until such orders are complied with.

No convict labor shall be employed and no materials manufactured or produced by convict labor shall be used in connection with the work. This provision shall not be construed as applying to convicts on parole or probation.

The Contractor shall not discriminate against any person because of sex, race, creed, color, or national origin.

108-2


All equipment which is proposed to be used shall be of appropriate size and in such mechanical condition as to meet the requirements of the work and to produce a satisfactory quality of work.

When the methods and equipment to be used by the Contractor in accomplishing the construction are not prescribed in the contract, the Contractor is free to use any methods or equip-ment that he demonstrates to the satisfaction of the COAR will accomplish the work in conformance with the requirements of the contract, except as provided above.

85

90

When the contract or manufacturer’s instruction specifies that the construction be performed by the use of certain methods and equipment, such methods and equipment shall be used unless others are authorized by the COAR.

108-1.06 Time

A. Time

Time shall be the period of time, measured in calendar days, that is allocated to the Contractor to complete the work required by the contract and deliver the vessel. Time equals the number of days of time stipulated in the contract plus any additional days of time allocated during the course of the contract by approved extensions of time, minus any days of time reclaimed by UAF based upon reductions in the scope or character of the work during the course of the contract.

95

100

105

110

115

120

The count of time expended shall begin on the date of the Notice to Proceed. The count of time, in conjunction with approved modifications or suspensions of the count of time, shall be the basis for establishing the approved scheduled date of Delivery Acceptance and for assessing liquidated damages associated with untimely vessel delivery as described in Subsection 108-1.07. Failure to complete the work, submit all deliverables, and deliver the vessel to UAF within the time allotted may also be an event of default authorizing UAF to take any steps permitted by Section 108-1.08. See Subsection 105-1.02(B) for schedule of deliverables requirements. See Section 110 for schedule requirements.

B. Extension of Time

The COAR will consider requests for extension of time and, if deemed warranted, approve extension of time equal to the number of additional days considered by the COAR to be necessary to accomplish approved change work or work associated with UAF-issued directives other than work orders id said work is on the critical path. Work associated with changes and directives, or any portion of such work, which could reasonably be accomplished within the design or construction time, as determined by the approved Contractor’s schedule, shall be completed within the established time.

The Contractor shall be responsible for promptly requesting extensions of time and for furnishing any and all information necessary to justify each proposed extension to the satisfaction of the COAR. For change work, a request for extension of time will be considered timely only if the request is included with the Contractor’s originally submitted change order.

Under no circumstances will time be extended due to inclement weather or the results of inclement weather. However, extraordinary weather conditions for the pertinent geographical area may, but not necessarily will, provide a basis for extension of time. Severe weather with historical precedent in the pertinent geographical area, including hurricanes, is not extraordinary weather.

108-3


Approved change documents and UAF-issued directives which reduce the scope of the contract or change the character of the work so as to justify a reduction in the amount of time allotted may result in an agreement between the parties to the contract, or a unilateral decision on the part of the COAR, to reduce the number of days of time, as applicable.

125

130

135

140

145

150

155

160

165

Extensions to time must be approved in writing by the COAR.

A plea that insufficient time was originally specified or otherwise required by the contract shall not constitute a valid reason for extension of time.

C. Suspension of Time

The COAR may, by written order, suspend work on the project, in whole or in part, for such periods as he determines to be necessary. Unless an item of work is suspended which is agreed by UAF to be on the critical path of the Project Schedule, no consideration will be given to extending time or stopping the count of time during the period of suspension of the work.

In those instances where the COAR orders suspension of the work to correct unsafe conditions, for failure by the Contractor to carry out contractual provisions, or for failure to carry out orders given by the COAR within the limits of his contractual authority, the count of time shall continue throughout the suspension period.

Suspension of the count of time may be allowed by the COAR because of delays in the completion of the work due to unforeseeable causes beyond the control of and without the fault or negligence of the Contractor, including but not restricted to acts of God or the public enemy, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, and extraordinary weather or delays of subcontractors due to such causes provided that the Contractor shall, within 10 days of the beginning of any such delay, notify UAF in writing of the cause of delay and request suspension of the count of time. UAF will ascertain the facts and the extent of the delay and the COAR will suspend the count of time an appropriate number of days when, in his judg-ment, the findings of fact justify such suspension.

Suspension of work by the COAR or delays in the completion of the work shall not constitute grounds for any claims by the Contractor for damages or extra compensation unless otherwise provided for in the contract.

For any suspension in the count of time to be allowable, such suspension must be approved in writing by the COAR.

D. Suspensions of Work Ordered by the COAR

If the performance of all or any portion of the work is suspended or delayed by the COAR in writing for an unreasonable period of time (not originally anticipated, customary, or inherent to the shipbuilding industry) and the Contractor believes that additional compensation and/or time is due as a result of such suspension or delay, the Contractor shall submit to the COAR in writing a request for adjustment within 7 calendar days of receipt of the notice to resume work. The request shall set forth the reasons and support for such adjustment.

Upon receipt, the COAR will evaluate the Contractor’s request. If the COAR agrees that the cost and/or time required for the performance of the contract has increased as a result of such suspension and the suspension was caused by conditions beyond the control of and not the fault of the Contractor, its suppliers, or subcontractors at any approved tier, and not caused by weather, the COAR will make an adjustment (excluding profit) and modify the contract in writing accordingly. The COAR will notify the Contractor of his determination whether or not an adjustment of the contract is warranted.

108-4


No contract adjustment will be allowed unless the Contractor has submitted the request for adjustment within the time prescribed.

No contract adjustment will be allowed under this clause to the extent that performance would have been suspended or delayed by any other cause, or for which an adjustment is provided for or excluded under any other term or condition of this contract.

170

108-1.07 Failure to Deliver on Time

Liquidated damages associated with untimely delivery of the vessel will be charged against the Contractor’s account by UAF beginning the day after the scheduled Delivery Acceptance date and ending on the

175 actual Delivery Acceptance date of each vessel. The scheduled Delivery

Acceptance date will be included in the count of days chargeable to liquidated damages. The day of actual Delivery Acceptance will stop the accrual of liquidated damages associated with untimely delivery and will not be included in the count of days chargeable to liquidated damages.

180 Notwithstanding any other provision of this Contract to the contrary, the liquidated damages provided for in Subsection 108-1.07 will be UAF’s sole and exclusive remedy for all damages incurred by reason of the Contractor’s failure to deliver each vessel on time.

The scheduled Delivery Acceptance date shall be the date by which all contracted work is scheduled to be completed, excluding any work that may be necessary to correct deficiencies arising during the warranty/guarantee period subsequent to actual Delivery Acceptance (see below). The scheduled Delivery Acceptance date shall be the number of days of construction time allocated and calculated in accordance with Subsection 108-1.06, and any days of approved suspension of construction time, after the date of signature of the Notice to Proceed. (The date of signature of the NTP may be different than the date scheduled for NTP given on the Project Schedule.)

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The actual Delivery Acceptance date shall be the date on which UAF signs the letter of Delivery Acceptance of the vessel (see Subsection 105-1.16) and takes custody of the vessel from the Contractor. The actual Delivery Acceptance date shall be the start date for the count of time for the warranty/guarantee period (see Subsection 105-1.20).

For day one through day thirty that the vessel remains undelivered after the scheduled Delivery Acceptance date, the sum of $10,000.00 per day shall be deducted from any monies due the Contractor. Beginning on day thirty-one and for each day thereafter the sum of $48,000 per day shall be deduct from the monies due to the Contractor. If no money is due the Contractor, UAF shall have the right to recover said sum from the Contractor, the surety or both. The amounts of these deductions are to cover estimated expenses to UAF as a result of the Contractor’s failure to complete the work within the time specified. Such deductions are liquidated damages and are not to be considered as penalties.

Permitting the Contractor to continue and finish the work, or any part of it, after the sched-uled Delivery Acceptance date, as approved by UAF, will in no way operate as a waiver on the part of UAF of any of its rights under this contract.

The maximum charge for Liquidated Damages for Delay for the vessel shall be $10,000,000.

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108-1.08 Default of Contractor

The Contracting Officer will give notice in writing to the Contractor and his surety of such delay or default if the Contractor:

A. Fails to begin the work under the contract within the time specified in a “Notice to Proceed”; or

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B. Fails to prosecute work in a sufficiently timely fashion; or

C. Fails to perform the work with sufficient workers and equipment or with sufficient materials to assure the prompt completion of said work; or

D. Performs the work unsuitably or neglects or refuses to remove materials or to perform anew such work as may be rejected as unacceptable and unsuitable; or

E. Discontinues the prosecution of the work; or

F. Fails to resume work which has been discontinued within a reasonable time after notice to do so; or

G. Becomes insolvent, except that if the Contractor declares bankruptcy, termination shall be in accordance with 11 U.S.C. 362 and/or 11 U.S.C. 365. In the event that the Contractor declares bankruptcy, the Contractor agrees that the contract will be assumed or rejected in a timely manner so that the contract will be completed by the dated specified in the contract; or

H. Makes an assignment for the benefit of creditors without the consent of the COAR; or

I. For any cause whatsoever, fails to carry on the work in an acceptable manner; or

J. Hinders any audit to which UAF is entitled.

If the Contractor or surety, within 14 calendar days of receipt of notice from the Contracting Officer, within the time specified in the notice, shall not proceed in accordance therewith, then UAF may, upon written notification from the Contracting Officer of the fact of such delay, neglect or default and the Contractor’s failure to comply with such notice, have full power and authority without violating the contract, to take the prosecution of the work out of the hands of the Contractor. UAF shall not take the prosecution of the work out of the hands of the Contractor without specifically advising the Contractor and the surety in writing that the condition of default has not been corrected. All completed or partially completed plans, drawings, information (including but not limited to all technical documentation and publications and operating manuals to be provided by Contractor, its suppliers and subcontractors), or other property which, if the contract had been completed, would be required to be furnished to UAF, shall become UAF’s property upon issuance by the UAF of a notice of delay, neglect, or default and the Contractor’s failure to comply with such a notice. UAF may appropriate or use any or all materials and equipment on the ground or in the water as may be suitable and acceptable and may enter into an agreement for the completion of said contract according to the terms and provisions thereof, or use such other methods that in the opinion of the Contracting Officer are required for the completion of said contract in an acceptable manner. In the event of the termination of Contractor, UAF shall be assigned and possess all warranties and guarantees from manufacturers, suppliers and subcontractors and rights thereto.

The Contracting Officer may, by written notice to the Contractor and his surety or his representative, transfer the prosecution of the work from the Contractor to the surety, or if the Contractor abandons the work undertaken under the contract, the Contracting Officer may, at his option with written notice to the surety and without any written notice to the Contractor, transfer the prosecution of said work directly to the surety. The surety shall submit its plan for completion of the work, including any contracts or agreements with third parties for such completion, to UAF for

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approval prior to beginning completion of the work. Approval of such contracts shall be in accor-dance with all applicable UAF requirements and procedures for approval of subcontracts, except that the 50 per cent limitation shall not apply. In lieu of prosecution of the work, the surety may, at its option, pay to UAF the full penal amount of the applicable bond(s) in discharge and exoneration of such bond(s).

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Upon receipt of such notice the surety shall enter upon the premises and take possession of all materials, tools, and appliances thereon for the purpose of completing the work included under the contract and employ by contract or otherwise any person or persons to finish the work and provide the materials therefor, without termination of the continuing full force and effect of this agreement, which shall be binding on the Contractor and any surety. In case of such transfer of employment to the surety, the surety shall be paid in its own name on estimates covering work subsequently performed under the terms of the contract and according to the terms thereof without any right of the Contractor to make any claim for the same or any part thereof.

In case of discontinuance of the Contractor’s prosecution of work by the Contracting Officer as aforesaid, the Contractor shall not be entitled to receive any further balance of the amount to be paid under the contract until the work shall be fully finished, at which time, if the unpaid earned balance of the amount to be paid under this contract shall exceed the expenses incurred by the COAR in finishing the work and all damages sustained, or which may be sustained by UAF by reason of such refusal, neglect, failure or discontinuance of prosecution of work, such excess shall be paid by UAF to the Contractor, but if such expense and damage shall exceed the unpaid balance, the Contractor and his surety and each thereof shall be jointly and severally liable therefore to UAF, and shall pay the difference to UAF.

In the event of a termination for default, the surety shall have the same rights to examine Escrow Proposal Documents as would the Contractor had no default occurred.

In the event of a termination for default, and in the event that the surety completes and/or UAF completes the work by employing another contractor or by some other means, any amount due the Contractor or UAF under this section will be determined at the final acceptance by UAF of the constructed vessel (as opposed to delivery acceptance) from whatever entity completes the vessel, unless the Contracting Officer, at his sole discretion, determines that an earlier final accounting with the defaulting Contractor is in the best interests of UAF. For purposes of calculating any amount due to or from a defaulting Contractor, all of UAF’s damages and expenses attributable to the Contractor’s default of completing the entirety of the work, not just damages and expenses relating to the costs of completing a suitable design, will be considered in determining whether any moneys are due to the defaulting Contractor from UAF or from the defaulting Contractor to UAF. Even if the Contracting Officer determines in favor of a final accounting with a defaulting Contractor before final completion of all contract work, the surety shall in no event be released from any liability, be it joint and several or otherwise.

If, after notice of termination of the Contractor’s right to proceed under the provisions of this clause, it is determined for any reason that the Contractor was not in default under the provisions of this clause, or that the delay was excusable under the provisions of this clause, the rights and obligations of the parties shall be the same as if the notice of termination had been issued pursuant to Section 108-1.09 as a termination for convenience of UAF.

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108-1.09 Termination of Work for UAF’s Convenience

The performance of the work under the contract may be terminated by UAF in accordance with this Section in whole or in part, whenever, for any reason, the Contracting Officer shall determine that such termination is in the best interest of UAF. Any such termination shall be effected by delivery of a Notice of Termination to the Contractor specifying termination is for the convenience of UAF, the extent to which performance of work under the contract is terminated, and the date upon which such termination becomes effective.

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In the event of termination for convenience, the basis of the Contractor’s recovery shall be actual costs incurred plus a reasonable profit, but in no event may Contractor’s recovery exceed the Contract amount, adjusted for the percentage of work completed.

After receipt of a Notice of Termination unless otherwise directed by the Contracting Officer, the Contractor shall:

A. Stop work under the contract on the date and to the extent specified in the Notice of Termination;

B. Place no further orders or subcontracts for materials, services, or facilities except as may be necessary for completion of such portion of the work under the contract that is not terminated;

C. Terminate all orders and subcontracts to the extent that they relate to the performance of work terminated by the Notice of Termination;

D. With the approval or ratification of the Contracting Officer, to the extent he may require, settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts, the cost of which would be reimbursable, in whole, or in part, in accordance with the provisions of the contract;

E. Submit to the Contracting Officer a list, certified as to quantity and quality, of all items of contract materials exclusive of items the disposition of which had been directed or authorized by the Contracting Officer;

F. Transfer to the Contracting Officer the completed or partially completed plans, drawings, information, and other property which, if the contract had been completed, would be required to be furnished to UAF;

G. Take such action as may be necessary, or as the Contracting Officer may direct, for the protection and preservation of the property related to the contract which is in the possession of the Contractor and in which UAF has or may acquire any interest.

The Contractor shall proceed immediately with the performance of the above obligations. All plans, drawings, information, or other property listed in paragraph “F” above shall become the property of UAF upon issuance of a Notice of Termination.

When UAF issues the Notice of Termination, the Contractor shall, as of the effective date of the Notice, maintain a daily record of all labor, materials and equipment utilized by the Contractor in conjunction with the project after the effective date of the Notice. The Contractor shall prepare and transmit to the COAR itemized statements of the costs of such personnel, labor, services, including overhead expenses, materials and summary of equipment usage, on a weekly basis. The itemized statements shall be referenced to payrolls, invoices, bills of lading and storage. The COAR shall be given the opportunity to review and check the keeping of such records.

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Within 30 days of the effective date of the Notice, the Contractor shall submit to the COAR a summary of all personnel, labor and services costs, with references to payrolls, salary agreements, and labor charge invoices; a summary of all material costs including shipping and storage, with references to invoices, bills of lading and storage; and a summary of equipment usage. 335

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These summaries shall contain only those costs or portions of costs, including overhead and actual duration of equipment usage directly allocable to the project from the date the Contractor received the Solicitation for the ARRV until the effective date of the Notice of Termination. The Contractor shall append to these summaries a tabulation of costs associated with items contained in paragraph “D” above.

The Contracting Officer will review the submittals and within 30 days after their receipt, will meet with the Contractors’ representatives to review, and if necessary, correct, the submittals and negotiate an equitable amount for the Contractor’s reasonably incurred actual costs and, unless the Contracting Officer can determine that the Contractor would have incurred a loss by completing the contract, a reasonable profit. The intent of the negotiation is to arrive at an equitable final settlement.

The basis of the Contractor’s recovery for convenience termination shall be reasonably incurred costs plus a reasonable profit. The only exception to a cost-based recovery shall be completed units of work that have a defined unit price in the contract. To the extent that unit prices are used as a basis for recovery, the Contractor shall have no additional entitlement to profit.

The Contractor shall not be entitled to a settlement, or an award under General Provisions Section 105-1.18 or any other provision of the contract, which is based in whole or in part on Contractor’s expectancy of profit had the Contractor been permitted to perform more of the contract than the Contractor was in fact permitted to perform. Contractor’s recovery of profit for convenience termination shall be a reasonable profit based on actual costs reasonably incurred by the Contractor. Contractor may be denied a profit if completion of the contract would have resulted in a net loss to the Contractor. The Contractor’s claimed costs must conform with the cost principles adopted pursuant to AS 36.30.480. The principles in effect at the date of Notice of Termination shall control.

Once the settlement figure has been arrived at for the terminated project, that amount shall have deducted from it:

A. All previous payments made to the Contractor;

B. The agreed price for, or the proceeds of sale of, any materials, supplies, or other things acquired by the Contractor or sold pursuant to the provisions of this Section and not otherwise recovered by or credited to UAF; and,

C. All partial payments made to the Contractor under the provisions of this section to arrive at the amount due the Contractor.

A change document shall then be issued creating a new pay item under the Contract which provides for compensation in the amount due as determined above.

UAF will from time to time, under such terms and conditions as it may prescribe, make partial payments on account against costs incurred by the Contractor in connection with the terminated contract or portion thereof whenever in the opinion of the Contracting Officer the aggregate of such payments shall be within the amount to which the Contractor will be entitled

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hereunder. Otherwise the Contractor shall not be entitled to receive further payments until the final settlement is reached. 375

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Where the work has been terminated by UAF, said termination shall not affect or terminate any of the rights of UAF against the Contractor or his surety.

Unless otherwise provided for in the contract, or by applicable statute, the Contractor, from the effective date of termination and for a period of three (3) years after final settlement under this contract, shall preserve and make available to UAF at all reasonable times at the office of the Contractor, all its books, records, documents, and other evidence bearing on the cost and expenses of the Contractor under his contract and relating to the work terminated hereunder. For purposes of this provision, the definition of “books, records, documents, and other evidence” which are “under his contract” or “relating to the work” shall be construed to require disclosure in case of doubt.

108-1.10 Termination for National Emergencies 385

UAF shall terminate the contract or portion thereof by written notice when the Contractor is prevented from proceeding with the contract as a direct result of an Executive Order of the President with respect to the prosecution of war or in the interest of national defense. Such a termination shall be treated as a termination for convenience.

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SECTION 109

MEASUREMENT AND PAYMENT

109-1.01 General

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Wherever it is provided in the contract that certain work is a subsidiary obligation or it is stated that certain provisions or work be without extra compensation or at the Contractor’s expense; it is understood in those cases that the Contractor’s compensation for such work is included in the payment provided for in the contract prices as set forth in the Cost Proposal.

Measurement and payment shall be coordinated with the contract requirements for the Project Schedule (Section 110), which incorporates Progress Payment and Schedule of Values (Subsection 109-1.06), and the Schedule of Deliverables (Subsection 105-1.02).

109-1.02 Not Used

109-1.03 Scope of Payment

The Contractor shall receive and accept compensation provided for in the contract price as full payment for providing the design; furnishing all materials, installed equipment, labor, and construction equipment; and for performing all work under the contract in a complete and acceptable manner and for all risk, loss, damage, or expense of whatever character arising out of the nature of the work or the prosecution thereof, subject to the provisions of Subsection 107-1.19.

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In the event that any item of work is to be done for a unit price, the unit price will be the sole compensation due the Contractor for all labor, services and material required to produce the item of work, and payment for such labor, services or material will not be duplicated by payment pursuant to any other provision of the contract.

The term "lump sum," when used as a basis for payment, shall mean full payment for the work described in the contract, including all necessary fittings and accessories. The procedures described in this section for extra work, material, progress and final payment apply to the lump sum items in this contract.

109-1.04 Not Used

109-1.05 Compensation for Extra Work

Extra work will be paid for at the unit prices or lump sums stipulated in the change documents authorizing the work, or the COAR may compensate the Contractor for such work on a time and materials basis to be computed in the following manner. The percentages in paragraphs "B," "E," and "F" below, however, shall also apply to lump sum change orders.

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A. Labor. For all labor and foremen in direct charge of the specific operations, the Contractor shall be paid at the rates indicated on the certified payroll, but at rates not to exceed those for comparable labor currently employed on the project. Payment will also include fringe benefits (Health and Welfare, Pension Fund, etc., when such amounts are required by collective bargaining agreement or other employment contract generally applicable to the classes of labor employed on the project), Worker’s Compensation Insurance (supported by proof of rates),

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subsistence and travel costs when applicable, and a labor markup (to cover additional bond, property damage liability insurance, unemployment insurance contributions, social security and other taxes, administrative overhead costs and profit). Compensation will be computed by the COAR as follows:

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1. The total hours worked times the straight time rate of pay; plus

2. the overtime hours worked times the difference between the overtime rate and the straight time rate; plus

3. the fringe benefit rate times the total hours worked; plus

4. the Worker’s Compensation rate times “1.” (above); plus

5. subsistence and travel costs; plus

6. thirty percent (30%) of the sum of 1, 3, 4, and 5.

If any employee is due and receives subsistence on his days off, this amount shall be divided by the number of days worked that week and shall be added to this daily subsistence for time and materials entitlement. If the employee did not work an entire day on time and materials work, that day’s entitlement shall be in direct proportion to the hours worked on time and materials.

Overtime or holiday rates will not be allowed unless approved by the COAR. Approval will not be given unless work is required to be done outside of normal hours due to tides, adverse weather or emergencies.

B. Materials. For materials, inclusive of installed equipment, accepted by the COAR and used, the Contractor shall receive the actual cost of such materials delivered on the work, including transportation charges paid by him (exclusive of construction equipment rentals as hereinafter set forth) to which cost fifteen percent (15%) will be added. The Contractor shall furnish to the COAR invoices for all materials used in the work plus freight charges when applicable. If materials used on the time and materials work are taken from the Contractor’s stock, then the Contractor shall furnish to the COAR a certified statement showing the actual direct cost to the Contractor of said materials and the quantities used in the work.

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C. Construction Equipment. For any machinery or special equipment (other than small tools) which has been authorized by the COAR, the Contractor shall receive the rental rates specified in the change document authorizing the work.

If agreement cannot be reached, the UAF reserves the right to establish a rate based on similar equipment at the prevailing commercial rates in the area or to establish the rate based on a determination of the actual costs to the contractor including an audit if necessary to determine these costs.

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These rates shall apply for equipment used during the Contractor’s regular shift of up to ten (10) hours per day. Where the equipment is used more than ten (10) hours per day, either on the Contractor’s normal work or on time and materials, an overtime rate, computed at 80% of the established rate shall apply.

Equipment which must be rented or leased specifically for work required under this section shall be authorized in writing by the COAR. The Contractor shall be paid invoice price plus 15 per cent.

When it is necessary to obtain equipment from sources beyond the project limits exclusively for time and materials work, the actual cost of transferring the equipment to the site of the work and return will be allowed as an additional item of expense. Where the move is made by common

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carrier, the move-in allowance will be limited to the rental rate for the hauling unit plus operator wages. In the event that the equipment is transferred under its own power, the moving allowance will be limited to one-half of the normal hourly rental rate plus operator’s wages. In the event that the move-out is to a different location, payment will in no instance exceed the amount of the move-in. Move-in allowance shall not be made for equipment brought to the project for time and equipment work which is subsequently retained on the project and utilized for completion of contract items or related work.

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Equipment ordered to be on a stand-by basis shall be paid for at a stand-by rental rate for the number of hours in the Contractor’s normal work shift, but not to exceed eight (8) hours per day. The stand-by rental rate shall be computed at 50% of the established rate.

Time will be recorded to the nearest one-quarter hour for purposes of computing compensation to the Contractor for equipment utilized under these rates.

The equipment rates as determined above shall be full compensation, including overhead and profit for providing the required equipment and no additional compensation will be made for other costs such as, but not limited to, replacement parts or maintenance costs. Cost of repairs, both major and minor, as well as charges for mechanic’s time utilized in servicing equipment to ready it for use prior to moving to the project and similar charges will not be allowed.

100 D. Miscellaneous. No additional allowance will be made for general superintendence, the use of small tools, or other costs for which no specific allowance is herein provided.

E. Work by a Subcontractor. The Contractor shall receive a percentage of the total time and materials work defined in paragraphs “A” through “D” above performed by an approved subcon-tractor. This percentage will be based on the following and will be for administrative expenses incurred in connection with the work. No percentage will be paid on work covered under priced items in the original contract. No percentage over the amount covered above will be paid if the work is done by a sub-subcontractor.

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To $1000 10% Over $1000 $100 plus 5% of excess over $1000 Over $10,000 $550 plus 3% of excess over $10,000

F. Work by a Specialty Contractor. When the COAR and the Contractor agree that a certain item or service cannot be satisfactorily performed by the forces of the Contractor or his subcontractors, such item or service may be performed by a specialist. 110

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Invoices for such item or service on the basis of the current market price thereof may be accepted without complete itemization of construction equipment, labor, materials and installed equipment costs when such itemization is impracticable or not customary under the circumstances. The Contractor will be paid the invoice cost of the service at the rate(s) set forth in paragraph E above.

G. Records. The Contractor will maintain a daily record of construction equipment, labor, materials and installed equipment utilized in the work and will present this record to the COAR at the end of each day’s work for verification and signature. Such records shall include copies of certified payroll.

120 H. Compensation. Payment for time and materials work will be made in the progress estimate following receipt of the verified daily records and all required supporting information from the Contractor. If, at any time, a unit price or lump sum basis of compensation can be agreed to for work being performed under this subsection, such compensation may be set forth in writing as a change document.

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I. The COAR may use the composite labor rates established under the guidelines of Subsection 104-1.02 to simplify the accounting procedures for labor and equipment employed in performance work under a time and materials basis. The following procedures apply:

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All direct labor and shipyard equipment used in performance of change order work would be compensated for using the established composite labor rates.

Compensation other than labor and equipment shall be as described in paragraphs “B,” “D,” “E,” “F,” “G,” and “H” above.

Paragraph “C” above may be used to calculate compensation for equipment not available in the shipyard which must be rented from an outside supplier.

109-1.06 Progress Payment

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The Contractor shall receive progress payments based on the following procedures for measurement and payment in accordance with principles of earned value management necessary for UAF reporting to NSF.

The Contractor shall prepare a Schedule of Values, containing an itemized breakdown of contract costs, with work packages corresponding to the work packages in the Project Schedule described in Section 110, Schedule Specification, of all work to be performed. The Schedule of Values will include the total cost for each work package with and without overhead and profit and contain a breakdown for contractor equipment, labor, materials, installed equipment, subcontractors and other costs totaling 100% of the contract value. The cost of overhead, profit, bonds, insurance, or any indirect cost shall be prorated evenly among items in the Schedule of Values and their breakdown.

The Schedule of Values shall be integrated into the Project Schedule in accordance with Section 110 and shall be submitted to the COAR for approval within thirty (30) days following NTP. After UAF comments are resolved, the schedule of Values shall be submitted for final approval within forty-five (45) days of NTP or the time specified by the COAR. If the COAR determines that the Contractor’s submitted Schedule of Values may result in unbalanced payments wherein the Contractor would collect payments disproportionate to the value of the work provided, or be detrimental to the interests of the UAF for other reason, the COAR may prepare an acceptable Schedule of Values or require the Contractor to submit another Schedule of Values until the COAR is satisfied with the form and content of the Schedule of Values.

All activities in the Project Schedule and Schedule of Values are to be broken down and cost loaded according to Section 110, Schedule Specifications. Items in the Schedule of Values are to correspond to “rollup” of related activities, designated as work packages, from the Project Schedule. The number of work packages shall be no less than 200, with no single work package having a cost greater than $2,500,000 or duration of more than 20 days. Exceptions to these requirements will be allowed provided the intent of a fair and effective means of payment for completed work is preserved.

The COAR will make the final determination as to whether the intent is preserved in the Contractor’s proposed approach. If no other agreement is reached the requirements will stand as written. In any proposed alternative, the basis of payment will be the physical progress as indicated in the Project Schedule. The Schedule of Values should include separate pay items for required deliverables such as spare parts, technical documentation and as-built drawings, as well as ordering of long lead materials.

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A mobilization fee may be used to cover shipyard labor and other expenses necessary to proceed with work required prior to approval of the Schedule of Values and Project Schedule. The maximum allowable scheduled value for mobilization fee shall be no greater than ½ % of the contract price. Exceptions to the limit of ½% of contract value will only be considered for the payment of equipment ordering costs and supplier fees associated with ordering long lead material as approved by the COAR.

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In order to receive mobilization payment the contractor shall provide a plan for utilization of the mobilization fee within 18 days of NTP. This Mobilization Plan will identify necessary interim payments and persons charging to the contract for project management, engineering, purchasing, administration and other reasonable charges needed to start work and make required progress in the initial 45 days of the contract. The Mobilization Plan shall be approved by the COAR prior to the first payment. Mobilization payments will be made no sooner than twice per month. These mobilization payments shall be reconciled, after the Schedule of Values and Project Schedule is approved, as work accomplished within the initial progress payment period.

The Schedule of Values shall have an item or item(s) designated “Contract Performance Allowance.” The Contract Performance Allowance shall be valued at 2.5% of the total contract value, unadjusted for contract options or subsequent change orders. The Contract Performance Allowance is that portion of the contract price relating to execution and fulfillment of the warranty/guarantee period and completion of performance obligations.

The COAR may allow a minor redistribution of costs in the Schedule of Values to more accurately reflect the costs. Any redistribution of costs is at the discretion of the COAR and will not be allowed without backup documentation from the Contractor demonstrating a clear and rational necessity for the redistribution. A redistribution of costs will not result in an acceleration of the payments made to the Contractor beyond the originally submitted Schedule of Values unless specifically permitted in writing by the COAR.

The Contractor shall, for each progress payment requested, submit a Progress Estimate reflecting physical progress by item in the Schedule of Values as reflected in Project Schedule. Each Progress Estimate is to be accompanied by an updated Project Schedule that substantiates, by item and in total, the percentage complete shown in the Progress Estimate. Work packages in the Progress Estimate are to correspond to the work packages in the Project Schedule. The percentage of completion shown in the work packages is to be derived from the updates to individual schedule activities.

The COAR may utilize a submitted Progress Estimate, or at his sole discretion, may make an independent estimate of physical percentage of completion of the contract, and may authorize progress payment on either basis. The COAR’s use of Contractor-submitted Progress Estimates or independent estimates shall solely be for purpose of establishing the value of progress payments and shall not be evidence of the actual percentage of completion or otherwise bind the UAF.

Progress payments will be made at least once a month. Progress payments may be made semi-monthly if requested in writing by the Contractor and the value of the estimate for the semi-monthly interval is equal to or exceeds $250,000.00. Each payment will be equal to the sum of total progress to date (including all pay items, approved contract changes, and earned incentives and disincentives) less the Contract Performance Allowance (CPA) and retainage, and less the sum of all previous payments.

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Upon written acceptance of vessel delivery by the UAF, the semi-final progress payment will be made to the extent that the total amount paid by the UAF may then be equal to 97.5% of the Contract price as adjusted by approved change orders and liquidated damages. Upon expiration of the twelve (12) month guarantee/warranty period set forth in Subsection 105-1.20, final payment will be made under the conditions described in Subsection 109-1.08. 215

In response to substantial unsatisfactory prosecution of the contract, the COAR may withhold, as retainage, an amount up to 10% of the total amount earned to date from all subsequent progress payments or withhold 10% of the contract price.

The UAF will notify the Contractor in writing at least five days before issuing a progress payment that includes new retainage and will cite the reason for the impending new retainage in the notice. Renotification concerning retainage amounts associated with a previous progress payment will not be provided in conjunction with subsequent progress payments.

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As a precondition to each Progress Payment, the Contractor shall also submit a Release of Claims Certification, in a format approved by the UAF, releasing the UAF from all claims (including subcontractor claims) for additional contract time or cost which have not previously been timely identified in writing pursuant to the procedures of the Contract.

Any claim or potential claim, including any claims for Change Orders, shall be deemed released and waived by the Contractor unless the claim is specifically and timely identified by the Contractor and explicitly excepted from the Release of Claims Certification. Once a claim or potential claim has been released pursuant to the terms of this Section, it cannot later be revived by inclusion in a new claim or by an exception to a later Release of Claims Certification. This Release of Claims Certification procedure is not intended to relieve the Contractor of any other obligations under this Contract to comply in a timely manner with any notice of claim or change order requirement in the Contract, including, but not limited to, Sections 104-1.02 and 105-1.18.

109-1.07 Payment for Material on Hand 235

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Payment may be made for materials, inclusive of equipment to be permanently installed, meeting the applicable specifications and stockpiled on the project or stored in acceptable storage facilities off the limits of the project for future incorporation into the work. Payment for such materials will be at the discretion of the COAR, who may decline to make payment until the materials are determined to be acceptable by the COAR for incorporation into the work.

Payment for materials on hand will not be made unless requested in writing by the Contractor, and accompanied by the proper documentation including, but not limited to, receipts of paid invoices. The Contractor’s request must include a certification that the materials meet the applicable contract specifications, a summary of the items stockpiled, the quantity of each and the stockpile location(s), all of which shall be verified by the COAR prior to acceptance for payment. In no case shall payment be considered without receipt of paid invoice and proof of shipment insurance.

Payment for materials purchased by the Contractor may be made to the extent of the delivered cost as evidenced by copies of invoices and freight bills, along with other information the COAR may require. In no case shall payments for stockpiled materials exceed the amounts in the Schedule of Values for those items.

109-6


Materials produced by the Contractor may be included in the payment for materials on hand provided the materials pass the applicable specifications. Quantities may be based on production statements submitted by the Contractor and approved by the COAR.

No payment will be made for stockpiled perishable materials that could be rendered useless because of long storage periods. 255

260

265

Payment for materials on hand will not constitute final acceptance. It shall be the Contrac-tor’s responsibility to protect the material from damage or loss while in storage.

Stockpiled materials payments will be made on the pay estimate following receipt of the Contractor’s request and all required documentation. Deductions will be made from stockpiled materials quantities appearing on the estimate as the materials are incorporated into the work.

This Subsection shall apply only when the total value of materials on hand for which payment is sought is in excess of $25,000.

The UAF shall be reimbursed payments made for materials on hand which are subsequently damaged or otherwise determined by the UAF to be unsuitable for incorporation in the work. This provision shall apply whether or not the materials are already installed at the time of the determina-tion.

109-1.08 Final Acceptance and Final Payment

Final acceptance of the work on a vessel shall be withheld until the guarantee survey required by Subsection 105-1.20 is complete with all associated liabilities reconciled to the satisfaction of the COAR and the Contractor furnishes all certificates, guarantees, releases, affidavits, etc., required by these provisions or elsewhere in the contract (see Subsection 105-1.16).

270

275

280

285

When the vessel has been finally accepted as provided in Subsection 105-1.17, the COAR will prepare the final estimate of the work performed. All prior partial estimates and payments shall be subject to correction in the final estimate and payment.

If the Contractor concurs with the estimate, or if he files no claim within thirty (30) days of receiving the final estimate, the estimate shall be processed for final payment. After concurrence regarding such final estimate by the Contractor, he will be paid the entire sum found to be due after deducting all previous payments and all amounts to be deducted under the provisions of the contract.

The written acceptance of the final estimate by the Contractor shall constitute acceptance by him of the total amount shown as payment in full for the amount due him under the contract. The Contractor’s written acceptance, however, preserves any claims timely filed in accordance with the terms of the contract prior to the signing of the final estimate by the Contractor. Any timely filed claims must be listed as exceptions to the final estimate by the Contractor. Any claims listed as exceptions on the final estimate that have not been timely filed (as provided under the terms of the contract) prior to the signing of the final estimate by the Contractor will be considered null and void. Any claims timely filed under the terms of the contract and not listed as exceptions on the final voucher shall be considered null and void and not subject to further consideration or legal action.

If the Contractor fails or declines to accept the final estimate within thirty (30) days and files no claim, the UAF will consider the estimate accepted and process the estimate for final payment.

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290 Once the final estimate assembly has been executed by both parties and all claims, if any, have been settled the Contractor shall furnish the COAR with a “Release on Contract,” which releases UAF from all claims in connection with the contract.

If the Contractor’s claim to amounts payable under the contract has been assigned, a release may also be required of the assignee.

109-1.09 Incentive and Disincentive for Weight Control 295

300

305

310

Based on the USCG approved, UAF witnessed and approved deadweight survey and inclining experiment results, UAF will issue a contract change order to adjust the contract amount as follows:

A. Within a “free zone” between 10 long tons below and 15 long tons above the approved Contractor Weight Estimate with construction margins included, no incentive/disincentive will be applied.

B. The incentive for coming in more than 10 long tons below the approved Contractors Weight Estimate with construction margins included, shall be $25,000.00 per long ton (to the closest long ton), with a maximum incentive of $250,000.00.

C. The disincentive for coming in more than 15 long tons above the approved Contractor Weight Estimate with construction margins included, shall be $100,000.00 per long ton (to the closest long ton), with a maximum disincentive of $1,000,000.00.

Refer to specification sections 096 and 097 for requirements related to weight control planning, reporting, weight estimate approval and the deadweight survey and inclining experiment.

109-8


SECTION 110

SCHEDULE SPECIFICATION

110-1.01 General

Within thirty (30) days after NTP with design and construction of ARRV, and prior to submission of the first Progress Estimate (not covered with mobilization as per 109-1.06), the Contractor shall prepare and submit to UAF for approval a resource and cost-loaded schedule as described below for the work described in this contract. In response to comments by UAF, the schedule shall be re-submitted within 45 days after NTP, and, when approved by the COAR, will become the Project Schedule. The Project Schedule shall be prepared by the Contractor’s “in-house” supervisory personnel. The Project Schedule should not deviate significantly from the preliminary schedule submitted with the Contractor’s Qualification Materials. The completed Project Schedule shall define the operations required to bring the entire work to Delivery Acceptance by the scheduled Delivery Acceptance date.

5

10

15

20

25

30

35

40

The Contractor warrants that the Project Schedule is the Contractor’s committed plan to complete all work within the allotted time and assumes responsibility for prosecution of the work as shown. The Contractor shall utilize the Project Schedule in planning, scheduling, coordinating, performing and controlling the work under this contract (including all activities of subcontractors, equipment vendors, and suppliers.)

The purpose of the Project Schedule shall be to:

A. Assure adequate planning, scheduling and reporting during execution of the work by the Contractor; and

B. Assure coordination of the work of the Contractor and all subcontractors; and

C. Assist the Contractor and UAF in monitoring the progress of the work and evaluating proposed changes to the contract and the Project Schedule. The Project Schedule must support UAF progress tracking using EVM principles (also see progress estimate section of the contract, Subsection 109-1.06); and

D. Assist the Contractor and UAF in arriving at true value for the Contractor’s Progress Estimates. NOTE: The Contractor’s Progress Estimate shall be accompanied by its Project Schedule reflecting an update corresponding to the date of the Progress Estimate. Payment will not be made to the Contractor without this updated Project Schedule.

E. Determine the critical path to Delivery Acceptance and support Time Impact Analysis required by Subsection 104-1.02 regarding contract changes.

The Project Schedule shall be developed to the work item level. “Work item” refers to an item of work which may be readily related to the contract’s technical specifications (i.e., install fire pump). Work items shall be summed up into Work Packages as discussed in the following subsection and in 109-1.06. The Project Schedule shall utilize the contractors work breakdown system (WBS) and shall reflect cost and schedule for all work packages.

The Contractor shall provide the schedule and all required updates and revisions to the COAR in both electronic and hard copy format. The Contractor shall utilize schedule and project management software to develop the Project Schedule and to maintain and update the schedule as required for project review and to support progress estimates for payment purposes (see Subsection

110-1


109-1.06). UAF will set up and maintain a mirror schedule using Primavera Contract manager or Expedition software. The contractor project scheduling and/or contract management software shall be independent and shall not be electronically interfaced with UAF software. 45

UAF approval or rejection, with comment, of the Project Schedule will take place within twenty-one (21) days of receipt from the Contractor.

110-1.02 Not Used

110-1.03 UAF Schedule Requirements

The Project Schedule shall be based on the Shipyard derived work breakdown system (WBS) and shall incorporate labor, equipment and quantity resource data as well as cost information as described below. The Project Schedule shall cover the time from Notice to Proceed to the Delivery Acceptance. The Project Schedule shall include a cumulative float of seven months, with six months prior to and one month after arrival of all Propulsion Thrusters equipment. The Project Schedule shall be itemized in sufficient detail to indicate all activities required for completion of the work including but not limited to the following:

50

55

60

65

70

75

80

A. Administration B. Design C. Engineering D. Submittals E. Procurement, including all long lead time items F. Construction (including a logical breakdown of structure, systems and outfitting tasks) G. Inspection and testing (including separate and clear identification of inspections and

tests requiring regulatory body witness) H. Equipment, dry-dock and facility utilization I. Trials and delivery J. Regulatory approvals

Activities in the Project Schedule will be grouped into work packages that correspond to items in the Schedule of Values. The number of work packages, inclusive of both Design and Construction work activities, shall be no less than 200 per vessel and no activity having a cost greater than $2,500,000 or duration of more than 20 days. The work packages shall represent the Contractor’s work plan and methods and wrap up costs of WBS elements. Exceptions to these requirements will be allowed provided the intent of a fair and effective means of payment for completed work is preserved. The COAR will make the final determination as to whether the intent is preserved in the Contractor’s proposed approach. If no other agreement is reached the requirements will stand as written.

The following shall be included for each schedule activity:

A. Performance responsibility by Contractor department, subcontractor, vendor, UAF, etc. All abbreviations or codes shall be fully described in a legend attached to the Project Schedule.

B. A numeric designation (i.e. WBS/cost code) identifying the pay item corresponding to items established for progress payments in General Provisions Section 109-1.06 to which costs for each activity are to be charged.

110-2


C. All non-field activities shall be identified through codes or other identification so that they are readily distinguished from field construction activities.

85

90

95

100

The Contractor shall be responsible for assuring that subcontractor work scope and sequencing is included in its Project Schedule.

The Contractor shall provide, in narrative form, a listing of the rationales and assumptions used in the development of its Project Schedule. The narrative shall include, at a minimum:

A. Sufficient information and references to define adequately the scope of work included in each major activity type (i.e., design, piping, cable, etc.) This would include such information as discipline, craft, cost code, location, etc.

B. A description of the means and methods the Contractor plans to use in the performance of the work for each major activity type. This would include such information as sub-contractors, craft, equipment to be employed, etc.

C. A description of the basis for the calculation of the duration for all activities. This would require using planned weekly work hours for engineering and production personnel, crew size, crew output, etc., to calculate how long an activity will take to perform as well as the amount of resources (people, construction equipment) that will be required to achieve the planned schedule.

Failure by the Contractor to include any element of work required for performance of the contract shall not excuse the Contractor from completing all work by the scheduled Delivery Acceptance dates.

110-1.04 Schedule Updates 105

110

115

120

The Project Schedule shall be updated on at least a monthly basis and whenever a Progress Estimate is submitted for payment. The updated Project Schedule shall include the dates activities were actually started and when they were completed, the physical percentage of work complete, and the estimated remaining duration for each activity in progress. The physical percentage of work complete shall be verified by UAF.

The Contractor shall also prepare a written narrative report that will include a description of the amount of progress during the last reporting period in terms of completed activities, a description of problem areas, current and anticipated delaying factors and their estimated impact on performance of other activities and completion dates and an explanation of corrective action taken or proposed. The report shall include a forecast of key activities to be completed, started and worked during the next 45 days.

The submission of the schedule reports and plotted diagrams shall be an integral part and basic element of the Progress Estimate upon which payments will be made pursuant to General Provisions Section 109. The Contractor shall be entitled to payments only upon approval of the corresponding schedule update submitted with the Progress Estimate. The Contractor is responsible for furnishing all of the information necessary to ascertain actual progress. Failure or refusal to furnish the required information and schedules shall constitute a basis for withholding any such payments until the required information is furnished and the schedule is prepared or revised on the basis of such information.

110-3


The initial and each updated Project Schedule shall be provided in electronic format and hard copy format suitable for use on the hardware and software provided by the Contractor for UAF’s use in the UAF Project Office. The files provided shall be a complete copy of all information contained in the basic schedule.

125

130 Updating the Project Schedule to reflect actual progress made shall not be considered a revision to the Project Schedule.

110-1.05 Schedule Revisions

If, as a result of the schedule updates, the schedule no longer represents the planned prosecution or progress of the remaining work, the COAR may request, and the Contractor shall submit, a revision to the Project Schedule.

The Contractor may also request revisions to the Project Schedule in the event the Contractor’s planning for the remaining work is revised. If the Contractor desires to make changes in the Project Schedule to reflect revisions in its method of operating and scheduling of the work, the Contractor shall notify the COAR in writing, stating the reason for the proposed revision.

135

140

145

150

155

160

If revision to the Project Schedule is contemplated by either the Contractor or the COAR, the other party shall be so advised in writing at least seven (7) calendar days, prior to the next schedule update, describing the revision and setting forth the reasons thereof.

COAR-directed revisions to the Project Schedule will not be incorporated into the Project Schedule without written notice to the Contractor, who shall respond in writing within seven (7) calendar days, either agreeing with the COAR’s proposed revision, or setting forth justification why it should not be accomplished. The COAR’s notice may include an analysis of the cost and schedule impacts of the revision under consideration. If the Contractor’s justification for not accomplishing the revision is acceptable to the COAR, such revision will not be incorporated in the Project Schedule. The Contractor’s failure to respond in writing within seven (7) calendar days will be deemed to be an acceptance of the COAR-directed revisions, and such revisions will be incorporated into the Project Schedule by the Contractor.

Contractor-requested revisions to the Project Schedule will not be incorporated into the Project Schedule without written approval by the COAR who shall respond in writing within seven (7) calendar days, either agreeing with the Contractor’s proposed revision, or setting forth justification as to why it should not be accomplished. The Contractor’s request shall include an analysis of the cost and schedule impacts of the revision under consideration. If the Contractor’s justification for incorporating revision is acceptable to the COAR, such revision will be incorporated in the Project Schedule. The COAR’s failure to respond in writing within seven (7) calendar days will be deemed to be acceptance of the Contractor-requested revisions, and such revisions will be incorporated into the Project Schedule by the Contractor.

Revisions to the labor assigned to each schedule activity shall be reported in the formal Project Schedule updates.

110-1.06 Time Impact Analysis

When contract modifications are initiated by either UAF or the Contractor, a change to the Project Schedule may be experienced. If the change indicates that a revision of the Project Schedule and related resources is needed, the Contractor shall submit to the COAR a written Time Impact 165

110-4


Analysis illustrating the influence of each Contract Modification on any of the interim completion dates and the scheduled Delivery Acceptance date. UAF may elect to perform an independent Time Impact Analysis of any change. If UAF performs such an analysis, the results will be provided to the Contractor.

The Time Impact Analysis shall demonstrate the time and resource impact to each and every affected activity in the Project Schedule utilizing the most recent update as the basis for measuring the change. The activity durations used in the Time Impact Analysis shall also be those included in the latest update unless adjusted by mutual agreement. If requested by the COAR, Time Impact Analysis information shall be provided in electronic format suitable for use on the scheduling hardware and software provided by the Contractor for UAF’s use in the UAF Project Office.

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175

180

185

190

195

Activity delays shall not automatically mean that an extension of the scheduled Delivery Acceptance date is warranted or due the Contractor. A contract Modification or delay may not affect existing critical activities or cause non-critical activities to become critical.

Extensions of time to interim completion dates or to the scheduled Delivery Acceptance date under the contract will be granted only to the extent that:

A. Equitable time adjustments to the activity or activities affected by the Contract Modifi-cation or delay exceeds the total float of the affected activity or subsequent paths and extends any interim completion date or the Delivery Acceptance date, and

B. The COAR agrees to a time extension in lieu of directing an acceleration of the work effort under the Contract.

Each Time Analysis shall be submitted to the COAR within seven (7) calendar days after notice of direction for a Contract Modification is given to the Contractor, or the Contractor provides notice of an impact to the COAR.

Approval or rejection in writing by the COAR of each Time Impact Analysis will be made within seven (7) calendar days after receipt. Upon approval of the Contractor’s Time Impact Analysis, and if so warranted under the terms of the contract, a Contract Modification will be issued incorporating the Time Impact Analysis and any warranted extension to interim completion dates or to the scheduled Delivery Acceptance date. Subsequent schedule updates shall then reflect the agreed upon changes to the Project Schedule (and related resources) as well as the approved time extension.

110-5

ARRV Owner Furnished Equipment List(OFE) Rev. A - 16 February 2009 Contract Attachment 1

Spec. Section Item Qty. Manufacturer

Vendor Data date

Delivery Date Notes

234 Propulsion Thrusters 2 tbd tbd tbdPurchase Specs provided as addendum to ship specifications.

722.4 150 kHz ADCP, transducer and deck unit only 1 Teledyne RDInstruments 2/15/10 4/15/10

From the Alpha Helix. To be provided to the acoustic systems integrator (Kongsberg), via the Contractor.

713.1 9/16” 3x19 wire rope 33000 ft unknown tbd tbd for oceanographic (traction) winch - spool 1

713.1 0.680" coax electro-mechanical cable 33000 ft unknown tbd tbd for oceanographic (traction) winch spool 2

713.2 3/8” 3x19 wire rope 33000 ft unknown tbd tbd for hydrographic winch

713.2 0.322” electro-mechanical cable 33000 ft unknown tbd tbd for CTD winch

714.6 Docking head bumper 1 unknown tbd tbd For Baltic Room over-the-side handling gear

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ARRV Contract Deliverable List - RFP Preliminary Revision A-, 16 February 2009 Contract Attachment 2

Subm

ittal

#

(not

iona

l) Specification / General

Provisions (gp) Reference

Deliverable/ Doc No./ Dwg. No.Scheduled delivery

(dates completed by Contractor)

Actual delivery Latest rev.

Planned date of

UAF review

Outstanding reservations

(Yes/No) Status of UAF review - Notes

ABS Submittal

DateStatus of ABS Review - Notes

Specification Deliverables

Shipyard drawings and all notifications and deliverables not othewise listed herein including production engineering drawings

To be completed by the Contractor

1 042 Long Lead Material (LLM) List 30 days after NTP

2 043Design Veirification and Transfer Plan, including Drawing, spec and LLM reviews At Start-up Conference

3 043Design Veirification and Transfer - Contractor Issue of Drawings End of DV/T

4 070.3 ABS Correspondence TBD

5 085.1 Contractor Engineering Deliverables TBD

6 085.2 Working Drawing Deliverables TBD

7 085.3 As-Built Drawings30 days prior to delivery

8 085.4 Vessel Record Plans prior to delivery

9 085.5 Mock Ups 4 months after NTP

10 085.6 Manufacturer suggested spares List180 days prior to delivery

11 085.6 Specified Spares at delivery

12 086.2 General Information Booklet prior to delivery

13 086.3 Purchase Orders TBD, prior to issue

14 086.5Tech Manuals, Instruction Books and Equipment Manuals (Vendor manuals) 90 days prior to trials

15 086.6 ARRV Manuals 90 days prior to trials

16 086.7 MMS Data 180 days prior to trials

This is a partial and preliminary Schedule of Deliverables for bidder information. This list is to be completed after contract award in accordance with Section 105-1.02 of General Provisions. Use of additional information fields, or revision of format, or revised order of presentation is at the Contractor's discretion in keeping with contract requirements.

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Subm

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Planned date of

UAF review



ABS Submittal


17 092.8.1/2 Lightship Survey and Inclining Plan/Report30 days prior and 5 days after

18 092.8.3 Stability Report to USCG upon submittal

19 092.8.4 EMI Test Plan/Report TBD

20 092.8.5 Airborne Noise Survey TBD

21 092.8.6 Sructure-Borne Noise Survey TBD

22 092.8.7 Vibration Survey TBD

23 092.9.5 Compartment Close-Out Checklists 45 days prior to checks

24 092.9.4 Sea Trial Handbooks Prior to Trial

25 092.9.7 Dock and Sea Trial Reports 10 days after trial

26 092.9.1 Test Program Plan 180 days after NTP

27 092.9.3 Test Memorandums30 days prior to test or trial, and 10 days after

28 092.9.6 Test Memorandums Reports

29 092.9.1 Test Program Index 270 days after NTP

30 092.9.2 Test Program Status Reports every 2-4 weeks

31 096 Contractor Weight Estimate 120 days after NTP

32 096 Weight Control Program 90 days after NTP

33 096 Weight Reports monthly

34 102 Welding Procedures and Details90 days prior to start of fabrication

35 102.1 Welding Surveyor Qualifications Prior to Fabrication

36 102.7 Radiographic Inspection Locations prior to welding

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Subm

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Planned date of

UAF review



ABS Submittal


37 200.4.1 Propulsion System Dynamic Analysis TBD

38 200.4.2 Torsional Vibration Analysis TBD

39 234.1 Propeller Design Details prior to order

40 234.2Propulsion Model Test and Wake Survey Reports TBD

41 234.3 Thruster Gear Drawings/Rating Calcs TBD

42 234.3 Thruster manufacturing Procedures prior to manufacture

43 234.2.7 Cavitation Test Details TBD

44 301.3 Electrical Harmonic Analysis 180 days after NTP

45 302.4 Main Propulsion Motor Shaft Stree Calcs prior to manufacture

46 302.5Bow Thruster Propulsion Motor Shaft Stree Calcs prior to manufacture

47 303.1 Circuit Breaker Coordination Studyat end of DV/T for USCG approval

48 304 Voltage Drop Calculations TBD

49 304.1 Cable Install Plan, for electrical noise control TBD

50 324.2 Integrated Power Management Details during detailed design

51 431.1 IMACS Points List Details TBD

52 491Location of Network Equipment and cableway drawings during detailed design

53 500.5 Waste heat recovery design details TBD

54 500.7 Lifting Points and Deck Fitting Test Drawing TBD

55 504.2 Gage Board Layouts As needed

56 600.1 Color Boards 180 days after NTP

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ABS Submittal


57 603.5 Draft Mark Survey Report TBD

58 611.1 Mooring Fitting Details TBD

59 624 Closure List TBD

60 624.13 Man Hole Locations during detailed design

61 638 Refer Shelving Details TBD

62 641.1 Furniture Details prior to order/fab

63 649 Plumbing Fixtures approvals TBD

64 670 Stowage and Shelving Details TBD

65 717 Van Service Details TBD

66 720 Acoustic System Installation Retails TBD

67 725.8 Benchmark Survey Report 30 days after survey

68 790 Flex Mount Selections End of DV/T

69 790 Vibration 6 degree of freedom analyses End of DV/T

70 790 Machinery Noise Source Level List End of DV/T

71 512/790 HVAC Design Details TBD

72 043/180/790 Foundation Drawings End of DV/TGeneral

Provision Deliverables

Shipyard deliverables not othewise listed as per the general provisions of the contract

To be completed by the Contractor

73 gp103 Bondswithin 10 days of NOIA, prior to NTP

74 gp105-1.02 Schedule of Deliverables 30 days after NTP

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Planned date of

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ABS Submittal


75 gp105-1.10 QA Status Reports monthly

76 gp105-1.10 Quality Assurance Program Plan 60 days after NTP

77 gp105-1.15 Delivery Acceptance Survey TBD

78 GP105-1.19 Certified Payroll Reports bi-weekly

79 gp105-1.22 Start Up Conference Materials 7 days after NTP

80 gp105-1.23 Manaagement Review Materials every 12 weeks

81 gp105-1.24 Photos every 12 weeks, plus

82 gp106-1.03 Samples as requested

83 gp106-1.04 Factory Inspection Reports as needed

84 gp106-1.05 Material Certificattions as delivered

85 gp107-1.04 EEO Records ans Reports TBD

86 gp107-1.06Health Safety and Environmental Program Plan 30/60 days after NTP

87 gp107-1.13 Insurance Evidence Documents prior to NTP

88 gp107-1.13 Joint Venture Agreement solicitation

89 gp109-1.06 Mobilization Plan 10 days after NTP

90 gp109-1.06 Schedule of Values 30/45 days after NTP

91 gp109-1.06 Progress Payment Requests (Invoices) each 2-4 weeks

92 gp110-1.03 Project Schedule 30/45 days after NTP

93 gp110-1.06 Time Impact Analyseswith change order estimates

94 gp110-1.04 Project Schedule Updatesmonthly/with progress estimates

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