Government’s Records

Except as provided in paragraph B of this clause, all records acquired or generated by the Contractor in its performance of this contract shall be the property of the Government and shall be delivered to the Government or otherwise disposed of by the Contractor either as the Contracting Officer may from time to time direct during the process of the work or, in any event, as the Contracting Officer shall direct upon completion or termination of the contract. Privileged and confidential legal documents prepared by or for Contractors that are not reimbursed under the contract are excluded.

All occupational health records generated during the performance of Hanford-related activities will be maintained by the Hanford Environmental Health Foundation (HEHF) and are the property of DOE.

All radiation exposure records generated during the performance of Hanford-related activities will be maintained by the Pacific Northwest National Laboratory (PNNL) and are the property of DOE.

Contractor’s Own Records

The following records are considered the property of the Contractor and are not within the scope of paragraph A above:

Employment-related records such as the following:

• Personnel files maintained on current individual employees, or Major Subcontractor employees
• Files maintained on applicants, or Major Subcontractor applicants
• Qualifications or suitability for employment
• Allegations, investigations, and resolution of employee misconduct
• Employee discipline
• Records on salary and employee benefits
• Labor negotiations records
• Employee concern program records
• Employee assistance program records

Confidential Contractor financial information, and correspondence between the Contractor and other segments of the Contractor located away from the DOE facility (i.e., the Contractor’s corporate headquarters);

Records relating to any procurement action by the Contractor, except for records that under 48 CFR (DEAR) 970.5204-9, Accounts, Records, and Inspection, are described as the property of the Government; and

The following categories of records maintained pursuant to the technology transfer clause of this contract:

Contract Completion or Termination

In the event of completion or termination of this contract, copies of any of the Contractor-owned records identified in paragraph (b) of this clause, upon the request of the Government, shall be delivered to DOE or its designees, including successor Contractors. Upon delivery, title to such records shall vest in DOE or its designees, and such records shall be protected in accordance with applicable federal laws (including the Privacy Act), as appropriate.

Inspection, Copying, and Audit of Records

All records acquired or generated by the Contractor under this contract in the possession of the Contractor, including those described at paragraph (b) of this clause, shall be subject to inspection, copying, and audit by the Government or its designees at all reasonable times, and the Contractor shall afford the Government or its designees reasonable facilities for such inspection, copying, and audit; provided, however, that upon request by the Contracting Officer, the Contractor shall deliver such records to a location specified by the Contracting Officer for inspection, copying, and audit. The Government or its designees shall use such records in accordance with applicable federal laws (including the Privacy Act), as appropriate.

Applicability

Paragraphs (b), (c), and (d) of this clause apply to all records without regard to the date or origination of such records.

Records Retention Standards

Special records retention standards, described at DOE Order 1324.5B, Records Management Program and DOE Records Schedules (version in effect on effective date of contract), are applicable for the classes of records described therein, whether or not the records are owned by the Government or the Contractor. The Government may waive application of these record retention schedules, if, upon termination or completion of the contract, the Government exercises its right under paragraph (c) of this clause to obtain copies and delivery of records described in paragraphs (a) and (b) of this clause.

Flow Down

The Contractor shall include the requirements of this clause in all subcontracts that are of a cost-reimbursement type if any of the following factors is present:

The value of the subcontract is greater than $2 million (unless specifically waived by the Contracting Officer);

The Contracting Officer determines that the subcontract is, or involves, a critical task related to the contract; or

The subcontract includes 48 CFR (DEAR) 970.5204-2, Integration of Environment, Safety, and Health into Work Planning and Execution, or similar clause.

The Contractor shall design, develop, or adopt the following systems of records on individuals to accomplish an agency function pursuant to the contract clause entitled “Privacy Act.”

The above list shall be revised from time to time by mutual agreement between the Contractor and the Contracting Officer as necessary to keep it current. A formal modification to the contract is not required to incorporate these revisions; but, the revisions become effective upon mutual agreement of the parties. The mutually agreed upon revisions shall have the same effect as if actually listed above for the purpose of satisfying the listing requirement contained in paragraph (a)(1) of the contract clause entitled “Privacy Act.” The revisions will be formally incorporated per the next annual contract update modification, unless added sooner by the Contracting Officer.

Payment of Fee Amounts Earned

Fee payments shall be made by direct payment or withdrawn from funds advanced or available under this contract, as determined by the Contracting Officer. The Contracting Officer may offset against any such fee payment the amounts owed to the Government by the Contractor, including any amounts owed for disallowed costs under this contract. No fee payments may be withdrawn against the letter-of-credit without prior written approval of the Contracting Officer.

Payments on Account of Allowable Costs

Allowable costs, determined in accordance with the cost principles in Subpart 31.2 of the Federal Acquisition Regulation (FAR) as supplemented by Subpart 931.2 of the Department of Energy Acquisition Regulations (DEAR), and other items as approved in writing by the Contracting Officer, shall be made from advances of Government funds limited by Section B.2. “Obligation of Funds.” When pension contributions are paid by the Contractor to the retirement fund less frequently than quarterly, accrued costs therefore shall be excluded from costs for payment purposes until such costs are paid. If pension contribution are paid on a quarterly or more frequent basis, accrual therefor may be included in costs for payment purposes, provided that they are paid to the fund within 30 days after the close of the period covered. If payments are not made to the fund within such 30-day period, pension contribution costs shall be excluded from cost for payment purposes until payment has been made.

Final FDH Incurred Cost Submittal

Proposed charge-out rates for the following fiscal year will be submitted each year in accordance with direction provided in the Baseline Updating Guidance issued in the spring of each year pertaining to the subsequent execution year and outyears.

The Contractor shall submit an adequate final incurred cost submittal to the Contracting Officer (or cognizant Federal agency official) and auditor within the 6-month period following the expiration of each of its fiscal years. Reasonable extensions, for exceptional circumstances only, may be requested in writing by the Contractor and granted in writing by the Contracting Officer. The Contractor shall support its proposal with adequate supporting data.

The submitted cost shall be based on the Contractor’s actual cost experience for that period. The appropriate Government representative and the Contractor shall establish the final indirect cost rates incurred costs as promptly as practical after receipt of the Contractor’s proposal.

Failure by the parties to agree on final annual incurred cost shall be a dispute within the meaning of the Disputes clause.

Quick-closeout procedures. Quick-closeout procedures are applicable when the conditions in FAR 42.708(a) are satisfied.

Special Financial Institution Account Use

All advances of Government funds shall be withdrawn pursuant to a letter-of-credit in favor of the bank or, at the option of the Government, shall be made by direct payment or any other payment mechanism to the Contractor, and shall be deposited only in the Special Demand Deposit Account referred to in the Special Bank Account Agreement, which is incorporated into this contract included in Section J. No part of the funds in the Special Demand Deposit Account shall be (1) commingled with any funds of the Contractor or (2) used for a purpose other than that of making payments for costs allowable and, if approved, fees earned under this contract or payments for other items specifically approved in writing by the Contracting Officer. If the Contracting Officer determines that the balance of such Special Demand Deposit Account exceeds the Contractor’s current needs, the Contractor shall promptly make such disposition of the excess as the Contracting Officer may direct.

Title to Funds Advanced

Title to the unexpended balance of any funds advanced and of any Special Demand Deposit Account established pursuant to this clause shall remain in the Government and be superior to any claim or lien of the bank of deposit or others. It is understood that an advance to the Contractor hereunder is not a loan to the Contractor, and will not require the payment of interest by the Contractor, and that the Contractor acquires no right, title or interest in or to such advance other than the right to make expenditures therefrom, as provided in this clause.

Certification and Penalties

The Contractor shall prepare and submit a monthly voucher for the total of costs incurred and accrued for the period covered by the voucher. It is anticipated that this will be a monthly submission unless otherwise agreed to by the Contracting Officer. Vouchers must be formatted in a manner approved by the Contracting Officer. Along with Accompanying the annual final indirect incurred cost submission the Contractor shall provide a certification subject to the penalty provisions for unallowable costs as stated in the contract clause, “52.242-3, Penalties for Unallowable Costs.”

Financial Settlement

The Government shall promptly pay to the Contractor the unpaid balance of allowable costs and earned fee upon termination of the work, expiration of the term of the contract, or completion of the work and its acceptance by the Government after (1) compliance by the Contractor with DOE’s patent clearance requirements, and (2) the furnishing by the Contractor of:

An assignment of the Contractor’s rights to any refunds, rebates, allowances, accounts receivable, collections accruing to the Contractor in connection with the work under this contract, or other credits applicable to allowable costs under this contract;

A closing financial statement;

The accounting for Government-owned property required by the clause entitled “Property;” and

A release discharging the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this contract subject only to the following exceptions:

Specified claims in stated amounts or in estimated amounts where the amounts are not susceptible to exact statement by the Contractor;

Claims, together with reasonable expenses incidental thereto, based upon liabilities of the Contractor to third parties arising out of the performance of this contract; provided that such claims are not known to the Contractor on the date of the execution of the release; and provided further that the Contractor gives notice of such claims in writing to the Contracting Officer promptly, but not more than one (1) year after the Contractor’s right of action first accrues. In addition, the Contractor should provide prompt notice to the Contracting Officer of all potential claims under this clause, whether in litigation or not (see also the contract clause entitled, “Insurance-Litigation and Claims”);

Claims for reimbursement of costs (other than expenses of the Contractor by reason of any indemnification of the Government against patent liability), including reasonable expenses incidental thereto, incurred by the Contractor under the provisions of this contract relating to patents; and

Claims recognizable under the clause entitled, Nuclear Hazards Indemnity Agreement.

In arriving at the amount due the Contractor under this clause, there shall be deducted, (1) any claim which the Government may have against the Contractor in connection with this contract, and (2) deductions due under the term of this contract, and not otherwise recovered by or credited to the Government. The unliquidated balance of the Special Demand Deposit Account may be applied to the amount due and any balance shall be returned to the Government forthwith.

Claims

Claims for credit against funds advanced for payment shall be accompanied by such supporting documents and justification, as the Contracting Officer shall prescribe.

Discounts

The Contractor shall take and afford the Government the advantage of all known and available cash and trade discounts, rebates, allowances, credits, salvage, and commissions unless the Contracting Officer finds that action is not in the best interest of the Government.

Collections

All collections accruing to the Contractor in connection with the work under this contract, except for the Contractor’s fee and royalties in accordance with this contract, shall be Government property and shall be processed and accounted for in accordance with applicable requirements imposed by the Contracting Officer and, to the extent consistent with those requirements, shall be deposited in the Special Demand Deposit Account or otherwise made available for payment of allowable costs under this contract, unless otherwise directed by the Contracting Officer.

Direct Payment of Charges

The Government reserves the right, upon ten days written notice from the Contracting Officer to the Contractor, to pay directly to the persons concerned, all amounts due which otherwise would be allowable under this contract. Any payment so made shall discharge the Government of all liability to the Contractor therefor.

Salaried and hourly employees whose jobs are likely to be eliminated due to changes in the Contractor’s scope of work, budgetary reductions, or efficiencies in performing the mission who are covered by the terms of section 3161 may be offered opportunities for retraining. Retraining programs will be designed to provide occupational skills which are in demand by the Contractor or by other employers locally, regionally, or nationally, as appropriate. Tuition payments for courses to qualify displaced employees for outside employment may be approved by the Contractor. Retraining for outside employment may be conducted during working hours under programs approved by DOE.

When actual or potential employment termination is the result of a work force restructuring plan prepared by the Department pursuant to section 3161, the Contractor shall comply with the DOE approved plan. This plan may prescribe funding amounts for retraining eligible workers for new Contractor jobs in environmental cleanup, and may prescribe funding amounts and procedures for providing displaced workers with tuition reimbursement for training or education that will assist the transition to new careers.

An allowance for transfers and relocations accomplished pursuant to section 3161 may be reimbursed with an outbound and an inbound allowance not to exceed the employee’s receipted expenses up to 4-1/3 weeks salary, except that a flat amount not to exceed one thousand dollars ($1,000.00) may be allowed in lieu of receipted expenses.

When actual or potential employment termination is the result of a work force restructuring plan prepared by the Department pursuant to section 3161, the Contractor shall comply with the plan. This plan may prescribe funding amounts for relocating an eligible employee to another company at another DOE site when the employee does not qualify for relocation assistance under the hiring Contractor’s policies.

The Contractor, or its Major Subcontractors, will respect the rights of employees (1) to organize, form, join, or assist labor organizations; bargain collectively through representatives of the employees own choosing; and engage in other protected concerted activities for the purpose of collective bargaining, or (2) to refrain from such activities.

To the extent required by law, the Contractor or its Major Subcontractors shall give notice to any lawfully designated representative of its employees for purposes of collective bargaining and, upon proper request, bargain to good faith impasses or agreement, or otherwise satisfy applicable bargaining obligations.

The Contractor shall promptly advise the Contracting Officer of, and provide all appropriate documentation regarding, any labor relations developments at the prime or subcontract level that involve or appear likely to involve:

Possible strike situations affecting the facility;

Referral to the Energy Labor-Management Relations Panel;

The National Labor Relations Board at any level;

Recourse to procedures under the Labor-Management Act of 1947, as amended, or any other Federal or state labor law; or

Any grievance that may reasonably be assumed to be arbitrated under a Collective Bargaining Agreement.

Cost of wages and fringe benefits, to employees represented by collective bargaining units, not in excess of those provided in the collective bargaining agreements listed below, shall be allowable. The costs associated with grievance processing and settlements, arbitration, and arbitration awards shall be allowable in accordance with the provisions of the contract clause entitled “Insurance - Litigation and Claims.” All other costs and expenses incurred pursuant to the provision of the collective bargaining agreements and revisions thereto listed below are allowable costs hereunder.

The Site Stabilization Agreement for all construction work for the DOE at the Hanford Site consists of a Basic Agreement dated September 10, 1984, plus an Appendix A. (The Site Stabilization Agreement is available in the DOE Public Reading Room. The Site Stabilization Agreement will be made a part of this contract by reference upon award. The Contractor shall be required to comply with the most current Site Stabilization Agreement, and as modified throughout performance of the contract.)

This clause applies to employees performing work under RL contracts or subcontracts subject to the Davis-Bacon Act, in the classifications set forth in the Site Stabilization Agreement for work performed at the Hanford Site.

Contractors and subcontractors at all tiers who are parties to an agreement(s) for construction work with a Local Union having jurisdiction over RL construction work performed at the Hanford Site, or who are parties to a national labor agreement for such construction work, shall become signatory to the Site Stabilization Agreement and shall abide by all of its provisions, including its Appendix A. Subcontractors at all tiers who have subcontracts with a signatory Contractor or subcontractor shall become signatory to the Site Stabilization Agreement and shall abide by all of its provisions, including its Appendix A.

Contractors and subcontractors at all tiers who are not signatory to the Site Stabilization Agreement and who are not required under paragraph C above to become signatory to the Site Stabilization Agreement shall pay not less and no more than the wages, fringe benefits, and other employee compensation set forth in Appendix A and shall adhere, except as otherwise directed by the Contracting Officer, to the following provisions of the Site Stabilization Agreement:

The Contractor agrees to make no contributions in connection with this contract to Industry Promotion Funds, or similar funds, except with the prior approval of the Contracting Officer.

The obligation of the Contractor and its subcontractors to pay fringe benefits shall be discharged by making payments required by this contract in accordance with the provisions of the amendments to the Davis-Bacon Act contained in the Act of July 2, 1964, (Public Law 88-349-78 Stat. 238-239) and the Department of Labor regulations in implementation thereof (29 CFR, Parts 1,3,5).

The Contracting Officer may direct the Contractor to pay amounts for wages, fringe benefits, and other employee compensation if the Site Stabilization Agreement, including its Appendix A, is modified by the involved parties.

In the event of failure to comply with paragraphs C, D, E, F, and G above, or failure to perform any of the obligations imposed upon the Contractor and its subcontractors, the Contracting Officer may withhold any payments due to the Contractor and may terminate the contract for default.

The rights and remedies of the Government provided in this paragraph (1) above shall not be exclusive and are in addition to any other rights and remedies of the Government provided by law or under this contract.

The requirements of this paragraph are in addition to, and shall not relieve the Contractor of any obligation imposed by other clauses of this contract, including those entitled “Davis-Bacon Act,” “Contract Work Hours and Safety Standards Act-Overtime Compensation,” “Payrolls and Basic Records,” “Compliance with Copeland Act Requirements,” “Withholding of Funds,” and “Contract Termination--Debarment.”

The Contractor agrees to maintain its bid or proposal records showing rates and amounts used for computing wages and other compensation, and its payroll and personnel records during the course of work subject to this paragraph, and to preserve such records for a period of 3 years thereafter for all employees performing such work. Such records will contain the name, address, social security number of each such employee, correct classification, rate of pay, daily and weekly number of hours worked, and dates and hours of the day within which work was performed, deductions made, and amounts for wages and other compensation covered by paragraphs C, D, E, F, and G. of this contract clause. The Contractor agrees to make these records available for inspection by the Contracting Officer and will permit employee interviews during working hours on the job.

The Contractor agrees to insert this clause, including this paragraph K, in all subcontracts for the performance of work subject to the Davis-Bacon Act.

The Contractor may, with the prior written authorization of the Contracting Officer or its designee, and shall, upon the request of the Government, initiate litigation against third parties, including proceedings before administrative agencies, in connection with this contract. The Contractor shall proceed with such litigation in good faith and as directed from time to time by the Contracting Officer or its designee.

The Contractor shall give the Contracting Officer and Chief Counsel RL, immediate notice in writing of any legal proceeding, including any proceeding before an administrative agency, filed against the Contractor arising out of the performance of this contract. Except as otherwise directed by the Contracting Officer or its designee in writing, the Contractor shall furnish immediately to the Contracting Officer copies of all pertinent papers received by the Contractor with respect to such action. The Contractor, with the prior written authorization of the Contracting Officer or its designee, shall proceed with such litigation in good faith and as directed from time to time by the Contracting Officer or its designee.

Except as provided in paragraph C (2) of this clause, the Contractor shall procure and maintain such bonds and insurance as required by law or approved in writing by the Contracting Officer.

The Contractor may, with the approval of the Contracting Officer, maintain a self-insurance program; provided that, with respect to workers’ compensation, the Contractor is qualified pursuant to statutory authority.

All bonds and insurance required by this clause shall be in a form and amount and for those periods as the Contracting Officer may require or approve and with sureties and insurers approved by the Contracting Officer.

The Contractor agrees to submit for the Contracting Officer’s approval, to the extent and in the manner directed by the Contracting Officer, any other bonds and insurance that are maintained by the Contractor in connection with the performance of this contract and for which the Contractor seeks reimbursement. If an insurance cost (whether a premium for commercial insurance or related to self-insurance) includes a portion covering costs made unallowable elsewhere in the contract, and the share of the cost for coverage for the unallowable cost is determinable, the portion of the cost that is otherwise an allowable cost under this contract is reimbursable to the extent determined by the Contracting Officer.

Except as provided in subparagraphs G and H of this clause or specifically disallowed elsewhere in this contract; the Contractor shall be reimbursed:

For that portion of the reasonable cost of bonds and insurance allocable to this contract required in accordance with contract terms or approved under this clause and

For liabilities (and reasonable expenses incidental to such liabilities, including litigation costs) to third persons not compensated by insurance or otherwise without regard to, and as an exception to the clause of this contract entitled “Obligation of Funds.”

The Government’s liability under paragraph E of this clause is subject to the availability of appropriated funds. Nothing in this contract shall be construed as implying that the Congress will, at a later date, appropriate funds sufficient to meet deficiencies.

Notwithstanding any other provision of this clause, the Contractor shall not be reimbursed for liabilities (and expenses incidental to such liabilities, including litigation costs, counsel fees, judgment and settlements):

Which are otherwise unallowable by law or the provisions of this contract;

For which the Contractor has failed to insure or to maintain insurance as required by law, this contract, or by written direction of the Contracting Officer.

In addition to the cost reimbursement limitations contained in DEAR 970.3103-3, and notwithstanding any other provision of this contract, the Contractor’s liabilities to third persons, including employees but excluding costs incidental to workers’ compensation actions, (and any expenses incidental to such liabilities, including litigation costs, counsel fees, judgments and settlements) shall not be reimbursed if such liabilities were caused by Contractor managerial personnel’s.

Any costs incurred by the Contractor which are affirmatively established as the direct result of the actions of the Yakama Indian Nation (YIN) performing Fisheries Resource Management (FRM) Program activities shall be deemed allowable costs and reimbursable under the PHMC contract. This authorization relieves the Contractor from obtaining all Government approvals required for the activities conducted by YIN FRM Program; it does not however relieve the Contractor from obtaining all Government approvals required for PHMC activities conducted pursuant to DOE direction.

The burden of proof shall be upon the Contractor to establish that costs covered by paragraph H of this clause are allowable and reasonable if, after an initial review of the facts, the Contracting Officer challenges a specific cost or informs the Contractor that there is reason to believe that the cost results from willful misconduct, lack of good faith, or failure to exercise prudent business judgment by Contractor managerial personnel.

All litigation costs, including counsel fees, judgments and settlements shall be differentiated and accounted for by the Contractor so as to be separately identifiable. If the Contracting Officer provisionally disallows such costs, then the Contractor may not use funds advanced by DOE under the contract to finance the litigation.

Punitive damages are not allowable unless the act or failure to act which gave rise to the liability resulted from compliance with specific terms and conditions of the contract or written instructions from the Contracting Officer.

The portion of the cost of insurance obtained by the Contractor that is allocable to coverage of liabilities referred to in paragraph (g) (1) of this clause is not allowable.

The term “Contractor’s managerial personnel” is defined in clause paragraph (j) of 48 CFR (DEAR) 970.5204-21.

The Contractor may, at its own expense and not as an allowable cost, procure for its own protection insurance to compensate the Contractor for any unallowable or unreimbursable costs incurred in connection with contract performance.

If any suit or action is filed or any claim is made against the Contractor, the cost and expense of which may be reimbursable to the Contractor under this contract and the risk of which is then uninsured or is insured for less than the amount claimed, the Contractor shall:

Immediately notify the Contracting Officer or its designee and promptly furnish copies of all pertinent papers received;

Authorize Department representatives to collaborate with,: in-house or DOE-approved outside counsel in settling or defending the claim; or counsel for the insurance carrier in settling or defending the claim if the amount of the liability claimed exceeds the amount of coverage, unless precluded by the terms of the insurance contract; and,

Authorize Department representatives to settle the claim or to defend or represent the Contractor in and/or to take charge of any litigation, if required by the Department, if the liability is not insured or covered by bond. In any action against more than one Department Contractor, the Department may require the Contractor to be represented by common counsel. Counsel for the Contractor may, at the Contractor’s own expense, be associated with the Department representatives in any such claim or litigation.

The Contractor’s accounting system must have the electronic capability to generate and transmit by acceptable mode, the periodic detailed accounting information, at a minimum monthly and at year-end, to the DOE’s Primary Accounting System for reporting financial activity under this contract in accordance with DOE requirements.

The Contractor shall maintain and administer a financial management system as described in the Management and Integration Plan that (1) is suitable to provide proper accounting in accordance with Generally Accepted Accounting Principles, and Cost Accounting Standards, except as modified by DOE requirements; (2) provides accurate and reliable financial and statistical data on a timely basis; (3) ensures accountability for all assets; (4) supports financial planning and budget formulation, validation, execution, and the recasting or changing of DOE funding or task codes such as Budget and Reporting Numbers (B&R), activity data sheet numbers (ADS), and local projects/tasks; (5) maintains proper funding authorization; (6) provides sufficient management controls per DEAR 970.5204-20 MANAGEMENT CONTROLS, and internal controls; (7) integrates and reports the financial information for subcontractors; and (8) provides all other necessary financial reports, which shall include accumulating and reporting indirect and support costs by function. The Contractor will be requested, periodically, to provide certain functional cost information not normally provided to DOE on a routine basis, but should be otherwise available through query of the Contractor’s accounting system.

The Contractor will assume existing responsibilities for accounting control of special nuclear materials. The Contractor will continue to operate the classified Departmental Inventory Management System (DIMS), which reports the financial aspects of special nuclear material inventory changes and status.

The Contractor shall submit a plan for DOE approval of any substantive change to the financial management system or subsystems at least 60 days in advance of implementation. This plan must identify the cost and schedule for changing from the existing financial systems, and provide a comparison of the capabilities of the new system(s) to the existing system(s).

The financial management systems of Major Subcontractors shall have the same level of detail required of the Contractor and be consistent with the requirements of this clause.

Definitions

Adverse Determination means.

A judgement of liability against the Contractor and in favor of the employee in an action in a judicial forum;

A recommended decision under 29 CFR 24.6 by an Administrative Law Judge that the Contractor has violated the employee provisions of the statutes or executive orders for which the Secretary of Labor has been assigned enforcement responsibility;

An initial agency decision, under 10 CFR 708.10 that the Contractor has engaged in conduct prohibited by 10 CFR 708.5;

Any decision against the Contractor by the head of an executive agency under § 6006 of the Federal Acquisition Streamlining Act, Pub. L. 103-355 (adding section 315 of the Federal Property and Administrative Services Act of 1949 (41 U.S.C. 251, et seq.), see paragraph C);

Retaliatory or Discriminatory Acts mean(s) discharge, demotion, reduction in pay, coercion, restraint, threats, intimidation or other similar negative action taken against an employee by the Contractor during the term of this contract as a result of activities protected by the statutes enumerated in 29 CFR 24.1(a) or as a result of the employee’s disclosure of information, participation in a proceeding or refusal to engage in illegal or dangerous activities as set forth in 10 CFR 708.5(a).

Employee Action means an action filed in Federal or state court for redress of retaliatory or discriminatory action by the Contractor, any administrative procedure brought by an employee or federal agency under 29 CFR Part 24, or any other complaint filed against the Contractor for retaliatory or discriminatory acts under 10 CFR Part 708 by an employee of any other Contractor or subcontractor which is cognizable under 10 CFR 708.

Litigation Costs include attorney, consultant, and expert witness fees, but exclude costs of settlements and judgements.

All costs incurred in the investigation and/or defense of an employee action under this contract clause shall be differentiated and accounted for by the Contractor so as to be separately identifiable. Subsequent to an adverse determination, such costs, as well as costs associated with any interim relief which may be granted, may not be paid from any advanced funding provided pursuant to this contract. Notwithstanding the foregoing, the Contracting Officer may, in appropriate circumstances, provide for conditional payment upon provisions of adequate security, or other adequate assurance, and agreements by the Contractor to repay all litigation costs incurred subsequent to an adverse determination, as well as any interim relief cost, plus interest, unless there is a final determination that the Contractor is not liable for any retaliatory or discriminatory acts. The allowance of such costs, notwithstanding any other provision of the contract, will be determined in accordance with this clause.

Litigation costs and settlement costs incurred in connection with the defense of, or a settlement of, an employee action are allowable if incurred by the Contractor before any adverse determination of the employee’s claim, if approved as just and reasonable by the Contracting Officer and otherwise allowable under the contract. Costs incurred in pursuit of mediation or other forms of alternative dispute resolution are allowable, if approved as just and reasonable by the Contracting Officer, and no adverse determination of the employee’s claim has occurred. Additionally, the Contracting Officer may, in appropriate circumstances, reimburse the Contractor for litigation costs and costs of judgements and settlements which, in aggregate, do not exceed any prior settlement offer approved by the Contracting Officer and rejected by the employee.

Except as provided in paragraphs C, E, and F of this clause, any other cost associated with an employee action (including litigation costs connected with, a judgement resulting from, or settlement subsequent to the employee action) are not allowable unless the Contractor receives a judgement or final determination favorable to the Contractor. In such event, reasonable litigation costs incurred by the Contractor are allowable, and the Contractor may submit a request for reimbursement for all such costs incurred subsequent to the adverse determination.

Costs incurred by the Contractor as a result of an employee action for retaliatory or discriminatory acts that resulted from compliance with either (1) specific terms and conditions of the contract or (2) written instructions from the Contracting Officer shall be allowable.

Reasonable litigation costs and settlement costs incurred by, and judgements entered by the Office of Hearings and Appeals against, the Contractor as a result of an employee action for discrimination under 10 CFR 708 are allowable where the Office of Contractor Employee Protection has issued a proposed disposition denying the relief being sought by the employee and the employee requests a hearing by the Office of Hearings and Appeals.

The provisions of this clause shall not apply to the defense of suits by employees or ex-employees of the Contractor under FAR 31.205-47.

The Contractor shall insert or have inserted the substance of this clause in all cost reimbursement subcontracts, with respect to work performed at a DOE-owned or -leased facility where 10 CFR 708 is also applicable under provisions of the contract clause entitled “Whistleblower Protection for Contractor Employees.”

Establishment of Baseline Performance Incentives

The Government will develop performance objectives, measures, and expectations along with related fee distribution for the coming fiscal year which, after discussion with the Contractor, will be unilaterally added to the contract. The performance incentives and fee distribution will reflect the priority and importance that DOE places on accomplishment of key results. The Contractor may propose additional performance objectives, measures, and expectations which may be negotiated prior to placement in the contract. The final determination of incentives and related fee distribution will be made solely by DOE and DOE may unilaterally add any and all of them in a modification to this contract. However, if the Contractor disagrees with the established objectives, measures, expectations, and related fee distribution, the Contractor may appeal the determination to the RL Manager. However, the final decision by the RL Manager shall not be subject to the contract clause entitled “Disputes - Alternate I,” or otherwise subject to litigation under the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613). The objectives, measures, expectations, and related fee distribution will be set forth in Section J, Appendix D, of this contract.

Performance Incentive

After determination of objectives, measures, expectations, and related fee distribution for a fiscal year, the Contractor and DOE shall execute Performance Incentives in the format included in Section J, Appendix D, for each incentive. The Performance Incentives set forth the agreed upon criteria/specifications for acceptable performance of such objectives, measures, and expectations. The criteria/specifications set forth in the Performance Incentives shall be mutually agreed to by both DOE and the Contractor. In the event the parties cannot mutually agree, the final decision shall be made solely by the RL Manager, and shall not be subject to the contract clause entitled “Disputes - Alternate I,” or otherwise subject to litigation under the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613).

Interference

In the event the Contractor believes the DOE has interfered with its ability to meet specific performance incentives, it may present evidence to support this position along with a proposed adjustment to the RL Manager. The RL Manager will make a determination and provide a copy of that determination to the Contractor. The RL Manager’s determination will be final and not subject to the contract clause entitled, “Disputes-Alternate I,” or otherwise subject to litigation under the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613).

Positive and Negative Incentives

A critical few of the performance objectives, measures, and/or expectations have fee directly assigned to their accomplishment, or have a negative deduction from earned fee for failure to accomplish. A lesser number of the expectations may be incentivized positively and/or negatively over and above the other fee assigned. If fee is assigned to an objective or measure, then in order to receive the fee amount set out for a single objective or measure, all performance expectations supporting that objective or measure must be met. If one or more of the expectations is not met, none of the fee associated with the objective or measure will be paid. If a performance expectation has an incentive level which is met, an incentive fee would be paid in addition to any fee earned for accomplishment of the objective, measure, and/or expectation. In addition, if the incentivized expectation is accomplished, its incentive fee portion would be paid regardless of whether or not the fee was earned on the overall objective or measure. Certain of the objectives, measures, and/or expectations may have a negative deduction set out. If the negative level of performance is not surpassed, no fee will be paid for these objectives, measures and/or expectations and further the negative deduction will be made from other fees earned. In no event, however, would the aggregate of all negative deductions exceed the amount of fee earned for the given Fiscal Year. Furthermore, for FY 1999, and 2000, the aggregate of all negative deductions actually invoked shall not exceed 20% of the total available fee for all Performance Incentives, excluding the FY 1999 fee for the Performance Expectation Plan.

Accomplishment of Incentives

In order for any expectation to be considered performed, not only must it meet the criteria of the Performance Incentive, but the work must be accomplished within the approved cost and schedule thresholds specified in the PI, as modified through the Change Control process.

Fee Re-Allocation due to Cancellation or Changes

If, for any reason, DOE cancels an objective, measure, and/or expectation, the fee attached to that objective, measure, and/or expectation shall be reallocated to a new objective, measure, and/or expectation or to existing other objectives, measures, and/or expectations or to both new and existing objectives, measures, and/or expectations. The decision as to the new objective, measure and/or expectation and/or the decision as to which existing objectives, measures, and/or expectations fee may be reallocated, is at DOE’s unilateral discretion.

Fee Determination at End of Period

At the conclusion of the annual performance period the government shall evaluate the Contractor’s performance to determine the performance based fee earned during the year. The evaluation of performance against objectives, measures, and expectations will be a consideration in (1) incentive fee determinations by the RL Manager, (2) in the DOE decision whether or not to exercise the option to extend the contract, and (3) in the DOE decision whether to terminate the contract for default. The final determination on the acceptability of the work performed by the Contractor under this provision and incentive fee determination shall be made solely by the RL Manager.

Superstretch Incentives

To challenge the Contractor to accomplish significant, mission critical, superstretch goals that are in the best interest of the Government, significantly accelerates outyear workscope identified in the DOE-approved baseline, and motivate the Contractor to extraordinary performance, the following incentive provision is established:

Performance incentives addressing superstretch goals should be developed prior to the beginning of the fiscal year, but may be developed and implemented during the fiscal year on a limited basis. The Contractor shall coordinate with the RL Manager or designee to identify superstretch goals. The fee for accomplishment of superstretch goals will be paid from a share of the cost of the accelerated work and will be outside the fee pool identified in the clause entitled “Estimated Cost and Fee.” The accelerated workscope must be identified and authorized by a duly approved Advanced Work Authorization (AWA) that must be approved by the RL Manager prior to the Contractor beginning work. Once approved, the Contractor shall prepare and submit a Baseline Change Request (BCR) to RL within 15 days. The BCR shall document the scope, cost, and schedule changes necessary to incorporate the accelerated workscope into the baseline. The superstretch costs will be identified in the BCR and will include fee at the rate up to 20% of the revised BCWS of the accelerated workscope. A copy of the performance incentive shall be attached to the BCR.

The BCR will be processed through the FDH and RL Change Control Boards. When the work is complete, a package documenting completion of the work will be prepared and submitted to DOE for approval. Approval of the completion package by DOE will authorize payment to the Contractor of the fee earned. To earn fee associated with a superstretch incentive, the workscope associated with the superstretch incentive must be completed in the fiscal year that the savings were realized.

The superstretch performance incentives must be performed in accordance with the cost and schedule criteria identified in the performance incentive. The cost savings must be realized through efficiencies and/or workscope deletions and not deferrals.

Fee payments from accomplishment of superstretch goals will be separate from and not subject to or impact the provisional payment of fee limitations described in the clause entitled, “Provisional Payment of Fee.”

Whenever the contract contains both fixed-price and cost-type efforts, the Contractor shall maintain separate accounts for each unique contract type by Contract Line Item Number (CLIN), by task order, or other suitable accounting procedure of all incurred segregable costs of work allocable to the work effort directly related to each contract.

Whenever the contract contains a provision for an incentive for a portion of the work effort under the contract, the Contractor shall maintain separate accounts, by CLIN, task order, or other suitable accounting procedure of all incurred segregable costs of work allocable to the work effort directly related to the incentive.

If the Contractor has initiated work pursuant to the contract clause entitled “Cost Savings Program,” if included in this contract, regardless of whether or not a proposal has been accepted, the Contractor, for each cost savings incentive effort/proposal, shall maintain separate accounts, by CLIN, task order or other suitable accounting procedure, of all incurred segregable costs, both changed and not changed, allocable to the changed work effort set forth in the applicable Cost Savings Proposal.

The Contractor shall maintain all such accounts, required pursuant to the paragraphs above, in accordance with this contract, but, in no case, for a period of less than 3 years following the Government’s determination of the applicable incentive fee.

Fee Pool Allocation

It is DOE’s intention that the Government will pay no more in the total available fee pool across the Hanford Site for the Contractor and its Major Subcontractors (including LMH as a separate prime Contractor to DOE starting in FY 2000) than if a single management and operating Contractor were operating the whole site. The total available fee pool under this contract will be no more than the maximum fee permitted under DEAR 970.1509 and 915.971-5 for a Defense Facility - A (See DEAR 970.1509-8(b)(6). The Government may also create “superstretch” incentives that would allow the Contractor to earn additional fee outside the fee pool. The fee structure for the period October 1, 1996, through September 30, 1997 is allocated 100% Performance Fee. For each fiscal year thereafter, the Contracting Officer shall allocate the total available fee pool, set forth in Section B, for that fiscal year across the fee structure in accordance with the following:

The allocation shall be documented in the annual update to the Fee Plan contained in Section J, Appendix H.

Fee Pool Adjustment

However, if the estimated cost for that fiscal year, set forth in Section B, differs significantly from the estimated cost being set for that fiscal year following passage of the budget, the corresponding total available fee pool for that fiscal year may be increased or decreased unilaterally by the Contracting Officer. The aforementioned unilateral increase or decrease will be determined as follows:

The fiscal year total available fee pool of Section B
will be multiplied by the following:

Estimated Cost Determined from Budget
Estimated Cost for Fiscal Year in Section B

The estimated cost, total available fee pool and the contract fee structure, as it may be determined from the formulas above, for the new fiscal year shall be set forth in a modification unilaterally executed by the Contracting Officer. The amount of the total available fee pool or fiscal year allocation of the available fee across the fee structure hereunder shall not be subject to the contract clause entitled “Disputes - Alternate I.”

If, at any time, the Contracting Officer determines that the amount of fee or fee structure is not commensurate with the scope of work or risk under the contract, the Contracting Officer may unilaterally decide, not subject to the contract clause entitled “Disputes - Alternate I,” or otherwise subject to litigation under the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613), to enter into negotiations with the Contractor to determine a revision to the total available fee pool or fee structure.

Base Fee and Award Fee

It is herewith agreed that a base fee and an award fee, to be determined in accordance with the provisions of this clause, are available for payment in accordance with the contract clause entitled “Payments and Advances (Modified).”

Fiscal Year Fee Amounts

Prior to the beginning of each fiscal year under this contract, the Contracting Officer shall determine the amount of the base and award fee in accordance with the clause entitled “Available Fee Pool.” This contract shall be unilaterally modified by the Contracting Officer to reflect fiscal year amounts for base and award fees. It is herein agreed the award fee amount shall be assigned to evaluation periods 6 months in duration. The fiscal year award and base fee amounts shall not be subject to the contract clause entitled “Disputes - Alternate I,” or otherwise subject to litigation under the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613).

Determination of Award Fee Earned

The Government shall, at the conclusion of each specified evaluation period, evaluate the Contractor’s performance for a determination of award fee earned.

For this contract, the Government Fee Determination Official (FDO) will be the RL Manager. The Contractor agrees that the determination as to the amount of award fee earned will be made by the Government FDO and such determination is binding on both parties and shall not be subject to appeal under the contract clause entitled “Disputes - Alternate I,” or otherwise subject to litigation under the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613), or any other appeal clause.

The evaluation of Contractor performance shall be in accordance with the Performance Evaluation Plan described in subparagraph D below. The Contractor shall be promptly advised in writing of the determination and the reasons why the award fee was or was not earned. While it is recognized that the basis for determination of the fee shall be the evaluation by the Government in accordance with the Performance Evaluation Plan (PEP), the FDO may also consider any information available to him or her which relates to the Contractor’s performance of contract requirements identified in the Statement of Work as amended to include annual work authorization plans (or similar documents specifying work scope) regardless of whether or not those requirements are specifically identified in the PEP. To the extent the Contractor does not perform those requirements in accordance with the Statement of Work as amended to include annual work authorization plans (or similar documents specifying work scope), the FDO may reduce the fee determination. In the event that the Contractor’s performance is considered unacceptable in any area of contract performance which is specified in the Performance Evaluation Plan, even if no weight or fee is specifically assigned to the particular performance area, the FDO may at his/her discretion determine the Contractor’s overall performance to be unacceptable, and accordingly may withhold the entire award fee for the evaluation period.

Performance Evaluation Plan

The Government shall establish unilaterally a Performance Evaluation Plan upon which the determination of award fee shall be based. Such Plan shall include the criteria to be considered under each area evaluated and the percentage of award fee available for each area. A copy of the Plan shall be provided to the Contractor 30 calendar days prior to the start of an evaluation period.

The Performance Evaluation Plan will set forth the criteria upon which the Contractor will be evaluated for performance relating to any technical, schedule, management, and/or cost objectives selected for evaluation. Such criteria may be objective or subjective. The Plan shall also set forth a performance grading and fee conversion table establishing performance points and the percentage of available award fee earned for each performance point for outstanding, good, satisfactory, marginal, and unsatisfactory performance levels.

The Performance Evaluation Plan may, consistent with the contract statement of work, be revised unilaterally by the Government at any time during the period of performance. Notification of such changes shall be provided to the Contractor at least 90 calendar days prior to the end of the evaluation period in which the change will apply and at least thirty (30) calendar days prior to the change becoming effective.

Contractor Self-Assessment

Following each evaluation period, the Contractor shall submit a self-assessment within 7 calendar days after the end of the period. This self-assessment shall address both the strengths and weaknesses of the Contractor’s performance during the evaluation period, including the areas within the Business Management Oversight Process. Where deficiencies in performance are noted, the Contractor shall describe the actions planned or taken to correct such deficiencies and avoid their recurrence. The FDO will review the Contractor’s self-assessment, if submitted, as part of their evaluation of the Contractor’s management during the period. An unrealistic self-assessment will result in lower award fee determinations. The Contractor will not be penalized for a realistic self-assessment, although deficiencies noted by the Contractor may be reflected in the Government’s evaluation. The self-assessment itself will not be the basis for the award fee determination.

Schedule for Award Determinations

The FDO shall issue the final award fee determination in accordance with the schedule set forth in the Performance Evaluation Plan. However, a determination must be made within 60 calendar days after the receipt by the Contracting Officer of the Contractor’s self-assessment discussed in paragraph E above, if required, or 75 calendar days after the end of the evaluation period. If the determination is delayed beyond that date, the Contractor shall be entitled to interest on the determined award fee amount at the rate established by the Secretary of the Treasury under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) that is in effect on the payment date. This rate is referred to as the “Renegotiation Board Interest Rate,” and is published in the Federal Register semiannually on or about January 1 and July 1. The interest on any late award fee determination amount will accrue daily and be compounded in 30-day increments inclusive from the first day after the schedule determination date through the actual date the determination is issued. That is, interest accrued at the end of any 30-day period will be added to the determined amount of award fee and be subject to interest if not paid in the succeeding 30-day period.