Military Ship Repair Terms & Conditions

 

Military Ship Repair Programs Purchase Order

  1. Definitions.
  2. Acceptance, Integration, Amendment and Interpretation.
  3. Assignment.
  4. Buyer’s Medical Treatment, if Seller operates within the Facilities.
  5. Changes and Requests for Equitable Adjustment Submissions.
  6. Cleanup of Work Site, if Seller operates within the Facilities.
  7. Compliance with Conflict Minerals Requirements.
  8. Compliance with Ethics.
  9. Compliance with Law.
  10. Computation of Time.
  11. Confidentiality and Third Party Intellectual Property Rights.
  12. Control Over Weekend and Holiday Performance.
  13. Default; Termination for Cause.
  14. Deliveries of Contract Products.
  15. Disputes.
  16. Environmental, if Seller Operates Within the Facilities.
  17. Export Control Compliance and Cooperation Applicable when Buyer is Procuring from Seller in support of Prime Contracts with the Government.
  18. Force Majeure.
  19. Furnished Property.
  20. Gratuities and Kickbacks.
  21. Guaranty in Support of Prime Contracts.
  22. Indemnity.
  23. Independent Contractor.
  24. Inspection and Acceptance.
  25. Insurance.
  26. Invoices.
  27. Liens with Right to Offset.
  28. Limitation on Liability.
  29. Littering.
  30. New Materials and Authorized Sources.
  31. No Advertising.
  32. No Hire.
  33. Notices.
  34. Order of Precedence.
  35. Packing and Shipment.
  36. Payment, Taxes and Duties.
  37. Pricing.
  38. Quality.
  39. Rights for Audit.
  40. Safety, if Seller Operates Within the Facilities.
  41. Scope of Performance.
  42. Screening: Background Check, Credit History Check and Drug Screen.
  43. Security, if Seller Operates Within the Facilities.
  44. Seller’s Personnel and Management.
  45. Setoffs/Back-charges.
  46. Shelf Life Requirements.
  47. Survival.
  48. Termination for Convenience.
  49. Time of Performance.
  50. Title and Risk of Loss.
  51. Waiver.

 

 

1. Definitions

“The following terms shall have the meanings set forth below throughout this Contract:

(a)               “ABS” means the American Bureau of Shipping.

(b)              “Buyer” means General Dynamics NASSCO-Mayport or “NASSCO-Mayport ”.

(c)               “Contract” means the Purchase Order between Buyer and Seller, including these Military Ship Repair Programs General Terms and Conditions, any applicable Special Terms and Conditions, the Specifications, and any other documents incorporated by reference. From time to time, the Purchase Order may be replaced by an agreement for either particular services or goods. If this circumstance is present, then the “Contract” shall consist of the Purchase Order, the agreement (whether in the form of a formal contract), all of these General Terms and Conditions, the Special Terms and Conditions, the Specifications, and any other documents incorporated by reference by NASSCO-Mayport.

(d)              “Contract Price” means the total amount to be paid by Buyer to Seller in consideration of Seller’s full performance of this Contract, as set forth on the face of the Purchase Order.

(e)               “Contract Problem” means a fact or circumstance of which the Seller is aware that does, will or reasonably is anticipated to (i) have a significant or substantial impact on the delivery schedule or completion of the Contract or the cost of the Contract (increase or decrease) or (ii) requires modification to the Contract or Specification(s). The terms “significant” and “substantial” shall be interpreted in the same manner as they would be interpreted by a reasonably prudent business person under the relevant circumstances.

(f)               “Contract Products” means the products, material, apparatus, equipment, supplies, articles, data or other goods to be furnished by Seller under this Contract.

(g)               “Contract Work” means the services and/or goods which are the subject of this Contract. Unless otherwise specifically defined, “Contract Work” includes any Contract Products called for by this Contract.

(h)              “Contracting Officer” means person authorized to negotiate, approve, enter into, deliver contracts, and change orders thereto, for the acquisition of material, personal and intellectual property and/or services for the Government.

(i)                “Delivery” means preliminary acceptance of the Vessel by the Government or the Owner whereby the Government or the Owner assumes responsibility for the Vessel and the Guaranty Period commences.

(j)                “Dispute” means a disagreement as to the validity of a payment or performance position taken by one party to this Contract with respect to the other.

(k)              “Environmental Incident” Means a spill or release of material to the air, water, or land. A spill of oil, chemicals, grit, or other unauthorized substance to the River, storm drain, or HRSD sewer line, reported immediately to Security.

(l)                “Facilities” means NASSCO-Mayport locations and other facilities used by Buyer or its affiliates located in the Jacksonville, Florida area or anywhere else designated by Buyer, including but not limited to, Government military bases, and customer shipyards.

(m)             “FAR” means Federal Acquisition Regulation as contained in Title 48, Code of Federal Regulations, and unless otherwise indicated shall be deemed to include the Department of Defense FAR Supplement (“DFARS”) as similarly contained in Title 48, Code of Federal Regulations. In the event of a conflict between the FAR and the DFARS provisions included in the Contract, the DFARS provisions shall prevail.

(n)              “Force Majeure” shall mean any event or occurrence beyond the reasonable control and without the fault or negligence of either party, which by exercise of due diligence, such party shall not have been able to avoid or overcome. Such events and occurrences may include, by way of example natural disasters, floods, windstorms, unusually severe weather and other acts of God, fires, explosions, riots, wars, sabotage, power failures, and acts of the Government. Failures or delays caused by a Force Majeure circumstance are neither compensable nor a breach, under the terms of this Contract.

(o)              “Furnished Property” means property owned, leased, rented, or held in bailment by Buyer, the Government or the Owner and that has been provided to Seller for Seller’s benefit.  Furnished Property may include equipment, tools, devices, apparatus or property belonging to Buyer.

(p)              “Government” means the Unites States of America, acting through its authorized representative, the Department of the Navy.

(q)              “Guaranty Period” shall mean the period for which Seller guaranties to Buyer, the Government or Owner, and their successors and assigns, that the Contract Work will conform to this Contract and will be free from defects in material, workmanship and design and will conform to the Specifications for a period defined in the Prime Contract after Delivery of the Vessel to the Government or Owner, plus any additional time as required by the Prime Contract and as defined in the Military Shipbuilding Programs, Contract, Special Terms and Conditions for the applicable military program in the “Guaranty Period” Section.

(r)               “Hull Structure” means the shell, or outer casting, and internal structure below the main deck which provide both the floatation envelope and structural integrity of the Vessel in its normal operations.

(s)               “Lien” means any lien, stop notice, bond right, security interest, encumbrance or other right in personam or in rem against the Vessel the Contract Products or Contract Work enforceable in a court of competent jurisdiction, including but not limited to mechanic’s liens.

(t)                “Manufacturing Materials” means completed Contract Products, partially completed Contract Products, and materials, parts, tools, dies, fixtures, plans, drawings, information and contract rights that Seller has specifically produced or acquired for this Contract.

(u)              “NASSCO-Mayport” means General Dynamics NASSCO-Mayport.

(v)              “OCM” means Original Component Manufacturer.

(w)             “OEM” means Original Equipment Manufacturer.

(x)              “Owner” means the party (which may be the Government or a commercial entity) for which the Vessel(s) is being constructed or repaired.

(y)              “Prime Contract” means the contract between Buyer and the Government or the Owner for the construction of the Vessel(s).

(z)               “Procurement Representative” means person authorized to negotiate, approve, enter into and deliver Purchase Orders, subcontracts and other engagements, and change orders thereto, for the acquisition of material, personal and intellectual property and/or services for NASSCO-Mayport.

(aa)            “Purchase Order” means any agreement from Buyer for Contract Products or Contract Work that references these and any other applicable Terms and Conditions.

(bb)           “REA” means Request for Equitable Adjustment.

(cc)            “Regulatory Body” means any external independent organization (including but not limited to ABS, FCC, FDA, EPA, USCG, Department of Homeland Security, Department of State), sometimes but not necessarily established by the Government, that regulates products or the activities of companies in an industry.

(dd)           “Risk of Loss” means the term used to determine which party should bear the risk of damage or destruction occurring to the Contract Products or Contract Work after the sale has been made, but before delivery has occurred.

(ee)            “Safety Representative” means the person who has the responsibility and authority to correct any safety violations by Seller during the performance of the Contract Work.

(ff)             “Seller” means the individual, association, partnership, corporation or other entity identified in the Contract who is to perform the Contract Work or supply the Contract Products, as well as all of their directors, officers, and employees.

(gg)            “Specifications” means all specifications, plans, data, drawings, diagrams, work schedules, and any other documents, which describe the Contract Work and/or the Contract Products.

(hh)           “Vessel(s)” means any one or more of the ships to be constructed or repaired under the terms of the Prime Contract.
PLEASE NOTE THAT ALL SECTIONS PRESENTED HEREAFTER APPEAR IN ALPHABETICAL ORDER.

2. Acceptance, Integration, Amendment and Interpretation

Seller shall strictly perform this Contract. Any performance, whatsoever, by Seller of any portion of this Contract, without regard to its value, shall constitute complete acceptance of all of such Contract, including without limitation, these Terms and Conditions. Seller agrees that a signed acknowledgement of these Terms and Conditions is not a condition precedent to the full enforceability of this Contract, including these Terms and Conditions, by NASSCO-Mayport against Seller.

Any terms proposed in the acceptance of this Contract which, add to, vary from, or conflict with the Terms and Conditions of this Contract are hereby objected to and shall be void.

This Contract constitutes the entire agreement between the parties and supersedes all previous communications, representations or agreements, whether oral or written, between the parties. No terms other than those set forth herein or in the Contract shall apply. Seller represents that, in entering this Contract, it does not rely on any previous oral or implied representation, inducement, or understanding of any kind. This Contract shall not be varied, supplemented, qualified or interpreted by any prior course of dealing, usage of trade or course of performance between the parties and shall be interpreted without regard to which party is deemed to have drafted this Contract.

This Contract may be amended or modified only by a written instrument executed by each party’s authorized representatives.

This Contract shall be governed by and interpreted under the laws of the Commonwealth of Virginia, excluding Virginia’s conflict or choice of law rules. The rights and remedies reserved to Buyer in this Contract are cumulative with, and in addition to, all other or further rights and remedies provided in law or equity.

If any one or more of the provisions of this Contract is found to be invalid, the remaining provisions shall not be affected, and this Contract shall be interpreted as if not containing such provisions. Paragraph and Section headings are for administrative convenience only and shall not be used to interpret this Contract.

This is a DO-A-3 Rated Order Certified for National Defense use and the Seller must follow the provisions of the Defense Priorities and Allocations System (DPAS) Regulations (15CFR700). This priority rating must be invoked on Seller’s order resulting from this Contract.

3. Assignment

Seller may not assign this Contract, in whole or in part, voluntarily or by operation of law, without Buyer’s prior written consent. Buyer may, without Seller’s consent, assign this Contract in whole or in part to any third party, including without limitation, the Owner, or the Government or to any other contractor acting under the terms of the Prime Contract.

4. Buyer’s Medical Treatment, if Seller operates within the Facilities

Buyer shall have no obligation to furnish medical treatment to Seller’s employees working in the Facilities. In the event Buyer’s Safety Department does furnish medical treatment to Seller’s employees, subcontractors or suppliers, Seller shall defend, indemnify and hold Buyer harmless as set forth in the Indemnity Section.

5. Changes and Requests for Equitable Adjustment Submissions

This Section covers all forms of changes to the Contract. This includes all agreed upon change orders as well as REAs. Nothing in this Section shall excuse Seller from proceeding with diligent performance of this Contract as changed.

      • Contract Changes. Subject to the Acceptance, Integration, Amendment and Interpretation Section only an authorized Procurement Representative or Buyer may, by unilateral written order, make changes to the Contract Work. If any such change causes an increase or decrease in the cost of, or the time required for, performance of this Contract, Buyer shall make an equitable adjustment in the Contract Price, the performance or delivery schedule, or both, and shall so modify this Contract, provided that, Seller timely and promptly submits pertinent information and Seller obtains prior written authorization from Buyer.
        • Buyer’s, the Government’s or the Owner’s engineering and technical personnel may from time to time render assistance or give technical advice or discuss or exchange information with Seller’s personnel concerning the Contract Work. Such actions, however, shall not be deemed to be a change under this Changes Section and shall not be the basis for any REA.
        • Promptly, but in any event no later than three (3) business days from the date of receipt of any request to change the terms, including schedule or price, of the Contract, Seller shall submit to Buyer a detailed written estimate of the impact of the change on the Contract Price, the performance or delivery schedule, and the performance capabilities of any Contract products. Failure of Seller to submit adequate documentation may result in denial of Seller’s request.
        • If the parties reach agreement as to such request, then Buyer will issue a change order in the form of an additional or amended Purchase Order, adding or deleting elements of either the price or the time to complete the Contract Work.
        • If the parties do not reach agreement after submission of Buyer’s written estimate, or an accord and satisfaction, then Seller shall submit a written request for equitable adjustment.
      • Requests for Equitable Adjustments (REA). All REAs submitted by Seller to Buyer should include, but are not limited to, the following information: a written rationale fully stating why Seller is entitled to a price and/or time adjustment, adequate supporting documentation (e.g., specific and clear time records for laborers as to what they were doing, when, for what duration, and at what price, any underlying contracts for additional or different materials, delivery charges, etc.) and any other documents reasonably requested by Buyer.
        • Seller must assert, in writing, its right to an equitable adjustment under this clause within thirty (30) days from completion of Seller’s applicable work.
        • HOWEVER, IN ALL EVENTS, SELLER’S REA SHALL EITHER BE RESOLVED BY THE PARTIES WITHIN SIX (6) MONTHS FROM THE DATE OF ITS SUBMISSION TO NASSCO-MAYPORT, OR IT SHALL BE THE SUBJECT OF ARBITRATION AS SET FORTH IN THE DISPUTES SECTION. IF THE PARTIES HAVE NOT RESOLVED THE REA, NOR FILED A DEMAND TO ARBITRATE THE REA WITHIN SIX (6) MONTHS FROM SELLER’S SUBMISSION OF THE REA TO NASSCO-MAYPORT, THE REA IS TIME BARRED, AND FOREVER RELEASED OR WAIVED. THIS IS A CONTRACTUAL STATUTE OF LIMITATIONS FOR THE PARTIES.
        • SELLER AGREES IT SHALL NOT FILE AN REA AFTER NASSCO-MAYPORT HAS ISSUED A LETTER INDICATING THAT THE CONTRACT BETWEEN SELLER AND NASSCO-MAYPORT IS CLOSED, FINISHED, COMPLETED, TERMINATED AND/OR HAS EXPIRED.

Nothing in this Section shall excuse Seller from proceeding with diligent performance of this Contract as changed. Further, nothing in this Section is intended to conflict for the Lien release laws applicable to this Contract, or the Contract Work.

Failure by Buyer and Seller to agree to any REA under this Section shall be resolved in accordance with Section 15, “Disputes” of these Terms and Conditions. Seller shall certify any REA for Contract Work in support of a Government Prime Contract was made in accordance with the provisions of the Contract Disputes Act of 1978, 41 U.S.C. § 601 et seq. Further, Seller shall indemnify and hold harmless Buyer for any claim or legal action resulting from Buyer’s submittal of Seller’s REA to the Government.

6. Clean-up of Work Site, if Seller operates within the Facilities

During the performance of this Contract, Seller shall ensure their designated work area is free of debris, garbage or other waste material at the end of every shift. Upon completion of the Contract Work or earlier termination of the Contract Work, Seller shall remove all of Seller’s tools and equipment from the Facilities. Seller shall also dispose of all debris, garbage, or other waste material, including excess materials, scrap and equipment used or generated by Seller, its subcontractors or suppliers in performance of this Contract, in the appropriate receptacles at the  Facilities, or as otherwise specified in the Contract. Seller shall be liable for and shall pay to Buyer, upon demand, all costs of removal or disposal of Seller’s tools and equipment, debris, garbage, waste materials, excess materials, scrap and equipment used or generated in performance of this Contract not so removed.

7. Compliance with Conflict Mineral Requirements

(a) Seller certifies that, regardless of whether Seller is publicly traded or not, Seller will notify Buyer in writing if Seller provides any Contract Work containing or using Conflict Minerals from Covered Countries, as those terms are defined by and consistent with the Securities and Exchange Commission’s final rule on Conflict Minerals, 17 CFR Parts 240 and 249(b), promulgated pursuant to Section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (“the Rule”). This written notification shall comply with all SEC Conflict Minerals disclosure requirements defined in the aforementioned Rule.

(b) Seller certifies and warrants that Contract Work that has been or will be delivered to Buyer by Seller under the Contract since January 31, 2013, shall comply with all parts of the Rule.

(c) Seller agrees that, if required by the Rule, it has made, and will continue to make, good faith inquiries reasonably designed to determine whether any Conflict Mineral that is included in any product delivered to Buyer pursuant to the Contract originated in the DRC or an Adjoining Country, or is from Recycled or Scrap Sources, as defined in the Rule. Seller further agrees that, if required by the Rule, it has performed, and will continue to perform, due diligence on the source and chain of custody of any Conflict Mineral that is included in any product delivered to Buyer for the Contract, and that such due diligence conforms to a nationally or internationally recognized due diligence framework, if such a framework is available for the Conflict Mineral. Seller agrees that all inquiries and diligence performed shall be consistent with the requirements of the Rule.

(d) Seller agrees that it shall require its own subcontractors and Seller (at any tier in the supply chain for a product delivered to Buyer under the Contract) to furnish information to Seller necessary to support Seller’s obligations under this Clause.

(e) Seller will maintain records reviewable by Buyer to support its certifications above.

(f) Seller acknowledges that Buyer may utilize and disclose Conflict Minerals information provided by Seller in order to satisfy its disclosure obligations under the Rule.

(g) If Buyer determines that any certification made by Seller under this Clause is inaccurate or incomplete in any respect, then Buyer may terminate the Contract pursuant to the provision of the Contract named “Default; Termination for Cause.”

8. Compliance with Ethics

Seller shall comply with the General Dynamics Standards of Business Ethics and Conduct, which can be found at http://www.nassconorfolk.com/docs/Blue-Book.pdf and the rules and regulations referenced therein, including but not limited to the U. S. Foreign Corrupt Practices Act. In this respect, Seller has an ethical obligation and legal responsibility to warn NASSCO- Mayport of any illegal conduct, or acts of impropriety which Seller discovers, or reasonably should have discovered, in the course of performing this Contract Work. Seller shall defend, indemnify and hold NASSCO-Mayport harmless from any and all claims and liabilities resulting from any failure to so comply.

9. Compliance with Law

Seller shall fully comply with all applicable laws, rules, regulations, codes, orders, conventions, ordinances and standards of the country(ies) of origin and destination or that relate to the manufacture, labeling, transportation, exportation, licensing, approval or certification of the Contract Work, including, but not limited to, those relating to environmental matters, wages, hours and conditions of employment, subcontractor selection, discrimination, occupational health and safety and motor vehicle safety and with all rules, regulations and requirements of the classification society selected by Buyer and the Government or the Owner to review and approve the Specifications and construction. Seller and its Suppliers shall abide by the requirements of 41 CFR §§ 60-1.4(a), 60-300.5(a) and 60-741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability, and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities and qualified protected veterans. Seller shall defend, indemnify and hold Buyer harmless from any and all claims and liabilities resulting from any failure to so comply as set forth in the Indemnity Section.

10. Computation of Time

Unless the context requires otherwise, time shall be computed by including Saturdays, Sundays and U.S. holidays, except that if such period terminates on a Saturday, Sunday or U.S. holiday, it shall be deemed extended to the next U.S. business day.

11. Confidentiality and Third Party Intellectual Property Rights

Information furnished by Buyer and identified by Buyer as “NASSCO-Mayport Proprietary/Trade Secret Information” or otherwise identified as proprietary or subject to restricted access or dissemination shall, as between Seller and Buyer, be and remain Buyer’s intellectual property, and shall not be duplicated, used or disclosed except for the purpose and to the extent necessary for the performance of this Contract. Upon completion of this Contract, such information shall be delivered to Buyer or destroyed by Seller as Buyer specifies (including all copies). Seller shall use its best efforts to maintain the confidentiality of this information. Seller may disclose such information to only those third parties who have a need to know such information for performance of this Contract, and provided such third parties are informed of the confidential nature of the same and have agreed in writing to protect such information consistent with Seller’s obligations hereunder. These obligations are not imposed upon Seller if: such information is already known to Seller, is lawfully obtained by Seller from another source, or becomes a part of the public domain otherwise than as a result of breach of this Section.

Seller further represents that it has read and understood the Specifications, and that based on its past experience and superior knowledge, Seller warrants to Buyer and its successors in interest that the manufacture, sale or use of the Contract Products or Contract Work, whether manufactured in accordance with the Specification or otherwise, does not and will not infringe or interfere with any intellectual property rights(s) of any third party, including, without limitation, patent, trademark, copyright, trade secret, industrial design or other proprietary rights. Seller shall defend, indemnify and hold Buyer harmless for any alleged claim of infringement of any third party intellectual property right as set forth in the Indemnity Section.

In addition:

(a) Seller shall use only those portions of the Specifications as are required to perform the Contract Work. Seller shall not disclose the Specifications, in whole or in part, except as expressly allowed in writing by Buyer and only for performing Contract Work. The Specifications shall be disclosed to Seller only as reasonably required for such purposes as are necessary in order to carry out the terms of the Contract Work that Buyer has agreed to perform for the Owner. Seller shall not disclose any portions of the Specifications in such a complete form as would enable third parties to construct, or have constructed, a vessel of the same design as the Vessels without: (i) expressly prohibiting the further disclosure thereof; and (ii) expressly prohibiting the use thereof for the purpose of constructing, or having constructed, a vessel of the same design as the Vessels. For purposes of this paragraph, “third parties” shall not include the ABS, US Coast Guard, and any other U.S. Regulatory Body or agency. At NASSCO-Mayport’s sole discretion, it may require Seller to execute a Non-Disclosure Agreement with additional and/or more stringent requirements.

(b) Any design or engineering data, in whatever form, relating to the Vessels that is produced by Seller under this Contract shall be the sole intellectual property of Buyer, unless otherwise agreed. In this regard, Seller agrees to assign, and does hereby assign, all right title and interest in and to all such design or engineering data produced under this Contract, including without limitation all intellectual property right in such design or engineering data. Seller grants to Buyer a limited license to all pre-existing intellectual property contained in any deliverables provided to Buyer under this Contract, for Buyer’s use on the Prime Contract with the Government. In accordance with DFARS 252.227-7013 (Rights in Technical Data – Noncommercial Items (Nov 1995)), DFARS 252.227-7014 (Rights in Noncommercial Computer Software and Noncommercial Computer Software Documentation (June 1995)) and DFARS 252.227-7015 (Technical Data – Commercial Items (Nov 1995)), Seller grants the Government and Buyer the rights delineated therein. These DFARS clauses are hereby incorporated into the Contract by this reference with the same full force and effect as if they were included as full text, except that “Contractor” shall mean “Seller.”

(c) Buyer’s review of any designs submitted by Seller shall not relieve or in any way diminish Seller’s obligations under this Contract. If Buyer identifies any non-conformance with Contract requirements in any Seller design, Seller, to the extent Seller agrees with such non-conformance, shall take the required corrective action and resubmit the affected design to Buyer. If the parties are unable to agree as to whether a design conforms to the Contract requirements, either party may treat the matter as a Dispute to be resolved as provided in the Disputes Section.

(d) Seller shall comply with the regulatory requirements as administered by the Regulatory Bodies as set forth in the Specifications or Contract. If the Specifications specifically require work in excess of that required by a Regulatory Body, such specifically required work shall be performed by Seller, at its expense, as Contract Work required by this Contract. If the Specifications require work which is less than that required by a Regulatory Body, Seller shall perform, at its expense, the work required by the Regulatory Body as Contract Work required by this Contract.

(e) Notwithstanding any obligations of confidentiality set forth in the Contract, including this Section, during repair of the Vessel, Seller understands and agrees that the ABS and any other Regulatory Body is authorized to discuss and disclose to NASSCO-Mayport all submitted drawings, specifications, correspondence, and information of Seller.

(f) Nothing in these Terms and Conditions shall be construed or interpreted to limit, or in any way restrict, the rights of the Government in regard to data it owns or has a right to use.

12. Control Over Weekend and Holiday Performance

Buyer reserves the right to declare by time written notice periods of “no weekend work” or “no holiday work” at the Facilities. Seller shall ensure that no Contract Work is performed in the Facilities, and that all of Seller’s and Seller’s suppliers’ and subcontractors’ employees are kept out of the Facilities on all affected weekends and holidays during such declared periods of “no weekend work” and “no holiday work”. Seller shall not be responsible for any performance delays or claims for damages caused by such declared periods of “no weekend work” and “no holiday work”.

13. Default; Termination for Cause

(a) In advance of Seller’s actual default, if in Buyer’s opinion Seller is falling behind in its performance or is likely to breach the Contract, Buyer may request written adequate assurances from Seller that it remains able to perform the Contract. If Seller is unable or unwilling to provide appropriate assurances within a reasonable period of time, which in no event shall be less than three (3) business days, as requested, and then Buyer may proceed with termination for default immediately, provided however that such termination shall be without opportunity to cure.

(b) With written notice to Seller, containing a reasonable time to cure, which in no event shall be less than three (3) business days, solely determined by Buyer, Buyer may terminate all or any part of this Contract: (i) if Seller fails to perform the Contract Work or deliver the Contract Products or Contract Work within the time specified by this Contract or any written extension; (ii) if Seller fails to perform any other material provision of this Contract; (iii) fails to make progress so as to endanger performance of this Contract; or (iv) Seller’s right to conduct business is suspended, Seller becomes insolvent, or becomes subject to the appointment of a receiver or becomes subject to an assignment, reorganization or arrangement for the benefit of its creditors.

(c) In the event Buyer terminates this Contract in whole or in part as provided above, Buyer may procure, goods or services similar to the Contract Work specified herein, and Seller shall be liable to Buyer for any excess costs for such similar procurement. If this Contract is terminated only in part, Seller shall continue the performance of this Contract to the extent not terminated.

(d) If Buyer terminates all or any part of this Contract:

(i) Buyer may require Seller to transfer title and deliver to Buyer, as directed by Buyer, any (i) completed Contract Products or Contract Work, (ii) partially completed Contract Products or Contract Work, and (iii) Manufacturing Materials. Upon direction of Buyer, Seller shall also protect and preserve property in possession of Seller in which Buyer has an interest.

(ii) Buyer shall pay the price specified in this Contract for completed Contract Products or Contract Work. Buyer shall pay a proportionate share of the Contract Price for partially completed Contract Products or Contract Work. Payment for Manufacturing Materials accepted by Buyer and for the protection and preservation of property shall be at Seller’s direct costs. Buyer may withhold from any amount due under this Contract any sum Buyer determines to be necessary to protect Buyer or the Government or the Owner against loss because of outstanding Liens or claims of former Lien holders.

(iii) If, after termination of this Contract for default, it is determined that Seller was not in default, or that the default was excusable, such notice of default shall be deemed to have been issued pursuant to FAR 52.249-2 (Termination for Convenience of the Government (Fixed Price)) incorporated herein and the Setoffs/Backcharges Section and the rights and obligations of the parties hereto shall, in such event, be governed by said clause.

(e) The rights and remedies of Buyer under this Default Section are in addition to any other rights and remedies provided by law or under this Contract.

14. Deliveries of Contract Products

(a) Deliveries are to be made both in quantities and dates specified in the Contract.

(b) Without Buyer’s prior written consent and acceptance, Buyer will not pay for, or return to Seller, any Contract Products that are delivered in excess of the quantity specified.

(c) Seller is advised that NASSCO-Mayport is a C-TPAT (Customs-Trade Partnership Against Terrorism) certified company. If Seller deliveries are full (sealed) containers from countries outside the U.S., Seller is requested to execute a NASSCO-Mayport Supplier ‘Supply Chain Security Terms and Conditions document and conform to U.S. C-TPAT security procedures in order to facilitate expedited U.S. Customs processing. Bulk type deliveries in open containers are excluded.

15. Disputes

(a) Unless there are exigent circumstances and/or the imminent disclosure of information required to be protected pursuant to the Confidentiality Section of this Contract is evident, any Dispute between Buyer and Seller arising out of this Contract shall be resolved by means of the following procedure:

(i) The Dispute initially shall be referred to each party’s senior management with responsibility for this Contract, who shall negotiate in good faith to reach a resolution of the Dispute.

(ii) If resolution of the Dispute is not achieved within thirty (30) days of the initial referral described immediately above, the parties shall submit to non-binding mediation. This shall be accomplished, prior to either party taking action pursuant to paragraph (b) hereof.

(b) Any Dispute solely in connection with or arising out of this Contract not resolved in accordance with paragraph (a), above, shall be resolved by binding arbitration which may be initiated by either party in Commonwealth of Virginia, and both parties consent to such exclusive jurisdiction and venue. The parties agree to negotiate in good faith to select three (3) arbitrators and agree on discovery rules. Each party shall select one (1) arbitrator and both parties shall agree on a third arbitrator. If the parties are unable to agree on a third arbitrator or discovery rules within thirty (30) days, then the arbitration shall be conducted in accordance with the American Arbitration Association’s rules for commercial arbitrations utilizing one (1) arbitrator. In resolving any Dispute under this Contract, each party shall bear its own attorneys’ fees and costs, without regard to any law or statute to the contrary.

(c) Any Dispute solely in connection with or arising out of the Prime Contract with the Government or in connection with or arising out of both the Prime Contract with the Government and this Contract not resolved in accordance with paragraph (a) or (b), above, shall be resolved by means of the following procedure:

(i) Seller may submit to Buyer a claim or request for equitable adjustment in accordance with the dispute resolution provisions of the Prime Contract, copies of which will be provided upon request. Buyer may, upon Seller’s request and in Buyer’s sole discretion, submit such claim or request for equitable adjustment to the Government through its Contracting Officer for resolution, including a Contracting Officer’s final decision in the case of a claim. Such submission, if not rejected for lack of jurisdiction, shall constitute Seller’s sole remedy and shall be a bar to Seller’s proceeding directly against Buyer in any forum. Seller’s compliance with the dispute resolution provisions of the Prime Contract is a condition precedent to Buyer’s submission of Seller’s claim or request for equitable adjustment to the Government.

(ii) The resolution of any claim or request for equitable adjustment by the Government through its Contracting Officer shall be conclusive and binding on Seller to the extent conclusive and binding on Buyer, subject to Seller’s rights of appeal as set forth below.

(iii) If Seller is dissatisfied with the final decision of the Contracting Officer with respect to any claim, Seller may appeal such final decision in accordance with the dispute resolution provisions of the Prime Contract, using Buyer’s name, if such appeal does not affect Buyer’s rights independent of Seller’s claim. If the final decision affects Buyer’s independent rights, Seller may appeal in Buyer’s name only with Buyer’s written consent.

(iv) Requests for equitable adjustment or claims that are not submitted to the Government or which are dismissed by the Government for lack of jurisdiction may be resolved in accordance with paragraph (b) above.

(v) Nothing said, written or done by Buyer in the course of prosecuting any submission to the Government on behalf of Seller shall be construed as an admission or declaration against Buyer’s interest in any other proceedings.

(d) In resolving any Dispute under this Contract, each party shall bear its own attorneys’ fees and costs. The parties agree that any judgment upon award may be entered in any court having jurisdiction.

(e) Until final resolution of any Dispute hereunder, Seller shall diligently proceed with the performance of this Contract as directed by Buyer.

(f) Except as may be expressly set forth in these Military Terms and Conditions with the Government Contracting Officer’s express consent, the Seller shall not acquire any direct claim or direct course of action against the U.S. Government.

16. Environmental, Safety and Health if Seller Operates Within the Facilities

(a) Environmental

      1. Seller must communicate the Buyer’s Environmental policies and all applicable environmental requirements to workers who will perform work on behalf of the Buyer before prior to arrival at any of Buyer’s facilities. This must be documented by the Seller and be available upon request from the Buyer. This documentation is achieved by the EHS Department prior to arrival and work start by means of NIMS WI-PM-001-0-FL, Sub-Contractor Checklist.
      2. Seller shall comply with Buyer’s written environmental policies, procedures and requirements, and with all United States Federal, state and local environmental laws and regulations, including without limitation, those regarding the handling, management and use of any hazardous substances, and shall be responsible for all hazardous waste (both as defined by United States and Virginia law) generated by Seller’s employees and subcontractors during the performance of this Contract. The environmental policies and procedures are located at http://www.nassconorfolk.com/ComplianceDocuments.html under the heading “About Us”.
      3. Seller shall notify Buyer of all activities and services Seller is anticipated to conduct (based on Contract Work at the Facilities) that may impact the environment by completing the Environmental Requirements Certification Form (located on the website).
      4. Seller must obtain pre-approval for all chemicals or Hazardous Material azMat that the Seller anticipates using in performing Contract Work at the Facilities. This requirement is specified in NIMS WI-PM-001-0-FL Sub-Contractor Checklist as directed by NAVSEA Standard Item 009-03 (Initial Determination) and includes submitting the Hazardous Substance Control Form (also found on the website) weekly inclusive of, all Safety Data Sheets (SDS) for the materials.
      5. Seller shall inform Buyer of current Florida Department of Environmental Protection (FDEP) EPA ID number (if applicable). Seller will additionally comply with Local Standard Item 099-60SE, General Environmental Compliance for NS Mayport. Seller shall inform Buyer of all hazardous waste generated at the Facilities and shall cooperate with Buyer in disposing of such waste as directed by Buyer. Seller shall bring to the immediate notice of Buyer any risk to the environment which Seller believes has not been adequately assessed and is not under adequate control, so that Buyer can take appropriate action to prevent potential environmental harm or other losses. Any failure to perform these obligations shall be an immediate default under this Contract not subject to any cure period. Seller shall be solely responsible for the consequences of its failure to perform the foregoing obligations and shall defend, indemnify and hold Buyer harmless as set forth in the Indemnity Section.
      6. Seller’s environmental management system or program shall incorporate measures which reasonably demonstrate that its employees are competent to perform their tasks, with due regard for the need to protect the environment and ensure that hazards to the environment have been eliminated, where possible, or are being controlled through formal planning methods and procedures.
      7. If Seller causes, to any extent, the actual or potential Environmental Incident, and Buyer’s On-Scene Emergency Coordinator responds to such an Environmental Incident, Buyer will incur costs and expenses to respond to each such Environmental Incident. The Seller agrees to pay the Buyer for their response to each such Environmental Incident. This includes the Buyer’s costs, expenses, and any fines or penalties of remediation resulting from the Environmental Incident, and shall not impair or waive Buyer’s indemnification rights as set forth in the Indemnity Section. Buyer shall have the right to offset or reduce any payments to Seller for these expenses.

(b) Safety and Health

    1. The safe conduct and health of all persons employed by Seller or its subcontractors and suppliers shall be the sole responsibility of Seller. Seller shall take all reasonable precautions to protect the health and safety of such employees and others and to minimize danger from all hazards to life and property. Seller shall comply with all applicable United States Federal, state, and local laws and regulations, including without limitation health, safety and fire protection laws and regulations in force at Contract award and as modified during the life of the Contract. Seller shall also comply with Buyer’s health and safety policies and procedures available at Buyer’s EHS Department. Seller is solely responsible for informing itself of said laws (Federal, State, and Local), regulations, policies and procedures, and training its employees. Said training shall be documented by the Seller and made available upon request from the Buyer.
    2. Unless otherwise addressed in the Contract, the Buyer has the right to reasonably require the Seller to reassign and/or remove any of Seller’s or Seller’s subcontractors’ or suppliers’ employees immediately upon Buyer’s request should this person’s conduct increase Buyer’s health and safety concerns. (This includes any on-going operations at the Facilities and in conjunction with Buyer’s rights herein).
    3. Seller’s Buyer’s Health and Safety Plan , Fire Safety Plan and OSHA-10 Maritime certification cards shall be submitted, reviewed and approved by the Buyer’s EHS Department prior to Seller’s arrival. Upon arrival, a Job Hazard Analysis (JHA) shall be conducted jointly by Buyer’s and Seller’s representatives to identify general and unique potential hazards requiring mitigation throughout all spaces and locations contained within the work item. and procedures shall be made available to the Buyer’s EHS Department. Any failure by Seller or any of its subcontractors or suppliers to comply with any such health and safety policies, procedures, laws or regulations shall constitute a default. Under no circumstances shall compliance with Buyer’s safety policies and procedures, alone, be considered complete satisfaction of the requirements of this Section.
    4. Seller’s occupational health and safety management system shall incorporate measures which demonstrate that its employees are competent to perform their tasks safely and ensure that hazards to health and safety have been eliminated, where possible, or are being controlled through formal planning methods and procedures. Further, NASSCO-Mayport meetings concerning any aspect of subcontractor health and safety must be attended by at least one of Seller’s managerial/health and safety staff members for the purpose of ensuring that proper transmission and direction of new safety rules, or current rules, are being communicated, understood, and followed by all of Seller’s employees when they are in the Facilities.
    5. Seller shall complete the following prior to commencement of the Contract Work: (i) Provide to Buyer’s EHS Department the name, telephone number and title or position of the Seller’s Health and Safety Representative, (ii) and (v) Seller’s designated managerial/safety leadership who will direct safety compliance in the Facilities to receive NASSCO’s subcontractor safety training and complete acknowledgement documentation of Seller’s responsibilities with regard to safety, health, and fire protection, and (vi) Seller is required to provide proof of compliance with the requirements of 29 CFR 1910.1200.
    6. Seller represents and warrants that all equipment used by Seller to perform any Contract Work at the Facilities conforms to all federal, state, and local safety, health, and fire protection standards.
    7. Seller represents and warrants that Seller’s employees, subcontractors’ and suppliers’ employees performing Contract Work at the Facilities are properly trained in all Federal, State, and local health, safety and fire protection laws and regulations and Buyer’s health and safety policies and procedures, applicable to the Contract Work.
    8. Seller shall report all recordable occupational injuries or illnesses occurring at the Facilities during performance of the Contract Work in accordance with the following procedures: (i) Seller shall secure the incident scene, make an initial report to the vessel Quarterdeck and the Buyer’s EHS Department as soon as it is known to Seller. This report shall consist of the name of the injured person, place of occurrence, nature of the injury, and a description of the incident. This report can be made orally by telephone call to (904) 249-7772 ext. 2045 or by personal visit to Buyer’s EHS Department, and (ii) Seller shall submit a written report in the form of a formal accident investigation report, within twenty-four (24) hours of the incident, using NASSCO-Mayport Form for First Report of Injury (FROI) available at Buyer’s EHS Department or any other form which includes all necessary information. This report shall be delivered to Buyer’s EHS Department.
    9. Seller shall immediately notify Buyer’s EHS Department, in writing, upon receiving notice of any inspection from either United States OSHA or Florida OSHA representatives, of their work area at the Facilities. In the event of such an inspection, Seller shall permit Buyer’s personnel to be present at any opening conference, the inspection, and any closing conference, and Seller shall provide Buyer with copies of all correspondence, including citations, received from OSHA or Florida OSHA.
    10. If, in Buyer’s sole opinion, Seller fails to comply with this Safety Section, Buyer may without prejudice to any other legal or contractual rights of Buyer, issue an order stopping all or part of the Contract Work. Seller shall have no claim for extension of time or for compensation or damages by reason of or in connection with such work stoppage.
    11. To the extent required of Buyer’s own employees, personal protective equipment to include but not limited to hard hats, steel-toed safety shoes with well-defined heel and ankle protection, ANSI Z87protective eyewear, and hearing protection are required, at Seller’s expense, for any and all of Seller’s employees, or Seller’s subcontractors’ or suppliers’ employees, who will be conducting Contract Work in production areas of the Facilities.

17. Export Control Compliance and Cooperation Applicable when Buyer is Procuring from Seller in support of Prime Contracts with the Government

(a) The Vessel and the Contract Products or Contract Services are deemed to be “Defense Articles,” and may require Buyer or Seller to furnish “Defense Services” and/or export “Technical Data” as contemplated by 22 CFR Parts 120 through 130, International Traffic in Arms Regulations (“ITAR”). The terms, “Defense Article,” “Defense Service” and “Technical Data” are defined at 22 CFR 120.6, 120.9 and 120.10, respectively.

(b) In performing this Contract, “U.S. Person” Seller, “Foreign Person” Seller or the U.S. office of any “Foreign Person” Seller, hereinafter individually or collectively referred to as Seller, shall comply with the ITAR. The terms, “U.S. Person” and “Foreign Person” are defined at 22 CFR 120.15 and 120.16, respectively.

(c) Seller shall additionally comply with; 15 CFR Chapter VII, Subchapter C, Parts 730 through 774, Export Administration Regulations (“EAR”); the regulations issued by the Office of Foreign Assets Control, and all other applicable laws, regulations and orders that control the export of defense articles and “Dual-Use” items and associated technology. The term “Dual Use” refers to items that have both commercial and military applications, and is discussed at EAR §730.

(d) Most Sellers will transact some amount of ITAR-controlled Defense Articles, Defense Services and/or Technical Data in the performance of the Contract. In support of the stringent requirements of the ITAR, Buyer will invoke additional export controls on Sellers whose scope of work requires the transaction of a moderate or large volume of ITAR-controlled Defense Articles, Defense Services and/or Technical Data.

(e) All Sellers will comply with the following Sub-paragraphs (i) through (xii).

(i) Seller acknowledges that Defense Articles, Technical Data and Defense Services furnished by Buyer to Seller are authorized for use only by Seller and may not be exported or re-exported without an export license or other approval from the Directorate of Defense Trade Controls (“DDTC”).

(ii) Seller having an office incorporated to do business in the U.S. represents and warrants that, if it manufactures or exports Defense Articles, Defense Services or Technical Data, it is registered with the DDTC, in accordance with 22 CFR Part 122.

(iii) Seller having an office incorporated to do business in the U.S. shall apply for, and execute any documents required for Seller to lawfully export Defense Articles, Defense Services or Technical Data to any Foreign Person.

(iv) Seller acknowledges that a Foreign Person signatory to Seller’s export authorization shall not re-export ITAR-controlled technical data or defense services to another Foreign Person subcontractor or supplier, unless that subcontractor or supplier is named as a Sub licensee in Seller’s export authorization. A Sub licensee is a lower-tier Foreign Person subcontractor or supplier requires ITAR-controlled technical data or defense services as a prerequisite to providing goods and services to the Foreign Person signatory, in support of the signatory’s scope of work.

(v) Seller’s Foreign Person employees, Sub licenses or other Foreign Person subcontractors, suppliers or agents, at any tier, shall not participate in the performance of this Contract without Buyer’s prior written consent.

(vi) Seller shall apply for, and execute any documents required for Seller to lawfully export Defense Articles, Defense Services or Technical Data to any foreign classification or survey provider, and shall notify any such provider, three (3) days in advance of each required classification or survey service, in the performance of this Contract.

(vii) Seller shall include Buyer and the Foreign Person who will receive Buyer’s data and services directly from Buyer, as signatories to Seller’s application for an export authorization, if in that authorization, Seller desires Buyer to export Technical Data or furnish Defense Services directly to the Foreign Person. Buyer may not export to a Foreign Person Sub- licensee.

(viii) Seller shall fully cooperate with Buyer regarding any request for documentation related to Buyer’s application for an export authorization, and shall execute any export-related documentation required by Buyer.

(ix) Seller shall provide to Buyer, upon request, all licenses or other approvals obtained by Seller in compliance with export regulatory requirements related to this Contract, redacted if Seller desires to prevent disclosure of proprietary data.

(x) Seller shall notify Buyer immediately if Seller is listed in any export-related Restricted, Denied or Blocked Persons List, Debarred Parties List, U.S. Federal Register General Order, or if Seller’s export privileges are otherwise denied, suspended or revoked in whole or in part by any United States Government entity or agency.

(xi) Seller shall notify Buyer of any material change in Seller’s organization including: a change in senior officers; the establishment, acquisition or divestment of any subsidiary, or any sub-licensee; or merger with, or acquisition by another entity, whether U.S. or foreign, within five (5) days of the event.

(xii) Seller shall request of Buyer, five (5) days in advance, in writing, any required access to the Facilities by any and all of Seller’s employees, sub-licensees, subcontractors or other agents, at any tier, and shall include in any such request, the name and citizenship/nationality, (or in the case of dual or third country citizenship/nationality, the countries of citizenship/nationality), of each such person. For the purposes of this Contract; the term “national” refers to an individual’s place of birth, all citizenships and all lawful permanent residencies of any country.

(f) If Seller is not organized to do business in the United States, Seller nevertheless shall perform this Contract in compliance with the laws, regulations and terms set forth in paragraphs (a) through (d) and (e)(i), (e)(ii), (e)(iii), (e)(v), (e)(viii), (e)(x), (e)(xi) and (e)(xii) hereof.

(g) If specified in the Purchase Order, Seller will additionally provide Buyer with a Technology Control Plan (“TCP”) that meets the requirements of the DDTC guidance document titled, Guidelines for Preparing Agreements.

(i) The TCP shall articulate how the Seller will comply with all ITAR requirements relevant to the scope of work defined in the Contract. Among other elements contained in the TCP, Seller will define physical, electronic and procedural processes in place to prevent unauthorized access to Defense Articles, Defense Services and/or Technical Data.

(ii) The DDTC Guidelines for Preparing Agreements may be accessed at: http://pmddtc.state.gov/licensing/agreement.html

 

(STOP PER KARL)