10-12G

As filed with the Securities and Exchange Commission on December     , 2005

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES PURSUANT
TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

GLENROSE INSTRUMENTS INC.

(Exact name of registrant as specified in its charter)

Delaware	20-3521719
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

GlenRose Instruments Inc.

45 First Avenue

Waltham, Massachusetts 02451

(Address of registrant’s principal executive offices)

Registrant’s telephone number, including area code: (781) 622-1120

Securities to be registered pursuant to Section 12(b) of the Act: None

Securities to be registered pursuant to Section 12(g) of the Act:

Common Stock, $.01 par value per share

TABLE OF CONTENTS

Item 1.	Business
Item 2.	Financial Information
Item 3.	Properties
Item 4.	Security Ownership of Certain Beneficial Owners and Management
Item 5.	Directors and Executive Officers
Item 6	Executive Compensation
Item 7	Certain Relationships and Related Transactions
Item 8.	Legal Proceedings
Item 9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Item 10.	Recent Sales of Unregistered Securities
Item 11.	Description of Registrant’s Securities to be Registered
Item 12.	Indemnification of Directors and Officers
Item 13.	Financial Statements and Supplementary Data
Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 15.	Financial Statements and Exhibits
	Signatures

Confidential

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Item 1.  Business

General

We provide radiological characterization and analysis; hazardous, radiological and mixed (radiological and hazardous) waste management; and environmental, safety and health services, primarily to the federal government. We do not treat, store, transport or dispose of hazardous waste as part of our business. As part of our ongoing business, our labs generate wastes, and we employ commercial firms to transport, treat, and dispose of the wastes. We also operate a network of laboratories in four locations in the United States.

Although we intend to continue to grow our laboratory and radiological services business, our primary growth strategy is to acquire and operate analytical instruments businesses. Analytical instruments use a variety of highly sophisticated measurement technologies and are used by the scientific community, the government and industry to perform basic research, applied research and development, process monitoring and control, and many other applications. Our management has extensive experience in acquiring and operating large analytical instruments businesses. We have identified a number of companies with revenues of between $10-35 million as potential acquisition targets, although we do not have any commitments to buy any businesses. Our initial strategy will be to acquire instrument companies with solid technology and to increase their operating margins and revenues using techniques developed by our management during the course of their careers in the analytical instruments industry.

GlenRose Instruments Inc. was incorporated in Delaware on September 7, 2005 as a holding company for our various subsidiaries. Its predecessor and current wholly owned subsidiary, Eberline Services Inc. (Eberline Services), was incorporated in Delaware in 1995. Our principal operational headquarters is located in Albuquerque, New Mexico, and our principal executive offices are located in Waltham, Massachusetts. We plan to maintain a website at the following address: www.glenroseinstruments.com. Through a link on our website to the SEC website, www.sec.gov, we will provide free access to our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after electronic filing with the SEC. The charters of our Board committees, and our Code of Business Conduct and Ethics for our directors, officers and employees, will also be available on our website, and we will post on our website any waivers of, or amendments to, such code of ethics. Our website and the information contained therein or connected thereto are not incorporated by reference into this Form 10.

Background and Market

Environmental Services

The principal regulatory drivers of the hazardous waste management industry are the Resource Conservation and Recovery Act, or RCRA, enacted in 1976, and the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA. RCRA requires waste generators to distinguish between “hazardous” and “non-hazardous” wastes, and to treat, store and dispose of hazardous waste in accordance with specific regulations. The collection and disposal of solid and hazardous wastes are subject to local, state and federal laws and regulations, which regulate health, safety, the environment, zoning and land use. CERCLA holds generators and transporters of hazardous substances, as well as past and present owners and operators of sites where there has been a hazardous release, strictly, jointly and severally liable for environmental cleanup costs resulting from the release or threatened release. An integral part of this regulatory and compliance scheme is the need to detect and measure contaminants in order to ensure compliance.

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Our present focus is on the detection and measurement of radioactive wastes and “mixed wastes” which consist of radioactive wastes and other hazardous materials. These wastes were primarily generated by the federal government during the development and production of nuclear weapons. The nuclear power industry is another source of radioactive wastes.

A significant portion of future Department of Defense and Department of Energy environmental expenditures will be directed to cleaning up military bases and to restoring former nuclear weapons facilities. The Department of Defense has stated that there is an urgent need to ensure that the hazardous wastes present at these sites, often located near population centers, do not pose a threat to the surrounding population, and, in connection with the closure of many military bases, there is an economic incentive to make sure that the environmental restoration enables these sites to be developed commercially by the private sector. The Department of Energy has long recognized the need to stabilize and safely store nuclear weapons materials and to clean up areas contaminated with hazardous and radioactive waste.

Our radiological and waste management services are employed primarily by the federal government in connection with the cleanup of the former and present atomic weapons and energy sites operated by the federal government.

Analytical Instruments

According to published sources, in 2004, the analytical instrument market was approximately $25 billion in revenues. Going forward, the global analytical instrument market is forecasted by industry reports to show solid growth, and assuming no macro-economic changes, should have sales in excess of $30 billion by 2006. We do not currently operate in the analytical instruments market, but we plan to do so.

Currently, there are over 60 types of analytical instruments being sold into a variety of markets worldwide. Analytical instruments for life sciences represent the largest single segment with annual sales of approximately $6.9 billion; sales of liquid phase instrumentation are approximately $4.1 billion; and sales of molecular spectroscopy instrumentation are approximately $2.7 billion. Instrument companies within these segments currently have higher valuations due to higher growth rate expectations. Over time, the growth rates and valuations of individual segments tend to vary as new instrumentation areas develop, demand for older instruments levels off, or new technology and regulations render older instruments obsolete.

Technologists, regulators and managers around the world rely on analytical and life science instrumentation in the pursuit of knowledge in all types of industries, from drug development and research to polymers and plastics to environmental monitoring. The number of different types of instruments and technologies employed is almost as large as the number of applications for which they are used. These life science and analytical instruments are based on various chemical separation, optical and other techniques, which each have strengths in analyzing specific materials and compounds.

Technological advancements and the search for production efficiency are driving the demand for application-specific laboratory analytical instruments and services globally. Market developments include a trend toward integrated instrumentation and software as well as extensive research in biochemistry, drug discovery, homeland security and environmental testing. Greater emphasis on quality control in manufacturing processes and economic prospects are also creating a positive impact. Historically, many instrument markets have remained relatively insulated from general economic pressures and have seen solid growth.

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Improvements in instrument design such as miniaturization, incorporation of software and unattended operation with automated sample handling are aiding customers to maximize productivity and minimize costs. Vendors are focusing on compatibility of instruments with research facilities such as lab-on-a-chip and laboratory information management systems to enable complete interconnectivity. Application-specific equipment, such as surface analyzers for semiconductor chips and infrared spectrometers, are increasing the demand for these instruments as a whole.

Analytical instruments are found in over 200,000 laboratories scattered around the world. Until recently, the major markets were the United States, Western Europe and Japan. Recently, countries such as China, Taiwan and South Korea are becoming major purchasers of all types of analytical instruments.

The majority of the instrument purchases are by large commercial companies, universities and government laboratories. After the government, the pharmaceutical industry is the largest single purchaser of analytical instruments. Academia traditionally continues to have a strong demand for nearly every type of available instrument due to the complete range of scientific disciplines found at universities.

Analytical Laboratory Services

Services

We operate a network of laboratories in four locations in the United States. In addition to three radiochemistry laboratories, we also operate a stable chemistry laboratory, which provides analyses for traditional samples and for radioactive mixed waste samples. Radiochemistry is an analysis technique to determine the presence and extent of radioactive materials. Our company and its predecessors have served the nuclear industry since 1948 with the opening of a laboratory in Richmond, California. In addition, we have laboratories in Albuquerque, New Mexico; Oak Ridge, Tennessee; and Exton, Pennsylvania.

We provide a wide variety of sample analyses for government agencies, industry and nuclear utilities. The radionuclides or radioactive substances analyzed are in many chemical and physical forms, often in low concentrations and in a variety of matrices. These matrices include:

•Surface and potable water

•Sea water

•Rain water

•Air filters

•Soils and sediments

•Food stuffs

•Vegetation

•Aquatic and land animals

•Particulate fallout

•Urine and feces bioassay

•Reactor coolants and effluents

•Irradiated reactor fuel

•Fissionable material

•Low-level radioactive waste

We have extensive experience in the transuranic characterization of samples generated by the nuclear utility industry, by nuclear fuel processors, and by Department of Energy and Department of Defense facilities. Transuranic isotopes are those radioactive substances found in the atomic weapons and nuclear industries that must be isolated and disposed of in order to produce clean sites that can be returned to industrial use. We have specifically designed procedures to dissolve any refractory transuranic substances that may be present in samples from the nuclear fuel cycle. We can also perform radio-bioassays to detect and quantify radioactive substances in body fluids and excretions. Our laboratories use a broad range of analytical techniques and instrumentation. However, we work in the environmental range of analyses and do not undertake to perform high-level (hot lab) analyses.

Our stable chemistry analysis laboratory in Exton, Pennsylvania offers a full range of capabilities and a large capacity to support environmental laboratory programs. Water, soil, solid waste and air

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samples are analyzed for a wide variety of organic, inorganic and physical parameters using a variety of Environmental Protection Agency protocols and American Society for Testing and Materials methods. Routine service capabilities include organic chemicals, metals, wet chemistry and physical properties. Ancillary services include field sampling, field screening, data interpretation, method development and validation, onsite laboratories, mobile laboratories, analytical specifications preparation (QA project plans, sampling and analysis plans) and data storage.

Regulation

While our business has benefited substantially from increased governmental regulation of hazardous wastes, the environmental services industry itself has become the subject of extensive and evolving regulation by federal, state and local authorities. Environmental testing laboratories like those we operate are subject to a variety of certifications. We believe that we have acquired all operating permits and approvals required for the current operation of our business. We make a continuing effort to anticipate regulatory, political and legal developments that might affect operations, but are not always able to do so. We cannot predict the extent to which any environmental legislation or regulation that may be enacted or enforced in the future may affect our operations.

Our laboratories hold the appropriate permits and licenses from the Department of Energy, Department of Defense, U.S. Corps of Engineers, Navy, Nuclear Regulatory Agency, and from over 26 states.

Clients

The largest component of our laboratory business is with the federal government and its prime contractors. We service more than 100 clients overall. We generally have long-standing relationships with our clients, averaging more than ten years with our top ten clients. Our diversified client base also provides stable and recurring revenues as a majority of our revenues are derived from previously served customers with recurring needs for our services. Our clients include federal agencies, prime contractors to the federal government, state regulatory agencies, and leading companies in the environmental marketplace.

Our strategy is to develop and maintain ongoing relationships with a diversified group of customers who have recurring needs for environmental services. We strive to be recognized as a reliable and high quality supplier of laboratory testing services based upon quality, responsiveness, customer service, information technologies, breadth of analytical techniques and cost effectiveness.

For the fiscal years ended December 31, 2004 and 2003, the federal government and its prime contractors accounted for more than 80% of our laboratory services revenues and more than 90% of our consolidated revenues. No other customer accounted for more than 5% of our laboratory services revenues. Total laboratory revenues were approximately 30% of our consolidated revenues.

Laboratory pricing is based upon fixed unit pricing. In this process, clients are invoiced for each analysis based on a fixed price for each substance that is analyzed, the type of report and quality assurance desired, and the total price is determined by the number of corresponding analyses. Discounts may be provided for large volumes. Premiums are added for faster turn-around times of analyses. The laboratories have no cost-reimbursable contracts.

We provide our services under contracts and purchase orders. We bill all of our laboratory clients as analyses are completed and data packages are submitted to the client. No billing is done periodically

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based on costs incurred, on either an hourly-fee basis or on a percentage of completion. Analyses are normally completed and invoiced within one month after sample receipt from the client.

Consulting Group Services and Field Services

Services

Our consulting group provides a wide range of services for radiological characterization and analysis; hazardous, radioactive and mixed waste management; and environmental, safety and health management. These services include program development, implementation and assessment; regulatory analysis, strategy development, permitting and compliance; and environmental liabilities management through such techniques as pollution prevention and application of best management practices. Our field services group provides radiological and industrial hygiene control and monitoring.

The major client of the consulting services group is the federal government, either directly or through its prime contractors. Our experience dates back to 1989 when we had our first contracts at the Department of Energy’s Los Alamos National Laboratory (Los Alamos) and Waste Isolation Pilot Plant (WIPP).

The consulting services group’s core competencies are hazardous and radioactive waste characterization, waste management, and multimedia environmental regulatory compliance. Environmental regulatory compliance capabilities include multimedia environmental program development, implementation and assessment, including in the following areas:

•Air quality;

•Water quality (drinking water, storm water, wastewater, surface water and groundwater);

•Waste management (sanitary, solid, hazardous, radioactive, mixed and toxic substances);

•Soil and subsurface quality (bioremediation strategies for petroleum-contaminated soils; and characterization and investigation of subsurface contamination).

The current staff of the consulting services group consists of over 25 professionals, who include environmental scientists and engineers, health physicists and nuclear engineers. The staff members hold professional certifications and registrations such as Certified Environmental Trainer, Safe Drinking Water Act Compliance Sampler, Hazardous Waste Specialist, Hazardous Substances Professional, Registered Environmental Manager, Certified Hazardous Materials Manager, New Mexico Water Systems Operator Levels I through IV, and New Mexico Wastewater Systems Operator Levels I through IV.  Several of our staff have Department of Energy security clearances. Approximately 90% of our consulting staff hold college degrees.

As an outgrowth of its radiological characterization expertise, our staff developed for its own use a gamma spectral analysis software tool, SNAP™, which we use on projects at Los Alamos, Rocky Flats Environmental Technology Site (Rocky Flats), and Idaho National Engineering and Environmental Laboratory (Idaho National Lab). This software tool allows an experienced gamma spectral analyst more flexibility in performing peak identification, source modeling, and assay calculations than other similar, commercially available software. SNAP is used by customers at Los Alamos, Sandia National Laboratories, and at the U.K. atomic agency in Aldermaston, England.

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Clients and Contracts

The consulting services group currently manages and performs contracts for clients at Los Alamos, Idaho National Lab, Oak Ridge National Laboratory (Oak Ridge), and for the New Mexico Environment Department. At Los Alamos, where we have supported waste management and environmental protection programs since 1989, we currently have two contracts. These include task order contracts to provide radiological waste characterization services and waste management technical support services, as well as a subcontract to manage environmental protection programs for the Los Alamos site support services subcontractor. We have provided radiological characterization services in support of closure activities at Rocky Flats since 1999, and radiological characterization in support of waste retrieval operations at Idaho National Lab since 2003. We have provided on-call, statewide hazardous materials incident response services to the New Mexico Environment Department since 1997.

Our waste management expertise includes comprehensive waste certification and characterization support activities for transuranic wastes destined for WIPP. We have provided WIPP certification support at numerous Department of Energy sites including Hanford (Washington State) Reservation Site (Hanford Reservation), Los Alamos, Idaho National Lab, Oak Ridge, Argonne National Laboratory-East and Lawrence Berkeley National Laboratory, and we have operated mobile transuranic waste characterization systems at Nevada Test Site and Argonne National/Laboratory-East. Additionally, the consulting services group is part of the PMTech, Inc. team that has been awarded one of the Department of Energy’s nationwide decontamination, decommissioning and remediation contracts. The consulting group has multiple-year basic ordering agreement contracts in two areas at Los Alamos. The first is a five-year contract for waste management with a total value of $20 million dollars of which less than $5 million has been expended. The second is an environmental support contract to a prime contractor at Los Alamos, which generates approximately $1.7 million dollars per year; this contract is renewable on an annual basis for two more years. We were awarded the contract again in 2003 after having held it for five years under a previous contractor.

Since 1994, our Eberline Services Hanford, Inc. subsidiary has provided radiological and industrial hygiene support, quality assurance, and safety services as a pre-selected subcontractor to Bechtel Hanford, Inc. at the Hanford Reservation. The Hanford Reservation is the largest complex within the Department of Energy, and the cleanup program is anticipated to extend beyond 2035. From 1994-2005, our subsidiary generated over $120 million in revenue from this contract. Based in Richland, Washington, our subsidiary has approximately 160 employees. It has a contract with the Hanford Atomic Metal Trades Council labor bargaining unit and employs radiological control and industrial hygiene technicians to support Hanford projects. The Hanford Reservation contract is the largest held by us and accounts for more than 40% of our total revenues.

On March 23, 2005, we were advised that a team including our subsidiary was awarded a multi-year contract to manage the clean up and remediation of the River Corridor at the Hanford Reservation. Other team members are the Washington Group International Inc., Bechtel National Inc., CH2M Hill Inc., and Integrated Logistics Inc. It is expected that this contract will replace the prior Hanford Reservation contract by the end of 2005. We expect that the new contract will increase our scope of work, and may be worth an estimated $150 million in revenue to us over the life of the project. There are also substantial incentives for the team to complete the project in fewer than ten years.

At the Hanford Reservation site, we provide radiation protection services for the excavation, decontamination, and decommissioning of reactors, area surveillance maintenance and transition facilities, area remedial action and waste disposal sites, the Environmental Restoration Disposal Facility for the underground disposal of low-level wastes, the ground water project, and the complex

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decontamination and decommissioning of the plutonium processing facility. The services provided by our radiological control group include:

•Maintain adequate staffing of radiological control technicians and radiological control supervisors for the projects to detect and prevent the exposure of personnel to radiation;

•Perform and document radiation, contamination and airborne surveys;

•Write and approve radiological work permits;

•Write and implement procedures and work instructions to ensure compliance with federal regulations for conducting work in areas that cause exposure to radioactivity;

•Provide program and inventory support for the radiological instrumentation and source control programs;

•Maintain and provide input for radiological worker and workplace monitoring metrics;

•Provide radiation surveys of large, contaminated open areas on the Hanford Reservation site using proprietary GPS and laser-assisted radiological mapping systems; and

•Maintain a cadre of certified instructors that provide radiological training.

We have established an excellent record for working safely in an environment consisting of radioactively contaminated condemned buildings and nuclear reactors, contaminated excavation sites with steep slopes and trenches, and in the vicinity of heavy equipment. In spite of the fact that approximately 120 technicians are deployed daily to work in excavation sites and old buildings and facilities, we have had only one lost-time injury in the 10-year contract history.

Our quality assurance team ensures that radiological and industrial hygiene work activities conducted at the Hanford Reservation site are planned, controlled, and performed in accordance with quality requirements of applicable regulations, Department of Energy orders and contract requirements.

Our quality assurance program is designed to detect and prevent programmatic problems. A graded approach is used to identify, control, and correct processes and services that do not meet specified requirements. This facilitates evaluation of actual performance against performance objectives and criteria.

Our industrial hygiene group is an integral part of the Integrated Safety and Management System. The group provides a broad range of industrial hygiene services for radiological and industrial job planning, hazard recognition and control, work performance and post job review. Planning activities include review for potential legacy toxicants (e.g., asbestos, lead, beryllium, etc.), confined space classification, and ventilation. The review may result in recommendations such as an alternate product or substitution, respiratory protection selection, and personal protective equipment requirements. During job evolution, the group provides respiratory protection and required protective equipment identified during the job evolution, as well as performs the duties of respiratory attendant. We conduct monitoring for oxygen content, explosive gases, and volatile organics, mercury, asbestos, beryllium air/wipe, lead, acids/bases, dust/silica, PCB wipes, noise, heat/cold stress, wind speed, and lab hood velocity. We also sample workers’ breathing zone for potential exposure to toxic gases, and provides monitoring and sampling results in accordance with Hanford Reservation site requirements.

Post-job review activities include clearance sampling to ensure residual toxic gases are removed. We also participate in post-job reviews and provide workers and supervisors with OSHA-mandated exposure notification.

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Government Contracts

We must comply with and are affected by laws and regulations relating to the formation, administration and performance of U.S. Government contracts. These laws and regulations, among other things:

•Require certification and disclosure of all cost or pricing data in connection with certain contract negotiations;

•Impose acquisition regulations that define allowable and unallowable costs and otherwise govern our right to reimbursement under certain cost-based federal government contracts; and

•Restrict the use and dissemination of information classified for national security purposes and the exportation of certain products and technical data.

Federal government contracts are conditioned upon the continuing availability of Congressional appropriations. Long-term government contracts and related orders are subject to cancellation if appropriations for subsequent performance periods become unavailable. Congress usually appropriates funds on a fiscal-year basis even though contract performance may extend over many years. Consequently, at the outset of a program, the contract is usually partially funded, and Congress annually determines if additional funds are to be appropriated to the contract.

The federal government, and other governments, may terminate any of our government contracts and, in general, subcontracts, at their convenience, as well as for default based on performance. Upon termination for convenience of a cost reimbursement contract, we normally are entitled to reimbursement of allowable costs plus a portion of the fee. The amount of the fee recovered, if any, is related to the portion of the work accomplished prior to termination and is determined by negotiation. A termination arising out of our default could expose us to liability and have a material adverse effect on our ability to compete for future contracts and orders.

In addition, our federal government contracts (or those of the prime contractors) typically span one or more base years and multiple option years. The federal government generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with our performance of the contract. Federal government contracts generally contain provisions that allow the federal government to unilaterally suspend us from receiving new contracts pending resolution of alleged violations of procurement laws or regulations, reduce the value of existing contracts, issue modifications to a contract and control and potentially prohibit the export of our services and associated materials.

Competition

We believe that the principal competitive factors in all areas of our business are:

•technical proficiency;

•operational experience;

•price;

•breadth of services offered; and

•local presence.

We compete with a diverse array of small and large organizations including the following:

•national or regional environmental management firms;

•national, regional and local architectural, engineering and construction firms;

•environmental management divisions or subsidiaries of international firms

•engineering, construction and systems companies; and

•hazardous waste generators that have developed in-house capabilities.

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If and when we acquire an analytical instrument business and enter that market, competition in that market will be intense. Currently, there are hundreds of analytical instrument companies worldwide. Sizes range from a few million dollars to over a billion dollars in analytical instrument revenues. The top ten analytical instrument companies control approximately 40% of the overall market.

Proprietary Technology

We have developed substantial proprietary technology and have established and maintain an extensive knowledge of the leading commercially available technologies. We incorporate these technologies into the environmental services that we provide to our customers. We currently hold three patents and 15 trademarks in the United States, and we license software and other intellectual property from various third parties. We enter into confidentiality agreements with certain of our employees, consultants and corporate partners, and control access to software documentation and other proprietary information. We believe that we hold adequate rights to all intellectual property used in our business and that we do not infringe upon any intellectual property rights held by other parties.

We have several proprietary technologies that we believe give us a competitive advantage by offering unique services that benefit our clients, including:

•SNAP^TM (Spectral Nondestructive Assay Platform)

•SGS^TM (Segmented Gate System)

•GPERS^TM (Global Positioning Environmental Radiological Surveyor)

•LARADS^TM (Laser-Assisted Ranging and Data System)

•APNEA^TM (Active-Passive Neutron Activation)

SNAP: Spectral Nondestructive Assay Platform

Each transuranic analysis is comparatively expensive due to the rigorous accuracy and quality assurance requirements dictated by federal and state law.  Another cost consideration to Department of Energy is that the disposal of transuranic waste at the WIPP is significantly more expensive than the disposal of routine low-level radioactive waste. Therefore, we have identified a secondary opportunity to provide a less expensive onsite analysis of uncharacterized waste to distinguish these wastes at the generator’s site. SNAP is the technology we developed in response to this need. SNAP is an onsite and non-intrusive method to radiologically characterize the contents of a wide array of wastes at lower costs than other methods. The use of mathematical models allows the Company to adequately characterize and quantify wastes in less than one-half the time typically required to achieve comparable results. SNAP makes it possible to accurately characterize wastes of unknown composition with minimal effort.

Defensible, cost-effective waste characterization capability is essential to the remediation of contaminated sites and waste management. SNAP yields the following benefits:

•Cost savings over standard characterization techniques;

•Small, light-weight, portable, and battery-powered instrumentation that lends its use to remote deployment;

•Digital storage of data on the locations and concentrations of contaminants and display of the data in near real-time;

•Ability to assay all sizes and shapes of waste packages;

•Portable non-destructive assay technology yielding excellent detection limits in addition to accurate radionuclide quantification;

•Data on isotopes, concentration levels and locations (rather than just activity levels).

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Considering the high cost of transuranic waste management and disposal, reductions such as these have produced significant cost savings for our clients. We believe that the use of SNAP has reduced disposal costs at the WIPP site.

SGS: Segmented Gate System

The Segmented Gate System (SGS) is a technology that separates radioactively contaminated soil from clean soil. The SGS is a combination of sophisticated conveyor systems, radiation detectors and computer controls that remove contaminated soil from a moving feed supply on a conveyor belt. It significantly reduces the volume of contaminated soils requiring treatment and disposal, enabling large cost savings. The clean soil stream is diverted for return to the site or cheaper disposal options. The SGS has been successfully used to remediate over 200,000 cubic yards of plutonium-contaminated soil on Johnston Atoll, which is the largest environmental restoration project involving a significant volume reduction of radioactively contaminated soil. The system has also processed over 15,000 cubic yards of soils contaminated with various radionuclides at many Department of Energy and Department of Defense sites across the United States.

Radiological Mapping Systems

We offer two types of radiological mapping technologies, GPERS and LARADS.

Common features of the two radiological mapping systems are as follow:

•Both systems collect and store in electronic files the positional coordinates and radiological readings on a point-per-second basis.  These field files are then downloaded and processed with software to produce both a color-coded (based on radiological reading) map of the survey trace overlaid upon a CAD base map or digital photo of the site or area

•Survey detectors can be hand-carried or mounted on vehicle for large area surveys

Use of the GPERS and LARADS systems offers several advantages over traditional radiological surveys, which involve manual collection and documentation of objective data and manual data archival, management, and assembly. These advantages include:

•The GPERS system constantly updates position data from global positioning satellites accurate to within less than 0.5 meters.  The LARADS system utilizes an auto tracking laser range finding system to provide the same positioning data accurate to less than inch for those situations where satellite data are unavailable (i.e., indoors or under trees next to buildings);

•GPERS and LARADS automatically acquire and store radiation and positioning data as the technician moves from location to location providing a continuous record in retrievable format;

•The radiation data are acquired every second and can be merged, averaged, and evaluated without subjective operator interpretation;

•The need for manual data entry is eliminated because data is collected and stored in database format. This eliminates transcription errors and position errors, and also allows the position data to be reported in any commonly used coordinates system;

•Ability to report on data collected within 24 hours; and

•Savings in accelerated performance.

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GPERS: Global Positioning Environmental Radiological Surveyor. Global Positioning Environmental Radiological Surveyor (GPERS) is a lightweight survey platform used for performing radiological surveys in open land areas. GPERS reduces labor requirements to characterize large outside land areas for radiological contaminants, thereby significantly reducing project costs. This technology merges standard radiation monitoring equipment with satellite global positioning to accurately locate and quantify areas of elevated radioactive contamination. The accuracy of the sophisticated equipment automatically produces repeatable and verifiable coordinates, thus reducing requirements for extensive grid establishment. The GPERS is coupled with conventional radiation detectors for outdoor radiological surveys where positional accuracies of less than one meter are sufficient.

LARADS: Laser-Assisted Ranging and Data System. Laser-Assisted Ranging and Data System (LARADS) is a radiological surveying instrument that automates the collection of indoor radiation measurement data. LARADS reduces labor costs to characterize the interior surfaces of buildings where GPS tracking is unavailable. This system integrates standard radiation monitoring equipment with a laser positioning total system to locate elevated levels of radioactive contamination. Both GPERS and LARADS databases can be overlaid on digital photographs, CAD drawings, and drawings generated by the system to visually depict the characterization data.

LARADS offers two advantages over the GPERS systems in that:

•It can be used inside a building or facility, while the GPERS requires a view of the sky; and

•Its positional accuracy, and hence detector velocity, are much more precise. This allows greater control of survey scan rates, and post-processed MDAs are much more accurate. The LARADS includes an alarm to alert the surveyor if the velocity user-set point is exceeded.

The resulting color-coded data maps are helpful tools for evaluating site conditions and providing pre-job briefings. This system is coupled with conventional radiation detectors for indoor surveys or surveys where higher positional accuracy is desired (less than two cm). The LARADS system can be (and has been successfully) mounted on automated platforms to allow surveys of walls and ceilings without the use of ladders and scaffolds, minimizing the risks to personnel accessing these types of equipment.

Research and Development

We do not presently conduct any independent research and development. All work is conducted through contracts for the environmental services group.

Employees

As of June 30, 2005, we employed approximately 270 active full-time employees. Included in this group are approximately 100 employees at the Hanford Reservation who are unionized. One of our subsidiaries has a contract with the Hanford Atomic Metal Trades Council. We have a good relationship with the union. In general, we believe that our relationship with our employees is satisfactory.

Risk Factors

The following risk factors should be considered carefully in addition to the other information contained in this Form 10. This Form 10 contains forward-looking statements. Forward-looking statements relate to future events or our future financial performance. We generally identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other similar words. These statements are only predictions. The outcome of the events described in these forward-looking statements is subject to known and

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unknown risks, uncertainties and other factors that may cause our, our customers’ or our industry’s actual results, levels of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business,” as well as other sections in this Form 10, discuss some of the factors that could contribute to these differences.

The forward-looking statements made in this Form 10 relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events.

This Form 10 also contains market data related to our business and industry. These market data include projections that are based on a number of assumptions. If these assumptions turn out to be incorrect, actual results may differ from the projections based on these assumptions. As a result, our markets may not grow at the rates projected by these data, or at all. The failure of these markets to grow at these projected rates may have a material adverse effect on our business, results of operations, financial condition and the market price of our common stock if one should develop.

We have incurred losses, and these losses may continue.

We have incurred losses in each of the last four fiscal years. Losses were incurred and continue to be incurred in our laboratory business. Prices and availability of samples have declined in our laboratory business, and there is no indication that prices will improve. While we have taken steps to reduce costs, there is no assurance that profitability will be restored in the near future to our laboratory business. Businesses that we acquire may be unprofitable after their acquisition, and we may not be successful in implementing our management techniques, which would increase our losses.

We are substantially dependent on contracts with the federal government.

Over 90% of our revenue is derived, directly or indirectly, from contracts with the federal government. Two contracts account for a large portion of that revenue. Any disruption in government funding or in our relationship with the government could have a material adverse impact on our financial condition. In addition, many of our contracts with federal government agencies require annual funding approval and may be terminated at their discretion. A reduction in spending by the applicable federal agencies could limit the continued funding of our existing contracts with them and could limit our ability to obtain additional contracts. The inability to win new government contracts would have a material adverse effect on our business and financial condition.

Fixed-price contracts expose us to losses in the event of unanticipated cost increases.

We presently do not have fixed-price contracts, but may in the future. Our laboratories conduct fixed-sample price business, which constitute over 30% percent of our revenues. In the event we are awarded fixed-price contracts, unanticipated or unforeseeable cost increases, could have a material adverse impact on our financial condition if we underbid these contracts. Fixed-price contracts protect clients but expose us to a number of risks. These risks include:

•underestimation of costs;

•problems with the appropriate choice of technologies;

•unforeseen costs or difficulties;

•delays beyond our control; and

•economic and other changes that may occur during the contract period.

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It is possible that future settlements of cost-plus-fixed-fee and related types of government contracts could result in overpayments by the government and create a liability for the company. In the past, the usual result has been opposite effect with the company recouping additional funds, but the possibility does exist for over billing due to incorrect provisional overhead rates in a given year.

Our government contracts expose us to the possibility of substantial fines and penalties, governmental audits and investigations and suspension or debarment.

We face specific risks associated with government contracting, which include the risk of substantial civil and criminal fines and penalties for violations of applicable laws and regulations. Government contracting requirements are complex, highly technical and subject to varying interpretations. During the course of an audit, an agency may disallow costs if, for example, it determines that we improperly accounted for such costs in a manner inconsistent with government cost accounting standards. Under the typical “cost-reimbursable” government contracts that we perform, only those costs that are reasonable, allocable and allowable are recoverable in accordance with federal acquisition regulations and cost-accounting standards. In addition to damage to our business reputation, the failure to comply with the terms of one or more of our government contracts could also result in our suspension or debarment from government contract projects for a significant period of time. This would have a material adverse effect on our business.

Our nuclear waste management services subject us to potential environmental and other liabilities.

Our business of rendering services in connection with management of waste, including certain types of hazardous waste and low-level radioactive waste, subjects us to risks of liability for damages. Such liability could involve, without limitation:

•claims for  clean-up  costs,  personal  injury  or  damage  to  the environment  in  cases in  which  we are  held  responsible  for the release of hazardous or radioactive materials;

•claims of employees, customers, or third parties for personal injury or property damage occurring in the course of our operations; and

•claims alleging  negligence or  professional  errors or omissions in the planning or performance of our services.

In addition, we are subject to potentially large civil and criminal liabilities. The federal government could suspend or disbar us as a federal government contractor or hold us liable for any failure to abide by environmental laws and regulations.

Our inability to successfully identify and complete acquisitions or successfully integrate any new or previous acquisitions could have a material adverse effect on our business.

Our primary growth strategy is to acquire and operate analytical instruments businesses. Promising acquisitions are difficult to identify and complete for a number of reasons. For example:

•We may fail to identify suitable acquisition candidates or to acquire additional companies on favorable terms

•We may fail to obtain the necessary financing, on favorable terms or at all, to finance any of our potential acquisitions

•We may fail to successfully integrate or manage these acquired companies due to differences in business backgrounds or corporate cultures or inadequate internal systems or controls

•These acquired companies may not perform as we expect

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Furthermore, identifying and pursuing future acquisition opportunities requires a significant amount of management time and skill.

Our acquisition strategy will require additional capital, and we may not be able to raise this capital on favorable terms, if at all.

We anticipate that we will need to raise additional capital to fund our acquisition strategy and our cash needs may vary significantly from our projected needs. If our estimates as to future cash needs are wrong, we may need to raise additional capital sooner than expected. We cannot assure you that our estimations regarding our cash needs will prove accurate, that we will be able to secure required additional financing if needed, or that additional financing, if obtained, will be on favorable or acceptable terms. We may raise additional funds through public or private equity offerings or debt financings. To the extent that we raise additional funds by issuing equity securities, our stockholders may experience significant dilution, and debt financing, if available, may involve restrictive covenants. If we are unable to obtain additional financing when needed, we would be required to significantly scale back development plans and, depending upon cash flow from our existing business, reduce the scope of our operations or cease operations entirely.

We are substantially dependent on current management, and if we fail to attract and keep senior management and key scientific and operating personnel, we may be unable to successfully pursue our growth strategy.

Our success depends on the contributions of our key management, especially our Chief Executive Officer, Arvin Smith, and our Chairman, John Hatsopoulos. Their respective ages are 76 and 71. We expect that our future market capitalization will be in significant part dependent on the reputation of these individuals. We do not have employment contracts with either of these individuals, and we do not maintain key person insurance on any of our employees, officers, or directors. The loss of the services of either of these individuals would likely have a material adverse effect on our business and prospects.

Our success also depends on our ability to retain and expand our staff of qualified managerial and technical personnel, particularly if we are successful in implementing our acquisition strategy. Qualified individuals are in high demand and are often subject to competing offers. We cannot be certain that we will be able to attract and retain the qualified personnel we need for our business. If we are unable to hire additional personnel as needed, it would likely have a material adverse effect on us.

Our operating results fluctuate across quarters due to the nature of our business.

Our quarterly revenues, expenses and operating results may fluctuate significantly due to a number of factors, including:

•the seasonality of the spending cycle of our public sector clients, notably the federal government;

•employee hiring and utilization rates;

•the number and significance of client projects commenced and completed during a quarter;

•delays incurred in connection with a project;

•the ability of our clients to terminate projects without penalties; and

•weather conditions.

Historically, we experience lower revenues in the first calendar quarter primarily due to weather conditions. Also, because we have a heavy concentration of federal government contracts the federal appropriations process may significantly affect our operating results. However, variations in any of these factors could cause significant fluctuations in our operating results from quarter to quarter.

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Our industry is subject to intense competition, and several of our competitors are larger than us.

In our radiological services business, we compete with many national environmental and consulting firms, and in our laboratory business we compete with many regional or niche firms. Some of our larger competitors benefit from economies of scale and have better access to bonding and insurance markets at a lower cost than we can achieve. The entry of large systems contractors and international engineering and construction firms into the environmental services industry has increased competition for major federal government contracts and programs.

The analytical instrument business is subject to intense competition. Competitors would include many other companies that offer products and services similar to ours. Many of our potential competitors have longer operating histories, large customer bases, greater brand recognition and significantly greater financial, marketing and other resources. Certain of our potential competitors may be able to devote greater resources to marketing, adopt more aggressive pricing policies and devote substantially more resources to developing their products. We may be unable to compete successfully against current and future competitors, and competitive pressures may have a material adverse effect on us.

If we are successful in acquiring analytical instrument businesses or products, that business will be subject to a variety of specific risks.

Our success in the analytical instrument business will depend in large part on our ability to engineer and improve or develop our products. The following circumstances, among others, may lead to a significant delay:

•our inability to hire or retain skilled internal technical developers and technicians to develop, maintain and enhance our products;

•unforeseen technical or development issues;

•unanticipated product requirements requested by vendors, consumers or regulators; and

•our inability to develop, in a cost-effective manner, unique products.

The analytical instrument business depends on the protection of proprietary rights, which is difficult and costly.

If we are successful in acquiring analytical businesses, we will need to protect our proprietary rights in our products.  Intellectual property rights implementation and protection is complex and costly.  We may be unable to obtain or maintain adequate protection, and we may be subject to infringement claims by our competitors. We may not have the financial resources to prosecute patent applications or defend our patents from infringement or claims of invalidity. In addition to patents, we expect to rely on trade secrets and proprietary knowledge, which we seek to protect, in part, through appropriate confidentiality and proprietary information agreements. Our proprietary information or confidentiality agreements with employees, consultants and others may be breached, or we may not have adequate remedies for any breach or our trade secrets may otherwise become known to or independently developed by competitors.

There is no public market for our outstanding common stock, and there will be restrictions on transferability.

There is presently no public market for our outstanding common stock, and we cannot assure you that a public market will ever develop. Moreover, even if a public market develops, any sale of our outstanding common stock may be made only pursuant to an effective registration statement under federal

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and applicable state securities laws or exemptions therefrom. Realization of any gains on an investment in us will be principally dependent upon our ability to effectuate one or more liquidity-providing transactions.

We anticipate that our capital stock may be quoted on the OTC Bulletin Board following effectiveness of this registration statement. Trading in stock quoted on the OTC Bulletin Board is often thin and characterized by wide fluctuations in trading prices, due to many factors that may have little to do with our operations or business prospects. Moreover, the OTC Bulletin Board is not a stock exchange, and trading of securities on the OTC Bulletin Board is often more sporadic than the trading of securities listed on a quotation system or a stock exchange.

Trading of our common stock may be restricted by the SEC’S “penny stock” regulations which may limit a stockholder’s ability to buy and sell our stock.

We anticipate that our common stock may be traded on the OTC Bulletin Board following the effectiveness of this registration statement. The Securities and Exchange Commission has adopted regulations which generally define “penny stock” to be any equity security that has a market price less than $5.00 per share or an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities will likely be covered by the penny stock rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers and accredited investors. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document in a form prepared by the Securities and Exchange Commission that provides information about penny stocks and the nature and level of risks in the penny stock market. The broker-dealer also must provide the customer with current bid and other quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction and monthly account statement showing the market value of each penny stock held in the customer’s account. The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation. In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from these rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure and suitability requirements may have the effect of reducing the level of trading activity in the secondary market for a stock that is subject to these penny stock rules. Consequently, these penny stock rules may affect the ability of broker-dealers to trade our securities. We believe that the penny stock rules discourage investor interest in and limit the marketability of our capital stock. Trading of our capital stock may be restricted by the SEC’S “penny stock” regulations which may limit a stockholder’s ability to buy and sell our stock.

We have no intention to pay dividends.

We have never declared or paid any cash dividends on shares of our capital stock. Eberline Services performs certain administrative and professional services on behalf of the GlenRose Partnership, L.P. (GlenRose Partnership). GlenRose Partnership is responsible for paying Eberline Services for the expenses incurred for these services. At the end of September 2005, the total amount due was $503,841. We anticipate that immediately before the effectiveness of this Form 10, we will issue a one-time $503,841 cash dividend to GlenRose Partnership. Immediately upon receipt of such a dividend, GlenRose Partnership will remit $503,841 to us as full payment of the sums due for such administrative and professional services. Other than such a one-time dividend, we currently intend to retain earnings, if any, to fund the development and growth of our business and, do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors

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after taking into account various factors, including our financial condition, operating results, cash needs and growth plans.

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Item 2.  Financial Information

Selected Financial Data

You should read the following selected consolidated financial data in conjunction with the section of this Form 10 entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated financial statements and the notes thereto included elsewhere in this Form 10.

The following data have been derived from audited consolidated financial statements as of and for the three years ended December 31, 2002, 2003 and 2004, which have been audited by Neff & Ricci LLP, an independent registered public accounting firm, and from our unaudited consolidated interim financial statements as of and for the nine-month periods ended September 30, 2004 and September 30, 2005. Our audited consolidated balance sheets as of December 31, 2003 and 2004 and the related audited consolidated statements of income and of cash flows for each of the three years in the period ended December 31, 2004, together with the notes thereto, appear elsewhere in this Form 10. Results for interim periods are not necessarily indicative of the results expected for the entire year. The fiscal year 2001 data include 54 weeks for the business of Eberline Services, Inc., our predecessor and currently a wholly-owned subsidiary which was acquired on December 15, 2000, and 48 weeks for the Lionville Laboratory which was acquired in January 2001. The 2001 financials were audited separately by Ernst & Young for Eberline Services, and Croft, Drozd & Company, P.C. for Lionville Laboratory Inc.

GlenRose Instruments Inc. & Subsidiaries

Consolidated Income Statement Data:

													Nine Months Ended September 30,
	2001			2002			2003			2004			2004			2005
Revenues	$	36,654,689		$	31,856,770		$	27,288,270		$	28,152,918		$	19,115,830		$	22,948,883
Cost of sales	31,764,539			28,028,509			23,564,483			26,252,937			17,524,884			21,237,132
Gross profit	4,890,150			3,828,261			3,723,787			1,899,981			1,590,946			1,711,751
Operating expenses:
General & administrative	4,079,101			3,748,415			3,094,166			2,596,367			1,892,339			1,465,900
Total operating expenses	4,079,101			3,748,415			3,094,166			2,596,367			1,892,339			1,465,900
Operating (loss) income	811,049			79,846			629,621			(696,386		)	(301,393		)	245,851
Other income (expense):
Gain on sale of assets	—			—			96,384			29,248			—			—
Interest income	45,987			39,236			26,524			10,241			4,426			8,500
Other income	—			2,114			—			463			28,749			36,081
Interest expense	(770,732		)	(619,683		)	(488,752		)	(335,815		)	(252,903		)	(260,529		)
Reserve (discontinued operations)	—			—			—			—			—			(70,000		)
Goodwill impairment	—			—			—			(606,403		)	—			—
Total other income & expense	(724,745		)	(578,333		)	(365,844		)	(902,266		)	(219,728		)	(285,948		)
Income before taxes	86,304			(498,487		)	263,777			(1,598,652		)	(521,121		)	(40,097		)
Income taxes / (benefit)	152,503			(254,458		)	335,639			359,088			102,289			—
Net (loss) income	$	(66,199	)	$	(244,029	)	$	(71,862	)	$	(1,957,740	)	$	(623,410	)	$	(40,097	)
Net income (loss) per common share:
Basic & diluted earnings per share	$	(0.02	)	$	(0.08	)	$	(0.02	)	$	(0.65	)	$	(0.21	)	$	(0.01	)
Shares outstanding	3,000,000			3,000,000			3,000,000			3,000,000			3,000,000			3,000,000

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GlenRose Instruments Inc. & Subsidiaries

Consolidated Balance Sheet Data:

					As of
	2001	2002	2003	2004	September 30, 2005
Cash & cash equivalents	3,152,930	2,138,052	1,082,089	710,547	978,435
Current assets	9,657,684	8,556,112	5,500,409	7,081,773	5,415,796
Total assets	18,827,717	17,830,368	13,886,475	13,826,902	11,649,529
Current liabilities	4,718,091	4,299,036	2,398,359	4,781,123	2,752,527
Long-term liabilities	8,243,426	7,041,559	5,070,206	4,585,609	4,476,928
Total liabilities	12,961,517	11,340,595	7,468,565	9,366,732	7,229,455
Working capital	4,939,593	4,257,076	3,102,050	2,300,650	2,663,269
Total shareholders’ equity	5,866,200	6,489,773	6,417,910	4,460,170	4,420,074

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the financial statements and related notes and the other financial information appearing elsewhere in this Form 10. This discussion and analysis contains forward-looking statements that involve risk, uncertainties and assumptions. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including those discussed in “Business – Risk Factors” and elsewhere in this Form 10.

Overview

We provide radiological characterization and analysis; hazardous, radiological and mixed (radiological and hazardous) waste management; and environmental, safety and health services, primarily to the federal government. We do not treat, store, transport or dispose of hazardous waste as part of our business. However, our labs generate wastes, and we employ commercial firms to transport, treat, and dispose of the wastes. We also operate a network of laboratories in four locations in the United States.

Eberline Services, which includes our consulting, field services and radiochemistry laboratory business, was acquired on December 15, 2000, and our mixed waste analytical laboratory business, Lionville Laboratory, was acquired in January 2001. Both businesses operated as brother-sister companies until January 2004 when the mixed waste analytical laboratory business became a wholly owned subsidiary of Eberline Services. The financial statements are presented on a consolidated and restated basis as if the two businesses had been combined at the beginning of 2001. The fiscal year 2001 data include 54 weeks for the business of Eberline Services, Inc., our predecessor and currently a wholly-owned subsidiary, which was acquired on December 15, 2000, and 48 weeks for the Lionville Laboratory which was acquired in January 2001.

Substantially all of our revenues are derived directly or indirectly from contracts with the federal government and its contractors. In our radiological services business we currently have two contracts that account for the large majority of that business’s revenue. These two contracts relate to the Hanford Reservation and Los Alamos. Our laboratories derive the large majority of their revenues from the

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processing of samples collected from government-funded cleanup sites by the prime contractors or other subcontractors; a minor portion of our laboratory revenues is derived from other government agencies and commercial customers.

Our services business is based largely on cost plus fee contracts. Under these contracts, we recover our allowable costs plus either a fixed fee or an incentive fee. In a cost plus contract, we derive revenues from the costs we incur plus a fee, but we are essentially required to manage these costs based on the work we expect to receive over the next fiscal quarter. The amount of this work is difficult to predict since it depends on work orders from the prime contractors and our ability to receive subcontracts and the timing of work orders tends to be highly variable for a number of reasons, including delays in government funding of existing contracts, as well as delays in contract renewals and the termination of contracts because of changing government priorities and the uncertainty of the government procurement process. For example, the uncertainty of the award of the new principal cleanup contract at Hanford, the River Corridor Contract caused the existing Environmental Restoration Contract to be extended twelve times. There are other contributing factors, including weather. Inclement weather, particularly in the late fall and winter reduces the amount of work that can be done at the various cleanup sites.

Over the last several years, there has been a reduced level of samples generated by cleanup sites and other sources. This has created intense price competition in the laboratory business. We have attempted to reduce our costs at the laboratories to be better aligned with the reduced volume of work, but there are certain constraints on our ability to do so in the short term, such as fixed expenses including equipment depreciation and facilities costs.

Critical Accounting Policies

We prepare our books in accordance with generally accepted accounting principles (GAAP). In addition, we are subject to the rules and regulations of the Federal Acquisition Regulations, certain provisions of the Cost Accounting Standards board, and regulatory oversight from the Defense Contract Audit Agency. Annual audits are performed by outside auditors. We are audited annually by the Defense Contract Audit Agency.

Management believes that our accounting for goodwill is the principal accounting policy that reflects the most difficult judgments in connection with the preparation of our financial statements.

In accordance with Statement of Financial Accounting Standards (SFAS) No. 142, “Goodwill and Other Intangible Assets,” goodwill and intangible assets deemed to have indefinite lives are not amortized, but are subject to annual impairment testing. As of December 31, 2004, we had $2,740,913 of goodwill on our consolidated balance sheet. We do not have any other intangible assets with indefinite lives. An impairment loss is recognized to the extent that the carrying amount exceeds the asset’s fair value. In performing its goodwill impairment assessment, we rely on a number of factors, including operating results, business plans, economic projections, and anticipated future cash flows discounted for risk. There are inherent uncertainties related to these factors, and management’s judgment in applying them to the analysis of goodwill impairment. At the end of 2004 we took a $606,403 charge against the entire goodwill related to our laboratory business due to the extent of losses in that business and the uncertainty of its recovery. No impairment charge was required for the consulting and field services business. We also applied a valuation allowance and took a charge of $253,500 against the entire amount of deferred tax assets at our Lionville Laboratory located in Exton, Pennsylvania.

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Results of Operations

First Nine Months of 2005 Compared to First Nine Months of 2004

For the nine months ending September 30, 2005, consolidated revenues were $22,948,883 versus $19,115,830 for the first nine months of 2004, an increase of $3,833,053 or 20.1%. The increased revenue was mainly due to a new contract at the Department of Energy, increased work at the Hanford Reservation and increased revenue in the laboratory units.

The increased level of effort at Hanford was due to acceleration of Environmental Restoration Contract efforts prior to award of the River Corridor Contract in June. The increased activity was promoted by the Department of Energy to achieve milestones leading to the transition to the new contract. The radiological barrel-monitoring project for the Department of Energy at Idaho also contributed to the increase over the prior year period. Sample flow at the labs increased over the same period the prior year, contributing to higher revenues; however, the sample flow was stronger during the first six months but decreased in the third quarter, primarily in the mixed waste lab.

The cost of sales was $21,237,132 for the nine months ending September 30, 2005 versus $17,524,884 for the first nine months of 2004, an increase of $3,712,248 or 21.2%. The cost of sales for the service projects as a percentage of revenues are higher than the cost of sales for the labs, which accounts for the higher increase in the overall cost of sales.

Gross profit was $1,711,751 for the nine months ending September 30, 2005 versus $1,590,946 for the first nine months of 2004, an increase of $120,805 or 7.6%. The main reason for the improved gross profit was due to lower overhead costs in connection to reduced personnel at the labs and greater direct utilization of personnel at the consulting and field services group. The gross profit increase was limited by the smaller improvements in the laboratories, which if operated closer to capacity generate higher gross profits than the service projects.

General and administrative expenses were $1,465,900 for the nine months ending September 30, 2005 versus $1,892,339 for the first nine months of 2004, a decrease of $426,439 or 22.5%. The decrease was mainly due to lower personnel and related costs from staff reductions.

Income from operations was $245,851 for the nine months ending September 30, 2005 versus a loss of $301,393 for the first nine months of 2004, an increase of $547,244.

Interest expense was $260,529 for the nine months ending September 30, 2005 versus $252,903 for the first nine months of 2004, relatively unchanged from the same period for the prior year.

The loss before taxes was $40,097 for the nine months ending September 30, 2005 versus a loss of $521,121 for the first nine months of 2004, an increase of $481,024.

The net loss was $40,097 for the nine months ending September 30, 2005 versus a loss of $623,410 for the first nine months of 2004, an increase of $583,313.

2004 Fiscal Year Compared to 2003 Fiscal Year

Our consolidated revenues were $28,152,918 in fiscal 2004 versus $27,288,270 in 2003, an increase of $864,648 or 3.2%. Low sample flow throughout the year at the laboratories, which results in lower revenues, offset increased revenues at other sites. The Environmental Restoration Contract at Hanford increased due to site-wide clean-up activities on the river corridor.

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Cost of sales was $26,252,937 in fiscal 2004 versus $23,564,483 in 2003, an increase of  $2,688,454, or 11.4%.

Gross profit was $1,899,981 in fiscal 2004 versus $3,723,787 in 2003, a decrease of $1,823,806 or 49.0%. The decreased gross profit was primarily due to the shift in the revenue mix between the laboratories and the service projects.

General and administrative expenses were $2,596,367 in fiscal 2004 versus $3,094,166 in 2003, a decrease of $497,799 or 16.1% as costs decreased.

The decrease in the gross profit was the primary reason there was an operating loss of $696,386 in fiscal 2004 versus an operating income of $629,621 in 2003.

Interest expense was $335,815 in fiscal 2004 versus $488,752 in 2003 due to repayment of a bank loan.

In 2004, we decreased goodwill by $606,403. The goodwill impairment was related to our Lionville Laboratory business because of its continuing losses and the uncertainty over its return to profitability in the near term. The goodwill associated with Eberline Services was unaffected. We also took a charge of $253,500 against the entire amount of the deferred tax assets that had been accumulated from our Lionville subsidiary. The net operating loss at the subsidiary is still available to reduce taxes on future income.

Our loss was $1,957,740 in fiscal 2004 versus a loss of $71,862 in 2003.

2003 Fiscal Year Compared to 2002 Fiscal Year

Our consolidated revenues were $27,288,270 in fiscal 2003 versus $31,856,770 in 2002, a decrease of  $4,568,500, or 14.3%. The major reasons for the decrease were the closure of the Rocky-Flats mobile laboratory in February 2003, the completion of the Fernald radiological technician contract in November 2002, and the completion of the Argonne National Laboratory-East transuranic waste analysis program in September 2003. In each case, contracts were completed for which there was no available follow-on work, and no new projects were found to replace the revenues from completed work.

Cost of sales was $23,564,483 in fiscal 2003 versus $28,028,509 in 2002, a decrease of  $4,464,026, or 15.9%.

Gross profit was $3,723,787 in fiscal 2003 versus $3,828,261 in 2002, a decrease of $104,474 or 2.7%.

General and administrative expenses were $3,094,166 in fiscal 2003 versus $3,748,415 in 2002, a decrease of $654,249 or 17.5% as we instituted cost control measures.

These factors resulted in an operating income of $629,621 in fiscal 2003 versus an operating income of $79,846 in 2002, an increase of $549,775.

Interest expense was $488,752 in fiscal 2003 versus $619,683 in 2002 due to repayment of a bank loan.

The net loss was $71,862 in fiscal 2003 versus a loss of $244,029 in 2002.

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Liquidity and Capital Resources

As of December 31, 2004, the following measures of liquidity were:

Cash and cash equivalents	$	710,547
Accounts receivable	$	5,238,309
Working capital	$	2,300,650
Accounts payable	$	2,670,390

Both accounts receivable and accounts payable were higher than usual primarily as the result of a subcontract that was not payable until Eberline Services received payment from a client.

On December 15, 2000, the GlenRose Partnership acquired Eberline Services and assumed an initial bank debt of $7,221,194.  By the end of September 2004 we had satisfied the obligation as described in the following paragraph.

On September 27, 2004, we issued Promissory Notes to two general partners of the GlenRose Partnership, namely, to Mr. Arvin Smith for $1,000,000, and to Mr. John Hatsopoulos for $1,000,000, filed respectively as Exhibits 10.1 and 10.2 hereto. The proceeds of those notes along with additional cash from operations were used to pay our bank debt down to zero. Those notes were replaced on January 1, 2005 with promissory notes for an equal amount that carried an interest rate of Bank Prime Rate plus one percent (1%) per annum. Principal of $62,500 plus accrued interest is due each quarter, payable over a four-year period starting March 31, 2005 and ending September 30, 2008.

On January 26, 2001, the GlenRose Partnership acquired Lionville Laboratory, Inc. and in connection with this transaction we issued to four of the general partners of the GlenRose Partnership promissory notes in the principal amount of $500,000 bearing interest of twelve and one half (12.5%) per annum. On January 1, 2004, our Lionville Laboratory subsidiary merged with Eberline Services and in connection with this merger we replaced the existing promissory notes with four notes issued to the same four general partners of the GlenRose Partnership. These new promissory notes have a principal amount of $622,945 each, and bear interest of eight and one half percent (8.5%) per annum, which accrues until the principal amount is fully paid. Those notes are subordinated to senior debt and are due on December 15, 2007.

On December 31, 2004, the Lionville Laboratory received a $100,000 line of credit with a bank near its operation in Pennsylvania. This line of credit is currently scheduled to be closed at the end of 2005.

Cash flow from operations has been as follows:

Fiscal Year Ended	Cash Flow from Operations
12-28-02	$	(291,954	)
12-27-03	$	1,359,361
12-31-04	$	749,899

Eberline Services anticipates that its revenue may increase in the final quarter of calendar 2005 and possibly in 2006. This may require an increase in working capital. Management believes cash flow from operations will be adequate to support the revenue increases in 2005 but may not be adequate to support possible revenue growth in 2006. This may require an infusion of additional equity or an increase in debt.

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Item 3.  Properties

We own two properties and lease office space at four locations. Our headquarters is located on four acres in Albuquerque, New Mexico and consists of 14,449 square feet of combined laboratory, office and storage space. We also have a laboratory facility with 20,000 square feet in Richmond, California. Our property described above is currently carried on our books at approximately $2 million, but has been appraised at $3.5 million. Laboratory space is leased in Exton, Pennsylvania and in Oak Ridge, Tennessee. The latter two lab facilities have 39,000 and 10,000 square feet, respectively. We also lease office space in Los Alamos, New Mexico, and in Richland, Washington. We also have office space in government provided facilities at Los Alamos, New Mexico and Richland, Washington. We believe that our facilities are appropriate and adequate for our current needs.

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Item 4.  Security Ownership of Certain Beneficial Owners and Management

All of our outstanding common stock is currently owned by the GlenRose Partnership. There are no outstanding stock options or other rights to purchase our common stock, and we do not anticipate granting any such options or other rights prior to the effectiveness of this Form 10. Our Board and stockholders have adopted our 2005 Stock Option and Incentive Plan and reserved 700,000 shares of our common stock for issuance thereunder. We anticipate that after the effectiveness of this Form 10, and assuming that a trading market for our common stock has developed, we will grant stock options to our employees and outside directors. The terms of such option grants have not yet been determined.

We have been advised that, prior to the effectiveness of this Form 10, GlenRose Partnership anticipates that it will distribute all of our common stock that is owned by it to its partners. The partners of GlenRose Partnership include certain of our officers and directors. The following table gives effect to such distribution and sets forth information with respect to the beneficial ownership of our common stock as of immediately prior to the effectiveness of this Form 10 for:

•each of our executive officers and directors;

•all of our executive officers and directors as a group; and

•any other beneficial owner of more than 5% of our outstanding common stock.

Beneficial ownership is determined in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities and include ordinary shares issuable upon the exercise of stock options that are immediately exercisable or exercisable within 60 days. Except as otherwise indicated, all persons listed below have sole voting and investment power with respect to the shares beneficially owned by them, subject to applicable community property laws. The information is not necessarily indicative of beneficial ownership for any other purpose.

Percentage ownership calculations are based on 3,000,000 shares outstanding as of September 30, 2005. Except as otherwise indicated in the table below, addresses of named beneficial owners are care of GlenRose Instruments Inc., 45 First Avenue, Waltham, Massachusetts, 02451.

	Beneficial Ownership
Name and Address of Beneficial Owner	Outstanding Shares Beneficially Owned	Right to Acquire Within 60 Days After September 30, 2005
			Shares
			Beneficially Owned
			Number	Percentage
Holders of 5% or more of our voting securities:
George N. Hatsopoulos 233 Tower Road Lincoln, MA 01773	513,954	0	513,954	17.1	%
Green River Fund I, LP(1) 610 Fifth Avenue New York, NY 10020	301,324	0	301,324	10.1	%

(1) Includes 201,073 shares beneficially owned by Green River Fund I, LP, 34,683 shares beneficially owned by Green River Fund II, LP and 65,568 shares beneficially owned by Green River Offshore Fund, Ltd.

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Phillip Frost, M.D. 4400 Biscayne Boulevard Miami, FL 33137	500,106	0	500,106	16.7	%
Ralph Wanger Trust 227 West Monroe Avenue Chicago, IL 60606	256,977	0	256,977	8.6	%
WHI Private Equity Managers Fund LLC 191 N. Wacker Drive Chicago, IL 60606	250,053	0	250,053	8.3	%
Directors and Officers:
John N. Hatsopoulos	513,954	0	513,954	17.1	%
Arvin H. Smith	513,954	0	513,954	17.1	%
Dr. Richard Chapman	12,503	0	12,503		*
Dominique Lahaussois	10,071	0	10,071		*
All executive officers & directors as a group (4 persons)	1,050,482	0	1,050,482	34.9	%

* Less than 1%

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Item 5.  Directors and Executive Officers

Executive Officers and Directors

The following table lists the current members of our board of directors and our executive officers. The address for our directors is c/o GlenRose Instruments Inc., 45 First Avenue, Waltham, Massachusetts 02451. There are no family relationships among members of our board or our executive officers.

Name	Age	Position
John N. Hatsopoulos	71	Chairman of the Board
Arvin H. Smith	76	President, Chief Executive Officer and Director
Dr. Richard Chapman	60	Vice President, Technology
Richard S. Melanson	52	Vice President, Instruments
Dr. Shelton Clark	58	Vice President, Services
Anthony S. Loumidis	41	Treasurer and Chief Financial Officer
Robert Aghababian	64	Director
Denis A. Helm	66	Director
Dominique G. Lahaussois	53	Director
Theo Melas-Kyriazi	46	Director

Mr. Aghababian, Ms. Lahaussois and Mr. Helm will be the initial members of our audit committee, which will be established immediately prior to the effectiveness of this Form 10. Ms. Lahaussois has been designated as the audit committee’s financial expert within the meaning of SEC and Nasdaq rules. Messrs. Aghababian and Helm will be the initial members of our compensation committee, which will be established immediately prior to the effectiveness of this Form 10. We do not have a nominating and corporate governance committee and do not believe that one is necessary or appropriate for a company of our size.

Each executive officer is elected or appointed by, and serves at the discretion of, our board of directors.

John N. Hatsopoulos is our Chairman of the Board. Mr. Hatsopoulos is Partner and Managing Director of Alexandros Partners LLC, a financial advisory firm providing consulting services to early stage entrepreneurial ventures. He is also President and Chief Executive Officer of American Distributed Generation Inc. Mr. Hatsopoulos is a co-founder of Thermo Electron Corporation and the retired President and Vice Chairman of the Board of that company. He is a member of the board of directors of Intelli-Check, Inc., TEI Biosciences Inc., and a “Member of the Corporation” for Northeastern University. Mr. Hatsopoulos graduated from Athens College in Greece, and holds a Bachelor Degree in History and Mathematics from Northeastern University as well as Honorary Doctorates in Business Administration from Boston College and Northeastern University.

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Arvin H. Smith is our President and Chief Executive Officer. Mr. Smith is one of the four founding members of GlenRose Partnership L.P., a General Partner of GlenRose Capital LLC, formed in 2000 as a leverage buyout firm focused on making acquisitions in the environmental services and instrumentation business areas. Mr. Smith was the Chairman of Thermo Instrument Systems Inc., a public subsidiary of Thermo Electron Corporation from 1997 until 2000, and was President and Chief Executive Officer of that company from 1986 until 1996. He was also an Executive Vice President and member of the operating committee of Thermo Electron. Mr. Smith joined Thermo Electron in 1970, where he held various senior management positions. Prior to joining Thermo Electron and during the early years of the space program from 1959 until 1970, he held positions at NASA headquarters in Washington, D.C, as chief of Solar and Chemical Power Systems in the office of Advanced Research & Technology and at the Jet Propulsion Laboratory. He was also employed by General Dynamics from early 1954 until 1959 as an electronic technician and test engineer in the Aircraft Nuclear Propulsion Programs and also served in the United States Navy from 1950 until 1954. Mr. Smith graduated with honors from Texas Christian University and holds Bachelor Degrees in Physics and Mathematics.

Dr. Richard Chapman is our Vice President of Technology. Dr. Chapman was President, Chief Executive Officer and a Director of ThermoQuest Corporation, a subsidiary of Thermo Electron Corporation, from 1995 until 2000. He was also Senior Vice President of Thermo Instrument Systems, Inc. from 1995 to 2000, and served as Chairman of the Board of Thermo BioAnalysis Corporation from 1995 to 1997, and a Director of Thermo Cardio Systems, Inc., both publicly held subsidiaries of Thermo Electron. He is also a Director of OI Corporation and founder and chairman of Axxiom Inc. In December 2003, he joined the board of directors of Intelligent Ion, Inc., located in Seattle, Washington. He holds Bachelor of Science and Master degrees from the University of North Texas, and a Doctorate from Oregon State University.

Richard S. Melanson is our Vice President, as well as President of the Instruments Group. Mr. Melanson held various senior management positions at Thermo Electron Corporation and its subsidiaries from 1997 to 2002. These positions included serving as President, Thermo Neslab, Senior Vice President and Chief Operating Officer of ThermoSpectra Corporation, Vice President, Business Development, Optical Technologies Sector, President, Industrial Division and President, Weighing and Inspection Division. Mr. Melanson had previously held senior management positions at Philips Electronics, and was CEO of Electroscan Corporation, a venture-backed technology startup. He had also worked for AMRAY Inc., a semiconductor capital equipment company. Mr. Melanson received a Bachelor degree in Business Administration from University of Massachusetts (Lowell Technological Institute) and a Masters Degree in Finance from Bentley College.

Dr. Shelton Clark is our Vice President, as well as the President of the Services Group. From 1990 to 2001, he served in a number of U.S. and international management positions with Thermo Instrument Systems Inc., a public subsidiary of Thermo Electron Corporation. Dr. Clark received a Bachelor of Science degree from the University of North Texas and holds a Doctorate degree from the University of Texas.

Anthony S. Loumidis is our Chief Financial Officer. Mr. Loumidis is Partner and President of Alexandros Partners LLC, a financial advisory firm providing consulting services to early stage entrepreneurial ventures. He is also the Chief Financial Officer of American Distributed Generation Inc. Mr. Loumidis was previously with Thermo Electron Corporation where he held various positions including National Sales Manager for Thermo Capital Financial Services, Manager of Investor Relations and Manager of Business Development of Tecomet, a subsidiary of Thermo Electron. Mr. Loumidis is an NASD Registered Representative, holds a Bachelor degree in Business Administration from the American College of Greece in Athens and an MBA from Northeastern University.

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Dominique G. Lahaussois is a member of our Board of Directors. Mrs. Lahaussois is a Partner and Managing Director of Alexandros Partners LLC, a financial advisory firm providing consulting services to early stage entrepreneurial ventures. She was previously President of the Thermo-Amex Convertible Growth Fund, a subsidiary of Thermo Electron Corporation, which took direct equity-linked positions in public companies traded on the American Stock Exchange. For 20 years she was employed at Lehman Brothers, first in research and then in the investment banking division. She was, when she left Lehman, a Senior Vice President in the Health Care/Life Sciences Corporate Finance Group where she was involved in equity and debt financing in the public and private markets, strategic advice and mergers and acquisitions. Mrs. Lahaussois studied at the University of Amiens, France, at Columbia University and at the Sloan School of Management at MIT. She holds Bachelor of Science degrees in Mathematics and Economics, and an MBA in Managerial Sciences and Finance.

Robert Aghababian is a member of our Board of Directors. Mr. Aghababian is a tax attorney and former employee of Thermo Electron Corporation where he served as the Director of Tax for seventeen years. Prior to Thermo Electron he served in a similar position for Pneumo-Abex Corporation. Mr. Aghababian received a Bachelor degree in Business Administration from Northeastern University and is a graduate of Boston College Law School.

Denis A. Helm is a member of our Board of Directors. Mr. Helm is Senior Vice-President of Business Development at FLIR Systems Inc. since 2002. He was previously with Thermo Electron Corporation from 1971 until 2002 where he held various senior management positions such as President of the Environmental Instruments Division, Senior Vice-President of Thermo Instrument Systems Inc., and President of Thermo Environmental Instruments. Prior to his long career at Thermo Electron, he was Senior Design Engineer for EG&G from 1963 until 1971. Mr. Helm was Chairman of the Board of Metrica Systems Inc., Chairman of the audit committee and Director of Spectra Physics Inc. and a Director of Unisearch Inc. Mr. Helm holds a Bachelor of Science degree and a Masters degree in Electrical Engineering from Stevens Institute of Technology, and an an MBA from Boston University.

Theo Melas-Kyriazi is a member of our Board of Directors. Mr. Melas-Kyriazi was the Chief Financial Officer of Thermo Electron Corporation from January 1999 until October 2004. He was also a Vice President of Thermo Electron since 1998. Mr. Melas-Kyriazi joined Thermo Electron Corporation as Assistant Treasurer in 1986, and was named Treasurer in 1988. From 1988 to 1994, he also served as Treasurer for all of Thermo Electron’s publicly traded subsidiaries. He was President, Chief Executive Officer, and a director for ThermoSpectra of Waltham, Massachusetts, from 1994 to 1998. Prior to joining Thermo Electron, Mr. Melas-Kyriazi was a Manager in the private investment-banking firm of Bourgeois Fils & Co., Inc., located in Exeter, New Hampshire. He is a member of the board of directors of Valeant Pharmaceuticals International (NYSE:VRX) since 2003, and of Cyberkinetics Neurotechnology Systems Inc. (OTC BB: CYKN.OB) since November 2004. Mr. Melas-Kyriazi received a bachelor’s degree in economics from Harvard University, and a master’s degree in business administration from the Harvard Graduate School of Business Administration.

Board of Directors

Our board currently consists of six directors. In addition, our amended and restated by-laws will provide that the authorized number of directors may be changed only by resolution of our board of directors.

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Board Committees

Our board of directors has established an audit committee and a compensation committee, to be effective immediately prior to the effectiveness of this Form 10. All of the members of each of these standing committees are independent as defined under Nasdaq rules and, in the case of the audit committee, the independence requirements contemplated by Rule 10A-3 under the Securities Exchange Act.

Audit Committee

The audit committee’s responsibilities will include:

•appointing, approving the compensation of, and assessing the independence of our independent auditor;

•overseeing the work of our independent auditor, including through the receipt and consideration of reports from the independent auditor;

•reviewing and discussing with management and our independent auditor our annual and quarterly financial statements and related disclosures;

•monitoring our internal control over financial reporting, disclosure controls and procedures, and code of business conduct and ethics;

•discussing our risk management policies;

•establishing policies regarding hiring employees from our independent auditor and procedures for the receipt and retention of accounting related complaints and concerns;

•meeting independently with our independent auditor and management; and

•preparing the audit committee report required by SEC rules to be included in our proxy statements.

All audit services and all non-audit services, except de minimis non-audit services, must be approved in advance by the audit committee.

Compensation Committee

The compensation committee’s responsibilities will include:

•annually reviewing and approving corporate goals and objectives relevant to compensation of our chief executive officer;

•determining the compensation of our chief executive officer;

•reviewing and approving, or making recommendations to our board of directors with respect to, the compensation of our other executive officers;

•overseeing an evaluation of our senior executives;

•overseeing and administering our cash and equity incentive plans; and

•reviewing and making recommendations to our board with respect to director compensation.

Corporate Governance

We believe that good corporate governance is important to ensure that, as a public company, we will managed for the long-term benefit of our stockholders. In that regard, we have established and adopted charters for the audit committee and compensation committee, as well as a code of business conduct and ethics applicable to all of our directors, officers and employees.

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Compensation Committee Interlocks and Insider Participation

None of our executive officers serves as a member of the board of directors or compensation committee, or other committee serving an equivalent function, of any other entity that has one or more of its executive officers serving as a member of our board of directors or its compensation committee. None of the current members of the compensation committee of our board has ever been one of our employees.

Director Compensation

Beginning at such time as this Form 10 becomes effective, each director who is not also one of our employees will receive a fee of $500 per day for service on the board, plus an additional fee of $500 per day for serving on each of the audit and compensation committees. Non-employee directors also will be eligible to receive stock options under our equity incentive plan.

We reimburse all of our non-employee directors for reasonable travel and other expenses incurred in attending board of directors and committee meetings. Any director who is also one of our employees receives no additional compensation for serving as a director.

Liability Limitations and Indemnification

The following description is intended as a summary only and is qualified in its entirety by reference to our amended and restated charter and amended and restated by-laws filed as exhibits to this Form 10 and to Delaware law. The description of liability limitations and indemnification reflects provisions of our amended and restated charter and by-laws that will become effective upon the effectiveness of this Form 10. We refer in this section to our amended and restated charter as our charter, and we refer to our amended and restated by-laws as our by-laws.

Our charter and by-laws limit the liability of directors to the maximum extent permitted by Delaware law. Delaware law provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except liability for:

•any breach of their duty of loyalty to the corporation or its stockholders;

•acts of omissions that are not in good faith or that involve intentional misconduct or a knowing violation of law;

•unlawful payments of dividends or unlawful stock repurchases or redemptions; or

•any transaction from which the director derived an improper personal benefit.

The limitations do not apply to liabilities arising under the federal securities laws and do not affect the availability of equitable remedies, including injunctive relief or rescission.

Our charter and by-laws provide that we will indemnify our directors and officers, and may indemnify other employees and agents, to the maximum extent permitted by law. We believe that indemnification under our by-laws covers at least negligence and gross negligence on the part of indemnified parties. Our by-laws also permit us to secure insurance on behalf of any officer, director, employee or agent for any liability arising out of actions taken in his or her capacity as an officer, director, employee or agent, regardless of whether the by-laws would permit indemnification.

At present, there is no pending litigation or proceeding involving any of our directors, officers or employees in which indemnification is sought, nor are we aware of any threatened litigation that may result in claims for indemnification.

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Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers and controlling persons under our charter or by-laws or the indemnification agreements we have entered into with our directors and officers, we have been advised that in the opinion of the SEC this indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

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Item 6. Executive Compensation

Compensation Earned

The following summarizes the compensation earned during fiscal 2004 by each of our executive officers.

Summary Compensation Table

	Annual Compensation
			Other Annual	Long-Term Compensation
Name and Principal Position	Salary	Bonus	Compensation	Securities Underlying Options
Arvin H. Smith(1) President and Chief Executive Officer	0	0	0	0
Dr. Richard Chapman Vice President, Technology	81,500	0	0	0
Richard S. Melanson Vice President, Instruments	141,000	0	0	0
Dr. Shelton Clark Vice President, Services	112,000	0	0	0
Anthony S. Loumidis(2) Treasurer & Chief Financial Officer	0	0	0	0

Option Grants

There are no outstanding stock options or other rights to purchase our common stock, and we do not anticipate granting any such options or other rights prior to the effectiveness of this Form 10. Our Board and stockholders have adopted our 2005 Stock Option and Incentive Plan and reserved 700,000 shares of our common stock for issuance thereunder. We anticipate that after the effectiveness of this Form 10, and assuming that a trading market for our common stock has developed, we will grant stock options to our employees and outside directors. The terms of such option grants have not yet been determined.

Employee Benefit Plans

2005 Stock Option and Incentive Plan

The Company’s 2005 Stock Option and Incentive Plan (the Stock Plan) was adopted by the Company in September 2005. The Stock Plan provides for the grant of stock-based awards to employees, officers and directors of, and consultants or advisors to, the Company and its subsidiaries. Under the

(1) Arvin H. Smith has not received any salary, bonus or any other compensation in 2005, and will not receive any salary, bonus or any other compensation in 2006, excluding reimbursable expenses.

(2) Anthony S. Loumidis was made Treasurer and Chief Financial Officer of the Company on September 22, 2005. Mr. Loumidis works for the Company, and is also employed on a part-time basis by two other organizations.  Mr. Loumidis’ anticipated salary from the Company will be $60,000 after the effectiveness of this Form 10.

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Stock Plan, the Company may grant options that are intended to qualify as incentive stock options (incentive stock options) within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the Code), options not intended to qualify as incentive stock options (non-statutory options), restricted stock and other stock-based awards. Incentive stock options may be granted only to employees of the Company. A total of 700,000 shares of Common Stock may be issued upon the exercise of options or other awards granted under the Stock Plan. The maximum number of shares with respect to which awards may be granted to any employee under the Stock Plan shall not exceed 25% of that number.

The Stock Plan is administered by the Board of Directors and the Compensation Committee. Subject to the provisions of the Stock Plan, the Board of Directors and the Compensation Committee each has the authority to select the persons to whom awards are granted and determine the terms of each award, including the number of shares of Common Stock subject to the award. Payment of the exercise price of an award may be made in cash, in a “cashless exercise” through a broker, or if the applicable stock option agreement permits, shares of Common Stock or by any other method approved by the Board or Compensation Committee. Unless otherwise permitted by the Company, awards are not assignable or transferable except by will or the laws of descent and distribution.

Upon the consummation of an acquisition of the business of the Company, by merger or otherwise, the Board shall, as to outstanding awards (on the same basis or on different bases as the Board shall specify), make appropriate provision for the continuation of such awards by the Company or the assumption of such awards by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such awards either (a) the consideration payable with respect to the outstanding shares of Common Stock in connection with the acquisition, (b) shares of stock of the surviving or acquiring corporation or (c) such other securities or other consideration as the Board deems appropriate, the fair market value of which (as determined by the Board in its sole discretion) shall not materially differ from the fair market value of the shares of Common Stock subject to such awards immediately preceding the acquisition. In addition to or in lieu of the foregoing, with respect to outstanding stock options, the Board may, on the same basis or on different bases as the Board shall specify, upon written notice to the affected optionees, provide that one or more options then outstanding must be exercised, in whole or in part, within a specified number of days of the date of such notice, at the end of which period such options shall terminate, or provide that one or more options then outstanding, in whole or in part, shall be terminated in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole discretion) for the shares subject to such Options over the exercise price thereof.  Unless otherwise determined by the Board (on the same basis or on different bases as the Board shall specify), any repurchase rights or other rights of the Company that relate to a stock option or other award shall continue to apply to consideration, including cash, that has been substituted, assumed or amended for a stock option or other award pursuant to these provisions. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions.

The Board may at any time provide that any stock options shall become immediately exercisable in full or in part, that any restricted stock awards shall be free of some or all restrictions, or that any other stock-based awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be.

The Board of Directors or Compensation Committee may, in its sole discretion, amend, modify or terminate any award granted or made under the Stock Plan, so long as such amendment, modification or termination would not materially and adversely affect the participant.

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401(k) Plan

Our retirement plan, which we refer to as the 401(k) plan, is qualified under Section 401 of the Internal Revenue Code. Our employees may elect to reduce their current compensation by an amount no greater than the statutorily prescribed annual limit and may have that amount contributed to the 401(k) plan. We may make matching or additional contributions to the 401(k) plan in amounts to be determined annually by us. To date, we have not made any contributions to the 401(k) plan.

We currently maintain two defined contribution 401(k) plans within Eberline Services.  Additionally, employees of the Hanford division are covered by a multi-employer, defined benefit plan that is not administered by us.

Eberline Services employees are not eligible until 30 days of employment have been completed.  Participants may elect to contribute 0% - 100% of their compensation to the 401(k) Plans, subject to IRS annual limitations. The Company may make discretionary matching contributions of up to 4.5% of a participant’s compensation, as well as discretionary profit-sharing contributions to the 401(k) Plans. Vesting occurs after one year of service. Eberline contributed approximately $210,000, $267,000 and $367,000 to the 401(k) Plan for the years ended December 31, 2004, December 27, 2003 and December 28, 2002, respectively.

The Lionville Laboratory subsidiary maintains a defined contribution plan that covers all eligible Lionville employees. Eligibility is tied to certain minimum compensation levels, an age requirement (21 years of age), and a minimum service requirement. The plan is funded by elective employee salary deferrals and employer contributions. Pension expense for the year ended December 31, 2004, 2003 and 2002 was $16,341, $46,821 and $51,183, respectively.

Employees at the Eberline’s Hanford division are eligible to participate in a multi-employer defined benefit plan (the Plan). The Plan is administered by Fluor Hanford, Inc., on behalf of eligible, participating companies. The Plan is funded by participating companies on a payroll-by-payroll basis, in amounts actuarially computed by Fluor Hanford, Inc. Under the terms and conditions of the Plan, individual companies assume no liability for future pension or benefit costs associated with the Plan. Accordingly, no information with respect to the Plan is included herein. Expenses incurred by the Company related to the Plan for the year ended December 31, 2004, December 27, 2003 and December 28, 2002 were approximately $193,000, $179,000 and $170,000, respectively.

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Item 7.  Certain Relationships and Related Transactions

On September 27, 2004, we issued Promissory Notes to two general partners of the GlenRose Partnership, namely, to Mr. Arvin H. Smith for $1,000,000, and to Mr. John N. Hatsopoulos for $1,000,000, filed respectively as Exhibits 10.1 and 10.2 hereto. The proceeds of those notes along with additional cash from operations were used to pay the bank debt down to zero. Those notes were replaced on January 1, 2005 with promissory notes for an equal amount that carried an interest rate of Bank Prime Rate plus one percent (1%) per annum. Principal of $62,500 plus accrued interest is due each quarter, payable over a four-year period starting March 31, 2005 and ending September 30, 2008.

On January 26, 2001, the GlenRose Partnership acquired Lionville Laboratory, Inc. and in connection with this transaction the Company issued to four of the general partners of the GlenRose Partnership senior promissory notes in the principal amount of $500,000 bearing interest of twelve and one half (12.5%) per annum. On January 1, 2004, our Lionville Laboratory subsidiary merged with Eberline Services and in connection with this merger we replaced the existing senior promissory notes with four notes issued to the same four of the general partners of the GlenRose Partnership. These new promissory notes have a principal amount of $622,945 each, and bear interest of eight and one half percent (8.5%) per annum, which accrues until the principal amount is fully paid. Those notes are subordinated to any other debt and are due on December 15, 2007.

Eberline Services performs certain administrative and professional services on behalf of GlenRose Partnership. GlenRose Partnership is responsible for paying Eberline Services for the expenses incurred for these services. At the end of September 2005, the total amount due was $503,841. We anticipate that immediately before the effectiveness of this Form 10, we will issue a one-time $503,841 cash dividend to GlenRose Partnership. Immediately upon receipt of such a dividend, GlenRose Partnership will remit $503,841 to us as full payment of the sums due for such administrative and professional services.

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Item 8.  Legal Proceedings

We are a party to a lawsuit, Eden versus Voss, et al. in the United States District Court for the District of New Mexico. In the suit, an individual is suing the State of New Mexico for what he deemed to be the wrongful removal of hazardous materials from his property. Our motion to dismiss was granted by the court, but it was reversed on appeal and the suit is being litigated. We do not anticipate that this litigation will adversely affect our business.

We are not currently a party to any other material litigation, and we are not aware of any pending or threatened litigation against us that could have a material adverse affect on our business, operating results or financial condition.

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Item 9.  Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters

Market Information

Our common stock is not currently traded on any stock exchange or electronic quotation system. We expect that our common stock will be traded on the OTC Bulletin Board following the effectiveness of this registration statement.

Holders

As of September 30, 2005, there was one holder of record of our common stock, GlenRose Partnership. We have been advised that, prior to the effectiveness of this Form 10, GlenRose Partnership anticipates that it will distribute all of our common stock that is owned by it to its partners. The partners of GlenRose Partnership include certain of our officers and directors. See “Securities Ownership of Certain Beneficial Ownership and Management” for information on the holders of our common stock giving effect to such distribution. Also see “Description of Registrant’s Securities to be Registered” for a description of our outstanding and issued capital stock.

Rule 144

In general, under Rule 144 under the Securities Act of 1933, as amended (the Securities Act), a person who has beneficially owned shares of our common stock for at least one year would be entitled to sell within any three-month period a number of shares that does not exceed the greater of:

•1% of the number of shares of our common stock then outstanding, which will equal approximately 30,000 shares of our common stock; or

•the average weekly trading volume of our common stock, if and when our common stock is traded on the OTC Bulletin Board, during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us for at least 90 days.

Under Rule 144(k) under the Securities Act, a person who is not deemed to have been one of our affiliates at any time during the 90 days preceding a sale, and who has beneficially owned the shares proposed to be sold for at least two years, including the holding period of GlenRose Partnership, is entitled to sell the shares without complying with the manner of sale, public information, volume limitation or notice provisions of Rule 144.

Under Rule 144(k), 935,458 shares of our common stock are eligible for resale under Rule 144(k) without any additional holding period.

Giving effect to the distribution by GlenRose Partnership described above, a total of 2,064,542 additional shares of our common stock will qualify for resale under Rule 144 beginning 90 days after the date of the effectiveness of this Form 10.

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Stock Options

There are no outstanding stock options or other rights to purchase our common stock, and we do not anticipate granting any such options or other rights prior to the effectiveness of this Form 10. Our Board and stockholders have adopted our 2005 Stock Option and Incentive Plan and reserved 700,000 shares of our common stock for issuance thereunder. We anticipate following the effectiveness of this Form 10, and assuming that a trading market for our common stock has developed, we will grant stock options to our employees and outside directors. The timing and terms of such option grants have not yet been determined. Please see “Executive Compensation–Employee Benefit Plans–2005 Stock Option and Incentive Plan” for a description of the plan. We intend to file with the SEC a registration statement on Form S-8 under the Securities Act covering the shares of common stock reserved for issuance under the plan. The registration statement is expected to be filed and become effective before the first grant of options under the plan. Accordingly, shares registered under the registration statement will be available for sale in the open market, subject to Rule 144 volume limitations applicable to affiliates, and subject to any vesting restrictions applicable to these shares.

Dividends

We have never declared or paid any cash dividends on shares of our capital stock. Eberline Services performs certain administrative and professional services on behalf of GlenRose Partnership. GlenRose Partnership is responsible for paying Eberline Services for the expenses incurred for these services. At the end of September 2005, the total amount due was $503,841. We anticipate that immediately before the effectiveness of this Form 10, we will issue a one-time $503,841 cash dividend to GlenRose Partnership. Immediately upon receipt of such a dividend, GlenRose Partnership will remit $503,841 to us as full payment of the sums due for such administrative and professional services. Other than such a one-time dividend, we currently intend to retain earnings, if any, to fund the development and growth of our business and do not anticipate paying cash dividends in the foreseeable future. Our payment of any future dividends will be at the discretion of our board of directors after taking into account various factors, including our financial condition, operating results, cash needs and growth plans.

Item 10.  Recent Sales of Unregistered Securities

We issued no shares of capital stock issued and granted no options within the past three years.

Item 11.  Description of Registrant’s Securities to be Registered

General

The following description of our capital stock is intended as a summary only and is qualified in its entirety by reference to our amended and restated charter and amended and restated by-laws filed as exhibits to this Form 10 and to Delaware law. The descriptions of our common stock and preferred stock reflect changes to our capital structure that will occur prior to the effectiveness of this Form 10. We refer in this section to our amended and restated charter as our charter, and we refer to our amended and restated by-laws as our by-laws.

Upon consummation of this offering, our authorized capital stock will consist of 10,000,000 shares of common stock, par value $0.01 per share, and 3,000,000 shares of preferred stock, par value $0.01 per share, all of which preferred stock will be undesignated.

As of September 30, 2005, we had issued and outstanding 3,000,000 shares of common stock, all of which were held by GlenRose Partnership.

41

Common Stock

The holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of the stockholders and do not have any cumulative voting rights. Holders of our common stock are entitled to receive proportionally any dividends declared by our board of directors, subject to any preferential dividend rights of outstanding preferred stock.

In the event of our liquidation or dissolution, holders of our common stock are entitled to share ratably in all assets remaining after payment of all debts and other liabilities, subject to the prior rights of any outstanding preferred stock. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. All outstanding shares of our common stock are validly issued, fully paid and nonassessable. The shares to be issued by us in this offering will be, when issued and paid for, validly issued, fully paid and nonassessable.

The rights, preferences and privileges of holders of our common stock are subject to, and may be adversely affected by, the rights of holders of shares of any series of preferred stock that we may designate and issue in the future.

Preferred Stock

Our charter provides that we may issue up to 3,000,000 shares of preferred stock in one or more series as may be determined by our board of directors. Our board has broad discretionary authority with respect to the rights of any new series of preferred stock and may establish the following with respect to the shares to be included in each series, without any vote or action of the stockholders:

•the number of shares;

•the designations, preferences and relative rights, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences; and

•any qualifications, limitations or restrictions.

We believe that the ability of our board of directors to issue one or more series of preferred stock will provide us with flexibility in structuring possible future financings and acquisitions, and in meeting other corporate needs that may arise. The authorized shares of preferred stock, as well as authorized and unissued shares of common stock, will be available for issuance without action by our stockholders, unless such action is required by applicable law or the rules of any stock exchange or automated quotation system on which our securities may be listed or traded.

Our board of directors may authorize, without stockholder approval, the issuance of preferred stock with voting and conversion rights that could adversely affect the voting power and other rights of holders of common stock. Although our board has no current intention of doing so, it could issue a series of preferred stock that could, depending on the terms of such series, impede the completion of a merger, tender offer or other takeover attempt of our company. Our board could also issue preferred stock having terms that could discourage an acquisition attempt through which an acquiror may be able to change the composition of our board, including a tender offer or other transaction that some, or a majority, of our stockholders might believe to be in their best interests or in which stockholders might receive a premium for their stock over the then-current market price. Any issuance of preferred stock therefore could have the effect of decreasing the market price of our common stock.

Our board of directors will make any determination to issue such shares based on its judgment as to our best interests of our company and stockholders. We have no current plan to issue any preferred stock after this offering.

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Registration Rights

The Company is not a party to any registration rights agreements.

Anti-Takeover Effects of Provisions of Delaware Law and Our Charter and By-Laws

We have elected to be governed by the provisions of Section 203 of the Delaware law statute, which generally will have an anti-takeover effect for transactions not approved in advance by our board of directors, including discouraging attempts that might result in a premium over the market price for our common stock. In general, Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a three-year period following the time that the stockholder becomes an interested stockholder, unless the business combination is approved in a prescribed manner. A “business combination” includes, among other things, a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or did own within three years prior to the determination of interested stockholder status, 15% or more of the corporation’s voting stock. Under Section 203, a business combination between a corporation and an interested stockholder is prohibited unless it satisfies one of the following conditions:

•before the stockholder became interested, the board of directors approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder; or

•upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances; or

•at or after the time the stockholder became interested, the business combination was approved by the board and authorized at a stockholder meeting by the affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder.

Our by-laws provide that directors may be removed only for cause and then only by the affirmative vote of a majority of the directors present at a meeting duly held at which a quorum is present, or the holders of at least 75% of the votes that all stockholders would be entitled to cast in any annual election of directors. Under our by-laws, any vacancy on our board of directors, however occurring, including a vacancy resulting from an enlargement of our board, may only be filled by vote of a majority of our directors then in office, even if less than a quorum. The limitations on the removal of directors and filling of vacancies could have the effect of making it more difficult for a third party to acquire, or of discouraging a third party from attempting to acquire, control of us.

Our by-laws provide that stockholders may not take any action by written consent in lieu of a meeting and limit the business that may be conducted at an annual meeting of stockholders to those matters properly brought before the meeting. In addition, our by-laws provide that only our board of directors or our chairman, chief executive officer or president may call a special meeting of stockholders. Business transacted at any special meeting of stockholders must be limited to matters relating to the purpose stated in the notice of the special meeting.

To be “properly brought” before an annual meeting, the proposals or nominations must be:

•specified in the notice of meeting;

•brought before the meeting by or at the direction of our board of directors; or

43

•brought before the meeting by a stockholder entitled to vote at the meeting who has given to our corporate secretary the required advance written notice, in proper form, of the stockholder’s intention to bring that proposal or nomination before the meeting and who was a stockholder of record on the date on which notice is given.

In addition to other applicable requirements, for a stockholder proposal or nomination to be properly brought before an annual meeting by a stockholder, the stockholder generally must have given notice in proper written form to our corporate secretary not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting of stockholders. If, however, the date of the annual meeting is advanced by more than 20 days or delayed by more than 60 days from the first anniversary of the preceding year’s annual meeting, we must receive the notice (a) no earlier than the one hundred-twentieth day prior to such annual meeting and (b) no later than the close of business on the later of the ninetieth day prior to the annual meeting and the tenth day following the date on which the notice of the date of the meeting was mailed or, if earlier, public disclosure was made. Although our by-laws do not give our board of directors the power to approve or disapprove stockholder nominations of candidates or proposals regarding other business to be conducted at a special or annual meeting, our by-laws may have the effect of precluding the consideration of some business at a meeting if the proper procedures are not followed or may discourage or defer a potential acquiror from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempting to obtain control of us.

Delaware law provides generally that the affirmative vote of a majority of the shares entitled to vote on any matter is required to amend a corporation’s charter or by-laws, unless the charter or by-laws require a greater percentage. Our by-laws may be amended or repealed by a majority vote of our board of directors, subject to any limitations set forth in the by-laws, and may also be amended or repealed by the stockholders by the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors. The 75% stockholder vote would be in addition to any separate class vote that might in the future be required pursuant to the terms of any series of preferred stock that might be outstanding at the time any of these amendments are submitted to stockholders.

Liability Limitations and Indemnification

Our charter provides that we must indemnify our directors and officers and that we must advance expenses, including attorneys’ fees, to our directors and officers in connection with legal proceedings, subject to very limited exceptions. In addition, our charter provides that our directors will not be personally liable for monetary damages to us for breaches of their fiduciary duty as directors, except to the extent that the Delaware law statute prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.

These provisions may discourage stockholders from bringing a lawsuit against our directors for breach of their fiduciary duties. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. Furthermore, you may lose some or all of your investment in our common stock if we pay the costs of settlement or damage awards against our directors and officers under these provisions. We believe these provisions, the director and officer insurance we maintain, and the indemnification agreements we have entered into with our directors and officers are necessary to attract and retain talented and experienced directors and officers.

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Item 12.  Indemnification of Directors and Officers

The Delaware General Corporation Law, our charter and by-laws provide for indemnification of our directors and officers for liabilities and expenses that they may incur in such capacities. In general, directors and officers are indemnified with respect to actions taken in good faith in a manner reasonably believed to be in, or not opposed to, the best interests of the Company, and with respect to any criminal action or proceeding, actions that the indemnitee had no reasonable cause to believe were unlawful. Reference is made to our corporate charter and by-laws filed as Exhibits 3.2 and 3.4 hereto, respectively.

Eberline Services’ current insurance policy expires on December 15, 2005. Upon renewal, and prior to the effectiveness of this Form 10, we expect to obtain insurance coverage that includes our directors and officers.

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Item 13.  Financial Statements and Supplementary Data

GLENROSE INSTRUMENTS INC.

CONSOLIDATED FINANCIAL STATEMENTS

INDEX

46

Report of Independent Registered Public Accounting Firm

Neff & Ricci LLP

Board of Directors

Eberline Services, Inc. and Subsidiary

Albuquerque, New Mexico

We have audited the accompanying consolidated balance sheets of Eberline Services, Inc. as of December 31, 2004 and December 27, 2003 and the related consolidated statements of income, stockholder’s equity, and cash flows for each of the three years in the period ended January 31, 2004.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.  The Lionville Laboratory, Inc. subsidiary for the years ended December 31, 2003 and 2002 was audited by other auditors whose reports, dated February 9, 2004 and March 19, 2003, respectively, expressed an unqualified opinion on those statements, except for the effects of not testing Goodwill for impairment as of January 1, 2002 or any date during the years ended December 31, 2003 and 2002.  The effect on the financial statements for the preceding practice is not reasonably determinable.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Eberline Services, Inc. and subsidiary as of December 31, 2004 and December 27, 2003, and the results of their operations and their cash flows for each of the years in the period ended December 31, 2004, in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 2 to the consolidated financial statements, the Company and its subsidiary restated the 2003 and 2002 consolidated financial statements in connection with the acquisition of Lionville Laboratory, Inc. under common control to reflect as if the subsidiary had been acquired from the beginning of 2002.

Albuquerque, New Mexico

February 24, 2005

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EBERLINE SERVICES, INC. AND SUBSIDIARY

CONSOLIDATED BALANCE SHEETS

December 31, 2004 and December 27, 2003

	December 31,			December 27,
	2004			2003
				As Restated*
ASSETS
Cash and cash equivalents	$	710,547		1,082,089
Accounts receivable, net of allowance of $87,341 and $183,095 for 2004 and 2003, respectively	5,028,534			2,914,433
Unbilled receivables	209,775			533,568
Due from related party	332,292			335,591
Other receivables	36,720			—
Income taxes receivable	112,500			—
Inventories	123,397			114,855
Prepaid expenses	374,949			366,814
Deferred tax asset	153,059			153,059
Total current assets	7,081,773			5,500,409
Certificates of deposit, restricted	433,797			415,566
Property and equipment, at cost	7,845,747			7,733,674
Accumulated depreciation and amortization	(4,275,328		)	(3,363,990	)
Total property and equipment	3,570,419			4,369,684
Goodwill	2,740,913			3,347,316
Deferred tax asset	—			253,500
Total assets	$	13,826,902		13,886,475

See notes to Consolidated Financial Statements.

* Restatement to reflect the FY2004 combination of an entity under common control

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	December 31,			December 27,
	2004			2003
				As Restated*
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable	$	2,670,390		450,440
Accrued expenses	393,787			290,814
Accrued interest	240,136			491,781
Accrued employee costs	1,116,946			927,178
Line-of-credit	100,000			100,000
Current maturities of long-term debt	—			629,927
Current maturities of long-term debt, related parties	500,000			2,000,000
Total current liabilities	5,021,259			4,890,140
Noncurrent deferred tax liability	353,693			171,691
Long-term debt	—			2,406,734
Long-term debt, related parties	3,991,780			—
Common stock; $0.01 par value; 3,000 shares authorized; 100 shares issued and outstanding at December 2004 and 2003	1			1
Additional paid in capital	6,799,999			6,799,999
Retained (deficit) earnings	(2,339,830		)	(382,090	)
Total stockholder’s equity	4,460,170			6,417,910
Total liabilities and stockholder’s equity	$	13,826,902		13,886,475

See notes to Consolidated Financial Statements.

* Restatement to reflect the FY2004 combination of an entity under common control

49

EBERLINE SERVICES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF INCOME

Years Ended December 31, 2004, December 27, 2003 and December 28, 2002

	December 31,			December 27,		December 28,
	2004			2003		2002
				As Restated*		As Restated*
Revenues	28,152,918			27,288,270		31,856,770
Cost of Sales	26,252,937			23,564,483		28,028,509
Selling, general and administrative expenses	2,596,367			3,094,166		3,748,415
Total operating expenses	28,849,304			26,658,649		31,776,924
Operating (loss) income	(696,386		)	629,621		79,846
Other income and (expense)
Gain on sale of assets	29,248			96,384		—
Goodwill impairment	(606,403		)	—		—
Interest expense	(335,815		)	(488,752	)	(619,683	)
Interest income	10,241			26,524		39,236
Other income	463			—		2,114
(Loss) income before income taxes	(1,598,652		)	263,777		(498,487	)
Income tax expense (benefit)	359,088			335,639		(254,458	)
Net loss	$	(1,957,740	)	(71,862	)	(244,029	)
Basic and Dilutive Net Earnings (loss) per Share, as previously reported	(19,577.40		)	5,558.78		1,308.81
Basic and Dilutive Net Earnings (loss) per Share, as restated*	(19,577.40		)	(718.62	)	(2,440.29	)
Weighted average number of common shares outstanding-basic and dilutive	100			100		100

See notes to Consolidated Financial Statements.

* Restatement to reflect the FY2004 combination of an entity under common control

50

EBERLINE SERVICES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF STOCKHOLDER’S EQUITY

Years Ended December 31, 2004, December 27, 2003 and December 28, 2002

	Common Stock			Additional	Retained		Total
	Number	Par		Paid in	Earnings		Stockholder’s
	of Shares	Value		Capital	(Deficit)		Equity
Balance at December 29, 2001, as restated*	100	$	1	5,799,999	45,692		5,845,692
Transfer in equity of subsidiary under common control	—	—		1,000,000	(111,891	)	888,109
Net loss, as restated*	—	—		—	(244,029	)	(244,029	)
Balance at December 28, 2002	100	1		6,799,999	(310,228	)	6,489,772
Net loss, as restated*	—	—		—	(71,862	)	(71,862	)
Balance at December 27, 2003	100	1		6,799,999	(382,090	)	6,417,910
Net loss	—	—		—	(1,957,740	)	(1,957,740	)
Balance at December 31, 2004	100	$	1	6,799,999	(2,339,830	)	4,460,170

See notes to Consolidated Financial Statements.

* Restatement to reflect the FY2004 combination of an entity under common control

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EBERLINE SERVICES, INC. AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31, 2004, December 27, 2003 and December 28, 2002

	December 31,			December 27,		December 28,
	2004			2003		2002
				As Restated*		As Restated*
Cash Flows From Operating Activities
Net loss	$	(1,957,740	)	(71,862	)	(244,029	)
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	913,293			924,655		1,261,595
Impairment of goodwill	606,403			—
Provision (benefit) for deferred income taxes	435,502			182,249		(404,067	)
Provision for accounts receivable	—			6,729		19,000
Gain on disposal of equipment	(29,248		)	(96,384	)	—
Changes in operating assets and liabilities
Certificates of deposit, restricted	(18,231		)	(9,096	)	(172,504	)
Accounts receivable	(2,114,101		)	14,789		800,883
Unbilled receivables	323,793			913,140		(391,532	)
Income taxes receivable	(112,500		)	—		—
Receivable from related party	3,299			3,781		(43,759	)
Prepaid expenses and other assets	(44,855		)	954,539		(414,330	)
Inventories	(8,542		)	(3,021	)	—
Accounts payable and accrued liabilities	2,752,826			(1,268,232	)	(715,414	)
Billings in excess of costs and fees	—			(274,047	)	12,203
Net cash provided (used) by operating activities	749,899			1,277,240		(291,954	)
Cash Flows From Investing Activities
Purchases of equipment	(118,860		)	(191,678	)	(633,435	)
Proceeds from disposal of equipment	34,080			159,060		—
Net cash used by investing activities	(84,780		)	(32,618	)	(633,435	)
Cash Flows From Financing Activities
Payment of revolving line of credit and long-term notes	(3,036,661		)	(2,300,585	)	(679,489	)
Borrowings under revolving line of credit and long-term notes	—			—		100,000
Additional paid-in capital contribution	—			—		1,000,000
Proceeds from related party notes payable	2,000,000			—		—
Repayments on related party notes payable	—			—		(510,000	)
Net cash used by financing activities	(1,036,661		)	(2,300,585	)	(89,489	)
Net decrease in cash and cash equivalents	(371,542		)	(1,055,963	)	(1,014,878	)
Cash and cash equivalents, beginning of year	1,082,089			2,138,052		3,152,930
Cash and cash equivalents, end of year	$	710,547		1,082,089		2,138,052
Supplemental Disclosure
Cash paid for interest	$	85,199		214,374		676,247
Cash paid for income taxes	—			59,110		156,320
Accrued interest payable exchanged for note payable	491,780			—		—

See notes to Consolidated Financial Statements.

* Restatement to reflect the FY2004 combination of an entity under common control

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NOTE 1.ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Organization.  Eberline Services Inc. and subsidiary(1) (Company) provide radiological and environmental services and a radiochemistry laboratory network.  The Company provides radiological characterization and analysis, hazardous, radioactive and mixed waste management, and also facility environmental, safety, and health management.  All shares of outstanding common stock are 100% owned by The GlenRose Partnership, L.P. (GlenRose).

Principles of Consolidation.  The accompanying consolidated financial statements include the Company and its subsidiary: Eberline Services, Inc. (ESI) and Lionville Laboratory Inc. (Lionville). All significant intercompany transactions have been eliminated.  On January 1, 2004, GlenRose transferred all 1,000 issued and outstanding shares of $.0001 par value common stock of Lionville to the Company.  The financial statements have been restated for 2003 and 2002 to reflect the business combination as if it took place on January 1, 2002.

Use of Estimates.  The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and underlying assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates, and such differences could be material to the financial statements.

Concentration of Credit Risk.  Financial instruments which potentially subject the Company to concentrations of credit risk consist of highly liquid cash equivalents and trade receivables. The Company’s cash equivalents are placed with high-credit, quality financial institutions and issuers.  The Company performs periodic credit evaluations of its customers’ financial condition and generally does not require collateral.  The Company provides for an allowance for doubtful accounts on receivable balances based upon the expected collectibility of such receivables.  Three customers accounted for 34.8%, 21.3%, and 13.6% of the Company’s accounts receivable at December 31, 2004, respectively.  While no single customer represented more than 45.0% of revenue for the year, federal and state governments collectively account for more than 90% of all revenues.

Fair Value of Financial Instruments.  The Company’s financial instruments consist primarily of cash and cash equivalents, receivables, accounts payable and borrowings.  The Company believes all of the financial instruments’ recorded values approximate current market values.

Cash and Cash Equivalents.  Cash and cash equivalents primarily consist of cash deposits and liquid investments with original maturities of three months or less when purchased and are stated at cost.

Restricted Cash.  Restricted cash includes Certificates of Deposit reserved for the decommissioning activities of certain laboratory operations, if needed.

Property and Equipment.  Property and equipment are stated at cost less accumulated depreciation.  Maintenance, repairs and minor renewals are expensed to operations as incurred.  Major repairs and betterments, which substantially extend the useful life of the property, are capitalized.  Depreciation expense is computed principally on a straight-line basis in amounts sufficient to relate the cost of depreciable assets to operations over the estimated service lives of assets as follows:

(1) The accompanying financial statements include Eberline Services Inc., with its five subsidiaries, Eberline Services Hanford, Inc., Eberline Analytical Corporation, Benchmark Environmental Corp., TMA Norcal Corporation and Lionville Laboratory Inc.

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Buildings	30 years
Computer Equipment	3 years
Plant and Lab Equipment	8 to 10 years

Leasehold improvements are amortized using the straight-line method over the lesser of the estimated useful lives of the assets or the term of the related leases.

Goodwill.  Goodwill is the excess of the purchase price over the fair value of identifiable net assets acquired in business combinations.  In accordance with SFAS 142, Goodwill is subject to an impairment test in the fourth quarter of each year.  Goodwill is also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  Goodwill for ESI in the amount of $2,740,913 was not considered to be impaired at December 31, 2004 and December 27, 2003.  Goodwill associated with the Lionville subsidiary of $606,403 was considered impaired and written off effective December 31, 2004.

Revenue Recognition.  Revenue for lab services, which are generally short-term, is recognized upon completion of the services.  Revenue for government service contracts is recognized as the services are performed.  Revenues are calculated using the accrual method of accounting, whereby income is measured based upon actual costs incurred plus specified fees or actual time and materials as required.  Calculations of allowable overhead and profit may change after audits by the Defense Contract Audit Agency for cost reimbursable type contracts.

The Company is engaged principally in three types of service contracts with the federal government and its contractors:

Cost Reimbursable Contracts.  Revenue from “cost-plus-fixed-fee” contracts is recognized on the basis of reimbursable contract costs incurred during the period plus the fee earned.  Costs incurred for services which have been authorized and performed, but may not have been billed, are burdened with operational fringe, overhead, general and administrative expenses and fees, and are shown as unbilled contract receivables.

Time-and-Materials Contracts.  Revenue from “time and material” contracts is recognized on the basis of man-hours utilized plus other reimbursable contract costs incurred during the period.

Fixed-Price Contracts.  Revenue from “fixed-price” contracts is recognized on the percentage-of-completion method.  For fixed-price contracts, the amount of revenues recognized is that portion of the total contract amount that the actual cost expended bears to the anticipated final total cost based on current estimates of cost to complete the project (cost-to-cost method).  It is not related to the progress billings to customers.  However, when it becomes known that the anticipated final total cost will exceed the contract amount, the excess of cost over the contract amount is immediately recognized as a loss on the contract.  Recognition of profit commences on an individual project only when cost to complete the project can reasonably be estimated and after there has been some meaningful performance achieved on the project (greater than 10% complete).  Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions (when applicable) and final contract settlements, may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

Direct costs of contracts include direct labor, subcontractors and consultants, materials and travel.  Most costs traditionally classified as indirect, that are associated with contracts, including facilities costs, insurance, administrative costs, overhead labor and fringe costs, etc. are allocated to jobs using direct labor dollars.  This rate is calculated by taking actual overhead costs as a percentage of total direct labor.  Provision for estimated losses on uncompleted contracts is made in the period in which such losses are

54

determined.  Claims and change orders are not recorded and recognized until such time as they have been accepted.

Accounts Receivable.  Accounts receivable are carried at original invoice amount less an estimate made for doubtful receivables based on a review of all outstanding amounts on a monthly basis. Management determines the allowance for doubtful accounts by identifying troubled accounts and by using historical experience applied to an aging of accounts. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded in revenue when received.

Unbilled Receivables.  Costs related to work that has been completed and performed, but are not yet fully billed, are classified as “unbilled receivables.”

Income Taxes.  Deferred income taxes are recorded using the liability method.  Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

Reclassifications.  Certain 2003 and 2002 balances were reclassified to conform to 2004 presentation.

NOTE 2.  TRANSFER OF SUBSIDIARY UNDER COMMON CONTROL AND RESTATEMENT OF CONSOLIDATED FINANCIAL STATEMENTS

On January 1, 2004, Glenrose transferred all 1,000 issued and outstanding shares of $.0001 par value common stock of Lionville to the Company.  The 2003 and 2002 consolidated financial statements have been restated to reflect the business combination as if Lionville was acquired in the beginning of 2002.  The restatement also includes the correction of timing differences on ESI’s financial statements as to the recognition of revenue between ESI and Lionville.  These timing differences include an overstatement of retained earnings of $165,599 at December 31, 2001, and an understatement of revenue, net of taxes of $82,121 and $83,478 for the years ended December 31, 2003 and 2002, respectively.

As a result of the transfer, the Company recorded the cost basis, net of allowances, of the assets and liabilities. Subsequent to the transfer, the Company determined that the entire amount of Goodwill at Lionville of $606,403 was impaired.  The Company also applied a valuation allowance against the entire $253,500 of deferred tax assets at Lionville.

Detailed Income Statement and Balance Sheets for years 2003 and 2002 reflective of the restatement are included below:

55

Detail of the 2003 consolidated financial statements before and after the restatement:

	2003			2003
	(As Previously Reported)			(As Restated)*
BALANCE SHEETS
ASSETS
Cash and cash equivalents	$	979,361		$	1,082,089
Accounts Receivable, less allowance for doubtful accounts of $193,095	2,300,758			2,914,433
Unbilled receivables	533,568			533,568
Due from related party	285,796			335,591
Inventories	—			114,855
Prepaid expenses	168,427			366,814
Deferred tax asset	153,059			153,059
Total Current Assets	4,420,969			5,500,409
Certificates of deposit, restricted	166,563			415,566
Property and equipment, at cost	6,733,080			7,733,674
Accumulated depreciation and amortization	(2,791,247		)	(3,363,990		)
Total Property and Equipment	3,941,833			4,369,684
Goodwill	2,740,913			3,347,316
Deferred tax asset	—			253,500
Total Assets	11,270,278			13,886,475
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts payable	355,700			450,440
Accrued expenses	169,303			290,814
Accrued interest	—			491,781
Accrued employee costs	850,534			927,178
Line-of-credit	—			100,000
Current maturities of long-term debt	626,071			629,927
Current maturities of long-term debt, related parties	—			2,000,000
Total Current Liabilities	2,001,608			4,890,140
Noncurrent deferred tax liability, net	171,691			171,691
Long-term debt	2,398,929			2,406,734
Common stock; $0.01 par value; 3,000 shares Authorized; 100 shares issued and outstanding at December 2003	1			1
Additional paid in capital	5,799,999			6,799,999
Retained (deficit) earnings	898,050			(382,090		)
Total Stockholder’s Equity	6,698,050			6,417,910
Total Liabilities and Stockholder’s Equity	11,270,278			13,886,475

*Restated to reflect the FY2004 combination of an entity under common control.

56

Detail of the 2003 consolidated financial statements before and after the restatement:

	2003			2003
	(As Previously Reported)			(As Restated)*
STATEMENTS OF INCOME
Revenues	$	23,136,327		$	27,288,270
Cost of Sales	19,666,805			23,564,483
Selling, general and administrative expenses	2,661,887			3,094,166
Total Operating Expenses	22,328,692			26,658,649
Operating Income	807,635			629,621
Other income and (expense)
Gain on sale of asset	23,090			23,090
Interest expense	(197,766		)	(488,752		)
Interest income	23,090			26,524
Other income	42,894			73,294
Income before Income Taxes	698,943			263,777
Income Tax Expense	143,065			335,639
Net Income (loss)	$	555,878		$	(71,862	)

*Restated to reflect the FY2004 combination of an entity under common control.

57

Detail of the 2002 consolidated financial statements before and after the restatement:

	2002			2002
	(As Previously Reported)			(As Restated)*
BALANCE SHEETS
ASSETS
Cash and Cash Equivalents	1,981,913			2,138,052
Accounts Receivable, less allowance for doubtful accounts of $199,824	1,961,895			2,995,724
Unbilled Receivables	1,446,708			1,364,587
Due from Related Party	311,926			361,721
Inventories	—			—
Prepaid Expenses and Other Assets	1,012,319			1,460,606
Deferred Tax Asset	153,301			153,301
Total Current Assets	6,868,062			8,473,991
Certificates of deposit, restricted	160,000			406,470
Property and Equipment, at cost	6,785,262			7,746,184
Accumulated Depreciation and Amortization	(2,267,126		)	(2,621,514		)
Total Property and Equipment	4,518,136			5,124,670
Goodwill	2,740,913			3,347,316
Deferred Tax Asset	—			395,800
Total Assets	14,287,111			17,748,247
LIABILITIES AND STOCKHOLDER’S EQUITY
Accounts Payable	907,978			1,387,441
Accrued Expenses	202,817			358,651
Accrued Interest	—			217,603
Accrued Employee Costs	1,302,113			1,302,113
Billings in excess of costs	274,047			274,047
Line-of-credit	—			100,000
Current maturities of long-term debt	800,000			887,186
Current maturities of long-term debt, related parties	0			0
Total Current Liabilities	3,486,955			4,527,041
Noncurrent Deferred Tax Liability, net	132,984			132,984
Long-term Debt	4,525,000			4,598,450
Long-term Debt, Related Party	—			2,000,000
Common stock; $0.01 par value; 3,000 shares authorized; 100 shares issued and outstanding at December 2002	1			1
Additional paid in capital	5,799,999			6,799,999
Retained Earnings (Deficit)	342,172			(310,228		)
Total Stockholder’s Equity	6,142,172			6,489,772
Total Liabilities and Stockholder’s Equity	$	14,287,111		$	17,748,247

*Restated to reflect the FY2004 combination of an entity under common control.

58

Detail of the 2002 consolidated financial statements before and after the restatement:

	2002		2002
	(As Previously Reported)		(As Restated)
STATEMENTS OF INCOME
Revenues	27,382,082		31,856,770
Cost of Sales	23,705,637		28,028,509
Selling, General and Administrative Expenses	3,199,380		3,748,415
Total operating expenses	26,905,017		31,776,924
Operating Income	477,065		79,846
Other Income and (Expense)
Gain on sale of asset	—		—
Interest expense	(333,661	)	(619,683	)
Interest income	26,732		39,236
Other income	—		2,114
Income before income taxes	170,136		(498,487	)
Income Tax Expense (Benefit)	39,255		(254,458	)
Net Income (Loss)	130,881		(244,029	)

*Restated to reflect the FY2004 combination of an entity under common control.

59

NOTE 3.PROPERTY AND EQUIPMENT

Property and equipment is comprised of the following:

	December 31, 2004			December 31, 2003
Land	$	775,514		$	775,514
Buildings & Improvements	1,963,968			1,959,973
Machinery, Equipment & Fixtures	5,066,100			4,899,294
Leasehold Improvements	40,165			40,165
Construction-in-Progress	—			58,728
Subtotal	7,845,747			7,733,674
Accumulated Depreciation & Amortization	(4,275,328		)	(3,363,990		)
Total Assets Net of Depreciation	$	3,570,419		$	4,369,684

NOTE 4.BANK LINE-OF-CREDIT

Lionville has a bank line-of-credit of $100,000 which is due on demand. Interest is payable monthly (currently at 6.75%), which floats at Bank’s Prime Rate plus 1.5%. The line-of-credit is secured by certain assets of the subsidiary.

NOTE 5.LONG-TERM DEBT

In October 2004, two investors of GlenRose loaned the Company $1,000,000 each as outlined below. The Company used the loan proceeds, along with available cash from operations, to pay off the balance of a term loan held by a bank.

In January 2004, four investors of GlenRose executed related-party agreements with Lionville for $622,945 each.  These agreements replaced four related-party agreements of $500,000 each, plus accrued interest of $122,945.  These loans are subordinated to the two senior loans noted above.

Long-term debt consists of the following:

	December 31, 2004			December 27, 2003
Term bank loan; variable interest rate of 4% at December 28, 2003. Interest payable monthly and principal payable quarterly, remaining unpaid balance retired on October 1, 2004.	—			3,025,000
Due to related parties, $1,000,000 each, interest at WSJ Prime + 1.0% (currently 5.75%), quarterly principal of $62,500 each quarterly, and interest due quarterly, with maturity on September 30, 2008.	2,000,000			—
Due to related parties, $622,945 each, principal and accrued interest at 8.5%, due on January 1, 2007.	2,491,780
Due to related parties, $500,000 each, interest accrued, per annum, at 12.5%, on demand, replaced with the above notes of $622,945 each which included accrued interest on these notes to January 1, 2004.	—			2,000,000
Term loan, payable in monthly installments of $379, including interest at 6.99%	—			11,661
Total	$	4,491,780		$	5,036,661
Less: Current Portion of Long-Term Debt	(500,000		)	(2,629,927		)
Total Long-Term Debt	$	3,991,780		$	2,406,734

60

Subsequent to year-end, the repayment terms of both of the $1,000,000 related party notes with the Company were restructured to include principal and interest payments until maturity on September 30, 2008. The maturity schedule below reflects the restructure of the notes.

Annual maturities of long-term debt at December 31, 2004 are as follows:

2005	$	500,000
2006	500,000
2007	2,991,780
2008	500,000
	$	4,491,780

In 2005, the Company also announced that it would revise the repayment schedule of the notes associated with Lionville during 2005 to stagger the repayment until years 2011.

NOTE 6.COMMITMENTS

The Company and its subsidiaries lease facilities under various operating leases.  Future minimum rental commitments for long-term, non-cancelable operating leases at December 31, 2004, are as follows:

2005	$	329,984
2006	251,431
2007	2,385
	$	583,800

Rent expense for facilities under operating leases was $604,224, $429,931 and $524,779 for the years ended December 31, 2004, December 27, 2003 and December 28, 2002, respectively.

NOTE 7.INCOME TAXES

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.  Significant components of the Company’s deferred taxes at December 31, 2004 and December 27, 2003, are as follows:

	2004			2003
				As Restated
Deferred tax liabilities
Depreciable assets	$	(353,693	)	(171,691	)
Deferred tax assets
Accrued liabilities and other	192,748			153,059
Net operating loss carryforwards	989,557			613,500
Valuation allowance	(1,029,246		)	(360,000	)
	153,059			406,559
Net deferred taxes	$	(200,634	)	234,868

61

Components of the provision for income taxes for the year ended December 31, 2004 and December 27, 2003, and December 28, 2002 are as follows:

				As Restated			As Restated
	2004			2003			2002
Current:
Federal	$	(70,301	)	$	141,119		$	131,656
State	(6,113		)	12,271			17,953
Total Current	(76,414		)	153,390			149,609
Deferred:
Federal	400,662			143,933			(314,581		)
State	34,840			38,316			(89,486		)
Total Deferred	$	435,502		$	182,249		$	(404,067	)
	$	359,088		$	335,639		$	(254,458	)
Statutory Rate Applied to Income (Loss) Before Taxes	(559,542		)	92,322			(174,470		)
Add (Deduct):
Non-deductible goodwill impairment	237,103			—			—
State income tax expense (benefit) net of federal benefit	(22,941		)	3,785			(7,153		)
Benefit of loss carryforward	—			(143,300		)	(88,500		)
Adjustment to valuation allowance	669,246			360,000			—
Other accruals and adjustments	35,222			22,832			15,665
Total income tax expense (benefit)	$	359,088		$	335,639		$	(254,458	)

The deferred tax asset valuation allowance at December 31, 2004 consists primarily of net operating loss carry forwards for the following:

Valuation allowance for ESI - 2004	$	202,263
Valuation allowance for Lionville - 2004	213,483
Valuation allowance for Lionville that arose prior to 2003 and applied in 2004	253,500
Valuation allowance for Lionville applied in 2003	360,000
	$	1,029,246

The Lionville subsidiary has approximately $1,770,000 in operating losses for both state and federal tax purposes that can be carried forward to offset taxable income earned by the Lionville subsidiary.  For state tax purposes, these operating losses expire in 2011-2013.  For federal tax purposes, these operating losses expire in 2021-2023.

The Company has additional operating losses of approximately $1,300,000 for state tax purposes and $1,000,000 for federal tax purposes that arose during 2004 that may be used to offset operating income of the Company as a whole.  For state tax purposes, the operating losses expire in 2009 and for federal tax purposes, the operating losses expire in 2024.

62

NOTE 8.BENEFIT PLANS

The Company currently maintains two defined contribution “401(k)” plans. Additionally, employees of the Hanford division are covered by a multi-employer, defined benefit plan that is not administered by the Company.

Employees of ESI are eligible to participate in the ESI plan from date of hire.  Participants may contribute up to 100% of their compensation to the 401(k) Plans, subject to IRS annual limitations.  The Company makes matching contributions of up to 4.5% of a participant’s compensation.  Vesting in matching contributions is immediate.  The Company contributed approximately $210,000, $267,000 and $367,000 to the 401(k) Plan for the years ended December 31, 2004, December 27, 2003 and December 28, 2002, respectively.

The Lionville Laboratory subsidiary maintains a separate defined contribution plan that covers all eligible Lionville employees.  Eligibility is tied to certain minimum compensation levels, an age requirement (21 years of age), and a minimum service requirement.  The plan is funded by elective employee salary deferrals and employer contributions.  Pension expense for the year ended December 31, 2004, 2003 and 2002 was $16,341, $46,821 and $51,183, respectively.

Employees at the Company’s Hanford division are eligible to participate in a multi-employer defined benefit plan (Plan). The Plan is administered by Fluor Hanford, Inc., on behalf of eligible, participating companies. The Plan is funded by participating companies on a payroll-by-payroll basis, in amounts actuarially computed by Fluor Hanford, Inc.  Under the terms and conditions of the Plan, individual companies assume no liability for future pension or benefit costs associated with the Plan.  Accordingly, no information with respect to the Plan is included herein.  Expenses incurred by the Company related to the Plan for the year ended December 31, 2004, December 27, 2003 and December 28, 2002 were approximately $193,000, $179,000 and $170,000, respectively.

NOTE 9.RELATED PARTY TRANSACTIONS

The Company performed administrative and professional services on behalf of GlenRose.  GlenRose is responsible for paying the Company for the expenses incurred for these services.

	December 31, 2004			December 27, 2003
Beginning Balance	$	335,591		361,721
Adjustments to Receivable	(3,299		)	(26,130	)
	$	332,292		335,591

NOTE 10.  EARNINGS (LOSS) PER SHARE

Basic earnings per share are computed by dividing earnings available to common stockholders by the weighted average number of common shares outstanding during the period.  Diluted earnings per share reflect per share amounts that would have resulted if dilutive potential common stock had been converted to common stock.  There is no potential dilution of common stock as of December 31, 2004, 2003 and 2002.  The following reconciles amounts reported in the financial statements:

63

	For the Year Ended December 31, 2004
	Income			Shares	Per-share Amount
	(Numerator)			(Denominator)
Loss available to common stockholders- basic and diluted earnings per share	$	(1,957,740	)	100	$	19,577.40

	As Previously Reported For the Year Ended December 31, 2003
	Income		Shares	Per-share Amount
	(Numerator)		(Denominator)
Income available to common stockholders- Earnings per share	$	555,878	100	$	5,558.78

	As Previously Reported For the Year Ended December 31, 2002
	Income		Shares	Per-share Amount
	(Numerator)		(Denominator)
Income available to common stockholders- Earning per share	$	130,881	100	$	1,308.81

	As Restated For the Year Ended December 31, 2003
	Income			Shares	Per-share Amount
	(Numerator)			(Denominator)
Loss available to common stockholders- Earning per share	$	(71,862	)	100	$	(718.62	)

	As Restated For the Year Ended December 31, 2002
	Income			Shares	Per-share Amount
	(Numerator)			(Denominator)
Loss available to common stockholders- Earning per share	$	(244,029	)	100	$	(2,440.29	)

NOTE 11. OPERATING SEGMENTS AND GEOGRAPHICAL INFORMATION

The Company’s executive officers include Managing Partner, Mr. Arvin Smith, Chairman, Dr. Richard Chapman, and President, Dr. Shelton Clark. Collectively, they are the Chief Operating Decision Maker (CODM) as defined by SFAS 131. The office of the CODM is responsible for assessing the performance of each segment, as well as the allocation of company resources(1).

The Company operates two primary business segments: Radio Chemistry Laboratories (Labs) and Consulting & Field Services (Services). In addition, the Company maintains a separate General & Administrative (G&A) division consisting of all executive management, business development, accounting & finance, and HR personnel. G&A costs are allocated to each segment/division proportional to its cost-base.  All costs (except federal taxes and interest income and expense) collected in the G&A division are fully absorbed by each segments/division. This allocation methodology is consistent with the Federal Acquisition Regulations (FAR).  In accordance with the FAR, direct and indirect costs are aggregated and reported at the division level. This includes indirect labor, as well as all other indirect costs including depreciation and amortization.

(1) This audit report includes Eberline Services Inc., and subsidiaries.

64

The Company does not identify or allocate assets by operating segment, nor does the CODM evaluate operating segments on these criteria. Operating segments do not record intersegment revenue, and accordingly, there is none to be reported. The Company does not allocate interest and other income, interest expense or taxes to operating segments. Although the CODM uses operating income to evaluate the segments, operating costs in one segment may benefit other segments. Except as discussed above, the accounting polices for segment reporting are the same as for the Company as a whole.

The Laboratory (Labs) segment consists of four separate labs serving a wide-variety of federal, state and local governments.  The labs are located in Richmond, CA, Albuquerque, NM, Oak Ridge, TN, and Exton, PA. Each lab is managed by a dedicated lab manager who reports directly to Dr. Shelton Clark. The financial performance of each lab, inclusive of all traceable costs, is tracked separately, but they collectively comprised 35%, 37%, and 31% of net revenues for years ending 2002, 2003 and 2004, respectively. Management monitors the performance of each lab separately. Intercompany costs and sales are segregated on the financial statements, and are eliminated in the combined financial statements.

The Consulting and Environmental Services segment provides engineering and technical support to Los Alamos National Lab, the Department of Energy’s Hanford Site, as well as other government and commercial agencies. Los Alamos operations are managed by Mr. Raoul Mebane. Mr. Mebane reports directly to Shelton Clark. Hanford Site operations are managed by Mr. Chuck Hellier. Mr. Hellier also reports to Dr. Clark.  The Services group accounted for 65%, 63%, and 69% of sales for the years ending December 31, 2002, 2003 and 2004, respectively.  As with the Labs segment, this segment is comprised of discrete divisions.  Select financial data is included below:

	2004			2003		2002
				As Restated		As Restated
Consulting and Environmental Services
Net Revenue	$	19,473,639		17,111,088		20,612,120
Operating Income	1,169,909			1,701,683		706,596
Radio Chemistry Laboratories
Net Revenue	$	8,679,279		10,177,182		11,244,650
Operating loss	(1,764,006		)	(1,072,062	)	(626,750	)
Total
Net Revenue	28,152,918			27,288,270		31,856,770
Operating (loss) income	$	(594,097	)	629,621		79,846

65

Item 14.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

66

Item 15.  Financial Statements and Exhibits

Financial Statements

An index to the financial statement filed as part of this Form 10 is contained in Item 13 above.

Exhibits  -

Exhibit Number		Description
3.1	–	Certificate of Incorporation as currently in effect
3.2	–	Certificate of Incorporation to be in effect upon the effectiveness of this Form 10
3.3	–	By-laws as currently in effect
3.4	–	By-laws to be in effect upon the effectiveness of this Form 10
10.1	–	Promissory note of Eberline Services, Inc. issued to ArvinSmith dated as of January 1, 2005
10.2	–	Promissory noteof Eberline Services, Inc. issued to John N.Hatsopoulosand Patricia Hatsopoulos dated as of January 1, 2005
10.3	–	Glenrose Instruments Inc.2005 Stock Option and Incentive Plan
10.4	–	Lease Agreement between G-C—T Corporation and Lionville Laboratories, Inc. dated September 23, 2004
10.5	–	Lease Agreement between J.W. Gibson Construction Company and Eberline Analytical Corp. dated October 24, 2000
10.6	–	Subcontract No. 03-PS-013 to Prime Contract Number 4734-001-03-C2 between KSL Services JV and Eberline Services Inc. dated November 23, 2003
10.7	–	Agreement between the Regents of the University of California (Los Alamos National Laboratory) and Eberline Services Inc. dated July 26, 2002
10.8	–	Agreement between Bechtel Hanford, Inc. and TMA Hanford dated as of July 1, 1994
11.1	–	Statement re computation of per share earnings*
14.1	–	Code of Business Conduct and Ethics to be in effect upon the effectiveness of this Form 10
21.1	–	List of subsidiaries

* To be filed by amendment.

67

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on December 5, 2005.

GLENROSE INSTRUMENTS INC.
By:	/s/ John N. Hatsopoulos
	John N. Hatsopoulos
Chairman

68

EX-3.1

Exhibit 3.1

CERTIFICATE OF INCORPORATION

OF

GLENROSE INSTRUMENTS INC.

FIRST.The name of the corporation is GlenRose Instruments Inc. (the “Corporation”).

SECOND.The address of the registered office of the Corporation in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle.  The name of the registered agent at such address is the Corporation Service Company.

THIRD.The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

FOURTH.The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is 1,000,000 shares of Common Stock, par value $.01 per share (the “Common Stock”).

FIFTH.The Corporation is to have perpetual existence.

SIXTH.In furtherance and not in limitation of the powers conferred by the laws of the State of Delaware:

A.The Board of Directors of the Corporation is expressly authorized to adopt, amend or repeal the By-Laws of the Corporation.

B.Elections of directors need not be by written ballot unless the By-Laws of the Corporation shall so provide.

C.The books of the Corporation may be kept at such place within or without the State of Delaware as the By-Laws of the Corporation may provide or as may be designated from time to time by the Board of Directors of the Corporation.

SEVENTH.The Corporation eliminates the personal liability of each member of its Board of Directors to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director; provided, however, that, to the extent required by applicable law, the foregoing shall not eliminate the liability of a director (i) for any breach of such director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of Title 8 of the Delaware Code or (iv) for any transaction from which such director derived an improper personal benefit.  No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

EIGHTH.The Corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon a stockholder herein are granted subject to this reservation.

NINTH.The name and mailing address of the sole incorporator is as follows:

1

Name	Mailing Address
Edwin L. Miller Jr.	Sullivan & Worcester LLP One Post Office Square Boston, MA 02109

I, THE UNDERSIGNED, being the sole incorporator, do hereby execute this instrument on September 7, 2005.

/s/Edwin L. Miller Jr.

Edwin L. Miller Jr.

Sole Incorporator

2

EX-3.2

Exhibit 3.2

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

GLENROSE INSTRUMENTS INC.

(Originally incorporated on September 7, 2005)

GlenRose Instruments Inc., a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

1.Pursuant to Section 242 and 245 of the General Corporation Law of the State of Delaware, this Amended and Restated Certificate of Incorporation restates, integrates and further amends the provisions of the Corporation’s Certificate of Incorporation, as amended to the date of this filing. The original Certificate of Incorporation was filed with the Secretary of State of Delaware on September 7, 2005. This Amended and Restated Certificate of Incorporation has been duly adopted and approved by the unanimous written consent of the directors and stockholders of the Corporation.

2.The text of the Certificate of Incorporation, as amended to the date of this filing, is hereby restated and amended to read in its entirety as follows:

First: The name of the Corporation is GlenRose Instruments Inc.

Second: The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle. The name of the registered agent at such address is the Corporation Service Company.

Third: The nature of the business or purposes to be conducted or promoted by the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

Fourth: The total number of shares of all classes of stock that the Corporation shall have authority to issue is 13,000,000 shares, consisting of (i) 10,000,000 shares of Common Stock, $.01 par value per share (“Common Stock”), and (ii) 3,000,000 shares of Preferred Stock, $.01 par value per share (“Preferred Stock”).

The following is a statement of the designations and the powers, privileges and rights, and the qualifications, limitations or restrictions thereof in respect of each class of capital stock of the Corporation.

A. COMMON STOCK.

1. General. The voting, dividend and liquidation rights of the holders of the Common Stock are subject to and qualified by the rights of the holders of the Preferred Stock of any series as may be designated by the Board of Directors upon any issuance of the Preferred Stock of any series.

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2. Voting. The holders of the Common Stock shall have voting rights at all meetings of stockholders, each such holder being entitled to one vote for each share thereof held by such holder; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (which, as used herein, shall mean the certificate of incorporation of the Corporation, as amended from time to time, including the terms of any certificate of designations of any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon pursuant to this Certificate of Incorporation. There shall be no cumulative voting.

The number of authorized shares of Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of Delaware.

3. Dividends. Dividends may be declared and paid on the Common Stock from funds lawfully available therefor as and when determined by the Board of Directors and subject to any preferential dividend or other rights of any then outstanding Preferred Stock.

4. Liquidation. Upon the dissolution or liquidation of the Corporation, whether voluntary or involuntary, holders of Common Stock will be entitled to receive all assets of the Corporation available for distribution to its stockholders, subject to any preferential or other rights of any then outstanding Preferred Stock.

B. PREFERRED STOCK.

Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or expressed herein and in the resolution or resolutions providing for the issue of such series adopted by the Board of Directors of the Corporation as hereinafter provided. Any shares of Preferred Stock that may be redeemed, purchased or acquired by the Corporation may be reissued except as otherwise provided by law.

Authority is hereby expressly granted to the Board of Directors from time to time to issue the Preferred Stock in one or more series, and in connection with the creation of any such series, by resolution or resolutions providing for the issuance of the shares thereof, to determine and fix the number of shares of such series and such voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other special rights, and qualifications, limitations or restrictions thereof, including dividend rights, conversion rights, redemption privileges and liquidation preferences, as shall be stated and expressed in such resolutions, all to the full extent now or hereafter permitted by the General Corporation Law of Delaware. Without limiting the generality of the foregoing, the resolutions providing for issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior to the Preferred Stock of any other series to the extent permitted by law.

The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares then outstanding) by the affirmative vote of the holders of a majority of the stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the General Corporation Law of Delaware.

Fifth: Except as otherwise provided herein, the Corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or

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hereafter prescribed by statute and this Certificate of Incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation.

Sixth: In furtherance and not in limitation of the powers conferred upon it by the laws of the State of Delaware, and subject to the terms of any series of Preferred Stock, the Board of Directors shall have the power to adopt, amend, alter or repeal the Corporation’s By-laws. The affirmative vote of a majority of the directors present at any regular or special meeting of the Board of Directors at which a quorum is present shall be required to adopt, amend, alter or repeal the Corporation’s By-laws. The Corporation’s By-laws also may be adopted, amended, altered or repealed by the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors or class of directors, in addition to any other vote required by this Certificate of Incorporation. Notwithstanding any other provisions of law, this Certificate of Incorporation or the By-Laws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article Sixth.

Seventh: Except to the extent that the General Corporation Law of Delaware prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty, no director of the Corporation shall be personally liable to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability. No amendment to or repeal of this provision shall apply to or have any effect on the liability or alleged liability of any director of the Corporation for or with respect to any acts or omissions of such director occurring prior to such amendment or repeal.

Eighth: The Corporation shall provide indemnification as follows:

1. Actions, Suits and Proceedings Other than by or in the Right of the Corporation. The Corporation shall indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was, or has agreed to become, a director or officer of the Corporation, or is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) (all such persons being referred to hereafter as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a manner that Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Indemnitee did not act in good faith and in a manner that Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful.

2. Actions or Suits by or in the Right of the Corporation. The Corporation shall indemnify any Indemnitee who was or is a party to or threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that Indemnitee is or was, or has agreed to become, a director or officer of the Corporation, or

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is or was serving, or has agreed to serve, at the request of the Corporation, as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with such action, suit or proceeding and any appeal therefrom, if Indemnitee acted in good faith and in a manner that Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Corporation, except that no indemnification shall be made under this Section 2 in respect of any claim, issue or matter as to which Indemnitee shall have been adjudged to be liable to the Corporation, unless, and only to the extent, that the Court of Chancery of Delaware shall determine upon application that, despite the adjudication of such liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnity for such expenses (including attorneys’ fees) that the Court of Chancery of Delaware shall deem proper.

3. Indemnification for Expenses of Successful Party. Notwithstanding any other provisions of this Article, to the extent that an Indemnitee has been successful, on the merits or otherwise, in defense of any action, suit or proceeding referred to in Sections 1 and 2 of this Article Eighth, or in defense of any claim, issue or matter therein, or on appeal from any such action, suit or proceeding, Indemnitee shall be indemnified against all expenses (including attorneys’ fees) actually and reasonably incurred by or on behalf of Indemnitee in connection therewith. Without limiting the foregoing, if any action, suit or proceeding is disposed of, on the merits or otherwise (including a disposition without prejudice), without (i) the disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the Corporation, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that Indemnitee did not act in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Corporation, and (v) with respect to any criminal proceeding, an adjudication that Indemnitee had reasonable cause to believe his conduct was unlawful, Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect thereto.

4. Notification and Defense of Claim. As a condition precedent to an Indemnitee’s right to be indemnified, such Indemnitee must notify the Corporation in writing as soon as practicable of any action, suit, proceeding or investigation involving such Indemnitee for which indemnity will or could be sought. With respect to any action, suit, proceeding or investigation of which the Corporation is so notified, the Corporation will be entitled to participate therein at its own expense and/or to assume the defense thereof at its own expense, with legal counsel reasonably acceptable to Indemnitee. After notice from the Corporation to Indemnitee of its election so to assume such defense, the Corporation shall not be liable to Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with such action, suit, proceeding or investigation, other than as provided below in this Section 4. Indemnitee shall have the right to employ his or her own counsel in connection with such action, suit, proceeding or investigation, but the fees and expenses of such counsel incurred after notice from the Corporation of its assumption of the defense thereof shall be at the expense of Indemnitee unless (i) the employment of counsel by Indemnitee has been authorized by the Corporation, (ii) counsel to Indemnitee shall have reasonably concluded that there may be a conflict of interest or position on any significant issue between the Corporation and Indemnitee in the conduct of the defense of such action, suit, proceeding or investigation or (iii) the Corporation shall not in fact have employed counsel to assume the defense of such action, suit, proceeding or investigation, in each of which cases the fees and expenses of counsel for Indemnitee shall be at the expense of the Corporation, except as otherwise expressly provided by this Article. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the defense of any claim brought by or in the right of the Corporation or as to which counsel for Indemnitee shall have reasonably made the conclusion provided for in clause (ii) above. The Corporation shall not be required to indemnify Indemnitee under this Article Eighth for any amounts paid in settlement of any action, suit, proceeding or investigation effected without its written consent. The Corporation shall not settle any

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action, suit, proceeding or investigation in any manner that would impose any penalty or limitation on Indemnitee without Indemnitee’s written consent. Neither the Corporation nor Indemnitee will unreasonably withhold or delay its consent to any proposed settlement.

5. Advance of Expenses. Subject to the provisions of Section 6 of this Article Eighth, in the event of any action, suit, proceeding or investigation of which the Corporation receives notice under this Article, any expenses (including attorneys’ fees) incurred by or on behalf of Indemnitee in defending an action, suit, proceeding or investigation or any appeal therefrom shall be paid by the Corporation in advance of the final disposition of such matter; provided, however, that the payment of such expenses incurred by or on behalf of Indemnitee in advance of the final disposition of such matter shall be made only upon receipt of an undertaking by or on behalf of Indemnitee to repay all amounts so advanced in the event that it shall ultimately be determined that Indemnitee is not entitled to be indemnified by the Corporation as authorized in this Article; and further provided that no such advancement of expenses shall be made under this Article Eighth if it is determined (in the manner described in Section 6) that (i) Indemnitee did not act in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the Corporation, or (ii) with respect to any criminal action or proceeding, Indemnitee had reasonable cause to believe his conduct was unlawful. Such undertaking shall be accepted without reference to the financial ability of Indemnitee to make such repayment.

6. Procedure for Indemnification. In order to obtain indemnification or advancement of expenses pursuant to Section 1, 2, 3 or 5 of this Article Eighth, an Indemnitee shall submit to the Corporation a written request. Any such advancement of expenses shall be made promptly, and in any event within 60 days after receipt by the Corporation of the written request of Indemnitee, unless  (i) the Corporation has assumed the defense pursuant to Section 4 of this Article Eighth (and none of the circumstances described in Section 4 of this Article Eighth that would nonetheless entitle the Indemnitee to indemnification for the fees and expenses of separate counsel have occurred) or (ii) the Corporation determines within such 60-day period that Indemnitee did not meet the applicable standard of conduct set forth in Section 1, 2 or 5 of this Article Eighth, as the case may be. Any such indemnification, unless ordered by a court, shall be made with respect to requests under Section 1 or 2 only as authorized in the specific case upon a determination by the Corporation that the indemnification of Indemnitee is proper because Indemnitee has met the applicable standard of conduct set forth in Section 1 or 2, as the case may be. Such determination shall be made in each instance (a) by a majority vote of the directors of the Corporation consisting of persons who are not at that time parties to the action, suit or proceeding in question (“disinterested directors”), whether or not a quorum, (b) by a committee of disinterested directors designated by majority vote of disinterested directors, whether or not a quorum, (c) if there are no disinterested directors, or if the disinterested directors so direct, by independent legal counsel (who may, to the extent permitted by law, be regular legal counsel to the Corporation) in a written opinion, or (d) by the stockholders of the Corporation.

7. Remedies. The right to indemnification or advancement of expenses as granted by this Article shall be enforceable by Indemnitee in any court of competent jurisdiction. Neither the failure of the Corporation to have made a determination prior to the commencement of such action that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Corporation pursuant to Section 6 of this Article Eighth that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct. Indemnitee’s expenses (including attorneys’ fees) reasonably incurred in connection with successfully establishing Indemnitee’s right to indemnification, in whole or in part, in any such proceeding shall also be indemnified by the Corporation.

8. Limitations. Notwithstanding anything to the contrary in this Article, except as set forth in Section 7 of the Article Eighth, the Corporation shall not indemnify an Indemnitee pursuant to this Article

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Eighth in connection with a proceeding (or part thereof) initiated by such Indemnitee unless the initiation thereof was approved by the Board of Directors of the Corporation. Notwithstanding anything to the contrary in this Article, the Corporation shall not indemnify an Indemnitee to the extent such Indemnitee is reimbursed from the proceeds of insurance, and in the event the Corporation makes any indemnification payments to an Indemnitee and such Indemnitee is subsequently reimbursed from the proceeds of insurance, such Indemnitee shall promptly refund indemnification payments to the Corporation to the extent of such insurance reimbursement.

9. Subsequent Amendment. No amendment, termination or repeal of this Article or of the relevant provisions of the General Corporation Law of Delaware or any other applicable laws shall affect or diminish in any way the rights of any Indemnitee to indemnification under the provisions hereof with respect to any action, suit, proceeding or investigation arising out of or relating to any actions, transactions or facts occurring prior to the final adoption of such amendment, termination or repeal.

10. Other Rights. The indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which an Indemnitee seeking indemnification or advancement of expenses may be entitled under any law (common or statutory), agreement or vote of stockholders or disinterested directors or otherwise, both as to action in Indemnitee’s official capacity and as to action in any other capacity while holding office for the Corporation, and shall continue as to an Indemnitee who has ceased to be a director or officer, and shall inure to the benefit of the estate, heirs, executors and administrators of Indemnitee. Nothing contained in this Article shall be deemed to prohibit, and the Corporation is specifically authorized to enter into, agreements with officers and directors providing indemnification rights and procedures different from those set forth in this Article. In addition, the Corporation may, to the extent authorized from time to time by its Board of Directors, grant indemnification rights to other employees or agents of the Corporation or other persons serving the Corporation and such rights may be equivalent to, or greater or less than, those set forth in this Article.

11. Partial Indemnification. If an Indemnitee is entitled under any provision of this Article to indemnification by the Corporation for some or a portion of the expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement actually and reasonably incurred by or on behalf of Indemnitee in connection with any action, suit, proceeding or investigation and any appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless indemnify Indemnitee for the portion of such expenses (including attorneys’ fees), judgments, fines or amounts paid in settlement to which Indemnitee is entitled.

12. Insurance. The Corporation may purchase and maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise (including any employee benefit plan) against any expense, liability or loss incurred by him in any such capacity, or arising out of his status as such, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the General Corporation Law of Delaware.

13. Savings Clause. If this Article or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each Indemnitee as to any expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement in connection with any action, suit, proceeding or investigation, whether civil, criminal or administrative, including an action by or in the right of the Corporation, to the fullest extent permitted by any applicable portion of this Article that shall not have been invalidated and to the fullest extent permitted by applicable law.

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14. Definitions. Terms used herein and defined in Section 145(h) and Section 145(i) of the General Corporation Law of Delaware shall have the respective meanings assigned to such terms in such Section 145(h) and Section 145(i).

Ninth: This Article is inserted for the management of the business and for the conduct of the affairs of the Corporation.

1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors.

2. Number of Directors; Election of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the number of directors of the Corporation shall be established by the Board of Directors. Election of directors need not be by written ballot, except as and to the extent provided in the By-laws of the Corporation.

3. Classes of Directors. Subject to the rights of holders of any series of Preferred Stock to elect directors, the Board of Directors shall consist of one class.

4. Terms of Office. Subject to the rights of holders of any series of Preferred Stock to elect directors, each director shall serve for a term ending on the date of the next annual meeting following the annual meeting at which such director was elected; provided that the term of any person who is a director of the Corporation on the date of filing of this Amended and Restated Certificate of Incorporation with the Secretary of State of Delaware shall expire at the Corporation’s annual meeting of stockholders held in 2006; and provided further that the term of each director shall continue until the election and qualification of his successor and be subject to his earlier death, resignation or removal.

5. Quorum. The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors fixed pursuant to Section 2 of this Article Ninth shall constitute a quorum. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

6. Action at Meeting. Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by this Certificate of Incorporation.

7. Removal. Subject to the rights of holders of any series of Preferred Stock, directors of the Corporation may be removed only for cause and only by the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors.

8. Vacancies. Subject to the rights of holders of any series of Preferred Stock, any vacancy or newly created directorships in the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. A director elected to fill a vacancy shall hold office until the next annual election of directors, subject to the election and qualification of a successor and to such director’s earlier death, resignation or removal.

9. Stockholder Nominations and Introduction of Business, Etc. Advance notice of stockholder nominations for election of directors and other business to be brought by stockholders before a meeting of stockholders shall be given in the manner provided by the By-laws of the Corporation.

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10. Amendments to Article. Notwithstanding any other provisions of law, this Certificate of Incorporation or the By-laws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article Ninth.

Tenth: Stockholders of the Corporation may not take any action by written consent in lieu of a meeting. Notwithstanding any other provisions of law, this Certificate of Incorporation or the By-laws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article Tenth.

Eleventh: Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors, the Chairman of the Board or the President, but such special meetings may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting. Notwithstanding any other provision of law, this Certificate of Incorporation or the By-laws of the Corporation, and notwithstanding the fact that a lesser percentage may be specified by law, the affirmative vote of the holders of at least 75% of the votes that all the stockholders would be entitled to cast in any annual election of directors or class of directors shall be required to amend or repeal, or to adopt any provision inconsistent with, this Article Eleventh.

IN WITNESS WHEREOF, this Certificate of Incorporation, which has been duly adopted in accordance with Sections 228, 242 and 245 of the Delaware General Corporation Law, has been executed by its duly authorized officer this September 22, 2005.

GLENROSE INSTRUMENTS INC.
By:	/s/ John N. Hatsopoulos
Name: John N. Hatsopoulos
Title:  Chairman

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EX-3.3

Exhibit 3.3

Bylaws effective before Form 10

BY - LAWS

of

GLENROSE INSTRUMENTS INC.

(a Delaware Corporation)

GLENROSE INSTRUMENTS INC.

BY-LAWS

ARTICLE IOFFICES

Section 1.  Registered Office.  The registered office of the Corporation shall be located at 2711 Centerville Road, Suite 400, in the City of Wilmington, County of New Castle, State of Delaware, and the name of the resident agent in charge thereof shall be Corporation Service Company.

Section 2.  Other Offices.  The Corporation may also have offices at such other places, within or without the State of Delaware, as the Board of Directors may from time to time appoint or the business of the Corporation may require.

ARTICLE IISEAL

The seal of the Corporation shall, subject to alteration by the Board of Directors, consist of a flat-faced circular die with the word “Delaware”, together with the name of the Corporation and the year of incorporation, cut or engraved thereon.

ARTICLE IIIMEETINGS OF STOCKHOLDERS

Section 1.  Place of Meeting.  Meetings of the stockholders shall be held either within or without the State of Delaware at such place as the Board of Directors may fix from time to time.  The Board of Directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorized by Section 211 of the Delaware General Corporation Law.

Section 2.  Annual Meetings.  The annual meeting of stockholders shall be held for the election of directors on such date and at such time as the Board of Directors may fix from time to time.  Any other proper business may be transacted at the annual meeting.

Section 3.  Special Meetings.  Special meetings of the stockholders for any purpose or purposes may, unless otherwise restricted by law or by the Certificate of Incorporation, be called by the Chairman of the Board of Directors, if there be one, the President or by the directors (either by written instrument signed by a majority or by resolution adopted by a vote of the majority), and special meetings shall be called by the Chairman of the Board of Directors, ifthere be one, the President or the Secretary whenever stockholders owning at least a majority of the capital stock issued, outstanding and entitled to vote so request in writing.  Such request of stockholders shall state the purpose or purposes of the proposed meeting.  Business transacted at any special meeting shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

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Section 4.  Notice.  Except as otherwise provided by law, written or printed notice of every meeting of stockholders, annual or special, stating the hour, date and place thereof, the means of remote communication, if any, by which stockholders or proxyholders may be deemed to be present in person and vote at such meeting, and the purpose or purposes in general terms for which the meeting is called shall, not less than ten (10) days, or such longer period as shall be provided by law, the Certificate of Incorporation, these By-Laws, or otherwise, and not more than sixty (60) days before such meeting, be served upon, mailed or delivered by a form of electronic transmission authorized by Section 211 of the Delaware General Corporation Law and consented to (if required by law) by the stockholder to whom such notice is given, to each stockholder entitled to vote thereat, at the address, facsimile number, electronic mail address or other form of electronic address, as applicable, of such stockholder as it appears upon the stock records of the Corporation or, if such stockholder shall have filed with the Secretary of the Corporation a written request that notices be served, mailed or delivered to some other address, facsimile number or electronic address then to the address, facsimile number or electronic address then designated in such request.

Notice of the hour, date, place and purpose of any meeting of stockholders may be dispensed with if every stockholder entitled to vote thereat shall attend either in person or by proxy and shall not, at the beginning of the meeting, object to the holding of such meeting because the meeting has not been lawfully called or convened, or if every absent stockholder entitled to such notice shall in writing, filed with the records of the meeting, either before or after the holding thereof, waive such notice.

Section 5.  Quorum and Adjournments.  Except as otherwise provided by law or by the Certificate of Incorporation, (a) the presence in person or by proxy at any stockholders’ meeting of the holders of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote thereat, shall be requisite and shall constitute a quorum, and (b) if two or more classes or series of stock are entitled to vote as separate classes upon any question, then, in the case of each such class or series, the presence in person or by proxy of the holders of a majority of the shares of that class or series issued, outstanding and entitled to vote shall constitute a quorum for the consideration of such question.  If a quorum for each class and series of shares of capital stock of the Corporation entitled to vote thereat shall not be present at any meeting of the stockholders regularly called, the vote of stockholders entitled to cast a majority of the votes that may be cast by the stockholders present in person or by proxy shall be requisite to adjourn the meeting to another time, or to another time and place, without notice other than announcement thereat of the time and place to which the meeting is adjourned, and there may be successive adjournments for like cause and in like manner until holders of the requisite number of shares of each class and series entitled to vote thereat shall be present in person or by proxy; provided, that if the adjournment is for more than thirty (30) days, notice of the hour, date and place of the adjourned meeting shall be given to each stockholder entitled to vote thereat.  Subject to the requirements of law and the Certificate of Incorporation, on any issue on which two or more classes or series of stock are entitled to vote separately, no adjournment shall be taken with respect to any class or series for which a quorum is present unless the chairman of the meeting otherwise directs.  If, at any subsequent session of a meeting previously adjourned for want of a quorum, holders of the requisite number of shares of each class and series entitled to vote thereat shall be present in person or by proxy, any business may be transacted that might have been transacted at the meeting as originally noticed. For purposes

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hereof, and, if authorized by the Board of Directors in its sole discretion and in accordance with Section 211 of the Delaware General Corporation Law (if such authorization is required by law), a stockholder or proxyholder may, by means of remote communication, be deemed to be present at any stockholders’ meeting for all purposes, including but not limited to establishing a quorum, participating in or voting at such a meeting.

Section 6.  Votes; Proxies.  Except as otherwise provided in the Certificate of Incorporation, at each meeting of stockholders, every stockholder of record on the date set by the Board of Directors for the determination of stockholders entitled to vote at such meeting, shall have one vote for each share of stock entitled to vote which is registered in such stockholder’s name on the books of the Corporation, and, in the election of directors, may vote cumulatively to the extent, if any, and in the manner authorized in the Certificate of Incorporation.

At each such meeting every stockholder entitled to vote shall be entitled to do so in person, or by proxy appointed by an instrument in writing or as otherwise permitted by law subscribed by such stockholder and bearing a date not more than three (3) years prior to the meeting in question, unless said instrument provides for a longer period during which it is to remain in force.  A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power.  A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or any interest in the Corporation generally.  A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing with the Secretary of the Corporation an instrument in writing or as otherwise permitted by law revoking the proxy or another duly executed proxy bearing a later date. For purposes hereof, and if authorized by the Board of Directors in its sole discretion and in accordance with Section 211 of the Delaware General Corporation Law (if such authorization is required by law), a stockholder or proxyholder may, by means of remote communication, participate in and vote at a meeting of stockholders.

Voting at meetings of stockholders need not be by written ballot; provided, however, that if any election of directors shall be by written ballot, and if authorized by the Board of Directors in its sole discretion and in accordance with Section 211(e) of the Delaware General Corporation Law, any ballot submitted by electronic submission in accordance with Section 211(e) shall be deemed to have been a vote made by written ballot.  Except as otherwise provided by law, voting at meetings of stockholders need not be conducted by inspectors of election unless so determined by the chairman of the meeting or by the holders of shares of stock having a majority of the votes which could be cast by the holders of all outstanding shares of stock entitled to vote thereon which are present in person or represented by proxy at such meeting.  If it is required or determined that inspectors of election be appointed, the chairman shall appoint two inspectors of election, who shall first take and subscribe an oath or affirmation faithfully to execute the duties of inspectors at such meeting with strict impartiality and according to the best of their ability.  The inspectors so appointed shall take charge of the polls and, after the balloting, shall make a certificate of the result of the vote taken.  No director or candidate for the office of director shall be appointed as such inspector.

At any meeting at which a quorum is present, a plurality of the votes properly cast for election to fill any vacancy on the Board of Directors shall be sufficient to elect a candidate to

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fill such vacancy, and a majority of the votes properly cast upon any other question shall decide the question, except in any case where a larger vote is required by law, the Certificate of Incorporation, these By-Laws, or otherwise.

Section 7.  Organization.  The Chairman of the Board, if there be one, or in his or her absence, any Vice Chairman, or in the absence of a Vice Chairman, the President, or in the absence of the President, any Vice President, shall call meetings of the stockholders to order and shall act as chairman thereof.  The Secretary of the Corporation, if present, shall act as secretary of all meetings of stockholders, and, in his or her absence, the presiding officer may appoint a secretary.

Section 8.  Consent of Stockholders in Lieu of Meeting.  Unless otherwise restricted by the Certificate of Incorporation, any action required or permitted by the Delaware General Corporation Law to be taken at any annual or special meeting of the stockholders of the Corporation, may be taken without a meeting, without prior notice and without a vote, if a consent or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to take such action at a meeting at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation by delivery to its registered office in Delaware, to its principal place of business, or to an officer or agent of the Corporation having custody of the books in which proceedings of meetings of stockholders are recorded.  Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested.

Every written consent shall bear the date of signature, or, for purposes of a written consent transmitted by telegram, cablegram or other electronic transmission, the date of deemed signature, of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within sixty (60) days of the earliest dated consent delivered to the Corporation in the manner required by the preceding paragraph of this section, written consents signed by, or deemed to have been signed by, a sufficient number of stockholders to take such action are so delivered to the Corporation.  The written consent of a stockholder or proxyholder may be transmitted by means of a telegram, cablegram or other electronic transmission from such stockholder or proxyholder, or by a person or persons authorized to act for such stockholder or proxyholder, in accordance with Section 228 of the Delaware General Corporation Law.

Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing.

ARTICLE IVDIRECTORS

Section 1.  Number.  The business and affairs of the Corporation shall be conducted and managed by a Board of Directors consisting of one or more directors, none of whom needs to be a stockholder.  The number of directors for each year shall be fixed at each annual meeting of stockholders, but if the number is not so fixed, the number shall remain as it stood immediately prior to such meeting.

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At each annual meeting of stockholders, the stockholders shall elect directors.  Each director so elected shall hold office, subject to the provisions of law, the Certificate of Incorporation, these By-Laws, or otherwise, until the next annual meeting of stockholders or until his or her successor is elected and qualified.

At any time during any year, except as otherwise provided by law, the Certificate of Incorporation, these By-Laws, or otherwise, the number of directors may be increased or reduced, in each case by the vote at a meeting at which a quorum is present of the holders a majority of the stock entitled to vote for the election of directors who are present or represented by proxy at the meeting, or by the consent of the holders a majority of the stock issued and outstanding and entitled to vote for the election of directors, or by vote of a majority of the directors in office at the time of such increase or decrease, regardless of whether such majority of directors constitutes a quorum.

Section 2.  Term of Office.  Each director shall hold office until the next annual meeting of stockholders and until his or her successor is duly elected and qualified or until his or her earlier death or resignation, subject to the right of the stockholders at any time to remove any director or directors as provided in Section 4 of this Article IV.

Section 3.  Vacancies.  If any vacancy shall occur among the directors, or if the number of directors shall at any time be increased, the directors then in office, although less than a quorum, by a majority vote may fill the vacancies or newly-created directorships, or any such vacancies or newly-created directorships may be filled by the stockholders at any meeting.

Section 4.  Removal by Stockholders.  Except as otherwise provided by law, the Certificate of Incorporation or otherwise, the holders of record of the capital stock of the Corporation entitled to vote for the election of directors may, by a majority vote, remove any director or directors, with or without cause, and, in their discretion, elect a new director or directors in place thereof.

Section 5.  Meetings.  Meetings of the Board of Directors shall be held at such place, within or without the State of Delaware, as may from time to time be fixed by resolution of the Board of Directors or by the Chairman of the Board, if there be one, or by the President, and as may be specified in the notice or waiver of notice of any meeting.  Meetings may be held at any time upon the call of the Chairman of the Board, if there be one, or the President or any two (2) of the directors in office by oral, telegraphic, telex, telecopy or other form of electronic transmission, or written notice, duly served or sent or mailed to each director not less than twenty-four (24) hours before such meeting, except that, if mailed, not less than seven (7) days before such meeting.

Meetings may be held at any time and place without notice if all the directors are present and do not object to the holding of such meeting for lack of proper notice or if those not present shall, in writing or by telegram, telex, telecopy or other form of electronic transmission, waive notice thereof.  A regular meeting of the Board may be held without notice immediately following the annual meeting of stockholders at the place where such meeting is held.  Regular meetings of the Board may also be held without notice at such time and place as shall from time to time be determined by resolution of the Board.  Except as otherwise provided by law, the

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Certificate of Incorporation or otherwise, neither the business to be transacted at, nor the purpose of, any regular or special meeting of the Board of Directors or any committee thereof need be specified in any written waiver of notice.

Members of the Board of Directors or any committee thereof may participate in a meeting of such Board or committee by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other and participation in a meeting pursuant to the foregoing provisions shall constitute presence in person at the meeting.

Section 6.  Votes.  Except as otherwise provided by law, the Certificate of Incorporation or otherwise, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors.

Section 7.  Quorum and Adjournment.  Except as otherwise provided by law, the Certificate of Incorporation or otherwise, a majority of the directors shall constitute a quorum for the transaction of business.  If at any meeting of the Board there shall be less than a quorum present, a majority of those present may adjourn the meeting from time to time without notice other than announcement of the adjournment at the meeting, and at such adjourned meeting at which a quorum is present any business may be transacted which might have been transacted at the meeting as originally noticed.

Section 8.  Compensation.  Directors shall receive compensation for their services, as such, and for service on any committee of the Board of Directors, as fixed by resolution of the Board of Directors, and for expenses of attendance at each regular or special meeting of the Board or any committee thereof.  Nothing in this Section shall be construed to preclude a director from serving the Corporation in any other capacity and receiving compensation therefor.

Section 9.  Action By Consent of Directors.  Unless otherwise restricted by the Certificate of Incorporation or these By-Laws, any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the Board or committee.  Such consent shall be treated as a vote adopted at a meeting for all purposes.  Such consents may be executed in one or more counterparts and not every Director or committee member need sign the same counterpart.

ARTICLE V           COMMITTEES OF DIRECTORS

Section 1.  Executive Committee.  The Board of Directors may appoint from its own number an Executive Committee of one (1) or more members, to serve during the pleasure of the Board, to consist of such directors as the Board may from time to time designate, and if there is more than one member of such committee, the Board shall designate the chairman thereof.

During the intervals between the meetings of the Board of Directors, except as otherwise provided by the Board of Directors in establishing such committee or otherwise, the Executive Committee shall possess and may exercise all the powers of the Board in the management and

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direction of the business and affairs of the Corporation; provided, that the Executive Committee shall not have the power:

(1)to adopt, amend or repeal any By-Law of the Corporation, or

(2)to approve or adopt, or to recommend to the stockholders, any action or matter expressly required by the Delaware General Corporation Law to be submitted to the stockholders for approval.

Section 2.  Audit Committee.  The Board of Directors may appoint from its own number an Audit Committee of one (1) or more members, who shall not be officers or employees of the Corporation to serve during the pleasure of the Board, and if there is more than one member of such committee, the Board shall designate the chairman thereof.

The Audit Committee, if any, shall review the annual financial statements of the Corporation prior to their submission to the Board of Directors, shall consult with the Corporation’s independent auditors, and may examine and consider such other matters in relation to the internal and external audit of the Corporation’s accounts and in relation to the financial affairs of the Corporation and its accounts, including the selection and retention of independent auditors, as the Audit Committee may, in its discretion, determine to be desirable.

Section 3.  Other Committees.  The Board of Directors may at any time appoint one or more other committees from its own number.  The Board may from time to time designate or alter, within the limits permitted by law, the Certificate of Incorporation and this Article V, if applicable, the duties, powers and number of members of such other committees or change their membership, and may at any time abolish such other committees or any of them.

Section 4.  General Provisions Applicable to All Committees.  The following provisions shall apply to all committees appointed pursuant to this Article V:

a.Procedure.  Each such committee shall, by a vote of a majority of its members, fix its own times and places of meeting, determine the number of its members constituting a quorum for the transaction of business, and prescribe its own rules of procedure, no change in which shall be made save by a majority vote of its members.

b.Reports.  Each such committee shall keep regular minutes of its proceedings, and all action by such committee shall, from time to time, be reported to the Board of Directors as the Board shall direct.  Such action shall be subject to review, amendment and repeal by the Board, provided that no rights of third parties shall be adversely affected by such review, amendment or repeal.

c.Appointment of Additional Members in place of Members Absent from or Disqualified from Voting at a Meeting.  If any member of a committee is absent from or disqualified from voting at a meeting, the member or members of such committee present at such meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the

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Board of Directors to act at the meeting in place of such absent or disqualified member.

d.Term of Office.  The members of any such committee shall hold office until the first meeting of the Board of Directors following the annual meeting of stockholders (or until such other time as the Board of Directors may determine, either in the vote establishing the committee or at the election of such member or otherwise) and until his or her successor is elected and qualified, or until he or she sooner dies, resigns, is removed, is replaced by change of membership or becomes disqualified by ceasing to be a director, or until the committee is sooner abolished by the Board of Directors.

ARTICLE VIOFFICERS

Section 1.  Officers.  The Board of Directors shall elect a President, a Secretary and a Treasurer, and, in their discretion, may elect a Chairman of the Board, one or more Vice Chairmen, a Controller, and one or more Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant Treasurers and Assistant Controllers, as they deem necessary or appropriate.  Such officers shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders (or at such other meeting as the Board shall determine), and each shall hold office for the term provided by the vote of the Board, except that each will be subject to removal from office in the discretion of the Board as provided herein.  The powers and duties of more than one office may be exercised and performed by the same person.

Section 2.  Vacancies.  Any vacancy in any office may be filled for the unexpired portion of the term by the Board of Directors, at any regular or special meeting.

Section 3.  Chairman of the Board.  The Chairman of the Board, if elected, shall be a member of the Board of Directors and shall preside at its meetings.  The Chairman, if other than the President, shall advise and counsel with the President, and shall perform such duties as from time to time may be assigned to him or her by the Board of Directors.

Section 4.  President.  The President shall be the chief executive officer of the Corporation.  Subject to the direction of the Board of Directors, the President shall have and exercise direct charge of and general supervision over the business and affairs of the Corporation and shall perform all duties incident to the office of the chief executive officer of a corporation and such other duties as from time to time may be assigned to him or her by the Board of Directors.  The President may but need not be a member of the Board of Directors.

Section 5.  Executive Vice Presidents and Vice Presidents.  Each Executive Vice President and Vice President shall have and exercise such powers and shall perform such duties as from time to time may be assigned to him or to her by the Board of Directors or the chief executive officer.

Section 6.  Secretary.  The Secretary shall keep the minutes of all meetings of the stockholders and of the Board of Directors in books provided for the purpose; shall see that all notices are duly given in accordance with the provisions of law and these By-Laws; the Secretary

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shall be custodian of the records and of the corporate seal or seals of the Corporation; shall see that the corporate seal is affixed to all documents the execution of which, on behalf of the Corporation under its seal, is duly authorized, and, when the seal is so affixed, he or she may attest the same; the Secretary may sign, with the Chairman, if any, any Vice Chairman, the President, an Executive Vice President or a Vice President, certificates of stock of the Corporation; and, in general, the Secretary shall perform all duties incident to the office of secretary of a corporation, and such other duties as from time to time may be assigned to him or her by the Board of Directors or by the chief executive officer.

Section 7.  Assistant Secretaries.  The Assistant Secretaries in order of their seniority shall, in the absence or disability of the Secretary, perform the duties and exercise the powers of the Secretary and shall perform such other duties as the Board of Directors shall prescribe or as from time to time may be assigned by the Secretary or by the chief executive officer.

Section 8.  Treasurer.  The Treasurer shall have charge of and be responsible for all funds, securities, receipts and disbursements of the Corporation, and shall deposit, or cause to be deposited, in the name of the Corporation, all monies or other valuable effects in such banks, trust companies or other depositaries as shall, from time to time, be selected by the Board of Directors; may endorse for collection on behalf of the Corporation checks, notes and other obligations; may sign receipts and vouchers for payments made to the Corporation; may sign checks of the Corporation, singly or jointly with another person as the Board of Directors may authorize, and pay out and dispose of the proceeds under the direction of the Board; shall render to the chief executive officer and to the Board of Directors, whenever requested, an account of the financial condition of the Corporation; may sign, with the Chairman, if any, any Vice Chairman, the President, or an Executive Vice President or a Vice President, certificates of stock of the Corporation; and in general, shall perform all the duties incident to the office of treasurer of a corporation, and such other duties as from time to time may be assigned to him or her by the Board of Directors or by the chief executive officer.  Unless the Board of Directors shall otherwise determine, the Treasurer shall be the chief financial officer of the Corporation.

Section 9.  Assistant Treasurers.  The Assistant Treasurers in order of their seniority shall, in the absence or disability of the Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors shall prescribe or as from time to time may be assigned by the Treasurer or by the chief executive officer.

Section 10.  Controller.  The Controller, if elected, shall be the chief accounting officer of the Corporation and shall perform all duties incident to the office of a controller of a corporation, and, in the absence or disability of the Treasurer or any Assistant Treasurer, perform the duties and exercise the powers of the Treasurer and shall perform such other duties as the Board of Directors shall prescribe or as from time to time may be assigned by the Treasurer or by the chief executive officer.

Section 11.  Assistant Controllers.  The Assistant Controllers in order of their seniority shall, in the absence or disability of the Controller, perform the duties and exercise the powers of the Controller and shall perform such other duties as the Board of Directors shall prescribe or as from time to time may be assigned by the Controller or by the chief executive officer.

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Section 12.  Subordinate Officers.  The Board of Directors may appoint such subordinate officers as it may deem desirable.  Each such officer shall hold office for such period, have such authority and perform such duties as the Board of Directors may prescribe.  The Board of Directors may, from time to time, authorize any officer to appoint and remove subordinate officers and to prescribe the powers and duties thereof.

Section 13.  Compensation.  The Board of Directors shall fix the compensation of all officers of the Corporation.  It may authorize any officer, upon whom the power of appointing subordinate officers may have been conferred, to fix the compensation of such subordinate officers.

Section 14.  Removal.  Any officer of the Corporation may be removed, with or without cause, by action of the Board of Directors.

Section 15.  Bonds.  The Board of Directors may require any officer of the Corporation to give a bond to the Corporation, conditional upon the faithful performance of his or her duties, with one or more sureties and in such amount as may be satisfactory to the Board of Directors.

ARTICLE VIIICERTIFICATES OF STOCK

Section 1.  Form and Execution of Certificates.  The interest of each stockholder of the Corporation shall be evidenced by a certificate or certificates for shares of stock in such form as the Board of Directors may from time to time prescribe.  The certificates of stock of each class shall be consecutively numbered and signed by the Chairman of the Board, if any, or any Vice Chairman, the President, an Executive Vice President or a Vice President and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer of the Corporation, and may be countersigned and registered in such manner as the Board of Directors may by resolution prescribe, and shall bear the corporate seal or a printed or engraved facsimile thereof.  Where any such certificate is signed by a transfer agent or transfer clerk acting on behalf of the Corporation, the signature or signatures of any such Chairman, Vice Chairman, President, Executive Vice President, Vice President, Treasurer, Assistant Treasurer, Secretary and/or Assistant Secretary may be facsimiles, engraved or printed.  In case any officer or officers, who shall have signed, or whose facsimile signature or signatures shall have been used on, any such certificate or certificates, shall cease to be such officer or officers, whether because of death, resignation or otherwise, before such certificate or certificates shall have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered by the Corporation as though the person or persons who signed such certificate or certificates or whose facsimile signature or signatures shall have been used thereon had not ceased to be such officer or officers.

In case the corporate seal which has been affixed to, impressed on, or reproduced in any such certificate or certificates shall cease to be the seal of the Corporation before such certificate or certificates have been delivered by the Corporation, such certificate or certificates may nevertheless be issued and delivered by the Corporation as though the seal affixed thereto, impressed thereon or reproduced therein had not ceased to be the seal of the Corporation.

Every certificate for shares of stock which are subject to any restriction on transfer pursuant to law, the Certificate of Incorporation, these By-Laws, or any agreement to which the

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Corporation is a party, shall have the restriction noted conspicuously on the certificate, and shall also set forth, on the face or back, either the full text of the restriction or a statement of the existence of such restriction and (except if such restriction is imposed by law) a statement that the Corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge.

Every certificate issued when the Corporation is authorized to issue more than one class or series of stock shall set forth on its face or back either the full text of the preferences, voting powers, qualifications, and special and relative rights of the shares of each class and series authorized to be issued, or a statement of the existence of such preferences, powers, qualifications and rights, and a statement that the Corporation will furnish a copy thereof to the holder of such certificate upon written request and without charge.

Section 2.  Transfer of Shares.  The shares of the stock of the Corporation shall be transferred on the books of the Corporation by the holder thereof in person or by his or her attorney lawfully constituted, upon surrender for cancellation of certificates for the same number of shares, with an assignment and power of transfer endorsed thereon or attached thereto, duly executed, with such proof or guaranty of the authenticity of the signature as the Corporation or its agents may reasonably require.  The Corporation shall be entitled to treat the holder of record of any share or shares of stock as the holder in fact thereof and accordingly shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person whether or not it shall have express or other notice thereof, save as expressly provided by law or by the Certificate of Incorporation.  It shall be the duty of each stockholder to notify the Corporation of his, her or its post office address.

Section 3.  Fixing Date for Determination of Stockholders of Record.  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of directors and which record date:  (a) in the case of determination of stockholders entitled to vote at any meeting of stockholders or adjournment thereof, shall, unless otherwise required by law, the Certificate of Incorporation or otherwise, not be more than sixty (60) nor less than ten (10) days before the date of such meeting; (b) in the case of determination of stockholders entitled to express consent to corporate action in writing without a meeting, shall, unless otherwise required by law, the Certificate of Incorporation or otherwise, not be prior to nor more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors; and (c) in the case of any other action, shall not precede the date on which the record date is fixed, nor be more than sixty (60) days prior to the date of such other action.  If no record date is fixed:  (a) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; (b) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action of the Board of Directors is required by law,

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shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation in accordance with applicable law, or, if prior action by the Board of Directors is required by law, shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action; and (c) the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.  A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, that the Board of Directors may fix a new record date for the adjourned meeting.

Section 4.  Lost or Destroyed Certificates.  In case of the loss or destruction of any certificate of stock, a new certificate may be issued under the following conditions:

a.The owner of said certificate shall file with the Secretary or any Assistant Secretary of the Corporation an affidavit giving the facts in relation to the ownership, and in relation to the loss or destruction of said certificate, stating its number and the number of shares represented thereby; such affidavit shall be in such form and contain such statements as shall satisfy the Chairman, if any, any Vice Chairman, the President, any Executive Vice President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer, that said certificate has been accidentally destroyed or lost, and that a new certificate ought to be issued in lieu thereof.  Upon being so satisfied, any such officer may require such owner to furnish the Corporation a bond in such penal sum and in such form as such officer may deem advisable, and with a surety or sureties approved by him or her, to indemnify and save harmless the Corporation from any claim, loss, damage or liability which may be occasioned by the issuance of a new certificate in lieu thereof.  Upon such bond being so filed, if so required, a new certificate for the same number of shares shall be issued to the owner of the certificate so lost or destroyed; and the transfer agent and registrar, if any, of stock shall countersign and register such new certificate upon receipt of a written order signed by any such officer, and thereupon the Corporation will save harmless said transfer agent and registrar in the premises.  In case of the surrender of the original certificate, in lieu of which a new certificate has been issued, or the surrender of such new certificate, for cancellation, the bond of indemnity given as a condition of the issue of such new certificate may be surrendered; or

b.The Board of Directors of the Corporation may by resolution authorize and direct any transfer agent or registrar of stock of the Corporation to issue and register respectively from time to time without further action or approval by or on behalf of the Corporation new certificates of stock to replace certificates reported lost, stolen or destroyed upon receipt of an affidavit of loss and bond of indemnity in form and amount and with surety satisfactory to such transfer agent or registrar in each instance or upon such terms and conditions as the Board of Directors may determine.

Section 5.  Uncertificated Shares.  The Board of Directors of the Corporation may by resolution provide that one or more of any or all classes or series of the stock of the Corporation

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shall be uncertificated shares, subject to the provisions of Section 158 of the Delaware General Corporation Law.

ARTICLE IX‘EXECUTION OF DOCUMENTS

Section 1.  Execution of Checks, Notes, etc.  All checks and drafts on the Corporation’s bank accounts and all bills of exchange and promissory notes, and all acceptances, obligations and other instruments for the payment of money, shall be signed by such officer or officers, or agent or agents, as shall be thereunto authorized from time to time by the Board of Directors, which may in its discretion authorize any such signatures to be facsimile.

Section 2.  Execution of Contracts, Assignments, etc.  Unless the Board of Directors shall have otherwise provided generally or in a specific instance, all contracts, agreements, endorsements, assignments, transfers, stock powers, or other instruments shall be signed by the Chairman of the Board, if any, any Vice Chairman, the President, any Executive Vice President, any Vice President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer.  The Board may, however, in its discretion, require any or all such instruments to be signed by any two or more of such officers, or may permit any or all of such instruments to be signed by such other officer or officers, agent or agents, as it shall be thereunto authorize from time to time.

Section 3.  Execution of Proxies.  The Chairman of the Board, if any, any Vice Chairman, the President, any Executive Vice President or any Vice President, and the Secretary, the Treasurer, any Assistant Secretary or any Assistant Treasurer, or any other officer designated by the Board of Directors, may sign on behalf of the Corporation proxies to vote upon shares of stock of other companies standing in the name of the Corporation.

ARTICLE IXINSPECTION OF BOOKS

The Board of Directors shall determine from time to time whether, and if allowed, to what extent and at what time and places and under what conditions and regulations, the accounts and books of the Corporation (except such as may by law be specifically open to inspection) or any of them, shall be open to the inspection of the stockholders, and no stockholder shall have any right to inspect any account or book or document of the Corporation, except as conferred by the laws of the State of Delaware, unless and until authorized so to do by resolution of the Board of Directors or of the stockholders of the Corporation.

ARTICLE XFISCAL YEAR

The fiscal year of the Corporation shall be determined from time to time by vote of the Board of Directors.

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ARTICLE XIAMENDMENTS

These By-Laws may be altered, amended, changed or repealed and new By-Laws adopted by the stockholders or, to the extent provided in the Certificate of Incorporation, by the Board of Directors, in either case at any meeting called for that purpose at which a quorum shall be present.  Any by-law, whether made, altered, amended, changed or repealed by the stockholders or the Board of Directors may be repealed, amended, changed, further amended, changed, repealed or reinstated, as the case may be, either by the stockholders or by the Board of Directors, as herein provided; except that this Article XI may be altered, amended, changed or repealed only by vote of the stockholders.

ARTICLE XIIINDEMNIFICATION

Section 1.  Indemnification.

a.Actions By Third Parties.  Subject to Section 2 of this Article XII, the Corporation shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, any person who was or is a party or is threatened to be made a party to or is otherwise involved in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that such person (or a person for whom he or she is the legal representative) is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, member, trustee, employee or agent of another corporation, partnership, joint venture, limited liability company, trust or other enterprise, or any non-profit organization (any such enterprise or non-profit organization, an “Entity”), against all liability, losses, expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if it shall be determined, pursuant to Section 2 of this Article XII, that such person acted in good faith and in a manner that he or she reasonably believed to be in or not opposed to the best interest of the Corporation, and, in the case of any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful.  The termination of any action, suit or proceeding against any such person by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that such person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interest of the Corporation, or, in the case of a criminal action or proceeding, that such person had reasonable cause to believe that his or her conduct was unlawful.

b.Actions By or on Behalf of the Corporation.  Subject to Section 2 of this Article XII, the Corporation may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, member, trustee, employee or agent of another Entity, as

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defined in subsection a. of this Section 1, against expenses (including attorneys’ fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if it shall be determined, pursuant to Section 2 of this Article XII, that such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation; provided, that no indemnification shall be made in respect of any claim, issue or matter as to which any such person shall have been adjudged to be liable to the Corporation unless and only to the extent that the Court of Chancery of the State of Delaware or the court in which such action or suit was brought shall determine upon application that despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.

c.Indemnification for Expenses of Successful Defense.  To the extent that any present or former director or officer of this Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in subsection a. or b. of this Section 1, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

Section 2.  Authorization.  To obtain indemnification under subsection a. or b. of Section 1 of this Article XII, the claimant shall submit to the Corporation a written request including therewith such documentation as is reasonably necessary to determine whether and to what extent the claimant is entitled to indemnification.  Any indemnification under such subsection a. or b. (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the person whose conduct is at issue has met the applicable standard of conduct set forth in such subsection a. or b.  Subject to the receipt by the Corporation of such written request, such determination shall be made, with respect to a person who is a director or officer of the Corporation at the time of such determination, (i) by a majority vote of the directors who were not parties to such action, suit or proceeding, even though less than a quorum, or (ii) by a committee of such directors designated by majority vote of such directors, even though less than a quorum, or (iii) if there are no such directors, or if such directors so direct, by independent legal counsel in a written opinion, or (iv) by the stockholders.  Such determination shall be made, with respect to former directors and officers, by any person or persons having the authority to act on the matter on behalf of the Corporation.  To the extent, however, that a present or former director or officer of the Corporation has been successful on the merits or otherwise in defense of any action, suit or proceeding described previously, or in the defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorney’s fees) actually and reasonably incurred by such person in connection therewith without the necessity of authorization in the specific case. Notwithstanding anything in this Article XII to the contrary, the Corporation shall not be obligated pursuant to any provisions of this Article XIIto indemnify any person for any expenses incurred in an action, suit or proceeding (or part thereof) initiated by such person (including any action brought by such person to recover expenses, including attorney’s fees, incurred in the prosecution of any claim for indemnification hereunder) unless

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such action, suit or proceeding (or part thereof) was authorized or consented to by the Board of Directors of the Corporation).

Section 3.  Expense Advance.  Expenses (including attorneys’ fees) incurred by a present or former officer or director of the Corporation in defending any civil, criminal, administrative or investigative action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized in one of the manners provided in Section 2 of this Article XII upon receipt of an undertaking by or on behalf of such person to repay such amount, if it shall ultimately be determined that he or she is not entitled to be indemnified by the Corporation as authorized in this Article XII.  Such expenses (including attorneys’ fees) incurred by other employees or agents of the Corporation may be so paid upon such terms and conditions, if any, as the Corporation deems appropriate.

Section 4.  Nonexclusivity.  The indemnification and advancement of expenses provided by, or granted pursuant to, the other Sections of this Article XII shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under any statute, by-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, partner, member, trustee, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 5.  Insurance.  The Corporation shall have power to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, member, trustee, employee or agent of another Entity, as defined in Section 1 a. of this Article XII, against any liability asserted against, and incurred by, him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify such person against such liability under the provisions of this Article XII or Section 145 of the Delaware General Corporation Law.

Section 6.  “The Corporation”.  For the purposes of this Article XII, references to “the Corporation” shall include (i) the corporation surviving or resulting from a merger or consolidation to which this Corporation is a party but is not the resulting or surviving corporation, and (ii) to the extent that the board of directors of the resulting corporation so decides, any constituent corporation (including any constituent of a constituent) which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers and employees or agents if its separate existence had continued, so that any person who is or was a director, officer, employee or agent of such constituent corporation or is or was serving at the request of such constituent corporation as director, officer, partner, member, trustee, employee or agent of another Entity, as defined in Section 1 a. of this Article XII, shall stand in the same position under the provisions of this Article XII with respect to the resulting or surviving corporation as he or she would have had with respect such constituent corporation if its separate existence had continued.

Section 7.  Other Indemnification.  The Corporation’s obligation, if any, to indemnify any person who was or is serving at its request as a director, officer, partner, member, trustee,

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employee or agent of another Entity, as defined in Section 1 a. of this Article XII, shall be reduced by any amount such person may collect as indemnification from such other Entity or from insurance.

Section 8.  Other Definitions.  For purposes of this Article XII, references to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such person with respect to an employee benefit plan, its participants, or beneficiaries; and a person who acted in good faith and in a manner he or she reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in a manner “not opposed to the best interests of the Corporation” as referred to in this Article XII.

Section 9.  Continuation of Indemnification.  The indemnification and advancement of expenses provided by, or granted pursuant to, this Article XII shall, unless otherwise provided when authorized or ratified, continue as to a person who has ceased to be a director, officer, partner, member, trustee, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such a person.

Section 10.  Amendment or Repeal.  Neither the amendment or repeal of this Article XII nor the adoption of any provision of these By-Laws inconsistent with this Article XII shall reduce, eliminate or adversely affect any right or protection hereunder of any person in respect of any act or omission occurring prior to the effectiveness of such amendment, repeal or adoption.

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EX-3.4

Exhibit 3.4

By-laws to be in effect upon the

 effectiveness of this Form 10

AMENDED AND RESTATED BY-LAWS

OF

GLENROSE INSTRUMENTS INC.

ARTICLE I.

STOCKHOLDERS

1.1Place of Meetings.  All meetings of stockholders shall be held at such place as may be designated from time to time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President or, if not so designated, at the principal office of the corporation.

1.2Annual Meeting.  The annual meeting of stockholders for the election of directors and for the transaction of such other business as may properly be brought before the meeting shall be held on a date and at a time designated by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President (which date shall not be a legal holiday in the place where the meeting is to be held). If no annual meeting is held in accordance with the foregoing provisions, a special meeting may be held in lieu of the annual meeting, and any action taken at that special meeting shall have the same effect as if it had been taken at the annual meeting, and in such case all references in these By-laws to the annual meeting of the stockholders shall be deemed to refer to such special meeting.

1.3Special Meetings.  Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President, but such special meetings may not be called by any other person or persons. Business transacted at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes stated in the notice of meeting.

1.4Notice of Meetings.  Except as otherwise provided by law, notice of each meeting of stockholders, whether annual or special, shall be given not less than 10 nor more than 60 days before the date of the meeting to each stockholder entitled to vote at such meeting. Without limiting the manner by which notice otherwise may be given to stockholders, any notice shall be effective if given by a form of electronic transmission consented to (in a manner consistent with the General Corporation Law of the State of Delaware) by the stockholder to whom the notice is given. The notices of all meetings shall state the place, date and time of the meeting and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such meeting. The notice of a special meeting shall state, in addition, the purpose or purposes for which the meeting is called. If notice is given by mail, such notice shall be deemed given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder’s address as it appears on the records of the corporation. If notice is given by electronic transmission, such notice shall be deemed given at the time specified in Section 232 of the General Corporation Law of the State of Delaware.

1.5Voting List.  The Secretary shall prepare, at least 10 days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, for a period of at least 10 days prior to the meeting: (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any stockholder who is present.

1.6Quorum.  Except as otherwise provided by law, the Certificate of Incorporation or these By-laws, the holders of a majority in voting power of the shares of the capital stock of the corporation

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issued and outstanding and entitled to vote at the meeting, present in person, present by means of remote communication in a manner, if any, authorized by the Board of Directors in its sole discretion, or represented by proxy, shall constitute a quorum for the transaction of business. A quorum, once established at a meeting, shall not be broken by the withdrawal of enough votes to leave less than a quorum.

1.7Adjournments.  Any meeting of stockholders may be adjourned from time to time to any other time and to any other place at which a meeting of stockholders may be held under these By-laws by the stockholders present or represented at the meeting and entitled to vote, although less than a quorum, or, if no stockholder is present, by any officer entitled to preside at or to act as secretary of such meeting. It shall not be necessary to notify any stockholder of any adjournment of less than 30 days if the time and place of the adjourned meeting, and the means of remote communication, if any, by which stockholders and proxyholders may be deemed to be present in person and vote at such adjourned meeting, are announced at the meeting at which adjournment is taken, unless after the adjournment a new record date is fixed for the adjourned meeting. At the adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting.

1.8Voting and Proxies.  Each stockholder shall have one vote for each share of stock entitled to vote held of record by such stockholder and a proportionate vote for each fractional share so held, unless otherwise provided by law or the Certificate of Incorporation. Each stockholder of record entitled to vote at a meeting of stockholders may vote in person (including by means of remote communications, if any, by which stockholders may be deemed to be present in person and vote at such meeting) or may authorize another person or persons to vote for such stockholder by a proxy executed or transmitted in a manner permitted by the General Corporation Law of the State of Delaware by the stockholder or such stockholder’s authorized agent and delivered (including by electronic transmission) to the Secretary of the corporation. No such proxy shall be voted upon after three years from the date of its execution, unless the proxy expressly provides for a longer period.

1.9Action at Meeting.  When a quorum is present at any meeting, any matter other than the election of directors to be voted upon by the stockholders at such meeting shall be decided by the affirmative vote of the holders of a majority in voting power of the shares of stock present or represented and voting on such matter (or if there are two or more classes of stock entitled to vote as separate classes, then in the case of each such class, the holders of a majority in voting power of the shares of stock of that class present or represented and voting on such matter), except when a different vote is required by law, the Certificate of Incorporation or these By-laws. When a quorum is present at any meeting, any election by stockholders of directors shall be determined by a plurality of the votes cast by the stockholders entitled to vote on the election.

1.10Nomination of Directors.

(a)Except for (1) any directors entitled to be elected by the holders of preferred stock, (2) any directors elected in accordance with Section 2.8 hereof by the Board of Directors to fill a vacancy or newly-created directorships or (3) as otherwise required by applicable law or stock market regulation, only persons who are nominated in accordance with the procedures in this Section 1.10 shall be eligible for election as directors. Nomination for election to the Board of Directors at a meeting of stockholders may be made (i) by or at the direction of the Board of Directors or (ii) by any stockholder of the corporation who (x) complies with the notice procedures set forth in Section 1.10(b) and (y) is a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such meeting.

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(b)To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation as follows: (i) in the case of an election of directors at an annual meeting of stockholders, not less than 90 days nor more than 120 days prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2006 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs; or (ii) in the case of an election of directors at a special meeting of stockholders, provided that the Board of Directors has determined that directors shall be elected at such meeting, not earlier than the 120th day prior to such special meeting and not later than the close of business on the later of (x) the 90th day prior to such special meeting and (y) the tenth day following the day on which notice of the date of such special meeting was mailed or public disclosure of the date of such special meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an annual meeting (or the public announcement thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth: (A) as to each proposed nominee (1) such person’s name, age, business address and, if known, residence address, (2) such person’s principal occupation or employment, (3) the class and number of shares of stock of the corporation that are beneficially owned by such person, and (4) any other information concerning such person that must be disclosed as to nominees in proxy solicitations pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the “Exchange Act”); (B) as to the stockholder giving the notice (1) such stockholder’s name and address, as they appear on the corporation’s books, (2) the class and number of shares of stock of the corporation that are owned, beneficially and of record, by such stockholder, (3) a description of all arrangements or understandings between such stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder, (4) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the person(s) named in its notice and (5) a representation whether the stockholder intends or is part of a group that intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to elect the nominee and/or (y) otherwise to solicit proxies from stockholders in support of such nomination; and (C) as to the beneficial owner, if any, on whose behalf the nomination is being made (1) such beneficial owner’s name and address, (2) the class and number of shares of stock of the corporation that are beneficially owned by such beneficial owner, (3) a description of all arrangements or understandings between such beneficial owner and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made and (4) a representation whether the beneficial owner intends or is part of a group that intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock requirement to elect the nominee and/or (y) otherwise to solicit proxies from stockholders in support of such nomination. In addition, to be effective, the stockholder’s notice must be accompanied by the written consent of the proposed nominee to serve as a director if elected. The corporation may require any proposed nominee to furnish such other information as may reasonably be required to determine the eligibility of such proposed nominee to serve as a director of the corporation. A stockholder shall not have complied with this Section 1.10(b) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case

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may be, proxies in support of such stockholder’s nominee in contravention of the representations with respect thereto required by this Section 1.10.

(c)The chairman of any meeting shall have the power and duty to determine whether a nomination was made in accordance with the provisions of this Section 1.10 (including whether the stockholder or beneficial owner, if any, on whose behalf the nomination is made solicited (or is part of a group that solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s nominee in compliance with the representations with respect thereto required by this Section 1.10), and if the chairman should determine that a nomination was not made in accordance with the provisions of this Section 1.10, the chairman shall so declare to the meeting and such nomination shall be disregarded.

(d)Except as otherwise required by law, nothing in this Section 1.10 shall obligate the corporation or the Board of Directors to include in any proxy statement or other stockholder communication distributed on behalf of the corporation or the Board of Directors information with respect to any nominee for director submitted by a stockholder.

(e)Notwithstanding the foregoing provisions of this Section 1.10, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual or special meeting of stockholders of the corporation to present a nomination, such nomination shall be disregarded, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 1.10, to be considered a qualified representative of the stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

(f)For purposes of this Section 1.10, “public disclosure” shall include disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

1.11Notice of Business at Annual Meetings.

(a)At any annual meeting of the stockholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before an annual meeting, business must be (1) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Board of Directors, (2) otherwise properly brought before the meeting by or at the direction of the Board of Directors, or (3) properly brought before the meeting by a stockholder. For business to be properly brought before an annual meeting by a stockholder, (i) if such business relates to the nomination of a person for election as a director of the corporation, the procedures in Section 1.10 must be complied with and (ii) if such business relates to any other matter, the business must constitute a proper matter under Delaware law for stockholder action and the stockholder must (x) have given timely notice thereof in writing to the Secretary in accordance with the procedures set forth in Section 1.11(b) and (y) be a stockholder of record on the date of the giving of such notice and on the record date for the determination of stockholders entitled to vote at such annual meeting.

(b)To be timely, a stockholder’s notice must be received in writing by the Secretary at the principal executive offices of the corporation not less than 90 days nor more than 120 days

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prior to the first anniversary of the preceding year’s annual meeting; provided, however, that (x) in the case of the annual meeting of stockholders of the corporation to be held in 2006 or (y) in the event that the date of the annual meeting in any other year is advanced by more than 20 days, or delayed by more than 60 days, from the first anniversary of the preceding year’s annual meeting, a stockholder’s notice must be so received not earlier than the 120th day prior to such annual meeting and not later than the close of business on the later of (A) the 90th day prior to such annual meeting and (B) the tenth day following the day on which notice of the date of such annual meeting was mailed or public disclosure of the date of such annual meeting was made, whichever first occurs. In no event shall the adjournment or postponement of an annual meeting (or the public announcement thereof) commence a new time period (or extend any time period) for the giving of a stockholder’s notice.

The stockholder’s notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before the annual meeting (1) a brief description of the business desired to be brought before the annual meeting, the text relating to the business (including the text of any resolutions proposed for consideration and in the event that such business includes a proposal to amend the By-laws, the language of the proposed amendment), and the reasons for conducting such business at the annual meeting, (2) the name and address, as they appear on the corporation’s books, of the stockholder proposing such business, and the name and address of the beneficial owner, if any, on whose behalf the proposal is made, (3) the class and number of shares of stock of the corporation that are owned, of record and beneficially, by the stockholder and beneficial owner, if any, (4) a description of all arrangements or understandings between such stockholder or such beneficial owner, if any, and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of the stockholder or such beneficial owner, if any, in such business, (5) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting and (6) a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group that intends (x) to deliver a proxy statement and/or form of proxy to holders of at least the percentage of the corporation’s outstanding capital stock required to approve or adopt the proposal and/or (y) otherwise to solicit proxies from stockholders in support of such proposal. Notwithstanding anything in these By-laws to the contrary, no business shall be conducted at any annual meeting of stockholders except in accordance with the procedures set forth in this Section 1.11; provided that any stockholder proposal that complies with Rule 14a-8 of the proxy rules (or any successor provision) promulgated under the Securities Exchange Act of 1934, as amended, and is to be included in the corporation’s proxy statement for an annual meeting of stockholders shall be deemed to comply with the requirements of this Section 1.11. A stockholder shall not have complied with this Section 1.11(b) if the stockholder (or beneficial owner, if any, on whose behalf the nomination is made) solicits or does not solicit, as the case may be, proxies in support of such stockholder’s proposal in contravention of the representations with respect thereto required by this Section 1.11.

(c)The chairman of any meeting shall have the power and duty to determine whether business was properly brought before the meeting in accordance with the provisions of this Section 1.11 (including whether the stockholder or beneficial owner, if any, on whose behalf the proposal is made solicited (or is part of a group that solicited) or did not so solicit, as the case may be, proxies in support of such stockholder’s proposal in compliance with the representation with respect thereto required by this Section 1.11), and if the chairman should determine that business was not properly brought before the meeting in accordance with the provisions of this Section 1.11, the chairman shall so declare to the meeting and such business shall not be brought before the meeting.

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(d)Notwithstanding the foregoing provisions of this Section 1.11, if the stockholder (or a qualified representative of the stockholder) does not appear at the annual meeting of stockholders of the corporation to present business, such business shall not be considered, notwithstanding that proxies in respect of such vote may have been received by the corporation. For purposes of this Section 1.11, to be considered a qualified representative of the stockholder, a person must be authorized by a written instrument executed by such stockholder or an electronic transmission delivered by such stockholder to act for such stockholder as a proxy at the meeting of stockholders and such person must produce such written instrument or electronic transmission, or a reliable reproduction of the written instrument or electronic transmission, at the meeting of stockholders.

(e)For purposes of this Section 1.11, “public disclosure” shall include disclosure in a press release reported by the Dow Jones New Service, Associated Press or comparable national news service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act.

1.12Conduct of Meetings.

(a)Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the Chairman’s absence by the Vice Chairman of the Board, if any, or in the Vice Chairman’s absence by the Chief Executive Officer, or in the Chief Executive Officer’s absence, by the President, or in the President’s absence by a Vice President, or in the absence of all of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen by vote of the stockholders at the meeting. The Secretary shall act as secretary of the meeting, but in the Secretary’s absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

(b)The Board of Directors may adopt by resolution such rules, regulations and procedures for the conduct of any meeting of stockholders of the corporation as it shall deem appropriate including such guidelines and procedures as it may deem appropriate regarding the participation by means of remote communication of stockholders and proxyholders not physically present at a meeting. Except to the extent inconsistent with such rules, regulations and procedures as adopted by the Board of Directors, the chairman of any meeting of stockholders shall have the right and authority to prescribe such rules, regulations and procedures and to do all such acts as, in the judgment of such chairman, are appropriate for the proper conduct of the meeting. Such rules, regulations or procedures, whether adopted by the Board of Directors or prescribed by the chairman of the meeting, may include, without limitation, the following: (i) the establishment of an agenda or order of business for the meeting; (ii) rules and procedures for maintaining order at the meeting and the safety of those present; (iii) limitations on attendance at or participation in the meeting to stockholders of record of the corporation, their duly authorized and constituted proxies or such other persons as shall be determined; (iv) restrictions on entry to the meeting after the time fixed for the commencement thereof; and (v) limitations on the time allotted to questions or comments by participants. Unless and to the extent determined by the Board of Directors or the chairman of the meeting, meetings of stockholders shall not be required to be held in accordance with the rules of parliamentary procedure.

(c)The chairman of the meeting shall announce at the meeting when the polls for each matter to be voted upon at the meeting will be opened and closed.  If no announcement is made, the polls shall be deemed to have opened when the meeting is convened and closed upon the final adjournment of the meeting. After the polls close, no ballots, proxies or votes or any revocations or changes thereto may be accepted.

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(d)In advance of any meeting of stockholders, the Board of Directors, the Chairman of the Board, the Chief Executive Officer or the President shall appoint one or more inspectors of election to act at the meeting and make a written report thereof. One or more other persons may be designated as alternate inspectors to replace any inspector who fails to act. If no inspector or alternate is present, ready and willing to act at a meeting of stockholders, the chairman of the meeting shall appoint one or more inspectors to act at the meeting. Unless otherwise required by law, inspectors may be officers, employees or agents of the corporation. Each inspector, before entering upon the discharge of such inspector’s duties, shall take and sign an oath faithfully to execute the duties of inspector with strict impartiality and according to the best of such inspector’s ability. The inspector shall have the duties prescribed by law and shall take charge of the polls and, when the vote in completed, shall make a certificate of the result of the vote taken and of such other facts as may be required by law.

1.13No Action by Consent in Lieu of a Meeting. Stockholders of the corporation may not take any action by written consent in lieu of a meeting.

ARTICLE II.

DIRECTORS

2.1General Powers.  The business and affairs of the corporation shall be managed by or under the direction of a Board of Directors, who may exercise all of the powers of the corporation except as otherwise provided by law or the Certificate of Incorporation.

2.2Number, Election and Qualification.  Subject to the rights of holders of any series of preferred stock to elect directors, the number of directors of the Corporation shall be established by the Board of Directors. Election of directors need not be by written ballot. Directors need not be stockholders of the corporation.

2.3Classes of Directors.  Subject to the rights of holders of any series of preferred stock to elect directors, the Board of Directors shall consist of one class.

2.4Terms of Office.  Subject to the rights of holders of any series of preferred stock to elect directors, each director shall serve for a term ending on the date of the first annual meeting following the annual meeting at which such director was elected; provided, that each director elected or appointed as a director in 2005 shall serve for a term expiring at the corporation’s annual meeting of stockholders held in 2006; provided further, that the term of each director shall continue until the election and qualification of a successor and be subject to such director’s earlier death, resignation or removal.

2.5Quorum.  The greater of (a) a majority of the directors at any time in office and (b) one-third of the number of directors fixed by the Board of Directors shall constitute a quorum. If at any meeting of the Board of Directors there shall be less than such a quorum, a majority of the directors present may adjourn the meeting from time to time without further notice other than announcement at the meeting, until a quorum shall be present.

2.6Action at Meeting.  Every act or decision done or made by a majority of the directors present at a meeting duly held at which a quorum is present shall be regarded as the act of the Board of Directors unless a greater number is required by law or by the Certificate of Incorporation.

2.7Removal.  Subject to the rights of holder of any series of preferred stock, directors of the corporation may be removed only for cause and only by the affirmative vote of the holders of at least 75%

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of the votes that all the stockholders would be entitled to cast in any annual election of directors or class of directors.

2.8Vacancies.  Subject to the rights of holder of any series of preferred stock, any vacancy or newly-created directorships on the Board of Directors, however occurring, shall be filled only by vote of a majority of the directors then in office, although less than a quorum, or by a sole remaining director and shall not be filled by the stockholders. A director elected to fill a vacancy shall hold office until the next election of the class for which such director shall have been chosen, subject to the election and qualification of a successor or until such director’s earlier death, resignation or removal.

2.9Resignation.  Any director may resign by delivering a resignation in writing or by electronic transmission to the corporation at its principal office or to the Chairman of the Board, the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event.

2.10Regular Meetings.  Regular meetings of the Board of Directors may be held without notice at such time and place as shall be determined from time to time by the Board of Directors; provided that any director who is absent when such a determination is made shall be given notice of the determination. A regular meeting of the Board of Directors may be held without notice immediately after and at the same place as the annual meeting of stockholders.

2.11Special Meetings.  Special meetings of the Board of Directors may be held at any time and place designated in a call by the Chairman of the Board, the Chief Executive Officer, the President, two or more directors, or by one director in the event that there is only a single director in office.

2.12Notice of Special Meetings.  Notice of any special meeting of directors shall be given to each director by the Secretary or by the officer or one of the directors calling the meeting. Notice shall be duly given to each director (a) in person or by telephone at least 24 hours in advance of the meeting, (b) by sending written notice via reputable overnight courier, telecopy or electronic mail, or delivering written notice by hand, to such director’s last known business, home or electronic mail address at least 48 hours in advance of the meeting, or (c) by sending written notice via first-class mail to such director’s last known business or home address at least 72 hours in advance of the meeting. A notice or waiver of notice of a meeting of the Board of Directors need not specify the purposes of the meeting.

2.13Meetings by Conference Communications Equipment.  Directors may participate in meetings of the Board of Directors or any committee thereof by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation by such means shall constitute presence in person at such meeting.

2.14Action by Consent.  Any action required or permitted to be taken at any meeting of the Board of Directors or of any committee thereof may be taken without a meeting, if all members of the Board of Directors or committee, as the case may be, consent to the action in writing or by electronic transmission, and the written consents or electronic transmissions are filed with the minutes of proceedings of the Board of Directors or committee.

2.15Committees.  The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board of Directors may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members of the committee present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another

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member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors and subject to the provisions of law, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the corporation and may authorize the seal of the corporation to be affixed to all papers that may require it. Each such committee shall keep minutes and make such reports as the Board of Directors may from time to time request. Except as the Board of Directors may otherwise determine, any committee may make rules for the conduct of its business, but unless otherwise provided by the directors or in such rules, its business shall be conducted as nearly as possible in the same manner as is provided in these By-laws for the Board of Directors. Except as otherwise provided in the Certificate of Incorporation, these By-laws, or the resolution of the Board of Directors designating the committee, a committee may create one or more subcommittees, each subcommittee to consist of one or more members of the committee, and delegate to a subcommittee any or all of the powers and authority of the committee.

2.16Compensation of Directors.  Directors may be paid such compensation for their services and such reimbursement for expenses of attendance at meetings as the Board of Directors may from time to time determine. No such payment shall preclude any director from serving the corporation or any of its parent or subsidiary entities in any other capacity and receiving compensation for such service.

ARTICLE III.

OFFICERS

3.1Titles.  The officers of the corporation shall consist of a Chief Executive Officer, a President, a Secretary, a Treasurer and such other officers with such other titles as the Board of Directors shall determine, including a Chairman of the Board, a Vice Chairman of the Board, and one or more Vice Presidents, Assistant Treasurers, and Assistant Secretaries. The Board of Directors may appoint such other officers as it may deem appropriate.

3.2Election.  The Chief Executive Officer, President, Treasurer and Secretary shall be elected annually by the Board of Directors at its first meeting following the annual meeting of stockholders. Other officers may be appointed by the Board of Directors at such meeting or at any other meeting.

3.3Qualification.  No officer need be a stockholder. Any two or more offices may be held by the same person.

3.4Tenure.  Except as otherwise provided by law, by the Certificate of Incorporation or by these By-laws, each officer shall hold office until such officer’s successor is elected and qualified, unless a different term is specified in the resolution electing or appointing such officer, or until such officer’s earlier death, resignation or removal.

3.5Resignation and Removal.  Any officer may resign by delivering a written resignation to the corporation at its principal office or to the Chief Executive Officer, the President or the Secretary. Such resignation shall be effective upon receipt unless it is specified to be effective at some later time or upon the happening of some later event. Any officer may be removed at any time, with or without cause, by vote of a majority of the directors then in office. Except as the Board of Directors may otherwise determine, no officer who resigns or is removed shall have any right to any compensation as an officer for any period following such officer’s resignation or removal, or any right to damages on account of such removal, whether such officer’s compensation be by the month or by the year or otherwise, unless such compensation is expressly provided for in a duly authorized written agreement with the corporation.

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3.6Vacancies.  The Board of Directors may fill any vacancy occurring in any office for any reason and may, in its discretion, leave unfilled for such period as it may determine any offices other than those of Chief Executive Officer, President, Treasurer and Secretary. Each such successor shall hold office for the unexpired term of such officer’s predecessor and until a successor is elected and qualified, or until such officer’s earlier death, resignation or removal.

3.7Chairman of the Board.  The Board of Directors may appoint from its members a Chairman of the Board, who need not be an employee or officer of the corporation. If the Board of Directors appoints a Chairman of the Board, such Chairman shall perform such duties and possess such powers as are assigned by the Board of Directors and, if the Chairman of the Board is also designated as the corporation’s Chief Executive Officer, shall have the powers and duties of the Chief Executive Officer prescribed in Section 3.8 of these By-laws. Unless otherwise provided by the Board of Directors, the Chairman of the Board shall preside at all meetings of the Board of Directors and stockholders.

3.8President; Chief Executive Officer.  Unless the Board of Directors has designated the Chairman of the Board or another person as the corporation’s Chief Executive Officer, the President shall be the Chief Executive Officer of the corporation. The Chief Executive Officer shall have general charge and supervision of the business of the Corporation subject to the direction of the Board of Directors. The President shall perform such other duties and shall have such other powers as the Board of Directors or the Chief Executive Officer (if the President is not the Chief Executive Officer) may from time to time prescribe. In the event of the absence, inability or refusal to act of the Chief Executive Officer or the President (if the President is not the Chief Executive Officer), the Vice President (or if there shall be more than one, the Vice Presidents in the order determined by the Board of Directors) shall perform the duties of the Chief Executive Officer and when so performing such duties shall have all the powers of and be subject to all the restrictions upon the Chief Executive Officer.

3.9Vice Presidents.  Any Vice President shall perform such duties and possess such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. The Board of Directors may assign to any Vice President the title of Executive Vice President, Senior Vice President or any other title selected by the Board of Directors.

3.10Secretary and Assistant Secretaries.  The Secretary shall perform such duties and shall have such powers as the Board of Directors or the Chief Executive Officer may from time to time prescribe. In addition, the Secretary shall perform such duties and have such powers as are incident to the office of the secretary, including the duty and power to give notices of all meetings of stockholders and special meetings of the Board of Directors, to attend all meetings of stockholders and the Board of Directors and keep a record of the proceedings, to maintain a stock ledger and prepare lists of stockholders and their addresses as required, to be custodian of corporate records and the corporate seal and to affix and attest to the same on documents. Any Assistant Secretary shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Secretary may from time to time prescribe. In the event of the absence, inability or refusal to act of the Secretary, the Assistant Secretary (or if there shall be more than one, the Assistant Secretaries in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Secretary. In the absence of the Secretary or any Assistant Secretary at any meeting of stockholders or directors, the chairman of the meeting shall designate a temporary secretary to keep a record of the meeting.

3.11Treasurer and Assistant Treasurers.  The Treasurer shall perform such duties and shall have such powers as may from time to time be assigned by the Board of Directors or the Chief Executive Officer. In addition, the Treasurer shall perform such duties and have such powers as are incident to the office of treasurer, including the duty and power to keep and be responsible for all funds and securities of the corporation, to deposit funds of the corporation in depositories selected in accordance with these

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By-laws, to disburse such funds as ordered by the Board of Directors, to make proper accounts of such funds, and to render as required by the Board of Directors statements of all such transactions and of the financial condition of the corporation. The Assistant Treasurers shall perform such duties and possess such powers as the Board of Directors, the Chief Executive Officer or the Treasurer may from time to time prescribe. In the event of the absence, inability or refusal to act of the Treasurer, the Assistant Treasurer (or if there shall be more than one, the Assistant Treasurers in the order determined by the Board of Directors) shall perform the duties and exercise the powers of the Treasurer.

3.12Salaries.  Officers of the corporation shall be entitled to such salaries, compensation or reimbursement as shall be fixed or allowed from time to time by the Board of Directors.

ARTICLE IV.

CAPITAL STOCK

4.1Issuance of Stock.  Subject to the provisions of the Certificate of Incorporation, the whole or any part of any unissued balance of the authorized capital stock of the corporation or the whole or any part of any shares of the authorized capital stock of the corporation held in the corporation’s treasury may be issued, sold, transferred or otherwise disposed of by vote of the Board of Directors in such manner, for such lawful consideration and on such terms as the Board of Directors may determine.

4.2Certificates of Stock.  Every holder of stock of the corporation shall be entitled to have a certificate, in such form as may be prescribed by law and by the Board of Directors, certifying the number and class of shares owned by such holder in the corporation. Each such certificate shall be signed by, or in the name of the corporation by, the Chairman or Vice Chairman, if any, of the Board of Directors, or the President or a Vice President, and the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary of the corporation. Any or all of the signatures on the certificate may be a facsimile. Each certificate for shares of stock that are subject to any restriction on transfer pursuant to the Certificate of Incorporation, these By-laws, applicable securities laws or any agreement among any number of stockholders or among such holders and the corporation shall have conspicuously noted on the face or back of the certificate either the full text of the restriction or a statement of the existence of such restriction. There shall be set forth on the face or back of each certificate representing shares of such class or series of stock of the corporation a statement that the corporation will furnish without charge to each stockholder who so requests a copy of the full text of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

4.3Transfers.  Except as otherwise established by rules and regulations adopted by the Board of Directors, and subject to applicable law, shares of stock may be transferred on the books of the corporation by the surrender to the corporation or its transfer agent of the certificate representing such shares properly endorsed or accompanied by a written assignment or power of attorney properly executed, and with such proof of authority or the authenticity of signature as the corporation or its transfer agent may reasonably require. Except as may be otherwise required by law, by the Certificate of Incorporation or by these By-laws, the corporation shall be entitled to treat the record holder of stock as shown on its books as the owner of such stock for all purposes, including the payment of dividends and the right to vote with respect to such stock, regardless of any transfer, pledge or other disposition of such stock until the shares have been transferred on the books of the corporation in accordance with the requirements of these By-laws.

4.4Lost, Stolen or Destroyed Certificates.  The corporation may issue a new certificate of stock in place of any previously issued certificate alleged to have been lost, stolen or destroyed, upon

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such terms and conditions as the Board of Directors may prescribe, including the presentation of reasonable evidence of such loss, theft or destruction and the giving of such indemnity and posting of such bond as the Board of Directors may require for the protection of the corporation or any transfer agent or registrar.

4.5Record Date.  The Board of Directors may fix in advance a date as a record date for the determination of the stockholders entitled to notice of or to vote at any meeting of stockholders, or entitled to receive payment of any dividend or other distribution or allotment of any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action. Such record date shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action to which such record date relates.

If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day before the day on which notice is given, or, if notice is waived, at the close of business on the day before the day on which the meeting is held. If no record date is fixed, the record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating to such purpose.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

ARTICLE V.

GENERAL PROVISIONS

5.1Fiscal Year.  Except as from time to time otherwise designated by the Board of Directors, the fiscal year of the corporation shall begin on the first day of January of each year and end on the last day of December in each year.

5.2Corporate Seal.  The corporate seal shall be in such form as shall be approved by the Board of Directors.

5.3Waiver of Notice.  Whenever notice is required to be given by law, by the Certificate of Incorporation or by these By-laws, a written waiver signed by the person entitled to notice, or a waiver by electronic transmission by the person entitled to notice, whether before, at or after the time stated in such notice, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

5.4Voting of Securities.  Except as the Board of Directors may otherwise designate, the Chief Executive Officer, the President or the Treasurer may waive notice of, and act as, or appoint any person or persons to act as, proxy or attorney-in-fact for this corporation (with or without power of substitution) at any meeting of stockholders or securityholders of any other entity, the securities of which may be held by this corporation.

5.5Evidence of Authority.  A certificate by the Secretary, or an Assistant Secretary, or a temporary Secretary, as to any action taken by the stockholders, directors, a committee or any officer or

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representative of the corporation shall as to all persons who rely on the certificate in good faith be conclusive evidence of such action.

5.6Certificate of Incorporation.  All references in these By-laws to the Certificate of Incorporation shall be deemed to refer to the Certificate of Incorporation of the corporation, as amended and in effect from time to time.

5.7Severability.  Any determination that any provision of these By-laws is for any reason inapplicable, illegal or ineffective shall not affect or invalidate any other provision of these By-laws.

5.8Pronouns.  All pronouns used in these By-laws shall be deemed to refer to the masculine, feminine or neuter, singular or plural, as the identity of the person or persons may require.

ARTICLE VI.

AMENDMENTS

These By-laws may be altered, amended or repealed, in whole or in part, or new By-laws may be adopted by the Board of Directors or by the stockholders as provided in the Certificate of Incorporation.

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EX-10.1

Exhibit 10.1

EBERLINE SERVICES, INC.

Promissory Note

$[1,000,000] January 1, 2005

FOR VALUE RECEIVED, the undersigned, Eberline Services, Inc., a Delaware corporation (“Maker”), hereby promises to pay to Mr. Arvin Smith (the “Lender”) the principal sum of One Million U.S. Dollars ($1,000,000), together with interest on the unpaid balance of such principal amount from the date hereof until maturity at the rate of Bank Prime Rate as quoted from time to time in the Wall Street Journal plus one percent (1.0%) per annum.

The Maker shall repay the principal amount of this Note in sixteen (16) equal quarterly installments commencing March 31, 2005 and on the last day of each calendar quarter thereafter until this Note is paid in full. The Maker shall pay accrued interest on such principal amount at the time of each quarterly payment of principal.  Notwithstanding the foregoing, the full amount of principal and interest shall be paid no later than September 30, 2008 (the “Maturity Date”).

This Note incorporates the following additional terms.

This Note evidences a loan made by the Lender to Maker.  This Note is intended to replace the Demand Promissory Note dated September 27, 2004 issued by Eberline Services, Inc. to the Lender, which note is hereby cancelled.

Payments of principal of and interest on this Note shall be made in lawful money of the United States of America to the Lender at the Lender’s address set forth below, or at such other place as the Lender shall have designated to the Maker in writing.  The Maker may prepay this Note without any penalty or premium, in whole or from time to time in part, upon written notice given at least ten (10) business days prior to the date fixed for such prepayment.  All payments received by the Lender with respect to this Note shall be applied first to the accrued interest and then to principal.  All computations of interest shall be calculated on the basis of actual number of days elapsed over a year of 360 days.

This Note will be treated as Senior to any other notes issued to Dr. Rick Chapman, Dr. Phillip Frost, Mr. Arvin Smith and Mr. John Hatsopoulos (the “Other Lenders^”).

The Lender, by his payment for and acceptance of this Note, (1) represents and warrants that he is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Untied States Securities Act of 1933, as amended (the “Act”), and that this Note is being purchased for his own account and not for distribution within the meaning of the Act, and (2) agrees that he will not sell or otherwise transfer or assign this Note unless it is registered under the Act or unless an exemption from such registration is available.

The obligations of the Maker under this Note shall automatically become due and payable immediately without notice or demand in the event that (1) the Maker shall commence any case, proceeding or other action under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to the Maker, or seeking to adjudicate the

Maker a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to the Maker or any of its debts, or seeking appointment of a receiver, trustee, custodian or other similar official for the Maker for all or any substantial part of the assets of the Maker, or Maker shall make a general assignment for the benefit of its creditors, or part of the assets of the Maker, or there shall be commenced against the Maker any case, proceeding or other action of a nature referred to in this subparagraph (1), or there shall be commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of the assets of the Maker which results in the entry of an order for any such relief, or the Maker shall take any action in furtherance of, or indicating its consent to, approval of, acquiescence in, any of the acts set forth in this subparagraph (1), or the Maker shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (2) the Maker shall commence proceedings for the dissolution or liquidation of the business of the Maker or shall suspend the usual business of the Maker for a period of thirty (30) consecutive days.

Nothing in the Note shall affect or impair the right, which is absolute and unconditional, of the Lender to receive payment of or to institute suit to enforce this Note at and after the maturity hereof (including maturity by declaration pursuant to this Note or otherwise) or the obligation of the Maker, which is also absolute and unconditional, to pay the principal of or interest on this Note to the Lender at the time and place expressed herein.

In any case where the date of maturity on, or principal of, this Note shall be a Sunday or a legal holiday in the Commonwealth of Massachusetts or a day on which banking institutions doing business in the Commonwealth of Massachusetts are authorized by law to close, then payment of such interest may be made on the next succeeding business day with the same force and effect as if made on the nominal date of maturity (and no interest shall accrue for the period after such nominal date).

Except as herein otherwise expressly provided, all notices, requests, demands, consents and other communications required or permitted under this Note shall be in writing and shall be considered to have been duly given when (1) delivered by hand, (2) sent by facsimile (with receipt confirmed), provided that a copy is mailed (on the same date) by certified or registered mail, return receipt requested, postage prepaid, or (3) received by the addressee, if sent by Express Mail, Federal Express or other reputable express delivery service (receipt requested), or by first class certified or registered mail, return receipt requested, postage prepaid, in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and telecopier numbers as a person whose address is herein specified may from time to time designate as to himself by notice similarly given to the other such designees in accordance herewith). A notice of change of address shall not be deemed given until received by the addressee. Notices shall be addressed:

To the Lender at:	Mr. Arvin Smith
	1300 Alexandra Court
	Colleyville, TX 76034
	Phone: (817) 788-1815
	Fax: (817) 788-1815
To the Maker at:	Eberline Services, Inc.
	7021 Pan American Freeway N.E.
	Albuquerque, NM 87109-4338
	Attn: President
	Phone: (505) 262-2694
	Fax: (505) 262-2698

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In the case of the occurrence of an Event of Default, the Maker shall be liable for all costs of enforcement and collection of this Note incurred by the Lender or any other holder of this Note, including but not limited to reasonable attorneys’ fees, disbursements and court costs.

The Maker hereby waives presentment, demand for payment, notice of dishonor, protest and notice of protest, and any or all other notices of demands in connection with the delivery, acceptance, performance, default, endorsement or guarantee of this Note.  The liability of the Maker hereunder shall be unconditional and shall not be in any manner affected by any indulgence whatsoever granted or consented to by the holder hereof, including but not limited to any extension of time, renewal, waiver or other modification.

This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without regard to the conflict of laws principles thereof).

EBERLINE SERVICES, INC.
By:	/s/ Dr. Shelton Clark
Name: Dr. Shelton Clark
Title: President, Eberline Services, Inc.

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EX-10.2

Exhibit 10.2

EBERLINE SERVICES, INC.

Promissory Note

$[1,000,000] January 1, 2005

FOR VALUE RECEIVED, the undersigned, Eberline Services, Inc., a Delaware corporation (“Maker”), hereby promises to pay to John N. Hatsopoulos and Patricia Hatsopoulos (the ^“Lender^”) the principal sum of One Million U.S. Dollars ($1,000,000), together with interest on the unpaid balance of such principal amount from the date hereof until maturity at the rate of Bank Prime Rate as quoted from time to time in the Wall Street Journal plus one percent (1.0%) per annum.

The Maker shall repay the principal amount of this Note in sixteen (16) equal quarterly installments commencing March 31, 2005 and on the last day of each calendar quarter thereafter until this Note is paid in full.  The Maker shall pay accrued interest on such principal amount at the time of each quarterly payment of principal.  Notwithstanding the foregoing, the full amount of principal and interest shall be paid no later than September 30, 2008 (the “Maturity Date”).

This Note incorporates the following additional terms.

This Note evidences a loan made by the Lender to Maker.  This Note is intended to replace the Demand Promissory Note dated September 27, 2004 issued by Eberline Services, Inc. to the Lender, which note is hereby cancelled.

Payments of principal of and interest on this Note shall be made in lawful money of the United States of America to the Lender at the Lender’s address set forth below, or at such other place as the Lender shall have designated to the Maker in writing.  The Maker may prepay this Note without any penalty or premium, in whole or from time to time in part, upon written notice given at least ten (10) business days prior to the date fixed for such prepayment.  All payments received by the Lender with respect to this Note shall be applied first to the accrued interest and then to principal.  All computations of interest shall be calculated on the basis of actual number of days elapsed over a year of 360 days.

This Note will be treated as Senior to any other notes issued to Dr. Rick Chapman, Dr. Phillip Frost, Mr. Arvin Smith and Mr. John Hatsopoulos (the “Other Lenders”).

The Lender, by his payment for and acceptance of this Note, (1) represents and warrants that he is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Untied States Securities Act of 1933, as amended (the “Act”), and that this Note is being purchased for his own account and not for distribution within the meaning of the Act, and (2) agrees that he will not sell or otherwise transfer or assign this Note unless it is registered under the Act or unless an exemption from such registration is available.

The obligations of the Maker under this Note shall automatically become due and payable immediately without notice or demand in the event that (1) the Maker shall commence any case, proceeding or other action under any law relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to the Maker, or seeking to adjudicate the Maker a bankrupt or insolvent or seeking reorganization, arrangement, adjustment, winding-up,

liquidation, dissolution, composition or other relief with respect to the Maker or any of its debts, or seeking appointment of a receiver, trustee, custodian or other similar official for the Maker for all or any substantial part of the assets of the Maker, or Maker shall make a general assignment for the benefit of its creditors, or part of the assets of the Maker, or there shall be commenced against the Maker any case, proceeding or other action of a nature referred to in this subparagraph (1), or there shall be commenced against the Maker any case, proceeding or other action seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of the assets of the Maker which results in the entry of an order for any such relief, or the Maker shall take any action in furtherance of, or indicating its consent to, approval of, acquiescence in, any of the acts set forth in this subparagraph (1), or the Maker shall generally not, or shall be unable to, or shall admit in writing its inability to, pay its debts as they become due; or (2) the Maker shall commence proceedings for the dissolution or liquidation of the business of the Maker or shall suspend the usual business of the Maker for a period of thirty (30) consecutive days.

Nothing in the Note shall affect or impair the right, which is absolute and unconditional, of the Lender to receive payment of or to institute suit to enforce this Note at and after the maturity hereof (including maturity by declaration pursuant to this Note or otherwise) or the obligation of the Maker, which is also absolute and unconditional, to pay the principal of or interest on this Note to the Lender at the time and place expressed herein.

In any case where the date of maturity on, or principal of, this Note shall be a Sunday or a legal holiday in the Commonwealth of Massachusetts or a day on which banking institutions doing business in the Commonwealth of Massachusetts are authorized by law to close, then payment of such interest may be made on the next succeeding business day with the same force and effect as if made on the nominal date of maturity (and no interest shall accrue for the period after such nominal date).

Except as herein otherwise expressly provided, all notices, requests, demands, consents and other communications required or permitted under this Note shall be in writing and shall be considered to have been duly given when (1) delivered by hand, (2) sent by facsimile (with receipt confirmed), provided that a copy is mailed (on the same date) by certified or registered mail, return receipt requested, postage prepaid, or (3) received by the addressee, if sent by Express Mail, Federal Express or other reputable express delivery service (receipt requested), or by first class certified or registered mail, return receipt requested, postage prepaid, in each case to the appropriate addresses and facsimile numbers set forth below (or to such other addresses and telecopier numbers as a person whose address is herein specified may from time to time designate as to himself by notice similarly given to the other such designees in accordance herewith).  A notice of change of address shall not be deemed given until received by the addressee.  Notices shall be addressed:

To the Lender at:	John Hatsopoulos & Patricia Hatsopoulos
	45 First Avenue
	Waltham, MA 02451
	Phone: (781) 622-1117
	Fax: (781) 622-1027
To the Maker at:	Eberline Services, Inc.
	7021 Pan American Freeway N.E.
	Albuquerque, NM 87109-4338
	Attn: President
	Phone: (505) 262-2694
	Fax: (505) 262-2698

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In the case of the occurrence of an Event of Default, the Maker shall be liable for all costs of enforcement and collection of this Note incurred by the Lender or any other holder of this Note, including but not limited to reasonable attorneys’ fees, disbursements and court costs.

The Maker hereby waives presentment, demand for payment, notice of dishonor, protest and notice of protest, and any or all other notices of demands in connection with the delivery, acceptance, performance, default, endorsement or guarantee of this Note.  The liability of the Maker hereunder shall be unconditional and shall not be in any manner affected by any indulgence whatsoever granted or consented to by the holder hereof, including but not limited to any extension of time, renewal, waiver or other modification.

This Note shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts (without regard to the conflict of laws principles thereof).

EBERLINE SERVICES, INC.
By:	/s/ Dr. Shelton Clark
Name: Dr. Shelton Clark
Title: President, Eberline Services, Inc.

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EX-10.3

Exhibit 10.3

GLENROSE INSTRUMENTS INC.

2005 STOCK OPTION AND INCENTIVE PLAN

1.Purpose and Eligibility

The purpose of this 2005 Stock Option and Incentive Plan (the “Plan”) of GlenRose Instruments Inc. (the “Company”) is to provide stock options and other equity interests in the Company (each an “Award”) to employees, officers, directors, consultants and advisors of the Company and its Subsidiaries, all of whom are eligible to receive Awards under the Plan.  Any person to whom an Award has been granted under the Plan is called a “Participant”.  Additional definitions are contained in Section 8.

2.Administration

a.Administration by Board of Directors.  The Plan will be administered by the Board of Directors of the Company (the “Board”).  The Board, in its sole discretion, shall have the authority to grant and amend Awards, to adopt, amend and repeal rules relating to the Plan and to interpret and correct the provisions of the Plan and any Award.  All decisions by the Board shall be final and binding on all interested persons. Neither the Company nor any member of the Board shall be liable for any action or determination relating to the Plan. Specifically, without limiting the foregoing, the Board shall have authority to adopt special rules and sub-plans for Participants in foreign jurisdictions to take advantage of favorable tax programs or for other legal objectives. The Board of Directors may further, with the consent of the affected optionee, affect the cancellation of any or all outstanding options and the grant of new options in substitution therefor covering the same or different numbers of shares of Common Stock having an option exercise price per share that may be higher or lower than the exercise price per share of the canceled options.

b.Appointment of Committees.  To the extent permitted by applicable law, the Board may delegate any or all of its powers under the Plan to one or more committees or subcommittees of the Board (a “Committee”).  All references in the Plan to the “Board” shall mean such Committee or the Board.

c.Delegation to Officers. To the extent permitted by applicable law, the Board may delegate to one or more officers of the Company the power to grant Awards to employees or officers of the Company or any of its present or future subsidiary corporations and to exercise such other powers under the Plan as the Board may determine, provided that the Board shall fix the terms of the Awards to be granted by such officers (including the exercise or purchase price of such Awards, which may include a formula by which the price will be determined) and the maximum number of securities subject to Awards that the officers may grant; provided further that no officer shall be authorized to grant Awards to any “executive officer” of the Company (as defined by Rule 3b-7 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or to any “officer” of the Company (as defined by Rule 16a-1 under the Exchange Act).

3.Stock Available for Awards

a.Number of Shares.  Subject to adjustment under Section 3(c), the aggregate number of shares of Common Stock of the Company (the “Common Stock”) that may be issued pursuant to the Plan is 700,000 shares.  If any Award expires, or is terminated, surrendered or forfeited, in whole or in part, the unissued Common Stock covered by such Award shall again be available for the grant of Awards under the Plan.  If shares of Common Stock issued pursuant to the Plan are repurchased by, or are surrendered

or forfeited to, the Company at no more than cost, such shares of Common Stock shall again be available for the grant of Awards under the Plan; provided, however, that the cumulative number of such shares that may be so reissued under the Plan will not exceed 700,000 shares.  Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.

b.Per-Participant Limit.  Subject to adjustment under Section 3(c), no Participant may be granted Awards during any one fiscal year to purchase more than 25% of the number of shares specified in Section 3(a).

c.Adjustment to Common Stock.  In the event of any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, combination, exchange of shares, liquidation, spin-off, split-up, or other similar change in capitalization or event, (i) the number and class of securities available for Awards under the Plan and the per-Participant share limit, (ii) the number and class of securities, vesting schedule and exercise price per share subject to each outstanding Option, (iii) the repurchase price per security subject to repurchase, and (iv) the terms of each other outstanding stock-based Award shall be adjusted by the Company (or substituted Awards may be made) to the extent the Board shall determine, in good faith, that such an adjustment (or substitution) is appropriate. If Section 7(e)(i) applies for any event, this Section 3(c) shall not be applicable.

4.Stock Options

a.General.  The Board may grant options to purchase Common Stock (each, an “Option”) and determine the number of shares of Common Stock to be covered by each Option, the exercise price of each Option and the conditions and limitations applicable to the exercise of each Option and the Common Stock issued upon the exercise of each Option, including vesting provisions, repurchase provisions and restrictions relating to applicable federal or state securities laws, as it considers advisable.

b.Incentive Stock Options.  An Option that the Board intends to be an “incentive stock option” as defined in Section 422 of the Code (an “Incentive Stock Option”) shall be granted only to employees of the Company and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code.  The Board and the Company shall have no liability if an Option or any part thereof that is intended to be an Incentive Stock Option does not qualify as such. An Option or any part thereof that does not qualify as an Incentive Stock Option is referred to herein as a “Nonstatutory Stock Option.”

c.Exercise Price.  The Board shall establish the exercise price (or determine the method by which the exercise price shall be determined) at the time each Option is granted and specify it in the applicable option agreement.

d.Duration of Options.  Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable option agreement.

e.Exercise of Option.  Options may be exercised only by delivery to the Company of a written notice of exercise signed by the proper person together with payment in full as specified in Section 4(f) for the number of shares for which the Option is exercised.

f.Payment Upon Exercise.  Common Stock purchased upon the exercise of an Option shall be paid for by one or any combination of the following forms of payment:

(i)by check payable to the order of the Company;

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(ii)except as otherwise explicitly provided in the applicable option agreement, and only if the Common Stock is then publicly traded, delivery of an irrevocable and unconditional undertaking by a creditworthy broker to deliver promptly to the Company sufficient funds to pay the exercise price, or delivery by the Participant to the Company of a copy of irrevocable and unconditional instructions to a creditworthy broker to deliver promptly to the Company cash or a check sufficient to pay the exercise price, plus in each case any required tax withholding; or

(iii)to the extent explicitly provided in the applicable option agreement, by (x) delivery of shares of Common Stock owned by the Participant valued at fair market value (as determined by the Board or as determined pursuant to the applicable option agreement), (y) delivery of a promissory note of the Participant to the Company (and delivery to the Company by the Participant of a check in an amount equal to the par value of the shares purchased), or (z) payment of such other lawful consideration as the Board may determine.

g.Repricing. The Board may, without stockholder approval, amend any outstanding Option granted under the Plan to provide an exercise price per share that is lower than the then-current exercise price per share of such outstanding Option. The Board may also, without stockholder approval, cancel any outstanding Option and grant in substitution therefor new Options covering the same or a different number of shares of Common Stock and having an exercise price per share lower than the then-current exercise price per share of the cancelled Option.

5.Restricted Stock

a.Grants.  The Board may grant Awards entitling recipients to acquire shares of Common Stock, subject to (i) delivery to the Company by the Participant of cash or other lawful consideration in an amount at least equal to the par value of the shares purchased, and (ii) the right of the Company to repurchase all or part of such shares at their issue price or other stated or formula price from the Participant in the event that conditions specified by the Board in the applicable Award are not satisfied prior to the end of the applicable restriction period or periods established by the Board for such Award (each, a “Restricted Stock Award”).

b.Terms and Conditions. The Board shall determine the terms and conditions of any such Restricted Stock Award.  Any stock certificates issued in respect of a Restricted Stock Award shall be registered in the name of the Participant and, unless otherwise determined by the Board, deposited by the Participant, together with a stock power endorsed in blank, with the Company (or its designee).  After the expiration of the applicable restriction periods, the Company (or such designee) shall deliver the certificates no longer subject to such restrictions to the Participant or, if the Participant has died, to the beneficiary designated by a Participant, in a manner determined by the Board, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death (the “Designated Beneficiary”).  In the absence of an effective designation by a Participant, Designated Beneficiary shall mean the Participant’s estate.

6.Other Stock-Based Awards

The Board shall have the right to grant other Awards based upon the Common Stock or the trading price thereof and having such terms and conditions as the Board may determine, including, without limitation, the grant of shares based upon certain conditions, the grant of securities convertible into Common Stock and the grant of stock appreciation rights, phantom stock awards or stock units.

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7.General Provisions Applicable to Awards

a.Transferability of Awards.  Except as the Board may otherwise determine or provide in an Award, Awards shall not be sold, assigned, transferred, pledged or otherwise encumbered by the person to whom they are granted, either voluntarily or by operation of law, except by will or the laws of descent and distribution, and, during the life of the Participant, shall be exercisable only by the Participant.  References to a Participant, to the extent relevant in the context, shall include references to authorized transferees.

b.Documentation.  Each Award under the Plan shall be evidenced by a written instrument in such form as the Board shall determine or as executed by an officer of the Company pursuant to authority delegated by the Board.  Each Award may contain terms and conditions in addition to those set forth in the Plan provided that such terms and conditions do not contravene the provisions of the Plan.

c.Board Discretion.  The terms of each type of Award need not be identical, and the Board need not treat Participants uniformly.

d.Termination of Status.  The Board shall determine the effect on an Award of the disability, death, retirement, authorized leave of absence or other change in the employment or other status of a Participant and the extent to which, and the period during which, the Participant, or the Participant’s legal representative, conservator, guardian or Designated Beneficiary, may exercise rights under the Award.

e.Acquisition of the Company

(i)Consequences of an Acquisition.  Upon the consummation of an Acquisition, the Board or the board of directors of the surviving or acquiring entity (as used in this Section 7(e)(i), also the “Board”), shall, as to outstanding Awards (on the same basis or on different bases as the Board shall specify), make appropriate provision for the continuation of such Awards by the Company or the assumption of such Awards by the surviving or acquiring entity and by substituting on an equitable basis for the shares then subject to such Awards either (a) the consideration payable with respect to the outstanding shares of Common Stock in connection with the Acquisition, (b) shares of stock of the surviving or acquiring corporation or (c) such other securities or other consideration as the Board deems appropriate, the fair market value of which (as determined by the Board in its sole discretion) shall not materially differ from the fair market value of the shares of Common Stock subject to such Awards immediately preceding the Acquisition. In addition to or in lieu of the foregoing, with respect to outstanding Options, the Board may, on the same basis or on different bases as the Board shall specify, upon written notice to the affected optionees, provide that one or more Options then outstanding must be exercised, in whole or in part, within a specified number of days of the date of such notice, at the end of which period such Options shall terminate, or provide that one or more Options then outstanding, in whole or in part, shall be terminated in exchange for a cash payment equal to the excess of the fair market value (as determined by the Board in its sole discretion) for the shares subject to such Options over the exercise price thereof.  Unless otherwise determined by the Board (on the same basis or on different bases as the Board shall specify), any repurchase rights or other rights of the Company that relate to an Option or other Award shall continue to apply to consideration, including cash, that has been substituted, assumed or amended for an Option or other Award pursuant to this paragraph. The Company may hold in escrow all or any portion of any such consideration in order to effectuate any continuing restrictions.

(ii)Acquisition Defined.  An “Acquisition” shall mean: (x) the sale of the Company by merger in which the shareholders of the Company in their capacity as such no longer own a majority of the outstanding equity securities of the Company (or its successor); or (y) any sale of all or substantially all of the assets or capital stock of the Company (other than in a spin-off or similar transaction) or (z) any other acquisition of the business of the Company, as determined by the Board.

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(iii)Assumption of Options Upon Certain Events.  In connection with a merger or consolidation of an entity with the Company or the acquisition by the Company of property or stock of an entity, the Board may grant Awards under the Plan in substitution for stock and stock-based awards issued by such entity or an affiliate thereof.  The substitute Awards shall be granted on such terms and conditions as the Board considers appropriate in the circumstances.

f.Withholding.  Each Participant shall pay to the Company, or make provisions satisfactory to the Company for payment of, any taxes required by law to be withheld in connection with Awards to such Participant no later than the date of the event creating the tax liability.  The Board may allow Participants to satisfy such tax obligations in whole or in part by transferring shares of Common Stock, including shares retained from the Award creating the tax obligation, valued at their fair market value (as determined by the Board or as determined pursuant to the applicable option agreement).  The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to a Participant.

g.Amendment of Awards.  The Board may amend, modify or terminate any outstanding Award including, but not limited to, substituting therefor another Award of the same or a different type, changing the date of exercise or realization, and converting an Incentive Stock Option to a Nonstatutory Stock Option, provided that the Participant’s consent to such action shall be required unless the Board determines that the action, taking into account any related action, would not materially and adversely affect the Participant.

h.Conditions on Delivery of Stock.  The Company will not be obligated to deliver any shares of Common Stock pursuant to the Plan or to remove restrictions from shares previously delivered under the Plan until (i) all conditions of the Award have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Participant has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

i.Acceleration.  The Board may at any time provide that any Options shall become immediately exercisable in full or in part, that any Restricted Stock Awards shall be free of some or all restrictions, or that any other stock-based Awards may become exercisable in full or in part or free of some or all restrictions or conditions, or otherwise realizable in full or in part, as the case may be, despite the fact that the foregoing actions may (i) cause the application of Sections 280G and 4999 of the Code if a change in control of the Company occurs, or (ii) disqualify all or part of the Option as an Incentive Stock Option. In the event of the acceleration of the exercisability of one or more outstanding Options, including pursuant to paragraph (e)(i), the Board may provide, as a condition of full exercisability of any or all such Options, that the Common Stock or other substituted consideration, including cash, as to which exercisability has been accelerated shall be restricted and subject to forfeiture back to the Company at the option of the Company at the cost thereof upon termination of employment or other relationship, with the timing and other terms of the vesting of such restricted stock or other consideration being equivalent to the timing and other terms of the superseded exercise schedule of the related Option.

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8.Miscellaneous

a.  Definitions.

(i)“Company,” for purposes of eligibility under the Plan, shall include any present or future subsidiary corporations of GlenRose Instruments Inc., as defined in Section 424(f) of the Code (a “Subsidiary”), and any present or future parent corporation of GlenRose Instrument Systems Inc., as defined in Section 424(e) of the Code.  For purposes of Awards other than Incentive Stock Options, the term “Company” shall include any other business venture in which the Company has a direct or indirect significant interest, as determined by the Board in its sole discretion.

(ii)“Code” means the Internal Revenue Code of 1986, as amended, and any regulations promulgated thereunder.

(iii)“employee” for purposes of eligibility under the Plan (but not for purposes of Section 4(b)) shall include a person to whom an offer of employment has been extended by the Company.

b.No Right To Employment or Other Status.  No person shall have any claim or right to be granted an Award, and the grant of an Award shall not be construed as giving a Participant the right to continued employment or any other relationship with the Company.  The Company expressly reserves the right at any time to dismiss or otherwise terminate its relationship with a Participant free from any liability or claim under the Plan.

c.No Rights As Stockholder.  Subject to the provisions of the applicable Award, no Participant or Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be distributed with respect to an Award until becoming the record holder thereof.

d.Effect on Other Benefit Plans. The amount of any compensation deemed to be received by a Participant as a result of the receipt or exercise of an Award will not constitute “earnings” with respect to which any other benefits of such Participant are determined, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan.

e.Authorization of Sub-Plans. The Board may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities or tax laws of various jurisdictions. The Board shall establish such sub-plans by adopting supplements to this Plan containing (i) such limitations on the Board’s discretion under the Plan as the Board deems necessary or desirable or (ii) such additional terms and conditions not otherwise inconsistent with the Plan as the Board shall deem necessary or desirable. All supplements adopted by the Board shall be deemed to be part of the Plan, but each supplement shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any supplement to Participants in any jurisdiction which is not the subject of such supplement.

f.Provisions for Foreign Participants. The Board may modify Awards granted to Participants who are foreign nationals or employed outside the United States or establish sub-plans or procedures under the Plan to recognize differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities, currency, employee benefit or other matters.

g.Effective Date and Term of Plan.  The Plan shall become effective on the date on which it is adopted by the Board.  No Awards shall be granted under the Plan after the completion of ten years from the date on which the Plan was adopted by the Board, but Awards previously granted may extend beyond that date.

h.Amendment of Plan.  The Board may amend, suspend or terminate the Plan or any portion thereof at any time.

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i.Governing Law.  The provisions of the Plan and all Awards made hereunder shall be governed by and interpreted in accordance with the laws of Delaware, without regard to any applicable conflicts of law.

Adopted by the Board of Directors on

September 22, 2005

Approved by the stockholders on

September 22, 2005

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EX-10.4

Exhibit 10.4

LEASE AGREEMENT

This Agreement is made on 9/23, 2004, between G-C-T CORPORATION, a New Jersey corporation, with offices c/o Cronheim Management Services, Inc., 205 Main Street, P.O. Box 268, Chatham NJ 07928, as LANDLORD, and LIONVILLE LABORATORIES, INC., a Delaware corporation, with offices at 208 Welsh Pool Road, Lionville, Uwchlan Township, Pennsylvania 19353, as TENANT.

WITNESSETH THAT the Landlord does hereby lease to the Tenant and the Tenant does hereby rent from the Landlord, the premises located at and commonly known as 208 Welsh Pool Road, Lionville, Uwchlan Township, Chester County, Pennsylvania, together with all improvements, equipment, fixtures, and appliances owned or controlled by Landlord and located or to be erected or installed by Landlord thereon; and all rights, alleys, rights-of-way, easements, appurtenances thereunto belonging or in anywise appertaining; and all rights of Landlord in and to any public or private thorofares abutting the above described premises, all being hereafter referred to as the “demised premises”;

for a TERM of TWO (2) YEARS, COMMENCING on JANUARY 1, 2005 and ENDING on DECEMBER 31, 2006, to be used and occupied for no other purpose than as offices, light manufacturing, warehouse and laboratory;

UPON THE FOLLOWING CONDITIONS AND COVENANTS:

1:             PAYMENT OF RENT:  The Tenant covenants and agrees to pay to the Landlord, as rent for and during the term hereof, according to the following schedule:

Lease Year	Rent/Year		Rent/Month
1	$	241,020.00	$	20,085.00
2	$	248,250.60	$	20,687.55

It is the purpose and intent of the Landlord and Tenant that the net rent shall be net to the Landlord, so that this lease shall yield, net, to the Landlord, the net rent specified herein in each ear of the lease. Rent is payable monthly, in advance, on the first day of each month, to:

G-C-T Corporation

c/o Cronheim Management Services, Inc.

P.O. Box 268

Chatham, New Jersey 07928

2:             ADDITIONAL RENT BASED UPON LATE PAYMENT:  If Tenant defaults for more than ten (10) days in the payment of any monthly installment of fixed annual rent or additional rent or any of the sums required of Tenant under the Lease or if Tenant, within ten (10) days after demand from Landlord, fails to reimburse Landlord for any expenses incurred by Landlord and payable by Tenant pursuant to the Lease, then Tenant shall pay Landlord, as additional rent, a late charge of 5% of the rent or expense.

3:             INTENTIONALLY OMITTED.

4:             REAL ESTATE TAXES:

(a)           Tenant shall further pay, at its own cost and expense, all taxes and assessments sewer rents and other governmental impositions and charges of every kind and nature whatsoever, extraordinary as well as ordinary, and each and every installment thereof, which shall or may during the term be charged, laid, levied, assessed, imposed, become due and payable, or liens upon, or which may arise in connection with the use, occupancy or possession of the demised premises or any appurtenances or equipment thereon or therein or any part thereof, or the sidewalks or streets in front of or adjoining the demised premises and all taxes charged, laid, levied, assessed or imposed in lieu of or in addition to the foregoing under or by virtue of all present or future laws, ordinances, requirements, orders, directions, rules or regulations of the Federal, state, county and municipal governments and of all other governmental authorities whatsoever. If at any time during the term of this lease Landlord shall make written demand, Tenant shall produce and exhibit to the Landlord satisfactory evidence of payment by Tenant of any such tax assessment, water rent, rate or charge, sewer charge or other governmental imposition or charge, and said proof or payment must be delivered to the Landlord not later than twenty (20) days after Landlord’s written demand therefor. Except as set forth in section (b) of this article, payments of all aforesaid charges shall be timely made by the Tenant in order to avoid the assessments of interest, penalties, and other costs.

With respect to assessments that may be paid in installments, at the option of the payer, Tenant may make payments in installments rather than in a lump sum. Tenant will be obligated to pay only the installments due during the term of the lease, including any extensions thereof.

(b)           Tenant shall have the right to contest or review by legal proceedings, or in such other manner as it may deem suitable (which, if instituted, Tenant shall conduct at its own expense, free of any expense to the Landlord and, if necessary, in the name of Landlord), any tax, assessment, water rent, rate or charge, sewer rent, or other governmental imposition or charge aforementioned. Tenant may defer payment of a contested item upon condition that, before instituting any such proceedings, Tenant shall furnish to Landlord or to any first Mortgagee Landlord may designate, a surety company bond, a cash deposit, or other security satisfactory to Landlord and such mortgagee, sufficient to cover the amount of the contested item or items, with interest and penalties, for the period which such proceedings may be expected to take, securing payment of such contested items, interest and penalties, and all costs in connection therewith. Notwithstanding the furnishing of any such bond or security other than a cash deposit, Tenant shall promptly pay such contested item or items if at any time the demised premises or any part thereof shall be in imminent danger of being sold, by an entity other than the Landlord, its successors or assigns, forfeited, or otherwise lost, or Landlord shall be subjected to criminal liability for such non-payment. If, however, Tenant shall have made a cash deposit, in any such event Landlord or such mortgagee, as the case may be, may pay such contested item or items out of such deposit. When any such contested item or items shall have been paid or canceled, any balance of any such cash deposit not so applied shall be repaid to Tenant without interest. The legal proceedings herein referred to shall include appropriate proceedings to contest and review tax assessments and appeals from any judgments, decrees or orders. If there shall be any refund with respect to any contested items based on a payment by Tenant, Tenant shall be entitled to the same.

(c)           Nothing herein contained shall require or be construed to require Tenant to pay any inheritance, estate, succession, transfer, gift, franchise, corporation, income or profit tax or capital levy that is or may be imposed upon or that is or may be payable by Landlord, its successors or assigns; provided, however, that in any case where a tax may be levied, assessed or imposed upon the income arising from the rent hereunder for the use and occupancy of the demised premises in lieu of or as a substitute, in whole or in part, for a real estate tax upon the demised premises and where such tax is a result of a shift of the incidence of taxation now and ordinarily imposed on realty, Tenant shall pay the same.

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(d)           All taxes, charges, costs, and expenses which Tenant assumes or agrees to pay under any provisions of this lease, together with all interest and penalties that may accrue thereon in the event of Tenant’s failure to pay the same as herein provided, and any and all other sums which may become due by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants and conditions of this lease on Tenant’s part to be performed, and each or any of them, shall be deemed to be additional rent and, in the event of nonpayment, Landlord shall have all the rights and remedies herein provided in the case of non-payment of rent.

5:             PROPERTY INSURANCE:

(a)           In addition to the rental paid by the Tenant as set forth herein, Tenant, at its own cost and expense, shall pay for the property insurance on all buildings and on, in, or appurtenant to the demised premises at the commencement of the term and thereafter erected thereon or therein, including all alterations, rebuildings, replacements, changes, additions and improvements insured against loss or damage by fire, with all standard extended coverage as may be usually required by any first mortgagee (and against loss or damage due to war, terrorism or nuclear action if such insurance shall be available and required by any first mortgagee), in an amount sufficient to prevent Landlord and Tenant from becoming co-insurers under provisions of applicable policies of insurance but in any event in an amount not less than the full insurable value thereof (replacement value and in no event less than Two million, one hundred thousand ($2,100,000.00) Dollars.

(b)           It is understood and agreed that in addition to the rental to be paid by the Tenant as set fort herein, the Tenant shall pay and maintain the cost of comprehensive general liability insurance. Said insurance shall be in the amount of $1,000,000.00 in respect of personal injury o death to any one person, and not less than $3,000,000.00 in respect of any one occurrence and not less than $150,000.00 for property damage. These coverage amounts may be increased from time to time at the sole discretion of the Landlord in order to afford reasonable protection to both Landlord and Tenant.

(c)           During the term, Tenant, at its own cost and expense, shall provide and keep in force rent insurance in amount not less than the annual net rent plus the estimated annual taxes, water charges, sewer rents and installments of assessments and the annual premiums for the insurance required by this Article 5. Said insurance will cover Landlord’s loss of rent due to the occurrence of a property loss, as set forth in Article 5 (a).

(d)           All insurance provided by Tenant as required by this Article 5 shall be carried in favor of the Landlord and Tenant, as their respective interest may appear and Landlord and Landlord’s mortgagee, if any, shall be an additional named insured. Tenant may carry the insurance required by this lease under a blanket policy as long as the insurable interests of both Landlord and Tenant under this lease are clearly defined and stated. Insurance shall be taken in such responsible companies, licensed to do business in the Commonwealth of Pennsylvania as Landlord shall approve, which approval shall not be arbitrarily or unreasonably withheld, provided the insurance company has a Best rating of “A” or better; and certificates of the policies therefore shall at all times be held by Landlord, or, when appropriate, by the holder of any such mortgages, in which case copies of the policies or certificates of such insurance shall be delivered by Tenant to Landlord. All such policies shall be non-assessable and shall require not less than thirty (30) days notice by registered or certified mail to Landlord of any cancellation thereof or change affecting Landlord’s coverage thereunder.

(e)           Wherever herein required, Tenant shall procure policies for all such insurance for periods of not less than one year and shall deliver to Landlord such policies or certificates thereof with evidence of the payment of premiums thereon, and shall procure renewals thereof from time to time before the expiration thereof so that there is no lapse in coverage.

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(f)            Tenant shall not violate or permit to be violated any of the conditions or provisions of any such policy, and Tenant shall so perform and satisfy the requirements of the companies writing such policies that at all times companies of good standing satisfactory to Landlord or any mortgagee designated by Landlord, shall be willing to write and/or continue with such insurance.

(g)           Tenant and Landlord shall cooperate in connection with the collection of any insurance moneys that may be due in the event of loss, and Tenant shall execute and . deliver to Landlord such proofs of loss and other instruments which may be required for the purpose of obtaining the recovery of any such insurance moneys.

6:             FIRE AND OTHER CASUALTY:

(a)           In case of fire or other casualty, the Tenant shall give immediate notice to the Landlord. If the premises shall be partially damaged by fire, the elements or other casualty, and the cost to repair said damages is $25,000 or less, then Tenant shall be responsible for making repairs directly. Except as provided in the next sentence, if the cost to repair such partial damage is more than $25,000, then the Landlord shall repair the same as speedily as practicable, but in neither case shall the Tenant’s obligation to pay the rent hereunder cease. If Landlord and Tenant agree that the premises are so extensively and substantially damaged as to render them untenantable, then the rent shall cease until such time as the premises shall be made tenantable by the Landlord. However, if the premises be totally destroyed or so extensively and substantially damaged that the building cannot be restored to tenantable condition within 180 days from the date of damage, or if Landlord has not restored the building to tenantable condition within such 180-day period, then either party may cancel this lease; then the rent shall be paid up to the time of such destruction and then and from thenceforth this lease shall come to an end. If the Tenant shall have been insured against any of the risks herein covered, then the proceeds of such insurance shall be paid over to the Landlord to the extent of the Landlord’s costs and expenses to make the repairs hereunder, and such insurance carriers shall have no recourse against the Landlord for reimbursement. Any disputes regarding these repair and restoration provisions will be settled by arbitration, in accordance with Article 38.

(b)           In the event of loss, the proceeds of the policies shall be dealt with as follows:

i)              In the event that there shall be a first mortgage on the premises, the loss, if any, shall be adjusted with the insurance companies and all insurance proceeds recovered by the mortgagee on account of damage or destruction to the premises (and all proceeds of any condemnation award recovered by the mortgagee for any building or equipment taken or damaged), less the cost, if any, to the mortgagee of such recovery, shall, based upon the written instruction of the Landlord, be applied by the mortgagee to the payment of the cost of repairing, restoring or rebuilding the property so damaged or destroyed (or taken), hereinafter referred to as the “work,” and shall be paid out in accordance with paragraph (iii) below. The restored building will be of like character and quality and of value at least equal to the original building existing prior to the occurrence of the destruction. Landlord represents and covenants that any existing mortgages or future mortgages have or will have an express provision allowing, at the option of the Landlord, the use of insurance proceeds for rebuilding and restoration of the demised premises.

ii)             In the event that there shall not be a mortgage on the premises, the loss, if any, under any policies provided for in Article 5 shall be adjusted with the insurance companies:

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A)           By Tenant in case of any particular casualty resulting in damage or destruction not exceeding Twenty-Five Thousand Dollars ($25,000.00) in the aggregate; or

B)            By Landlord and Tenant, in the case of any such particular casualty resulting in damage or destruction exceeding Twenty-Five Thousand Dollars ($25,000.00) in the aggregate.

iii)            Subject to the rights of the holder of any mortgage to which this lease is or shall be subject and subordinate, the proceeds of any such insurance, as so adjusted, shall be payable as follows:

A)           With respect to any loss not exceeding Twenty-Five Thousand Dollars ($25,000.00) in the aggregate, such loss shall be paid to Tenant, who shall hold the proceeds in trust for the purpose of paying the costs of repair and restoration; and

B)            With respect to losses exceeding Twenty-Five Thousand Dollars ($25,000.00) in the aggregate, the loss shall be paid to Landlord or, if Tenant shall so request, to a commercial bank or trust company selected by Tenant having a banking office in New Jersey, having a capital of not less than One hundred Million Dollars ($100,000,000.00), and supervised by the Comptroller of Currency of the United States or the Banking Department of the State of New Jersey (such bank or trust company being hereinafter called the “Insurance Trustee”). All insurance proceeds, less any cost of recovery, shall be held by the recipient (whether Landlord or the Insurance Trustee, as the case may be) and shall be applied by such recipient to pay the costs of repair and restoration.

(c)           Increase of Insurance Rates: If for any reason it shall be impossible to obtain fire and other hazard insurance on the buildings and improvements on the leased premises, in an amount and in the form and in insurance companies reasonably acceptable to the Landlord, the Landlord may, if the Landlord so elects at any time thereafter, terminate this lease and the term hereof, upon giving to the Tenant fifteen days notice in writing of the Landlord’s intention so to do, and upon the giving of such notice, this lease and the term thereof shall terminate.

7:             UTILITIES:  In addition to the rent to be paid by Tenant as set forth in this lease, Tenant shall pay for all utilities consumed by it, including but not limited to water rents, electric, gas or other heating fuel, sewer rents, sprinkler supervisory and maintenance charges,

8:             PREMISES “AS IS”:  At the commencement of the term, Tenant shall accept the demised premises and any equipment on or in the demised premises in their then existing condition and state of repair and Tenant covenants, except to the extent specifically elsewhere provided, that no representations, statements or warranties, expressed or implied, have been made by or on behalf of Landlord in respect thereof, in respect of their condition or the use or occupancy that may be made thereof, and that the Landlord shall in no event whatsoever be liable for any latent defects therein, except for guarantees or warranties expressly stated in separate warranty agreements, if same are available to Landlord.

9:             COMPLIANCE WITH LAWS, ETC.: The Tenant shall promptly comply with all laws, ordinances, rules, regulations, requirements and directives of the Federal, State and Municipal Governments or Public Authorities and of all their departments, bureaus and subdivisions, applicable to and affecting the said premises, their use and occupancy, for the correction, prevention and abatement of nuisances, violations or other grievances in, upon or connected with the said premises, during the term hereof; and shall promptly comply with all orders, regulations, requirements and directives of the Board of Fire Underwriters or similar authority and of any insurance companies which have issued or are about

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to issue policies of insurance covering the said premises and its contents, for the prevention of fire or other casualty, damage or injury, at the Tenant’s own cost and expense.

10:           ASSIGNMENT:  The Tenant shall not assign, mortgage or hypothecate this lease, nor sublet or sublease the premises or any part thereof; nor occupy or use the leased premises or any part thereof without the approval of Landlord, which shall not be unreasonably withheld; nor permit or suffer the same to be occupied or used for any purposes other than as herein limited, nor for any purpose deemed unlawful, disreputable, or extra hazardous, on account of fire or other casualty. Assignment will be permitted to a subsidiary, or successor corporation by merger.

11:           ALTERATIONS AND IMPROVEMENTS:  No alterations, additions or improvements shall be made, and no climate regulating, air conditioning, cooling, heating or sprinkler systems, television or radio antennas, heavy equipment, apparatus and fixtures shall be installed in or attached to the leased premises, without the written consent of the Landlord, which shall not be unreasonably withheld provided, however, that Tenant may make interior non-structural alterations or improvements to the premises without the written consent of the Landlord. Unless otherwise provided herein, except for Tenant’s trade fixtures and equipment, all such alterations, additions or improvements and systems, when made, installed in or attached to the said premises, shall belong to and come s e property of the Landlord and shall be surrendered with the premises and as part thereof upon the expiration or sooner termination of this lease, without hindrance, molestation or injury.

12:           INTENTIONALLY OMITTED.

13:           INSPECTION AND REPAIR:  The Tenant agrees that the Landlord and the Landlord’s agents, employees or other representatives, shall have the right to enter into and upon the said premises or any part thereof, at all reasonable hours, upon reasonable notice to Tenant, except in the case of an emergency, for the purpose of examining the same or making such repairs or alterations therein as may be necessary for the safety and preservation thereof.

This is to include the running of piping, wiring, etc., which the Landlord in its sole judgment may find necessary for the building of which the demised premises are a part.

This clause shall not be deemed to be a covenant by the Landlord nor be construed to create an obligation on the part of the Landlord to make such inspection or repairs. Entry shall be preceded by reasonable prior oral or written notice, except in case of emergency, and Landlord, its agents, employees, and/or representatives shall exercise due care an not interfere with the operation of Tenant’s business to the extent reasonably possible.

14:           RIGHT TO EXHIBIT:  The Tenant agrees to permit the Landlord’s agents, employees, or other representatives to show the premises to persons wishing to rent or purchase the same, and Tenant agrees that on and after 180 days next preceding the expiration of the term or option period exercised by Tenant hereof, the Landlord or the Landlord’s agents, employees or other representatives shall have the right to place notices on the front of said premises or any part thereof, offering the premises for rent or for sale; and the Tenant hereby agrees to permit the same to remain thereon without hindrance or molestation.

15:           SIGNS:  The Tenant shall not place nor allow to be placed any signs of any kind whatsoever upon, in or about the said premises or any part thereof, except of a design and structure and in or at such places as may be indicated and consented to by the Landlord in writing. In case the Landlord or the Landlord’s agents, employees or representatives shall deem it necessary to remove any such signs in order to paint or make any repairs, alterations or improvements in or upon said premises or any part thereof, they may be so removed, but shall be replaced at the Landlord’s expense when the said repairs,

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alterations or improvements shall have been completed. Any signs permitted by the Landlord shall at all times conform with all municipal ordinances or other laws and regulations applicable thereto.

16:           NON-LIABILITY OF LANDLORD:  The Landlord, except where caused by the negligence or intentional conduct of the Landlord, its agents, employees or contractors, shall not be liable for any damage or injury which may be sustained by the Tenant or any other person, as a consequence of the failure, breakage, leakage or obstruction of the water, plumbing, steam, sewer, waste or soil pipes, roof, drains, leaders, gutters, valleys, downspouts or the like or of the electrical, gas, power, conveyor, refrigeration, sprinkler, air-conditioning or heating systems, elevators or hoisting equipment; or by reason of the elements; or resulting from the carelessness, negligence, or improper conduct on the part of any other Tenant or this or any other Tenant’s agents, employees, guests, licensees, invitees, subtenants, assignees or successors; or attributable to any interference with, interruption of or failure, beyond the control of the landlord, of any services to be furnished or supplied by the Landlord.

17:           MORTGAGE PRIORITY:  This lease shall not be a lien against the said premises in respect to any mortgages that may hereafter be placed upon said premises.

The recording of such mortgage or mortgages shall have preference and precedence and be superior and prior in lien to this leases, irrespective of the date of recording and the Tenant agrees to execute any instruments, without cost, which may be deemed necessary or desirable, to further effect the subordination of this lease to any such mortgage or mortgages. A refusal by the Tenant to execute such instruments shall entitle the Landlord to the option of canceling this lease, and the term hereof is hereby expressly limited accordingly. Landlord agrees to use its best efforts to obtain from any mortgagee placing a lien on the premises, a non-disturbance agreement to the effect that, provided Tenant is not in default under the lease, Tenant may remain undisturbed in possession of the premises and its leasehold interest will not be terminated by foreclosure.

18:           CONDEMNATION AND EMINENT DOMAIN:  If the land and premises leased herein, or any portion thereof, shall be taken under eminent domain or condemnation proceedings, or if suit or other action shall be instituted for the taking or condemnation thereof, then this lease, at the option of the Tenant or Landlord, shall terminate, and the term hereof shall end as of such date as the Tenant or Landlord shall fix by notice in writing; and the Tenant shall have no claim or right to claim or be entitled to any portion of any amount which may be awarded as damages or paid as the result of such condemnation proceedings or paid as the purchase price for such option, sale or conveyance in lieu of formal condemnation proceedings other than any portion of an award attributable to Tenant’s fixtures or personal property; and all rights of the Tenant to damages, if any, are hereby assigned to the Landlord. The Tenant agrees to execute and deliver any instruments, at the expense of the Landlord, as may be deemed necessary or required to expedite any condemnation proceedings or to effectuate a proper transfer of title to such governmental or other public authority, agency, body or public utility seeking to take or acquire the said lands and premises or any portion thereof. The Tenant covenants and agrees to vacate the said premises, remove all the Tenant’s personal property therefrom and deliver up peaceable possession thereof to the Landlord or to such other party designated by the Landlord in the aforementioned notice. Failure by the Tenant to comply with any provisions in this clause shall subject the Tenant to such costs, expenses, damages and losses as the Landlord may incur by reason of the Tenant’s breach hereof.

19:           REMEDIES-UPON-TENANT’S DEFAULT:  If there should occur any default on the part of the Tenant in the performance of any conditions and covenants herein contained, or if during the term hereof the premises or any part thereof shall be or become abandoned or deserted, vacated or vacant, or should the Tenant be evicted by summary proceedings or otherwise, the Landlord, in addition to any other remedies herein contained or as may be permitted by law, may either by appropriate process, without being liable for prosecution therefor, or for damages, re-enter the said premises and the same

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have and again possess and enjoy; and as agent for the Tenant or otherwise, re-let the premises and receive the rents therefor and apply the same, first to the payment of such expenses, reasonable attorney fees and costs, as the Landlord may have been put to in re-entering and repossessing the same and in making such repairs and alterations as may be necessary; and second to the payment of the rents due hereunder. The Tenant shall remain liable for such rents as may be in arrears and also the rents as may accrue subsequent to the re-entry by the Landlord, to the extent of the difference between the rents reserved hereunder and the rents, if any, received by the Landlord during the remainder of the unexpired term hereof, after deducting the aforementioned expenses, fees and costs; the same to be paid as such deficiencies arise and are ascertained each month.

20:           TERMINATION ON DEFAULT:  Notwithstanding any of the provisions of Article 19, upon the occurrence of any’ of the contingencies set forth in the preceding clause, or should the Tenant be adjudicated a bankrupt, insolvent or placed in receivership, or should proceedings be instituted by or against the Tenant for bankruptcy, insolvency, receivership, agreement of composition or assignment for the benefit of creditors, or if this lease or the estate of the Tenant hereunder shall pass to another by virtue of any court proceedings, writ of execution, levy, sale, or by operation of law, the Landlord may, if the Landlord so elects, at any time thereafter, terminate this lease and the term hereof, upon giving to the Tenant or to any trustee, receiver, assignee or other person in.-charge of or acting as custodian of the assets or property of the Tenant, five days notice in writing, of the Landlord’s intention so to do. Upon the giving of such notice, this lease and the term hereof shall end on the date fixed in such notice as if the said date was the date originally fixed in this lease for the expiration hereof; and the Landlord shall have the right to remove all persons, goods, fixtures and chattels therefrom, by appropriate summary process, without liability for damages.

21:           REMOVAL OF TENANT’S PROPERTY:  Any equipment, fixtures, goods or other property of the Tenant, not removed by the Tenant upon the termination of this lease, or upon any quitting, vacating or abandonment of the premises by the Tenant, or upon the Tenant’s eviction, shall be considered as abandoned and the Landlord shall have the right, upon thirty (30) days written notice to Tenant, to sell or otherwise dispose of the same, at the expense of the Tenant, and shall not be accountable to the Tenant for any part of the proceeds of such sale, if any.

22:           REIMBURSEMENT OF LANDLORD:  If the Tenant shall fail or refuse to comply with and perform any such conditions and covenants of the within lease, the Landlord may, if the Landlord so elects, carry out and perform such conditions and covenants, at the cost and expense of the Tenant, and the said cost and expense shall be payable on demand, or at the option of the Landlord shall be added to the installment of rent due immediately thereafter but in no case later than one month after such demand, whichever occurs sooner, and shall be due and payable as such. This remedy shall be in addition to such other remedies as the Landlord may have hereunder by reason of the breach by the Tenant of any of the covenants and conditions in this lease contained.

23:           NON-PERFORMANCE BY LANDLORD:  This lease and the obligation of the Tenant to pay the rent hereunder and to comply with the covenants and conditions hereof, shall not be affected, curtailed, impaired, or excused because of the Landlord’s inability to supply any service or material called for herein, by reason of any rule, order, regulation or preemption by any governmental entity, authority, department, agency, or subdivision or for any delay which may arise by reason of negotiations for the adjustment of any fire or other casualty loss or because of strikes or other labor trouble or for any cause beyond the control of the Landlord.

24:           ESTOPPEL CERTIFICATE:  At any time during the term of this Lease and upon request in writing from the Landlord, the Tenant shall, within fifteen (15) days from receipt of such notice,

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execute an estoppel certificate in a form reasonably satisfactory to Landlord or mortgagee or prospective purchaser.

25:           LANDLORD’S LIABILITY:  It is understood that the liability of the Landlord under this lease or under any other agreement, instrument of document executed in connection with this lease shall be limited to the demised premises which is the subject of this lease agreement and that the officers, shareholders, trustees or partners of the Landlord shall be free of any personal liability in connection with this lease or any such agreement, instrument or document.

26:           LANDLORD/TENANT MAINTENANCE:

(a)           Tenant shall, at all times during the term of this lease and at its own cost and expense, keep and maintain in good order and condition, the demised premises and the equipment, utilities, and appurtenances therein or serving the premises and make all repairs thereto as to the utilities, extraordinary and ordinary, seen and unforeseen, howsoever the necessity or desirability for repairs may occur, reasonable precautions to prevent waste, damage, or injury.

(b)           The Tenant shall neither encumber nor obstruct the sidewalks, driveways, yards, entrances, hallways and stairs but shall keep and maintain the same in a clean condition, free from debris, trash, refuse, snow and ice.

(c)           Landlord will be responsible for-and will pay for all roof and structural repairs, unless damage to structure or roof is caused by acts of commission or omission or negligence of the Tenant, its servants, agents, contractors, servants, or employees, such as, but not limited to, work or placement of any articles or equipment on roof or to any other part of structure. “Structural” is defined as exterior walls (not including doors, windows, or loading docks), structural steel, foundation and floor slab.

27:           AIR CONDITIONING MAINTENANCE:

a)             As set forth in Article 26 of this Lease, Tenant’s agreement to maintain and repair includes all mechanical equipment such as heating and air conditioning, which are upon or are used in connection with the leased premises. Tenant agrees to maintain service contracts during the term of this lease and any extensions thereof with reputable HVAC contractors to provide regular servicing and maintenance of this equipment. When requested in writing by the Landlord, the Tenant will furnish a copy of each service contract. Landlord represents that the HVAC systems, as well as the plumbing, electrical, and mechanical systems in the demised premises, will be in good working order at the time of commencement of lease.

b)            The Tenant further agrees that it will not move roof equipment or penetrate the roof with vents, wiring, piping, etc., unless it first advises the Landlord, so that the Landlord has the opportunity to inspect and approve the work to protect the structural integrity of the roof and keep it watertight.

28:           MECHANICS AND OTHER LIENS:

Tenant shall have no power to do any act or make any contract which may create or be the foundation for any lien, mortgage or other encumbrance upon the reversion or other estate of the Landlord, or upon any interest of Landlord in the demised premises, it being agreed that, should Tenant cause any alterations, rebuildings, replacements, changes, additions, improvements or repairs to be made to the demised premises, or cause any labor to be performed or material to be furnished therein, thereon or thereto, neither Landlord nor the demised premises shall under any circumstances be liable for the payment of any expense incurred or for the value of the work done or material furnished, but all such

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alterations, rebuildings, replacements, changes, additions, improvements and repairs, and labor and material, shall be made, furnished and performed at Tenant’s expense, and Tenant shall be solely and wholly responsible to contractors, laborers, and material men furnishing and performing such labor and material.

If, because of any act or omission (or alleged act or omission) of Tenant, any mechanic’s or other lien, charge, or order for the payment of money shall be filed against the demised premises or against Landlord or any conditional bill of sale or chattel mortgage shall be filed for or affecting any equipment. or any materials used in the construction or alteration of any improvements (whether or not such lien, charge order, conditional bill of sale or chattel mortgage is valid or enforceable as such), Tenant shall, at its own cost and expense cause the same to be canceled and discharged of record or bonded within ten (10) business days after notice of filing thereof.

29:           BROKER:  Landlord and Tenant each represent that they have not contacted or dealt with any real estate broker, agent, or salesman regarding the within and each agrees to save and hold the other harmless from claims arising out of any alleged breach of the foregoing representations

30:           CONFORMATION WITH LAWS AND REGULATIONS:  The parties may pursue the relief or remedy sought in any invalid clause by conforming the said clause with the provisions of the statutes or the regulations of any governmental agency in such case made and provided, as if the particular provisions of the applicable statutes or regulations were set forth herein at length.

31:           GOVERNMENTAL REGULATIONS/TENANT’S ENVIRONMENTAL PROVISIONS:

a)             Tenant shall, at Tenant’s sole cost and expense, without notice or demand from Landlord, comply with all the requirements of all county, municipal, state, federal and other applicable governmental authorities now in force, or which may hereafter be in force, pertaining solely to Tenant’s use of the said Demised. Premises and shall faithfully observe in the use of the Demised Premises all governmental requirements, including environmental regulations, now in force or which may hereafter be in force.

b)            Tenant shall indemnify Landlord, save harmless Landlord from all fines, suits, procedures, claims, actions and costs, including reasonable attorneys’ fees arising out of or in any way connected with any spills or discharges of hazardous substances or wastes at the Demised Premises caused by Tenant, its agents or employees and which spills or discharges occur during the term of this Lease or which may have occurred during the period of Tenant’s occupancy of the demised premises prior to the Commencement Date of this Lease, and from all fines, suits, procedures, claims and actions of any kind arising out of Tenant’s failure to provide all information, make all submissions and take all actions required by any regulatory authority. Tenant’s obligations under this Article shall continue so long as Landlord remains responsible for any spills or discharges of hazardous substances or wastes at the Demised Premises caused by Tenant, its agents or employees and which spills or discharges occur during the Term of this Lease.

c)             Landlord shall have the right to inspect the Demised Premises and in finding any violation(s) by Tenant of said environmental statutes, acts or regulations, and if the Tenant (upon notice) does not commence to correct within 30 days, Landlord may cancel this agreement upon 30 days notice to the Tenant in writing unless sooner required by the applicable regulatory agency. This right of cancellation is in addition to such other remedies as the Landlord may have hereunder by reason of the breach by the Tenant of any of the covenants and conditions in this Lease.

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d)            Any effluent generated by operation of Tenant’s business will be treated by Tenant so that contents of sewage will comply with standards set by local, state or federal environmental agencies and applicable laws and regulations. Tenant will supply Landlord with such certifications which may be required by the aforesaid agencies and will hold the Landlord harmless and will defend the landlord against any future claims or suites arising out of the conduct of Tenant’s business.

32:           VALIDITY OF LEASE:  The terms, conditions, covenants and provisions of this lease shall be deemed to be severable. If any clause or provision herein contained shall be adjudged to be invalid or unenforceable by a court of competent jurisdiction or by operation of any applicable law, it shall not affect the validity of any other clause or provision herein, but such other clauses or provisions shall remain in full force and effect.

33:           NON-WAIVER BY LANDLORD:  The various rights, remedies, options and elections of the Landlord, expressed herein, are cumulative, and the failure of the Landlord to enforce strict performance by the Tenant of the conditions and covenants of this lease or to exercise any election or option or to resort or have recourse to any remedy herein conferred or the acceptance by the Landlord of any installment of rent after any breach by the Tenant, in any one or more instances, shall not be construed or deemed to be a waiver or a relinquishment for the future by the Landlord of any such conditions and covenants, options, elections, or remedies, but the same shall continue in full force and effect.

34:           NOTICES:  All notices required under the terms of this lease shall be given and shall be complete upon personal delivery or three days after mailing such notices by certified or registered mail, return receipt requested, to the address of the parties as shown at the head of this lease, or to such other address as may be designated in writing, which notice of change of address shall be given in the same manner.

35:           TITLE AND QUIET ENJOYMENT:  The Landlord covenants and represents that the Landlord is the owner of the premises herein leased and has the right and authority to enter into, execute and deliver this lease; and does further covenant that the Tenant on paying the rent and performing the conditions and covenants herein contained, shall and may peaceably and quietly have, hold, and enjoy the leased premises for the term aforementioned.

36:           ENTIRE CONTRACT:  This lease contains the entire contract between the parties. No representative, agent or employee of the Landlord has been authorized to make any representations or promises with reference to the within letting or to vary, alter or modify the terms hereof. No additions, changes or modifications, renewals or extensions hereof, shall be binding unless reduced in writing and signed by the Landlord and the Tenant.

37:           MISCELLANEOUS:  In all references herein to any parties, persons, entities or corporations, the use of any particular gender or the plural or singular member is intended to include the appropriate gender or member, as the text of the within instrument may require. All the terms, covenants and conditions herein contained shall be for and shall inure to benefit of and shall bind the respective parties hereto, and their heirs, executors, administrators, personal or legal representatives, successors and assigns.

38:           ARBITRATION:

(a)           In such cases where this lease provides for the settlement of disputes by arbitration, the same shall be settled by arbitration in Chester County, Pennsylvania in accordance with the rules, then

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obtaining, of the American Arbitration Association, and judgment upon the award rendered may be entered in any court having jurisdiction thereof.

(b)           In the event that either of the parties shall have any dispute and it shall invoke this arbitration clause, no action shall be deemed effective under the terms of this lease until the determination of the arbitrators shall have been final and a judgment thereon shall. have been served upon the party against whom action shall be taken or invoked.

39:           HOLDING OVER:  In the event that Tenant shall remain in the demised premises after the expiration of the term of this lease without having executed a new written lease with the Landlord, such holding over shall not constitute a renewal or extension of this lease. The Landlord may, at its option, elect to treat the Tenant as one who has not removed at the end of his term and thereupon be entitled to all the remedies against the Tenant provided by law in that situation, or the Landlord may elect, at its option, to construe such holding over as a tenancy from month to month, subject to all the terms and conditions of this lease, except as to duration thereof.

40:           SURRENDER OF PREMISES:

(a)           Tenant covenants and agrees to deliver up and surrender to the Landlord possession of the demised premises upon expiration of this lease, or its earlier termination as herein provided, broom clean and in as good condition and repair as the same shall be at the commencement of the term of this Lease, or may have been put by the Landlord during the continuance thereof, ordinary wear and tear and damage by fire or the elements excepted. Tenant shall also surrender all keys for the Demised Premises, as well as all building drawings and environmental reports of any kind relating to the Demised Premises. The foregoing shall require that Tenant cause the following (which is not an exclusive list) to be true as of the date of surrender, to the extent such condition existed at the date of occupancy:

a.All interior and exterior lights are operational and burning.

b.All exhaust, ceiling and overhead fans are operational.

c.Warehouse floor is broom swept and clean of all trash and materials.

d.Warehouse floor is cleaned of excessive oils, fluids and other foreign materials.

e.All electrical, plumbing, and other utilities which are terminated are disconnected, capped and/or terminated according to applicable building codes and all other governmental requirements.

f.All electrical conduit and wiring installed by Tenant specifically for Tenant’s equipment are removed to originating electrical panel if Landlord so requires.

g.Overhead interior and exterior doors are operational and in good condition.

h.Any bolts secured to floor are cut off flush and sealed with epoxy.

i.Warehouse fencing or partitions installed by Tenant are removed if Landlord so requires.

j.All furniture, trash and debris are removed.

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k.All pictures, posters, signage, stickers and all similar items are removed from all walls, windows, doors and other interior and exterior services of the Premises.

l.Carpet areas are vacuumed.

m.All uncarpeted office floors are swept, and any excess wax buildup on tile and vinyl floors is removed.

n.All Tenant-installed computer cable is removed to point of origin.

o.All doors, windows and miscellaneous hardware are operational.

p.All heating, air conditioning and mechanical equipment is operational and in good working condition.

q.Ceiling tiles, grid, light lenses, air grills and diffusers are in place with no holes or stains.

r.There are no broken windows or other glass items.

s.Bathroom, walls, floors, and fixtures are clean.

t.All plumbing fixtures are intact and operational and do not leak.

u.All downspouts are undamaged and operational.

v.Walls (internal and external) are clean and any holes are properly and permanently patched.

w.Parking lot is in good condition with no potholes or cracked/alligatored surfaces.

x.Sidewalks and concrete aprons are in good condition with no broken surfaces or holes.

(b)           Within thirty (30) days of Tenant’s receipt of written request from the Landlord, the Tenant shall, at Tenant’s expense, remove all property of Tenant and repair all damage to the Demised premises caused by such removal and restore the Demised Premises. Any property not so removed shall be deemed to have been abandoned by Tenant and may be retained or disposed of by Landlord, as Landlord shall desire. Tenant will remove special piping, wiring and ductwork installed above hung ceilings for Tenant’s operations. Tenant’s obligation to observe or perform this covenant shall survive the expiration of the term of this Lease.

41:           TENANT’S WORK:  Within ninety (90) days of execution of this Lease, Tenant will repair broken sidewalks and curbs at the demised premises.

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IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and seals or caused these presents to be signed by their proper corporate officers and their proper corporate seal to be hereto affixed, the day and year first above written.

LANDLORD:
G-C-T CORPORATION
By:	/s/ Robert Cronheim
	Robert Cronheim, President
TENANT:
LIONVILLE LABORATORIES, INC.
By:	/s/ Carter Nulton
	Carter Nulton

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EX-10.5

Exhibit 10.5

LEASE AGREEMENT
BETWEEN
J.W. GIBSON CONSTRUCTION COMPANY
AND
TMA/EBERLINE
601-B SCARBORO ROAD
OAK RIDGE, TN 37830

1.  PARTIES

THIS INDENTURE OF LEASE, made and entered into this the 24th day of October, 2000, by and between J.W. GIBSON CONSTRUCTION COMPANY, of Oak Ridge, Anderson County, Tennessee, hereinafter called “Lessor”, and Eberline Analytical Corp., of Albuquerque, Bernalillo County, New Mexico, hereinafter called “Lessee”.

2.  CONSIDERATION

That each of the aforesaid parties hereto acknowledges the receipt of one dollar and other valuable considerations paid by Lessee to Lessor, and that they and each of them, in further consideration of the engagements and mutual covenants of the other as herein stated agree as follows:

3.  PREMISES

A.            The Lessor has and does hereby grant, demise and lease unto the said Lessee, those certain premises (the “Premises”) consisting of approximately 10,000 square feet of administrative, laboratory and storage type space within the entire building situated upon approximately 1.85 acres of land being approximately 16.5% of Lessor’s parcel and being addressed as 601-A Scarboro Road, Oak Ridge, TN. Demised premises is furthermore set out in the attached “Exhibit A”.

B.            Lessee, its employees, guests, and invitees shall have the right of common usage for egress to and egress from the premises.

C.            During the duration of the lease, Lessee may install, at Lessee’s own expense, any improvements desired or needed by the Lessee, inside or outside of the respective buildings located on premises subject to Lessor approval, which approval shall not be unreasonably withheld.

D.            Upon the expiration of the lease either at its normal termination, at the end of any extension, termination because of default or early termination pursuant to Article 6, the Lessee shall immediately quit the Premises. All improvements except trade fixtures shall remain and the Lessee shall repair any material damage to Premises excepting normal wear and tear, fire, explosion, extended coverage endorsement perils as defined by the standard insurance company policy form and events beyond the control of Lessee. Trade fixtures are defined as items of personal property used by Lessee in its business operations and shall specifically exclude partitions, heating and air-conditioning equipment, water fountains, toilets, plumbing and electrical equipment and the like which although installed by Lessee are nevertheless a usual fixture and/or appurtenance to the building. If any structural damage is

caused in removing trade fixtures, Lessee shall promptly repair such damage. If applicable, Lessee specifically promises to remove radioactive and/or contaminated materials from the Premises at the expiration of the lease to the extent necessary to have the premises declared acceptable for unrestricted use as defined by the State of Tennessee Department of Health and Environment, Division of Radiological Health.

E.             Notice is hereby given the Lessor shall not, under any circumstances; be liable to pay for any work, labor or services rendered or materials furnished to or for the account of Lessee or anyone holding the Premises or any part thereof by, through or under Lessee upon or in connection with the Premises, and that no mechanics’ or other lien for work, labor or services rendered or material furnished to or for the account of Lessee or anyone holding the Premises or any part thereof by, through or under Lessee, shall under any circumstances, attach to or affect the Premises or any part thereof or the interest of Lessor therein. All such work, labor, services or material shall be rendered or furnished at the expense of Lessee, and Lessee shall be solely and wholly responsible therefor and shall hold Lessor and the Premises harmless against the same.

F.             Lessee shall not suffer or permit any liens to stand against the Premises or any part thereof, or the interest of Lessor therein, by reason of any work, labor, services or material done for or supplied to, or claimed to have been done for or supplied to, Lessee or anyone holding the premises, or any part thereof, through or under Lessee. If Lessee shall fail to discharge any such liens within sixty (60) days after demand from Lessor, then in addition to any other right or remedy of Lessor, Lessor may, but shall not be obligated to, discharge the same in any manner permitted by law.

Any amount paid or deposited by Lessor for such purpose and all legal and other expenses of Lessor, including attorney fees incurred in procuring the discharge of such lien, with all necessary disbursements in connection therewith, together with interest at the prime rate of interest charged by Bank of Boston, plus 2 % per annum (the “Default Rate”) from the date of payment of deposit shall become due and payable forthwith by Lessee to Lessor.

4.  PURPOSE

The demised Premises are leased by Lessor to Lessee for the purpose of routine office, administrative, and analytical type uses and any use deemed appropriate to the operation of Lessee’s business. Any such uses shall comply fully with any current zoning regulations or any amendments thereof.

5.  TERM

A.            The initial term of this lease shall be for a term of 5 consecutive years, beginning October 1, 2000, unless sooner terminated as provided for herein.

B.            Lessee shall have the right and option to extend said lease term for a period of an additional 5 year term at a mutually agreeable rental rate, as determined not later than 120 days prior to lease expiration by providing Lessor with written notice of intent to do same, such notice to be provided to Lessor at the address where basic rents are paid not less than ninety (90) days and not more that one hundred eighty (180) days before the expiration of the term of this lease.

C.            Lessor agrees to keep Lessee in peaceable, uninterrupted possession of Premises so long as Lessee complies with and performs all of the terms, covenants and conditions of this Lease Agreement.

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6.  RIGHT TO TERMINATE NOT EXCLUSIVE

The right of the Lessor to terminate this Lease Agreement as herein set forth is in addition to and not in exhaustion of such other rights that the Lessor has or causes of action that may accrue to the Lessor because of Lessee’s failure to fulfill, perform or observe the obligations, agreements, or covenants of this Lease Agreement, and the exercise or pursuit by the Lessor of any of the rights or causes of action accruing hereunder shall not be in exhaustion of such other rights or causes of action that the Lessor might otherwise have.

7.  RENTAL

A.            Lessee shall and hereby agrees to pay to Lessor at Lessor’s office or such place as Lessor may from time to time, designate in writing, an annual base rental of $84,996 Dollars. The rent shall be in equal monthly installments, each installment being 1/12th of the annual base rental. The monthly rate shall be $7.083 Dollars.

B.            In addition to the base rental, Lessee shall pay Lessor the direct cost of all real property taxes net of any abatement, real property insurance, and other real property assessments net of any abatement prorated in accordance with the effective fractional space defined in Article 3. Lessor shall submit to Lessee paid receipts or similar documentation of these costs prior to December 31st of each year of this lease term and Lessee agrees to reimburse Lessor within 30 days of the receipt of the billing. Expenses for the first and last year of the lease shall be apportioned between Lessor and Lessee based on actual period of occupation.

The term “Real Estate Taxes” shall in no event be deemed to include any income, excess profits, excise, franchise, estate, succession, inheritance, gift, mortgage lien, documentary stamp or transfer taxes. If Lessor shall obtain any abatement, refund or rebate in Real Estate Taxes theretofore paid by Lessee under this Lease, Lessor shall promptly forward to Lessee Lessee’s Pro Rata Share thereof, less Lessee’s Pro Rata Share of the cost obtaining the same. Lessor covenants and agrees that it shall timely and fully pay to the applicable taxing authority all Real Estate Taxes levied against the Property. Lessee shall not, in any event be liable for any interest or penalty charges payable by Lessor with respect to the Real Estate Taxes. Notwithstanding anything to the contrary contained in this Lease, in the event that Lessee is obligated to pay any portion of any betterment or special assessment Lessee’s payments shall be calculated as if such assignment were amortized on a straight-line basis consistent with generally accepted accounting principles consistently applied (“GAAP”), such that Lessee shall pay a total amount equal to Lessee’s Pro Rata Share of such assessment multiplied by a fraction, the numerator of which is the number of years remaining in the Tern and the denominator of which is the greater of (a) the number of years in the entire Tern or (b) the number of years for amortization indicated by GAAP.

C.            It is expressly understood and agreed that no act, practice or custom on the part of Lessor with respect to giving notice to Lessee of the time that monthly rental payments are due shall ever be construed as an obligation on the part of Lessor to give such notice to Lessee.

D.            The burden of proof of payment of the rental or any other sum due Lessor hereunder shall be on the Lessee.

E.             The first payment of rent shall be due on the first day of the month following the month that the obligations expressed herein become effective, and subsequent payments due on the like day of subsequent months.

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8.  ASSIGNMENT AND SUBLETTING

Lessee covenants and agrees not to assign this Lease Agreement or sublet the demised Premises or any part of same, or in any other manner transfer the lease agreement, leasehold or demised Premises, without the written consent of the Lessor, which consent shall not be unreasonably withheld.

Notwithstanding anything to the contrary contained in this Lease, Lessee shall have the right to make, without Lessor’s consent, any assignment of this Lease or subletting of all or any portion of the Premises to (a) a parent, subsidiary, or division of Lessee, (b) any entity with which or into which Lessee may consolidate or merge, or ( c ) any entity acquiring all or substantially all of the assets of Lessee. In the event of any such assignment, Lessee shall promptly and within 10 days give notice to Lessor of any such assignment.

In the event Lessor consents to a subletting or assignment, Lessee shall, nevertheless, remain liable for the payment to Lessor of all slims due Lessor hereunder, and remain responsible for compliance with all of the terms and conditions of this Lease Agreement. Any consent given by Lessor to a subletting or an assignment shall not be deemed a consent to a subsequent subletting or assignment.

9.  LAWFUL AND MORAL USE

Lessee covenants that the demised Premises shall, during the term of this Lease Agreement, be used only and exclusively for lawful and moral purposes, and that no part of the demised Premises shall be used by Lessee or any persons holding by, through or under Lessee in any manner whatsoever for any purpose(s) which violate the laws of the United States, the State of Tennessee, the County of Anderson, the ordinance of the City of Oak Ridge, or the laws of any other applicable governmental authority; and the Lessee shall save and hold Lessor harmless for all loss, cost, expenses and damages incurred by Lessor or which Lessor should become liable for an account of any such violation.

10.  INTERPRETATION AND CONSTRUCTION

This lease shall be interpreted under the laws of the State of Tennessee.

11.  ENTIRE AGREEMENT

This lease contains all the agreements and conditions made between the parties hereto, and no representations or statements claimed to have been made and not herein contained shall vary or modify this contract in any way and this lease cannot be modified except as the parties agree in writing.

12.  CONDEMNATION

If the whole or substantially the whole of the Premises shall be lawfully condemned or taken in any manner for any public or quasi public use or purpose, this tease shall terminate as of the date of the taking. If less than the whole or substantially the whole Premises are taken and it is still feasible for Lessee to operate its business, the base rental shall be diminished by the amount representing the part of said rent properly applicable to the portion of the Premises which may be so taken and the Lessor shall at his expense proceed with reasonable diligence to repair, alter and restore the remaining part of the Premises to substantially its former condition to the extent that the same may be feasible. The Lessor shall be entitled to receive the award in any condemnation proceeding, including any award for the value of any unexpired term of this lease and Lessee shall have no claim against Lessor or against the proceeds of

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the condemnation. Nothing contained herein shall affect Lessee’s right to a separate award for it’s trade fixtures and moving expenses.

13.  NUISANCES

Lessee covenants not to create or allow any nuisance to exist in, from, on or about the demised Premises, and Lessee covenants to immediately at his expense abate any such nuisance that may arise when requested by Lessor to do so.

14.  SUBORDINATION

This lease shall be subordinate to any first mortgage and extensions thereto, now or hereafter placed upon the land upon which the Premises are located and in the event of foreclosure of such first mortgage, the exercise of a power of sale thereunder, or deed in lieu of foreclosure, Lessee shall attorn to and recognize such purchaser, foreclosure, sale or other transfer as the Lessor; provided that in each case such shall not disturb Lessee’s right to possession or its other rights hereunder so long as Lessee complies with the terms of this lease.

15.  INSURANCE

A.            Lessee covenants and agrees that, during the term of this lease, it will carry, at its expense, property insurance covering against loss or damage of Lessee’s improvements on the Premises and such insurance shall be in the kind and amounts customarily maintained by Lessee for such property.

B.            Lessee covenants and agrees to carry, during the term of the lease, at Lessee’s expense:

1.             Workers Compensation Insurance on Lessee’s employees; and

2.             Public liability and property damage insurance coverage insuring Lessee with minimum coverage limits for public liability insurance of $2,000,000 for one person in respect to one accident and for more than one person in respect to any one accident, and for property damage insurance a limit of $2,000,000 each accident. Lessor will be included as an additional insured but only as regards to liability arising out of the fault or negligence of Lessee in its use or occupancy of the Premises.

C.            Lessee covenants and agrees not to do or permit anything to be done or anything to remain on the Premises, not to permit any business, trade, or occupation to be carried on in the Premises, which causes or may cause an increase or additional premium for the fire and extended coverage insurance on the Premises without the written consent of Lessor, and if Lessee’s actions do cause an increase in the premium, Lessee shall pay such additional premiums.

Lessee agrees to obtain, at its expense, adequate insurance related to the nature of the business. Certificates of nuclear liability insurance will be provided upon request.

D.            Lessee agrees to deliver to Lessor on the inception date and on renewal date of each such policy of insurance that Lessee is required to carry by the terms of this Lease Agreement the usual certificate issued by the insurance carriers certifying that such insurance is in full force and that all such policies shall not be canceled without ten (10) days written notice to Lessor.

E.             If the Premises shall be so damaged or destroyed by fire or other causes within the insurance coverage of Lessor’s standard fire and extended coverage insurance policy and Lessor cannot

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repair or rebuild same within ninety (90) days from the date of such damage or destruction, this lease shall terminate and the Lessee shall be allowed an abatement of all rent from the date of such damage or destruction. If the Premises shall be so damaged or destroyed by fire or other causes within the insurance coverage of Lessor’s standard fire and extended insurance coverage policy that it can be repaired within ninety (90) days of the date of such damage or destruction, then this lease shall not terminate and the Premises shall be repaired by the Lessor, at its own expense, and the rent shall abate until such repair or rebuilding is completed and possession of the Premises or so much thereof as shall have become untenable is returned to the Lessee; provided that subject to Force Majeure, if the reparation and rebuilding is not so completed within said Ninety (90) day period, Lessee may terminate this lease by notice given within one hundred twenty (120) days of such damage or destruction.

F.             If the Premises shall be damaged or destroyed by causes not within the coverage of the Lessor’s above-mentioned fire and extended coverage insurance and not arising out of the Lessee’s use and occupancy, then rent will abate and if Lessor does not within thirty (30 ) days after such damage or destruction commence to repair or rebuild the demised Premises, either party may terminate this Lease Agreement by notice to the other of said termination. If the Lessor repairs or rebuilds the demised Premises, this Lease Agreement shall not so terminate, provided Lessor diligently pursues and completes same within ninety (90) days form the commencement of repair or rebuilding subject to delays beyond Lessor’s reasonable control. Until rebuilding or repairs are completed the rent shall be abated.

G.            In the event of repair or rebuilding, the terms of this Lease Agreement shall be extended for a period equal to such period of rent abatement.

H.            Lessee shall in case of any damage or destruction not otherwise known to Lessor, give immediate notice thereof to the Lessor. Lessor shall within thirty (30) days after such damage or destruction give written notice to Lessee whether Lessor can or will repair and restore within the time period as herein provided. Failure to give such notice shall be deemed notice that Lessor cannot or will not repair and restore.

I.              Lessor agrees to maintain fire and extended coverage insurance at the full replacement cost of the building. Lessor agrees to deliver to Lessee on this inception date and on renewal date of each such policy of insurance that Lessor is required to carry by the terms of this Lease Agreement the usual certificate issued by the insurance carriers certifying that such insurance is in full force and that all such policies shall not be canceled without ten (10) days written notice to Lessee.

16.  DAMAGES. ACCIDENTS. ETC.

Notwithstanding anything to the contrary contained in this Lease, Lessee shall indemnify and hold harmless Lessor from and against any and all damages, liabilities, actions, causes of action, suits, claims, demands, losses, costs and expenses ( including without limitation reasonable attorneys’ fees and disbursements and court costs ) to the extent arising from or in connection with the negligence or willful misconduct of Lessee, its agents, employees, representatives or contractors.

Notwithstanding anything to the contrary contained in this Lease, Lessor shall indemnify and hold harmless Lessee, its parent, subsidiaries and affiliates, and their respective officers, directors, shareholders and employees, from and against any and all damages, liabilities, actions, causes of action, suites, claims demands, losses, costs and expenses (including without limitation reasonable attorneys’ fees and disbursements and court costs ) to the extent arising from or in connection with the negligence or willful misconduct of Lessor, its agents, employees, representatives or contractors.

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The party seeking indemnification under this Section (the ‘Indemnified Party”) shall provide prompt written notice of any third party claim to the party from whom indemnification is sought (the “Indemnifying Party”). The Indemnifying Party shall then have ten (10) days to elect, by written notice to the Indemnified Party, to assume, at the Indemnifying Party’s expense, exclusive control of the defense of such claim. The Indemnified Party agrees to cooperate reasonably with the Indemnifying Party in connection with the performance of the Indemnifying Party’s obligations under this Section.

Notwithstanding anything to the contrary contained in this Lease, in no event shall either party be liable to the other for any indirect, special, consequential or incidental damages (including without limitation damages for loss of use of facilities or equipment, loss of goodwill or loss of revenue other than the rent, additional rent and other charges payable by Lessee under, this Lease) regardless of whether such party has been informed of the possibility of such damages or is negligent.

The provisions of this Section shall survive the expiration or earlier termination of this Lease.

17.  INSOLVENCY, ETC. OF LESSEE

In the event of insolvency or bankruptcy of the Lessee, or the filing of any petition under any provision of the Bankruptcy Act or State insolvency laws against Lessee, whether voluntarily or involuntarily, or in the event of a partial or general assignment by Lessee for the benefit of Lessee’s creditors, or in the event Lessee files a petition for an arrangement or composition under the provisions of the Bankruptcy Act, Lessor shall have the right and privilege to immediately terminate this Lease Agreement and declare the then remaining unpaid balance of the rental due for the remainder of the term, as if same were not terminated, immediately due and payable. Lessor shall have the right with or without legal process to immediately reenter into possession of the Premises.

Without limiting the preceding paragraphs, no interest of Lessee in this lease shall be assignable by operation of law. Each of the following acts shall be considered an involuntary assignment:

A.            If Lessee is adjudicated bankrupt or insolvent, makes an assignment for the benefit of creditors, or institutes a proceeding under the Bankruptcy Act in which Lessee is the bankrupt; and

B.            If a writ of attachment or execution is levied on this lease and such attachment is not removed within forty-five (45) days of such levy; and

C.            If, in any proceeding or action to which Lessee is a party, a receiver is appointed with authority to take possession of the Premises and the appointment of such receiver is not vacated within forty-five (45) days after such appointment.

An involuntary assignment shall constitute a default by Lessee and Lessor shall have the right to terminate this lease, in which case the lease shall not be treated as an asset of Lessee.

18.  COVENANT TO SURRENDER

Upon the expiration or termination of this lease. Lessee shall quit and surrender the Premises to Lessor in good condition and repair, normal wear and tear, acts of God, the elements and casualty damage excepted.

19.  RIGHT OF ENTRY: INSPECTION AND SHOWING

With reasonable notice to Lessee, Lessor or Lessor’s agent shall have the right to enter the Premises during Lessee’s normal business hours to examine the same and to show them to prospective mortgagees or purchasers of the Premises during the term thereof, and during the last four (4) months of the term to show them to prospective lessees. With reasonable notice to Lessee, Lessor or Lessor’s agent

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may also enter the Premises for the purpose of inspecting for damages or for making any repairs required to be made by it under the terms of this lease, and also to make any repairs required to be made by Lessee under this lease and which Lessee has not made or refuses to make. With reasonable notice to Lessee and when accompanied by Lessor or Lessor’s agent, any mortgagee of the Premises shall have the right to inspect the Premises during Lessee’s normal business hours. Any such entry may be made without Lessor or Lessor’s agents being deemed guilty of trespass and without the same constituting any eviction of Lessee, in whole or in part. Nothing herein contained shall be deemed or construed to impose on Lessor any obligation, responsibility or liability whatsoever, for the care, supervision or repair of the Premises or any part thereof other than as herein provided. Lessor or Lessor’s agents shall also be allowed to take all material and necessary tools and equipment into and upon the Premises that may be required for the aforesaid repairs and the rent reserved shall in no way abate while any such repairs are being made.

19.  DEFAULT

A.            All covenants and agreements herein made and obligations assumed are to be construed also as conditions and are upon the express condition that if Lessee shall fail to pay when due any one of the aforesaid installments of rent or any other monetary obligations hereunder, or if Lessee shall fail or refuse to perform or observe any of the covenants, agreements or obligations herein made or assigned by said Lessee, and if such default is continued for ten (10) days (in the case of rent or other monetary obligations) or sixty (60) days (in the case of other covenants, agreements or obligations herein made or assumed by Lessee) after Lessee’s receipt of written notice from Lessor specifying the respects in which Lessee is in default hereof, then and thenceforth so long as such default is not cured, in any of said events, (i) this Lease Agreement may be terminated at the option of the Lessor, and said Lessor may immediately at or anytime thereafter,(ii) re-enter into possession of the Premises, or any part thereof in the name of the whole, with or without resort to legal process from any court, and (iii) to declare the then remaining unpaid balance of the total rental due for the remainder of the term, as if the same were not so terminated, immediately due and payable.

B.            If Lessee is dispossessed form the Premises and this lease is terminated by Lessor under the provisions of paragraph A of this article 20, Lessor may, at its option, relet same for such period or period as Lessor deems advisable (whether for the entire residue of the term or for a shorter or longer period) and upon the best rent and terms that Lessor, by the exercise of reasonable diligence, is able to obtain. Whether or not the Premises are relet, Lessee shall remain liable hereunder, until the time originally fixed for expiration of the term hereof, for the rent reserved hereunder less the net avails of any reletting, if any, after deducting therefrom all expenses incurred by Lessor of obtaining possession (including reasonable attorney’s fees), reletting, collection and necessary repairs and alterations; and the same shall be due and payable by Lessee on the first day of each month from and after the first day of each of said months from and after such date, Lessee will, upon receiving a statement of the net avails of releasing, if any, pay to the Lessor the amount of deficiency than existing. Notwithstanding the foregoing, Lessor agrees to use commercially reasonable efforts to relet the premises and mitigate its damages.

C.            Any item, other than rent, which Lessee is obligated to pay Lessor hereunder, shall, at the option of Lessor, be treated as additional rent due hereunder, and Lessor, in addition to any other rights or remedy Lessor may have shall have the same right and remedies for non-payment thereof as for non-payment of rent.

D.            The specific remedies to which Lessor or Lessee may resort under the terms of this lease are cumulative and not intended to be exclusive of any other remedies or means or redress to which Lessor may be lawfully entitled in case of any breach or threatened breach by Lessee of any provision of this lease.

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E.             In addition to any and all other rights and remedies to which the parties may be entitled, the parties shall be entitled to the restraint by injunction of any violation or attempted or threatened violation of any of the terms, covenants, conditions, provisions or agreements of this lease.

F.             In the event of any action at law or in equity between Lessor and Lessee to enforce any of the provisions and/or rights hereunder, the unsuccessful party of this litigation covenants and agrees to pay to the successful party all costs and expenses, including reasonable attorney’s fees incurred therein by such successful party, which shall be included in and as part of such judgment. Should either Lessor or Lessee by reason of this lease and without fault on its part, be made a party to any litigation instituted by or against the other, then said party so named as a party to said litigation shall be entitled to receive from the other party all costs, expenses and reasonable attorney’s fees incurred in or. in connection with such litigation.

G.            Lessee hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Lessee’s being evicted or dispossessed for any cause, or in the event of Lessor’s obtaining possession of demised Premises by reason of the violation by Lessee of any of the covenants and conditions of this lease or otherwise.

21.  REPAIRS AND WARRANTY

A.            Lessee will be responsible for repairs to the cement floor due to cracking, splitting, or disintegration due to overloading in excess of load design. Any repairs to the roof or exterior walls arising out of Lessee’s negligent operation will be the responsibility of the Lessee. Lessee agrees to maintain the Premises in good and neat appearance and in working order. Lessor agrees to make any repairs arising out of Lessor’s negligence or breach of its obligations under this lease. Notwithstanding anything to the contrary contained herein, in no event shall Lessee be obligated to make or pay for any repairs or replacements which would constitute items of expense properly chargeable to “capital account” under • GAAP and which are required as the result of the negligence or willful misconduct of Lessor, its agents, employees, representatives or contractors, or the failure of Lessor to perform any of its obligations under this Lease, all in which repairs and replacements shall be made by Lessor at Lessor’s sole cost and expense. Lessor shall maintain, at its sole cost and expense, the foundation, floor slab, exterior walls, steel frame, structural portions, roof, gutters, downspouts, and exterior doors of the Building, as well as all utility lines, pipes and plumbing serving but located outside of the Building (including without limitation all underground utility lines, pipes and plumbing), in good, clean and safe repair, order and condition. Lessor shall make all repairs and replacements without, to the extent practicable, interfering with the conduct of Lessee’s business. If during such repairs or replacements the Premises are wholly or partially unsuitable for their use as provided in this Lease, there shall be an equitable abatement of Fixed Rent, Additional Rent and all other charges payable by Lessee hereunder until such time as such repairs and replacements have been completed.

B.            Lessor covenants and agrees to maintain and keep in good repair the roof, roof structure, gutter, down-spouts, plumbing, exterior walls and foundation walls and floors unless the repairs are occurred by the negligent acts of the Lessee. Lessee agrees to restrict access to any roof area being Lessor’s responsibility to maintain, with any such access being granted only to a licensed roofing contractor. Violation of this restriction by Lessee shall immediately upon occurrence relieve Lessor of any stated maintenance liability.

C.            The Lessor shall provide supplier’s and manufacturer’s warranties that all work performed in the design and construction of the premises is free form any defect in equipment, material,

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design furnished, or workmanship performed by any of Lessor’s subcontractors or suppliers, as may still be applicable and appropriate.

D.            With respect to all warranties, expressed or implied, from Lessor’s subcontractors, manufacturers or suppliers for work performed and materials furnished for the Premises, the Lessor shall:

1.             Obtain all warranties that would be given in normal commercial practice;

2.             Require all warranties to be executed, in writing for the benefit of the Lessee, if requested by the Lessee, as may be applicable;

3.             Enforce all warranties for the benefit of the Lessee, if requested by the Lessee.

22.  UTILITIES

All electricity, heating, air conditioning, water sewage disposal and waste disposal shall be furnished by Lessee. Lessee shall pay the cost of water, sewer, electric current, heating, ventilating and air conditioning used in or supplied to the Premises at the actual rates charged by the utility company. governmental entity or individual or company providing such services. Lessor shall provide separate utility meters for the respective facilities as deemed appropriate.

23.  COVENANTS RUN TO HEIRS, SUCCESSORS AND ASSIGNS

It is hereby covenanted and agreed between the parties hereto that all covenants, conditions, agreements and undertakings contained in this Lease Agreement shall inure and extend to and be binding on the heirs, administrators, executors, legal representatives, successors and assigns of the respective parties hereto as if they were in every case named and expressed. However, this paragraph is not intended, nor shall be construed, to permit assignment or transfer of this lease, whether by contract or operation of law, without compliance with Article 8 of this Lease Agreement.

The term “Lessor” and “Lessee” shall be construed in the singular or plural number accordingly as they respectively represent one or more than one person.

24.  NOTICES

All notices required or provided for under this Lease Agreement shall be given in writing by registered or certified (return receipt request) U.S. Mail, with the postage prepaid thereon, and addressed to Lessee at:

Eberline Analytical Crop.

Attn: Mike McDougal, Manager

601-A Scarboro Road Oak Ridge, TN 37830

to Lessor at:

J.W. Gibson Construction Company

P.O. Box 7027

Oak Ridge, TN 37831-7027

with a copy to:

Allied Realty & Management

148 Ridgeway Center

Oak Ridge, TN 37830

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25.  TRANSFER OF LESSOR’S RIGHTS

Lessor shall have the right to transfer and assign, in whole or in part, all and every feature of its rights and obligations hereunder and in the building and property referred to herein. Such transfers or assignments may be made either to a corporation, partnership, trust company, group of individuals, and howsoever made, are to be in all things respected and recognized by Lessee and in the event of a transfer following commencement of the term hereof upon assumption of Lessor obligations hereunder by said transferees or assignee, the Lessor, immediately prior to said transfer or assignment shall be relieved of all further liabilities and obligations hereunder; provided, however, that Lessee’s rights under the lease shall remain in effect so long as Lessee is not in default.

26.  PROPERTY TAXES

Lessee shall be liable for all personal property taxes which shall be its sole responsibility. Lessor shall be liable for real property taxes, but shall be reimbursed by Lessee pursuant to Article 7, Paragraph B herein.

27.  RIGHT TO PURCHASE PROPERTY

Lessee has the first right of refusal to purchase the entire property and buildings, as defined by Exhibit A, or a portion thereof, if divisible. Lessor will provide Lessee with thirty (30) days written notice of intent to sell and Lessee has that time to exercise right of first refusal. The purchase price shall be negotiated between Lessor and Lessee at the time of purchase.

J. W. Gibson Construction Company			Thermo Nutech
By:	/s/ J.W. Gibson	By:	/s/ Jeffery Stein
	J.W. Gibson		Jeffery Stein
Title: President		Title: Vice President
Date: 10/24/00		Date: 10/6/00

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EX-10.6

Exhibit 10.6

KSL Contract

Payment Terms:	This is a DPAS DO-E2 rated order
See Subcontract Terms, paragraph 5.0,
“Payments”

Subcontract No.  03-PS-013

Sublet Work
PRIME CONTRACT NUMBER 47394-001-03-C2

PROJECTSITE SUPPORT SERVICES AT THE LOS ALAMOS NATIONAL LABORATORY,
NEW MEXICO

24 November 2003
(Effective Date)

THIS SUBCONTRACT by and between KSL SERVICES JV, “GENERAL CONTRACTOR”, whose address is P.O.  Box 80, Los Alamos, NM 87544 and EBERLINE SERVICES, INC., “SUBCONTRACTOR”, whose address is 7021 Pan American Freeway NE, Albuquerque, NM 87109, is entered into as of the EFFECTIVE DATE stated above.

Requisition Number:	CU139
Subcontract NTE Ceiling Amount:	$1,503,594.57
Socioeconomic Status:	SB
Tax Identification Number:	59-3328623

WITNESSETH

In consideration of the mutual promises herein contained CONTRACTOR and SUBCONTRACTOR agree, promise and obligate themselves as follows:

1.SUBCONTRACTOR promises to perform the SUBLET WORK for the PROJECT in accordance with the Subcontract Documents.

2.CONTRACTOR promises to pay SUBCONTRACTOR, for full, accurate and timely performance of the SUBLET WORK in - accordance herewith, the Price, and promises to perform all of the other obligations of CONTRACTOR, as set forth in the Subcontract Documents.

3.The Subcontract Documents constituting this Subcontract consist of:

a.Subcontract, 2 pages.

b.Subcontract Terms, 9 pages.

c.General Conditions for Subcontracted Professional Services, 5 pages.

d.Subcontract Special Conditions, 33 pages.

e.Affidavit for Subcontractor, (10-88), 1 page.

f.Monthly Subcontract Injury/illness Report, 1 page.

g.U.S. Department of Labor, Wage Determination No: 1994-2361, Revision 18, dated 3/19/02, pages 1 through 10.

h.Exhibit A - - Statement of Work (SOW), 6 pages.

i.Exhibit B — Pricing Schedule, 1 page.

j.Exhibit C — Certificate of Insurance.

k.Exhibit D — Fall Prevention Program, 8 pages.

1.Exhibit E - - Illegal Drugs, Alcohol, and Firearms Policy, 3 pages.

The foregoing constitutes the entire contract and supersedes all prior proposals, negotiations, agreements, awards, letter of intent and written or oral statement, representations or agreements.

4.The EFFECTIVE DATE set forth above is the date as to which all Subcontract Documents and provisions thereof have references for purposes of coordination of their meaning and effect.  The price relates to the SUBLET WORK as described in drawings, specifications and other Contract Documents in their condition on that date.  The EXECUTION DATE of this SUBCONTRACT shall not be prior to award of CONTRACT to CONTRACTOR and if for any reason the CONTRACT is not awarded to the CONTRACTOR the intended SUBCONTRACT shall not be executed.

5.Changes after the effective date will be dealt with in accordance with the provisions for changes.  Any work commenced and any payments made pursuant to an Award or Letter of Intent prior to the execution hereof shall be deemed to have been done and paid after the EFFECTIVE DATE under the terms of this SUBCONTRACT.

SUBCONTRACTOR:		GENERAL CONTRACTOR:
EBERLINE SERVICES, INC.		KSL SERVICES JV
BY:	/s/Jeffrey P. Stone	BY:	/s/ Frank B. Sedlacek
TITLE: VP		TITLE: Subcontract Administrator
DATE: 11-24-03		DATE: 11-24-03

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SUBCONTRACT TERMS
Environmental Services

1.0DEFINITIONS

1.1PROJECT shall mean the LOS ALAMOS NATIONAL LABORATORY, UNIVERSITY OF CALIFORNIA SITE SUPPORT SERVICES CONTRACT; LOS ALAMOS, NEW MEXICO.

1.2OWNER shall mean the UNIVERSITY OF CALIFORNIA, DEPARTMENT OF ENERGY or the UNITED STATES GOVERNMENT.

1.3CONTRACTOR, GENERAL CONTRACTOR, PRIME CONTRACTOR, OR BUYER shall mean KSL SERVICES JV.

1.4SUBCONTRACTOR shall mean EBERLINE SERVICES, INC.

1.5CONTRACT shall mean the FIRST TIER SUBCONTRACT between CONTRACTOR and the UNIVERSITY OF CALIFORNIA, 47394-001-03-C2.

1.6SUBCONTRACT shall mean this subcontract between CONTRACTOR and SUBCONTRACTOR.

1.7SUBLET WORK shall mean all work and other requirements, expressed or implied, necessary for the performance required of the Subcontractor by the Subcontract Documents.

2.0SCOPE OF WORK

The SUBCONTRACTOR shall be responsible for providing the management, administration, expertise, personnel, and equipment except as furnished by KSL and others, which are necessary for the effective and timely performance of the services set forth in the Statement of Work (SOW) as specified in Exhibit A.

In addition to the services established in the SOW, the SUBCONTRACTOR shall perform other related services that KSL and the SUBCONTRACTOR otherwise agree to in writing.  These related services include support of the programs of KSL when the services have been determined by KSL to be within the capabilities of the SUBCONTRACTOR or when the services are of such an urgency that the need for the services precludes acquiring them from another source.

The place of performance shall be the Los Alamos National Laboratory, Los Alamos, New Mexico, to the extent provided in the Statement of Work, the immediate area surrounding the Laboratory, other remote sites, sites specifically identified elsewhere in this SUBCONTRACT, and other sites agreed to by the parties, also referred to as the “site”.  The SUBCONTRACTOR will only be allowed to invoice as a direct cost to the SUBCONTRACT those persons who are working and the goods being used at the location described above, without prior approval.

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The SUBCONTRACTOR by accepting this SUBCONTRACT, represents and guarantees that it possesses the necessary skills, means of performance and financial resources to satisfactorily perform the work specified herein and within the constraints herein.

3.0PRICING

3.1This SUBCONTRACT is a Cost Plus Fixed Fee (CPFF) Subcontract.  The base year is priced, but the option periods will not be priced until such time that the option is exercised.

3.2The CONTRACTOR reserves the right to change the type of subcontract pricing format in the option years, if it is decided that such a change would be in the best interest of the parties to do so.

3.3Estimated Cost - The estimated cost for this SOW will be as indicated on the SUBCONTRACT form, Exhibit B Pricing Schedule and follow on modifications.  The amount stated is a not to exceed amount and the SUBCONTRACTOR is not allowed to exceed this amount in the performance of his work, as provided in FAR clause 52.232-22 entitled Limitation of Funds.

3.4G&A and Overhead - The agreed upon G&A and Overhead rates are as follows.  These rates are provisional rates and are subject to adjustment downward only if the results of an audit show a lower rate.  These rates will be used for one year, which is the period of performance of the subcontract.  At such time that an option year is exercised a revised G&A and Overhead rate will be negotiated.  The SUBCONTRACTOR agrees to furnish CONTRACTOR a copy of any audit reports which are performed by a responsible party relating to the establishing of Overhead and G&A rates.

G&A 12.25% Overhead 43% of Total direct labor

Overhead 103%.  This overhead rate will only be used for personnel who are mobilized from off-site and performing assignments/tasks on a temporary basis and have preapproval of CONTRACTOR.  This rate is provisional and subject to audit and adjustment downward only as a result of such an audit.

3.5Fee - CONTRACTOR shall pay the SUBCONTRACTOR for performing this SUBCONTRACT a fixed fee as specified below:

Fixed Fee for the base year: $66,837.84

Fee for temporary assignments/tasks will be calculated at the rate of 8.0% for these tasks only.  Payment of fee for these tasks will be paid as part of the task invoice.  Any fee which is part of the temporary assignment tasks will not be deducted from the fixed fee pool.

Payment of the fixed fee shall be made on basis of prorating the Fee over the twelve (12) months of performance, provided that after payment of 85 percent of

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the fixed fee, the Subcontract Administrator may withhold further payment of fee until a reserve is set aside in an amount that the Subcontract Administrator considers necessary to protect CONTRACTOR’S interest.  This reserve shall not exceed 15 percent of the total fixed fee or $100,000.00 whichever is less.  Release of the fee withholds will be made when the condition as set forth in Special Provisions Nos.  33 and 34 are met.

3.6Compensation to SUBCONTRACTOR for changes in the SUBLET WORK shall be in accordance with the Subcontract Provisions.

4.0TIME OF PERFORMANCE

4.1SUBCONTRACTOR shall begin the Submittal process (if applicable) upon notice of award, and shall continue until all required submittals have been approved, in no more than 7 calendar days.  SUBCONTRACTOR shall commence the physical performance of SUBLET WORK, upon receipt of written Notice to Proceed (NTP) from CONTRACTOR.  The basic period of performance of this subcontract shall be for the period beginning December 1, 2003 through November 30, 2004, with an option for an additional (3) three, (1) one year option periods.  Completion shall be defined as Final Acceptance of the work by the OWNER, and acceptance of all required submittals by CONTRACTOR.

4.2The decision whether or not to exercise the option period(s) will occur after an evaluation of the SUBCONTRACTOR’S performance to the entire SOW under this subcontract.  CONTRACTOR shall use its best efforts to notify the SUBCONTRACTOR whether or not the CONTRACTOR intends to exercise the option period at least (60) sixty days prior to expiration of this SUBCONTRACT.

4.3The normal work schedule, for on site work, shall be 8 hours of performance, per day, between the hours of 0630 hrs to 1830 hrs, five days a week.  The actual hours of performance shall be directed contingent upon work schedule of owner or mutual agreement of SUBCONTRACTOR AND CONTRACTOR.

5.0PAYMENT

5.1SUBCONTRACTOR’S invoice in duplicate shall be submitted, no later than the 10^th day of the month, for approval by CONTRACTOR.  Payment will be made within thirty (30) days after an acceptable invoice is received by CONTRACTOR, acceptance of SUBLET WORK by CONTRACTOR, and receipt of all required documentation.  Invoices shall be no more frequent than monthly.

5.2Two (2) copies of CONTRACTOR’S “Affidavit for Subcontractor” are attached.  hereto.  SUBCONTRACTOR shall execute one (1) copy and submit it with its final invoice.

5.3SUBCONTRACTOR will create a Subcontract billing format, acceptable to CONTRACTOR, to be used for payment for services performed.  This form will include, but not be limited to amount billed for each subcontract line time; the

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previous quantity and amount paid; to the “to date” quantity and amount paid; the balance remaining for each subcontract line item; the billing period, and the SUBCONTRACT number.

5.4Direct all invoice(s) for this Subcontract to:

Attn: Subcontract Administrator

KSL Services JV

P.O.  Box 80, MS A199

Los Alamos, NM 87544

Subcontract No.: 03-PS-012

6.0SUBCONTRACT ADMINISTRATION

6.1The KSL Subcontract Administrator is:  Frank Sedlacek

KSL Services JV

P.O.  Box 80

Los Alamos, NM 87544

Phone: (505) 667-0418

No oral or written statement of any person other than the Subcontract Administrator shall, in any manner or degree, modify or otherwise affect the terms of this subcontract.  The Subcontract Administrator is the only person authorized to approve changes in any of the requirements of this subcontract, and notwithstanding any provision contained elsewhere in this in this subcontract, that authority remains solely with the Subcontract Administrator.  If the Subcontractor effects any change at the direction of any person other than the Subcontract Administrator, the change will be considered to have been made without authority, and no adjustment will be made-in the subcontract price to cover an increase in costs incurred as a result of the change.

The KSL Technical Representative is: Timothy Delong

KSL Services JV

P.O.  Box 80

Los Alamos, NM 87544

Phone: (505) 667-5771

The individual identified as the KSL Technical Representative is the person designated to monitor the work performed under the subcontract.

6.2Subcontractor Representative: Jeffery Stein

The above named individual is designated as the SUBCONTRACTOR’S full-time local representative who is fully authorized and empowered to make decisions, and execute on behalf of the Subcontractor such subcontract

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modifications, notices, and policy directives to ensure full compliance with the requirements of this subcontract.

7.0TAXES

SUBCONTRACTOR shall be responsible for all taxes imposed by Federal, State or Local jurisdictions measured by or assessed upon SUBCONTRACTOR’S income or payroll.  SUBCONTRACTOR shall be responsible for all applicable state or local sales, use, gross receipts or any other tax imposed on SUBCONTRACTOR’S purchase of consumable supplies, construction equipment or tools or other incidentals necessary to complete the work.

GENERAL CONTRACTOR shall include specific tax instructions as to the proper application and handling of any sales, use, gross receipts or other tax imposed on the work in each subcontract or work release.  New Mexico NTTC, Type 5, Certificate as applies to Service of Resale is intended to be provided to the Subcontractor by the Contractor.

8.0INSURANCE

Prior to mobilization, SUBCONTRACTOR shall forward its certificate of insurance stating the names and addresses of its insurance carriers and certifying that its insurance coverages meet or exceed the requirements of Special Condition No.  29.  The certificate shall also reference the SUBCONTRACT number.

Original Certificates of Insurance plus one copy shall be submitted to:

Attn: Subcontract Administrator

KSL Services JV

P.O.  Box 80, MS A199

Los Alamos, NM 87544

SUBCONTRACTOR is responsible for maintaining proper insurance coverage.  SUBCONTRACTOR shall provide to the CONTRACTOR new certificates of insurance, as set above; no later than thirty (30) days prior to the expiration date(s) on its certificates and insure uninterrupted coverage during the life of the subcontract and any extensions thereof.

The SUBCONTRACTOR shall maintain a copy of all lower tier Subcontractor’s proofs of required insurance and forward same to the General Contractor.

If written on a claims made basis, Subcontractor shall continue to be carried^- for not less than two years beyond project completion, and provide proof satisfactory to General Contractor.

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9.0KSL HOLIDAYS

KSL observes the following holidays:

New Years, Martin Luther King’s Birthday, Presidents’ Day, Memorial Day, Independence Day, Labor Day, Columbus’ Birthday, Veteran’s Day, Thanksgiving, Day after Thanksgiving, Energy Day (a floating holiday between Christmas and New Years), Christmas.

10.0SECURITY CLEARANCE REQUIREMENTS

SUBCONTRACTOR shall provide personnel with active security clearances for the facility where performance is required and the sublet work that is required.  Individuals without required security clearances shall not have access to the client’s facilities and the SUBCONTRACTOR shall be in default of this subcontract if individuals cannot access to the facilities or perform sublet work due to security clearance issues.

11.0ACCESS TO PROJECT SITE

In order for SUBCONTRACTOR to be permitted onto the project site (in addition to required security clearances), it must provide the following to the CONTRACTOR no later than two (2) days after Notice to Proceed:

11.1A list of all employees who will be working on the project site which includes each employee’s name, address, date and place of birth, Social Security Number and driver’s license.  This information requirement is subject to change due to the requirements of the installation on which the project site is located.  SUBCONTRACTOR shall coordinate specific information requirements with CONTRACTOR.

12.0SAFETY REPORT

The KSL Services JV, Monthly Subcontractor Injury/Illness Report shall be submitted on a monthly basis to the CONTRACTOR’S designated Safety Representative at the Project Site or, if there is no designated Project Safety Representative, to the SUBCONTRACT ADMINISTRATOR.  The exact time of submission shall be coordinated with CONTRACTOR’S Safety representative or SUBCONTRACT ADMINISTRATOR.  If the report is submitted to the SUBCONTRACT ADMINISTRATOR, a copy shall be provided, at the same time, to the CONTRACTOR’S on site representative.  If the SUBCONTRACT work is less than a month in duration, a report covering the period is still required.  Such reports shall be submitted upon completion and acceptance of all work, and prior to payment of the final invoice.

13.0REPORTING REQUIREMENTS/REQUIRED DOCUMENT SUBMITTALS

SUBCONTRACTOR is required to submit the following documents in accordance with this SUBCONTRACT:

13.1Deliverables as required by Exhibit A, Statement of Work.

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14.0SMALL BUSINESS CONCERN EXEMPTION

Should SUBCONTRACTOR be a small business concern, it is exempt from pursuing a subcontract plan to procure supplies, equipment or services from, Small Business and Small Disadvantaged Business or Women Owned concerns; however the PROJECT has a strong policy related to the acquisition of supplies, equipment and services from these concerns and the CONTRACTOR encourages the SUBCONTRACTOR to participate in the affirmative action policy.  SUBCONTRACTOR agrees to report to the CONTRACTOR all such transactions for reporting to the Government’s Contracting Officer.

15.0WAGE DECISION

SUBCONTRACTOR shall comply with the Service Contract Act of 1965, as amended and the current U.S. Department of Labor, Service Contract Act, Wage Determination for Los Alamos, New Mexico Area, incorporated herein.

16.0COMMUNICATION/CORRESPONDENCE

16.1All SUBCONTRACTOR communication/correspondence regarding this Subcontract shall be addressed to the Subcontract Administrator with a copy to the Technical Representative.  Subcontract correspondence shall include the CONTRACTOR’S Subcontract number, SUBLET WORK description, subject, and shall be sequentially numbered with an alpha-numeric number and dated for identification.

17.0LABOR RELATIONS POLICY

17.1SUBCONTRACTOR represents that its prehiring collective bargaining agreements, if any, contain or will contain provisions that SUBCONTRACTOR has entered into or will enter into a contract project agreement modifying such collective bargaining agreements to provide that there shall be no strikes, slowdowns, picketing, secondary boycotts or work stoppages during the performance of the SUBLET WORK.  SUBCONTRACTOR will further subcontract only to lower-tier subcontractors having similar provisions in their collective bargaining agreements, if any.  A copy of each such agreement shall be provided to the CONTRACTOR upon execution of the contract agreement.

18.0SUBCONTRACTOR’S REPRESENTATIVE

18.1SUBCONTRACTOR shall maintain, full time for the duration of the SUBLET WORK, a qualified and capable PROJECT MANAGER who shall be available to the SUBCONTRACT ADMINISTRATOR by telephone or in person onsite during performance of SUBLET WORK at all times.  SUBCONTRACTOR’S Supervisor shall be authorized to act on behalf of SUBCONTRACTOR and any instructions given to him will be considered as having been given to the SUBCONTRACTOR.

18.2SUBCONTRACTOR shall submit to CONTRACTOR, for approval, resumes and work history for the PROJECT MANAGER.  Continued acceptance of these

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personnel will be contingent on actual site performance.  CONTRACTOR may require removal and replacement of these personnel at any time during the progress of the SUBLET WORK, if CONTRACTOR determines that the individuals continued participation in the work effort will be detrimental to the completion of a quality project in accordance with this SUBCONTRACT.

19.0MATERIAL SAFETY DATA SHEETS (MSDS’S)

Material Safety Data Sheets are required and will be delivered to the CONTRACTOR’S PROJECT Office and copies mailed to the address in Article 6.1 and 6.2.

20.0KEY PERSONNEL

The following listed positions are key to the successful performance of this subcontract.  The SUBCONTRACTOR agrees to assign such persons to these positions to perform work under this SUBCONTRACT and shall not reassign or remove any of them without the written consent of the Subcontract Administrator.  If the Subcontractor has to replace a key person due to attrition or other reason, he is to submit for Contractor approval a person/employee of substantially equal abilities and qualifications.

Project Manager: Suzanne Moore

21.0QUALITY

It is the policy of CONTRACTOR to execute projects and deliver services and products in conformance to the requirements agreed upon with Clients.  Anticipating, clearly understanding and conforming to these agreed upon requirements is quality.  Subcontractors are expected to adopt a standard of performance that demands conformance to the agreed upon requirements.  This standard includes: 1) clearly understanding the requirements, 2) providing required documentation and technical submittals at the time specified, 3) delivering ordered quantities or performing services at the time specified, 4) satisfying warranty obligations, 5) responding in a timely way to questions and 6) having a system in place to assure that products or services meet the mutually agreed-upon requirements.  In order to satisfy the above-mentioned standard, CONTRACTOR and the SUBCONTRACTOR mutually agree to.  create an atmosphere to improve communications, understand needs and requirements, exchange ideas and information and cooperate in the solution of problems.

21.1SUBCONTRACTOR shall be responsible for all Quality Control Requirements which pertain to its scope of work.

21.2CONTRACTOR will be responsible for Quality Assurance.

22.0PROPERTY MANAGEMENT

KSL will not require the SUBCONTRACTOR to develop or implement a property management system.  All Government property that the SUBCONTRACTOR will use during his performance of the SOW will be retained under the property management

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system of KSL.  But it is the requirement of this SUBCONTRACT that the SUBCONTRACTOR will still be responsible for loss or damage to any .  Government property that they will use during the performance of the SOW.  The SUBCONTRACTOR will still be held accountable for Government property.

23.0THE USE OF OFF-SITE PERSONNEL AND/OR FACILITIES

During the performance of this SUBCONTRACT there may be such times that support is requested by either the Subcontract Administrator or the Technical Representative for personnel who normally do not perform work under this SUBCONTRACT.  It is recognized that such personnel may be located at offices with different cost structures and billing rates.  In order to support this, at any time the SUBCONTRACTOR receives a request for such support from either the Subcontract Administrator and the Technical Representative or other authorized parties, SUBCONTRACTOR must submit to the Subcontract Administrator, the Scope of Work to be performed, and any deliverables which are to be submitted as part of this work, also an estimate of the not-to-exceed (NTE) cost for the work which will include justification and documentation of rates to be charged for approval prior to incurring any costs.  If the SUBCONTRACTOR proceeds with any work or incurs any cost prior to receiving approval from the Subcontractor Administrator, he shall be doing so at his own risk.

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STATEMENT OF WORK

Environmental Services

(Eligible NAICS Codes-562910, 541620, 541330,
562910, 541380, 561210)

Introduction.  The subcontractor is responsible for providing KSL with operational and quality services to ensure site-wide environmental compliance with laws and regulations of the U.S. Government, State of New Mexico, Los Alamos National Laboratory, and other relevant authorities.

Please refer to attachment 1 for a description of the KSL work at LANL.

The Subcontractor must be able to obtain a favorable DOE Foreign Ownership, Control or Influence determination from the Department of Energy.

The Subcontractor’s Project Manager and essential personnel must be able to obtain DOE security clearances at the ‘t” or “Q” level.

The Subcontractor is expected to provide expertise in each of the major environmental program areas described below, and to have sufficient qualified staff available to accomplish the anticipated tasks.

The Subcontractor’s work consists of a Base Program and a Work for Others Program.  The Base Program is currently funded at $1.2 million for FY 03 and consists of work that is in direct support of KSL organizations.  The Work for Others Program is incrementally funded by LANL work orders and consists of environmental services that are ordered by LANL organizations.  Funding for the Work for Others Program can vary significantly from year-to-year depending on LANL needs, budgets, priorities, and other factors.

The work to be accomplished each year for the Base Program will be defined in an Annual Management Plan (AMP).  The AMP will consist of the Subcontractor’s.  approved budget for the year, and a description of the performance goals to be achieved in each of the major program areas.  The Subcontractor should be aware that budgets and performance goals may change during the course of the year because of operational emergencies, LANL direction, funding shortfalls, enactment of new laws, and other factors.

The KSL Technical Representative will provide oversight and approval of contractor activities and will be the point of contact for programmatic task review, annual management plan implementation and project performance evaluation.  A review of performance against goals will be conducted quarterly.

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MAJOR ENVIRONMENTAL PROGRAM AREAS OF THE
BASE PROGRAM AND THE WORK FOR OTHERS PROGRAM

1.Water and Wastewater

Maintain and improve operation of the KSL operated, State-certified laboratory for coliform analyses that supports the Laboratory’s drinking water program by providing the capability to perform coliform sampling, membrane filtration tests, coliform confirmation testing, utilizing required quality assurance practices, as specified by the New Mexico Regulations Governing Water Supply.

Conduct studies on water complaints and stagnation problems as directed to KSL by the Laboratory to assess microbiological quality, develop data, and generate and implement recommendations.

Support DOE and the Laboratory’s National Pollutant Discharge Elimination System (NPDES) permit compliance program by providing the capability to perform sanitary wastewater analyses, including pH, BOD, COD, TSS, and fecal coliform analyses, and to provide collection of sanitary samples (wastewater and sludge), quality control, and operational monitoring of NPDES sanitary wastewater discharges.  These tests will adhere to the methodology in the specified editions of Standard Methods for the Analysis of Water and Wastewater.

2.Hazardous and Solid Waste

Comply with applicable hazardous waste regulations by conducting inspections, maintaining documentation, and following Subcontractor and Laboratory procedures for the storage and disposal of waste.

3.Storm Water and Spill Prevention, Control, Containment (SPCC)

Develop, maintain, revise and monitor SPCC plans for KSL managed facilities and work.  Provide inspection services to assure operational compliance with approved plans.  Provide assistance to the KSL Engineering and Construction departments for developing storm water plans for construction activities.

4.Spill Response and Mitigation

Provide trained personnel to respond to both post-emergency response operations and non-emergency spills.  Personnel will provide support on an as-needed basis at the direction of the Laboratory’s Emergency Management and Response group or the designated “Recovery Manager” for both post and non-emergency events.

5.Pollution Prevention and Waste Minimization

Implement pollution prevention plans and programs that comply with applicable regulatory requirements.  Examples include, but are not limited to, pollution prevention/waste minimization strategies (such as chemical and solvent substitution,

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source reduction and segregation), and recycling.  The contractor will support LANL programs for P2 (Pollution Prevention) and proactively integrate P2 strategies into KSL’s work control process.

6.Environmental Management System

Complete development of, and implement the existing KSL environmental management system (EMS).  The EMS is intended to be consistent with the requirements of ISO 14001.  The EMS is approximately 90% complete.

7.Air Quality

Implement a written Air Quality Management Program to comply with Clean Air Act requirements as defined in the Laboratory’s Title V Operating Permit.

Provide trained personnel to support the LANL Air Quality Group’s stack monitoring program.  Program responsibilities are to record airflow measurements using properly calibrated measuring equipment.

8.Radiological characterization and sample preparation (This work is not currently performed by KSL or the incumbent subcontractor, however, KSL anticipates that this work may be performed in the future.)

Provide support to LANL groups by developing unique sampling protocols for the preparation of sediment samples for radiological analyses.

Provide characterization and sample preparation services in contaminated facilities that are scheduled for decommissioning, decontamination, or demolition.  Related services may include establishing characterization baselines, writing SOWs for D&D work, and developing plans related to D&D procurements.  Provide environmental support to hazardous operations such as clean up of radiological liquid waste tanks.

The work may also include providing Radiological Control Technicians (RCT) who work under the LANL radiation protection program and provide radiation protection services to KSL work activities.

Anticipated Tasks (to be defined and prioritized in an Annual Management Plan)

1.Operate the NMED-certified microbiology laboratory (approximately 1100 square feet).  Perform operational and perform compliance testing on drinking water and wastewater.  Collect and analyze on average 46 membrane filtration samples per month, perform BOD (biological oxygen demand), TSS (total suspended solids), pH, and fecal coliform samples for NPDES compliance.

2.Perform RCRA inspections, site self-assessments.  Monthly storage area compliance verification for 12 to 16 sites.

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3.Coordinate KSL activities with LANL’s storm water permit.  Write storm water plans, verify implementation and perform inspections on impacted projects as projects arise (number varies but can be as many as six at a time during the July through September construction season).

4.Provide support to D&D, construction, and HAZWOPER projects.  Implement Site Health and Safety Plans (SHASP), complete waste profiles, and manage waste for about 1,000 small construction projects per year.

5.Environmental Management System and ISO 14001 development and operation.  Complete the KSL EMS plan and implement company wide.  The EMS plan is about 90% complete.

6.Line disinfections and construction project support services.  The number to be performed varies based on construction activities but could be as high as 100 per year, including 1 or 2 major projects related to new construction of LANL facilities.

7.NPDES compliance and Wastewater Treatment Facilities support.  Collect Wastewater Treatment Plant acceptance criteria samples, perform upstream monitoring, trouble shoot WWTP problems, and maintain NMED Level 4 certifications.  The WWTP has a design flow of 600,000 gallons per day and supports a site population of about 15,000 people during normal working hours.

8.Chemical Inventory Surveillance and Review.  Assess opportunities for hazardous waste reduction and elimination in all areas of KSL work.

9.Design Review for construction projects.  Engage in up-front planning and design of 10-20 projects per year to incorporate pollution prevention methodologies.  Design reviews will be based on potential environmental impacts including energy use, water.  use, waste streams, and compliance with CAA and CWA.

10.Spill response plans, SPCC implementation and oversight.  Provide 24-hour response capability, support the KSL environmental response and recovery team (ERRT), and confirm SPCC compliance.  Currently there are 6 SPCC plans.

11.Radiological characterization and sample preparation (optional).  Support LANL groups and/or KSL on special projects, D&D, ER as requested.  Currently, there are no requirements for this work.

12.Waste management coordination.  Support KSL departments that generate waste to comply with requirements.  Most KSL waste streams are generated by Roads and Grounds Department, Metal Fabrication Shop, Heavy Equipment Shop, Stationary Equipment Shop, and the following craft work: carpentry, facility mechanical work, electrical work, painting, and insulating.

13.Radiological Control Technicians (optional).  RCTs may be requested to support special projects in LANL nuclear facilities.  Currently, there are no requirements for this work.

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14.Pollution Prevention (P2) initiatives.  This work includes waste reduction, reuse, and recycling.  Apply P2 initiative to all aspects of KSL operations.  Ensure generators properly characterize waste prior to disposal, (2 to 4 metric tons were generated in FY02).  Develop waste stream reduction strategies.  Review and implement strategies to eliminate or reduce waste.

15.Air emissions inventories and surveys.  Oversee KSL operations for compliance with CM and Title V permit requirements.  KSL operates an asphalt plant and a steam-electric cogeneration plan with nominal output of 10 MW.

16.Pesticide usage and reporting guidance.  Provide oversight of certified applicator activities and tracking of annual usage.

17.Material reuse and recycling.  Ensure compliance with Executive Order 13101 “Greening the Government Through Waste Prevention, Recycling, and Federal Acquisition Regulations”, and oversee salvage operations.

18.Oil reuse and recycling.  Develop a site-wide waste oil recycling program.  The current program supports the Heavy Equipment and Stationary Equipment shops.  KSL desires to offer this service to all LANL organizations.

19.Underground and above ground storage tank management (UST, AST).  Ensure compliance with 40 CFR 280.  KSL owns one UST and two AST’s.  Ensure implementation of SPCC plans for 2 >150K gallon ASTs.

20.Cooling tower management.  Provide technical oversight for waste disposal, NPDES compliance, and water conservation.

21.Refrigerant Program oversight.  Provide services for CAA Title VI- CFC management in accordance with LANL procedures.

22.LANL stack monitoring measurements.  Measurements are taken about 60 times per year.  Equipment is calibrated monthly and measurements are coordinated through LANL.

23.Liaison with LANL, DOE, NMED, EPA, and other regulatory agencies.  Maintain regular communication with relevant regulatory agencies to provide updates on environmental programs and accomplishments.

Subcontract Deliverables

1.Annual Price Proposal to be submitted by August 30, of each subcontract base period beginning in 2004

2.Quarterly Contract Review

3.Quarterly EEO/AA Status Report

4.Annual Salary Increase Authorization request by August 30, 2003

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5.Federal Insecticide, Fungicide, Rodenticide Act (FIFRA) Compliance Report

6.National Pollutant Discharge Elimination System (NPDES) Sanitary Wastewater Test Results

7.Los Alamos National Laboratory Air Quality Operating Permit Reports

8.Annual overhead budget report to be submitted by August 1, of each year

9.OSHA 200 Log — monthly and annual summary

10.Monthly Subcontractor Injury/Illness Report

Ad hoc reports, special management reports, and other management information will be required from time to time.

Attachment:

1)KSL Statement of Work

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GENERAL CONDITIONS
FOR
SUBCONTRACTED PROFESSIONAL SERVICES

1.WORK OF THE SUBCONTRACTOR

1.1All Work shall be performed in accordance with sound and generally accepted professional practices and industry standards by Professional, Managerial, and administrative personnel fully qualified in the respective disciplines required.

1.2Subcontractor shall have the complete Professional, Managerial, and Technical responsibility for the validity, accuracy and reliability of the work performed, and its work shall conform to all applicable codes, standards, statutes, rules and regulations and the Task Order and Contract design criteria and definition.

1.3Subcontractor shall designate a Manager in charge of the Work as a whole on a continuous basis and having authority with responsibility for providing adequate supervision or direction to take all action that may be required in performance of that Agreement.

1.4Subcontractor shall remove from the Work any person assigned whose work is not satisfactory to Prime Contractor, but Subcontractor shall not remove or reassign its Manager in charge of the Work or its other key personnel designated in the “Terms” of this Agreement without the approval of Prime Contractor unless such person is no longer employed by Subcontractor.

1.5The Work shall be performed at a location satisfactory to Prime Contractor and such location shall not be changed without approval of Prime Contractor.  Prime Contractor shall have access at all times to the location where Work is performed and to all of the drawings, specifications, data, calculations, models, test results and specimens, documents and other things related to the Work or to the Project as a whole.

2.SCHEDULING

2.1Subcontractor shall perform the Professional, Management or Technical work expeditiously with sufficient number -of qualified personnel to conform to Prime Contractor’s schedule and progress with the Work on the individual Task Orders and the Contract as a whole.

2.2As required by the Project Manager, Subcontractor shall provide Prime Contractor a detailed Schedule for performance of the Work and update such Schedule as work on each of the Task Orders progresses subject to revision or approval by Prime Contractor.

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3.PROJECT SITE

3.1Whenever Subcontractor has employees performing the Work subject of this Agreement, at any worksite, property of the Client, or of any third party.  Subcontractor shall comply with all government laws and regulations with regard to safety, security and sanitation, and shall be fully responsible for the safety of its personnel.  Subcontractor shall not create any hazards for others, or the work of others, and shall conduct its work in a manner which protects life, property and the environment.

3.2If Subcontractor is to furnish any items of equipment, machinery and materials which are to become a permanent part of a Project required by a Task Order, Subcontractor shall warrant that the equipment, machinery and materials will perform as specified and are free from defects in workmanship and materials for a period of one year after initial commercial operation of the equipment or completion of the relevant Task Order, whichever is later, unless a different period is stated in the ‘”Terms” of this Agreement.  With respect to items of machinery, equipment, and materials manufactured by others, Subcontractor’s obligation shall be limited to the terms of the best warranty obtainable from the manufacturer.

4.STANDARD OF PERFORMANCE

In the event Subcontractor’s services hereunder should not prove satisfactory to Program Manager and Client, as a result of human error, omission or otherwise, Subcontractor’s obligation resulting therefrom shall be to perform corrective services of the type originally undertaken, provided such corrective services are requested in writing by Program Manager or Client, within the notice period and terms of compensation, if any, for such work to be as required by Owner or Program Manager under the Prime Contract.

5.CHANGES

Prime Contractor may order changes in the work or conditions under which the Work is to be performed or may increase or decrease the scope of work to be performed by Subcontractor.  Such additional work shall be performed under the same terms and conditions of the base Agreement.

6.DELAYS

Prime Contractor may require Subcontractor to suspend performance hereunder completely or partially for whatever length of time Client and Prime Contractor may elect.  The time for completion shall be extended by an appropriate period that Subcontractor is delayed by any cause beyond the Subcontractor’s reasonable control.  Prime Contractor and Client shall not be liable for any damages, direct, and consequential or otherwise, suffered by Subcontractor due to delays and suspensions.  Subcontractor shall be obligated to proceed with the work notwithstanding a dispute on reimbursement; such action shall not prejudice either party’s claim with respect to reimbursement.

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7.NOTICES.

Notices of changes, deficiencies, delays, claims or disputes shall be in writing, and shall furnish full information to the extent available.  The party notified will acknowledge receipt by endorsement of a copy if requested, or will otherwise confirm receipt in writing.  To avoid difficulty in delivery of notice, sufficient notice shall be deemed to have been given by mailing by registered or certified mail or equivalent, to the address shown in the Subcontract “Terms.”

8.TERMINATION

8.1If, within seven (7) days written notice by Prime Contractor to Subcontractor specifying any deficiency in the Work or the promptness with which the Work is being performed, Subcontractor has not commenced to correct, and within a reasonable time has corrected, such deficiency to the satisfaction of the Prime Contractor, Prime Contractor may supplement the work of Subcontractor, or take over performance of the Work temporarily or completely, with Prime Contractor’s own forces, or by contract with others.

8.2Prime Contractor may terminate this Subcontract for convenience in those cases where Client terminates the Prime Contract or the portion of the Prime Contract that includes the Work.

8.3If work of Subcontractor is suspended or terminated by Prime Contractor, Subcontractor will be paid for the work actually completed and accepted and for acceptable costs incurred for partially performing and closing out work not completed, but shall not be paid for the loss of profit or contribution to overhead of work not performed by Subcontractor.

9.ASSIGNMENT.  SUBCONTRACTING

9.1Subcontractor shall not assign this Subcontract or any funds due hereunder.

9.2Subcontractor shall not subcontract any portion of the Work without the, prior written approval of Prime Contractor and without the prior written approval by the Prime Contractor of the form, terms and conditions of the lower-tier Subcontract.

9.3No assignment or subcontracting, even with Prime Contractor’s approval, shall relieve Subcontractor of any obligations hereunder, or create any contractual relationship between such Sub-Subcontractor and Prime Contractor or Client.

9.4Any lower-tier Subcontractor shall assume unto Prime Contractor all of the obligations of the Subcontractor as they relate to such portion of the Work.

9.5Prime Contractor may assign this Subcontractor to Client should the Prime Contract give the option and Client elects to exercise such right.

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10.RECORDS AND PAYMENTS

10.1Subcontractor shall maintain good accounting and personnel records reflecting performance of the Work and shall preserve such records for a period of two years after completion and acceptance of the Prime Contract as a whole.

10.1.1Client and Prime Contractor shall have the right to inspect and audit such part of the records as relate to cost reimbursement or performance of labor related provisions.  Such audit may also cover Subcontractor’s procedures and controls with respect to the cost of the Work.  Subcontractor shall assist in making the above audits.

10.1.2Copies of documents and records supporting requests for payment or compliance with labor related provisions shall be furnished to Prime Contractor with such request or at such other times as Prime Contractor directs.  Payments will be made by Prime Contractor to Subcontractor in accordance with the “Terms” of this Agreement.

10.2The cost of the Work to be reimbursed under this Agreement shall be only that reasonably necessary to perform the work in an efficient manner in accordance with the time schedule and shall not exceed the amount authorized by Prime Contractor in the “Terms” of this Agreement.

10.3Prime Contractor shall make progress payments to Subcontractor monthly or at other intervals specified in accordance with the Subcontract Terms.  Prime Contractor may withhold from those progress payments ten percent (10%) of the amount earned until final completion and acceptance of the Work.

10.4Subcontractor shall submit with its request for final payment evidence, including affidavits and certificates, as may be requested by Prime Contractor, showing a) Work is completed b) compliance with all requirements c) Payment of all bills, and d) that no lien exists or could be claimed arising from the Work.

10.5Notwithstanding any other provision hereof, payment by Client to Prime Contractor is a condition precedent to any obligation of Prime Contractor to make payment hereunder.  Prime Contractor shall have no obligation to make payments to Subcontractor for any portion of the Work for which Prime Contractor has not received payment from the Client.

11.BENEFITS & PAYROLL TAXES

Subcontractor’s compensation includes, and Subcontractor accepts exclusive liability for the payment of all benefit contributions and payroll taxes for all employees of Subcontractor engaged in the performance of this Agreement.

12.INDEMNITY

Subcontractor hereby indemnifies, holds harmless and will defend Prime Contractor and Client from any loss, cost, damage, or liability from injury or death of any person, including Subcontractor or its employees, or damage to any property arising from or in

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connection with the Work whether or not there be concurring negligence by Prime Contractor or Client, but Subcontractor does not hereby assume responsibility for the sole negligence of Prime Contractor or Client.

13.INSURANCE

Without in any way limiting Subcontractor’s liability hereunder, Subcontractor shall maintain the following insurance in form and with underwriters satisfactory to Prime Contractor:

13.1Worker’s Compensation as prescribed by applicable law.

13.1.1Employer’s Liability Insurance shall be not less than $100,000 per occurrence.

13.2Comprehensive or Commercial General Liability (Bodily Injury and Property Damage) Insurance written on a comprehensive form of policy of at least $500,000 per occurrence.

13.3Automobile Bodily Injury and Property Damage Liability Insurance written on a comprehensive form of policy providing minimum coverage in the amounts of $200,000 per person and $500,000 per occurrence for bodily injury and of $20,000 per occurrence for property damage in connection with the operation of all automobiles used in connection with subcontract performance

13.4Professional Liability insurance with an amount no less than $1,000,000 if the Subcontract is for professional services such as those performed by doctors, lawyers, and architect-engineers or as required by the Subcontract Administrator

13.5The above policies shall name KSL Services JV, the University of California and the U.S. Government as additional insured.

13.6The above policies shall include a waiver of subrogation in favor .of KSL Services JV, the university of California and the U.S. Government.

14.PATENTS AND PROPRIETARY RIGHTS

Subcontractor indemnifies Prime Contractor and Client against any loss, cost or liability for infringement by Subcontractor of any patent or proprietary rights involving any information, items of equipment, materials, or services furnished hereunder.

15.LAWS

This Subcontract is entered into in Los Alamos, New Mexico and shall be construed and governed by the laws of the State of New Mexico.  Subcontractor shall comply with all laws, statutes, ordinances, rules and regulations of any governmental entity having jurisdiction, and Subcontractor shall indemnify and hold harmless the Client and Prime

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Contractor from any fines, penalties, costs or liability arising from Subcontractor” failure to comply therewith.

16.TITLE

Title to all drawings, specifications, reports, test results and specimens, plans, data and work product of Subcontractor arising hereunder shall be in .Prime Contractor, or if Prime Contractor so designates, in Client.

16.1All discoveries, inventions, patents, know-how, trade secrets, computer programs, or other proprietary information generated hereunder shall be the property of Prime Contractor, or if Prime Contractor so designates, of Client, and Subcontractor will take appropriate action to assign and transfer same to Prime Contractor or Client.

16.2Subcontractor will, if requested, execute Prime Contractor’s Standard’ Secrecy Agreement (a copy of which is available on request) and will, if requested, cause each of its employees assigned to the Work to execute Prime Contractor’s Standard Secrecy Agreement for Employees (a copy of which is available on request).

16.3Subcontractor and Subcontractor’s employees will limit access to Client’s and Prime Contractor’s technical information to Subcontractor’s employees who reasonably require the same for performance of work pursuant to this Agreement.

16.4At Prime Contractor’s request, Subcontractor will return to Engineer all drawings and written materials furnished to Subcontractor by Client or Prime Contractor, including all copies thereof, if any, made by Subcontractor except that Subcontractor may retain one copy of the same in its files for record purposes only.

17.INTEGRATION

17.1This Subcontract shall be valid and in force when signed by both parties and delivered and the parties understand that thereafter no person is authorized to amend this Subcontract except by agreement in writing and signed with equal formality.  These General Conditions may be modified by the Subcontract Terms, and as so modified it is intended that all Terms and Provisions of this Subcontract shall be construed in harmony and with equal dignity and effect.

17.2Headings of sections and other parts of this Agreement are for quick reference only and are not to be construed as a part of this Agreement.  In some instances, a section or part contains provisions not covered by the heading thereof.  In other instances, a section or part contains provisions that are described in the heading of another section or part.

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18.AMENDMENTS

No representative of Prime Contractor, other than an officer, has authority to change, amend or supplement this Agreement of Contract or make any Agreement or Contract on behalf of Prime Contractor or Client, and no contractual relationship exists between Subcontractor and Client.

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KSL SERVICES, JV FALL PREVENTION PROGRAM

Purpose

To provide guidelines for maximum protection for all personnel against falls.

Goal

Achieve 100% Fall Protection for all personnel when working above ground level.

Responsibility

Project Management and front line supervision are responsible for supporting and enforcing this program to ensure 100% compliance by all personnel.  The Project Safety Department shall have full authority to ensure 100% enforcement of the program.  The Safety Department’s primary responsibility however, will be to support crafts and to monitor the program for compliance and advising Project Management.

Total Safety Task Instruction (TSTI)

Total Safety Task Instruction is to be given to each person assigned work in elevated areas.  Supervisors must analyze all elevated tasks as to fall protection needs and to ensure adequate fall protection systems are provided.  After analyzing, the tasks supervisors shall instruct personnel involved in the specifics of the fall protection measures to be used.

Procedures

All personnel on this project will be required to wear an approved full body harness and shock absorbing lanyard or an approved safety belt with a shock absorbing lanyard.

Crafts/departments shall make maximum use of primary fall protection systems such as scaffolds, aerial lifts, personnel hoists, etc.  These systems shall be equipped with complete working/walking surfaces free of floor openings, standard guard rail systems and a safe means of access.

Personnel traveling or working in elevated areas where a fall exposure exists shall make use of secondary fall protection in securing their safety lanyard at all times to a structure, lifeline or approved fall arresting device capable of supporting 5400 pounds.

Personnel working from or traveling in powered work platforms or personnel lifting/hoisting devices shall also properly secure their safety lanyards as noted in procedures below.

Personnel working from or traveling in powered work platforms or personnel lifting/hoisting devices shall also properly secure their safety lanyards as noted in procedures below.

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NOTE:PERSONNEL TRAVELING IN CONSTRUCTION ELEVATORS ARE NOT REQUIRED TO SECURE SAFETY LANYARDS.

Fall protection devices such as lifelines, safety harnesses/lanyards, etc., shall be inspected on a regular basis for damage and/or deterioration.  Defensive equipment shall be removed from service and destroyed or in some cases repaired.

Fall prevention devices and systems shall not be used for any other purpose other than employee safe guarding.

Subcontractors shall comply with the requirements set forth in this program a minimum for fall protection.

Fall Protection Devices

1.Primary Fall Prevention Systems

These systems provide walking and working surfaces in elevated areas which are free from floor openings and are equipped with standard guard rail systems on all open sides and with closure apparatus for ladder openings or other points of access when required.  These systems include but are not limited to: scaffolds, pencil boards, aerial lifts (JLG, scissor lifts, etc.) and other approved personnel hoisting devices.

Standard guard rail systems consist of a top rail of 2 X 4 lumber or equivalent material approximately forty-two inches (42”) above the walking/working surface, a mid rail at approximately twenty-one inches (21”) above said surface.  Upright support post spacing must not exceed eight feet (8’) and the entire system must be capable of supporting 200 pounds force in any direction with minimum deflection.  These systems are used to guard open sides of floors, platforms and walkways in elevated areas.

Floor opening/hole covers are used to close opening and holes in floors, platforms and walkways.  These covers must be capable of supporting the maximum potential load they may be subjected to.  The cover must completely cover the opening/hole and be secured against accidental displacement.  These covers must be marked “HOLE COVER - DO NOT REMOVE”

2.Secondary Fall Protection Systems - Safety Harness/Lanyard Systems

These systems must be worn and used as a backup to Primary Fall Protection Systems noted above and in the absence of Primary Systems.

Only safety harnesses/lanyard systems furnished by Brown &.  Root may be used on this project.  Personal safety harnesses/lanyard systems may not be used.

Subcontractors shall provide appropriate fall protection for fall protection.  Lanyards must be of the shock absorbing type when used for fall protection

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The fall protection lanyard shall be attached to the d-ring located in the middle back of the safety harness.

D-rings located at the waist may only be used for positioning and with rail type ladder climbing devices.

Work positioning lanyards are to be attached to d-rings at the waist belt location and be supported by an appropriate work belt.  Positioning lanyards need not be of shock absorbing type and must not be used for fall protection.  The positioning lanyard must always be backed up by a properly secured shock absorbing fall protection lanyard.

Lifelines

Lifeline systems are points of attachment for fall protection lanyards and must be capable of supporting at least 5400 pounds.  Lifelines may be mounted either vertically or horizontally and are generally intended to provide mobility to personnel working elevated areas.  Horizontal Lifelines must be made at least three eighths inch (3/8”) wire rope cable properly supported to withstand at least 5400 pounds impact.  Alternate materials for specific cases (e.g.  use of synthetic fiber rope) must be okayed by the Project Safety Department.

Horizontal Lifelines should be positioned so as to provide points of attachment at waist level or higher to personnel utilizing them.

Lifelines shall not be used for any purpose other than fall protection.

Horizontal Lifelines shall be installed and maintained by the Project Rigging/Structural Department.  (NOTE: Other crafts must obtain Safety Department approval to install alternate material lifeline lines noted above).

Vertical Lifelines are used for personnel fall protection when vertical mobility is required and may be comprised of static lifelines made of synthetic fiber rope or cable which are equipped with approved sliding rope grabs or they may consist of self retracting reel type lanyard/lifelines which are attached directly to a safety harness.

Static rope lifelines with rope grabs are required for personnel working from spiders/ski-climbers and two point suspension scaffolds.  These types of lifelines can also be used to provide fall protection for other operations such as scaffold erection and structural steel erection where tie off points are limited and vertical mobility is required.

Sliding rope grabs approved for the size rope used are the only method for securing a safety lanyard to a vertical lifeline.  Lanyards shall not be attached to lifelines by means of knots or loops.

Rope grabs shall be positioned on the lifeline at lease above the shoulders of the user.  Other devices which can be used are:

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•Safety Nets

Safety nets may be used in some situations as secondary fall protection.  Use and installation of nets when required will be under direction of the Project Safety Department.  The Structural/Rigging Department is responsible for net installation when required.

•Connectors Toggles

These devices lock into structural steel bolt holes to provide an attachment point for a safety lanyard.  These devices are to be used by structural iron connectors and bolt up personnel during steel erection.

•Concrete Form Tie-Offs

These devises attach to patented concrete forms to provide an attachment point for safety lanyards.  These devices are to be used when placing concrete forms at elevations where a fall exposure exists.

Lifeline Placement/Installation

1.Horizontal Lifelines

All horizontal lifelines placed in skeletal steel structures (e.g.  pipe racks, etc.) shall be three-eighths inch (3/8” cable as a minimum and shall be secured on each end by at least two (2) cable clamps.  Intermediate supports shall be adequate to minimize sag and vertical deflection under loading.

Horizontal lifelines shall be installed and maintained by the Rigging/Structural Department.

Priority shall be given to lifeline placement as structures are erected.

Lifelines shall be arranged to provide adequate mobility in all areas of the structure while maintaining 100% fall protection for personnel.

Lifelines should be used arranged to provide tie off points at lease waist high for personnel using them.

Lifelines shall not be used for any purpose other than fall protection.

Personnel installing lifelines shall be protected from falls at all times by use of retractable lanyards or tie off to structural steel, etc.

The Rigging/Structural Department shall schedule regular documented inspections of all lifelines at least weekly.

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Vertical Lifelines/Retractable Lifelines

1.Static Rope

Static rope lifelines shall be of synthetic fiber rope approved and maintained by the Project Safety Department.

Static rope lifelines must be used with approved rope grabs for, lanyard attachment.

Static rope lifelines must be anchored at the top by means capable of supporting 5400 pounds.

NOTE: SOFTENERS SHOULD BE USED WHERE LIFELINES CONTACT - SHARP EDGES SUCH AS BEAM FLANGES.

Static rope lifeline/rope grabs will be placed for each person working from or riding in spiders/ski-climbers or two point suspension scaffolds.  Each person must have an individual lifeline.

Retractable Reel Lifelines

Retractable lifeline devices shall be attached to supports capable of withstanding 5400 pounds impact loading.

Retractable lifeline devices shall be secured by means of shackles and wire rope chokers or synthetic slings.  ROPE (synthetic or natural fiber) SHALL NOT BE USED TO SECURE THESE DEVICES.

Each retractable lifeline device shall be equipped with a rope tag line for extending the device to elevations below the point of attachment.

Retractable lifeline shall be placed at the top of every temporary construction ladder which is to be used for repeated access/egress to elevations.

Retractable lifelines shall also be used to provide fall protection to structural iron workers during erection prior to installation of other fall protection systems.

Ladders

Permanent caged structural ladders may be ascended or descended without additional fall protection.

Temporary construction ladders shall extend at lease thirty-six (36”) above their uppermost landing and be secured against displacement.

When ascending or descending ladders personnel shall use both hands.  Materials or tools shall not be carried in hands while using ladders.

All temporary construction ladders placed for repeated access/egress to elevations shall be equipped with retractable lifelines.  Personnel using these ladders shall secure the retractable lifeline to their harness while ascending or descending the ladder.

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Retractable lifelines reels shall be secured above the highest point of access to applicable ladders and be equipped with tag line of one-forth inch (1/4”) synthetic fiber rope extending from the lifeline reel to the ground when the reel is fully retracted.

Portable ladders (e.g.  extension ladders, step ladders, etc.) do not require the retracting lifeline when they are used for access to an elevation to perform a single task.  when using these types of ladders in this way the following must be complied with:

•Personnel using the ladder must receive specific TSTI concerning the use of portable ladders and associated fall protection techniques.

•Personnel climbing ladders which are not tied off at the top must have another person hold the ladder at the bottom until it can be secured.  This includes the last trip down after untying a ladder at the top.

•Upon climbing to the elevation where the task is to be performed the person on the ladder properly secure their safety lanyard before doing anything else.  Next, the ladder must be tied off before work can be begin.  When the task is complete the process is reversed with the safety lanyard being the last protective device released prior to descent.

•Absolutely no objects, tools, or material are to be carried in hands while climbing or descending ladders.

Temporary Lifts/Hoisting Devices

Every efforts shall be made to ensure all temporary platforms/walkways are equipped with solid decks free of openings and standard guard rail systems.

Personnel working from temporary platforms or traveling on temporary -catwalks shall have their safety lanyard secured at all times to a lifetime of structure capable of supporting 5400 pounds impact loading.

Every temporary work platform or walkway must be provided with a safe means of access/egress which allows personnel to remain tied off at all times.  Retractable lifelines shall be used to achieve fall protection while ascending or descending access ladders to temporary work platforms or walkways.

Personnel Lifts/Hoisting Devices

1.Aerial Lifts (JLG, Scissors, Snorkel, Etc.)

Personnel riding in or working from these lifts must secure their safety lanyard to the lift basket at all times.

Lifts shall be placed on solid level surfaces so as to eliminate possibility of overturning.

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2.Spider And Ski-Climbers

Personnel -riding in or working from these hoisting devices shall each be provided an independent lifeline and rope grab to which their lanyard shall be secured at all times when aloft.

3.Crane Hoisted Personnel Baskets

Use of these devices shall comply with the safety procedures set forth in the Project Procedures Manual.

Personnel riding in or working from personnel baskets must have their lanyard secured to the basket when aloft.

4.Elevators

Personnel riding inside enclosed elevator cars are not required to secure their safety lanyard.

Skeletal Steel/Open Structures

This section deals with fall protection when personnel are required to gain access to travel and work in skeletal steel/open structures such as pipe racks.  This includes traveling on or working on any elevated surface which is not designed as a personnel work surface or walkway (e.g.  pipe, cable tray, etc.).

Personnel working or traveling in elevated skeletal steel/open structures shall secure their lanyards to a lifeline or structure capable of supporting 5400 pounds at all times (10% fall protection).  NOTE: THIS INCLUDES BOTH HORIZONTAL AND VERTICAL TRAVEL.

Personnel working or traveling in skeletal steel/open structures shall have two (2) safety lanyards at all times in order to achieve 100% fall protection.  One of the lanyards must be secured at all times.

Adequate lifeline system will be provided skeletal/open structures to allow 100% fall protection for personnel working or traveling in these structures.  The Rigging/Structural Department shall be responsible for installation and maintenance of these lifelines.

Vertical travel in these structures shall, consist of properly placed and secured access ladders equipped with retractable lifelines.  Personnel -climbing or descending these ladders shall secure these retractable lifelines to their safety harnesses while using the ladder.

In lieu of lifelines personnel may secure safety lanyards to substantial structural steel members, pipe and pipe supports.  Personnel shall avoid securing lanyards to cable tray, conduits and small bore screw pipe.

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Permanent Structures/Stairs/Caged Ladders

All BRS and subcontractor personnel are required to wear an approved full body safety harness and shock absorbing lanyard or an approved safety belt with a shock absorbing lanyard.  THIS REQUIREMENT INCLUDES COMPLETED PERMANENT STRUCTURES.

Personnel working or traveling in complete permanent structures where fall protection exist such as floor openings and open sided floors must be properly tied off within six feet (6’) of any fall exposure.

Priority shall be given to installation and securing of permanent floors and walking surfaces and all guard rails and other permanent fall protection devices.

When required temporary guard rails and floor covers shall be installed to eliminate fall exposures.

Only personnel of the Rigging/Structural Department responsible for steel erection are allowed on elevated floors and with fall exposures, such as floor openings or open sided floors.

Permanent stairs when completed shall be used to access or egress elevated work areas.

Caged ladders do not require secondary fall protection as the cage is a fall protection device.  Personnel climbing ladders must keep both hands free of climbing at all times.

Structural Steel Erection

Personnel erecting structural steel shall achieve 100% fall protection through use of safety harness/lanyards, retractable lifelines, connectors toggles and aerial lifts ALG, snorkel, etc.).

Access to structural steel shall be obtained by use of ladders, aerial lifts or other approved personnel hoisting devices.  Climbing of structural steel members such as columns and diagonal braces shall not be allowed.

Prior to and during horizontal lifeline placement structural personnel shall crawl (coon) steel members with lanyards secured around said members.  Retractable lifelines secured at elevations above the point of operation may be used in some applications to provide fall protection prior to availability of horizontal lifelines.

When lanyard lengths longer than standard are required due to large steel members the Project Safety Department shall be contacted to approved methods for obtaining the additional length.

Reinforcement Steel/Concrete Form Work

Personnel working on rebar walls, piers and on concrete form walls must have fall protection 100% of the time they are off the ground.

This fall protection can be achieved through the use of retractable lifelines, static lifeline and rope grabs or use of double lanyards.

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Personnel working rebar or formed walls and elevated piers generally require a work positioning lanyard (cannot be used for fall protection) and a fall protection lanyard.

On vertical rebar walls the safety lanyard shall be secured at a point above the workers head, either to a lifeline or a horizontal section of rebar.

On form walls personnel shall use patented construction form tie-off attachments or lifelines to secure their safety lanyards.  These persons shall receive specific TSTI on the equipment to be use and the fall protection practices to be used.

Rigging/Crane Assembly and Dismantling

Crane assembly-dismantling operations pose a challenge to the 100% fall prevention program.  However, through thought and planning maximum protection can be achieved.

Fall protection shall be obtained during these operations through the use of retractable lifelines, safety harnesses and lanyards and minimizing movement in elevated areas by using ladders in some personnel lifts.

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NOTICE TO SUBCONTRACTOR EMPLOYEES

ILLEGAL DRUGS.  ALCOHOL AND FIREARMS POLICY
FOR CONTRACTORS

The Policy of KSL SERVICES, JV regarding illegal drugs and controlled substances, alcoholic beverages, and firearms is:

1.The use, possession, distribution, purchase or sale of any illegal drugs or other controlled substances by any person while on KSL SERVICES, JV premises or project sites, engaged in KSL SERVICES, JV business or while operating KSL SERVICES, JV equipment is prohibited.

2.The use of any illegal drug or other controlled substances or alcohol which causes or contributes to unacceptable job performance or unusual job behavior is prohibited.

3.The use, possession, transportation, or sale of explosives, unauthorized flammable materials, firearms, or other weapons by SUBCONTRACTOR, its subcontractors or their employees while on KSL SERVICES, JV premises or project sites, engaged in KSL SERVICES, JV business or while operating KSL SERVICES, JV equipment is prohibited.

4.The unauthorized use, possession, transportation, or sale of alcoholic beverages by SUBCONTRACTOR, its subcontractors or their employees while on KSL SERVICES, JV premises or project sites, or while operating KSL SERVICES, JV equipment is prohibited.

SUBCONTRACTOR’S employees shall abide by this Policy.  Any person violating this Policy shall be removed from KSL SERVICES, JV premises or project sites, and may be denied future access to KSL SERVICES, N premises or project sites.  In addition, KSL SERVICES, JV may suspend work or, in repeated or serious situations, terminate a subcontract as a result of violation of this Policy.  In appropriate cases, local law enforcement agencies may be advised of violation.

In support of this Policy, KSL SERVICES, JV may conduct or require searches and require screens as set forth in the following:

SEARCH

Without prior announcement, and at any time, KSL SERVICES, JV may carry out reasonable searches of individuals and their personal effects when entering KSL SERVICES, JV premises or project sites, while on KSL SERVICES, JV premises or project sites, and when leaving KSL SERVICES, JV premises or project sites.  Unless prohibited by applicable law, KSL SERVICES, JV may require SUBCONTRACTOR to search its employees or subcontractors’ employees before entering KSL SERVICES, JV premises or project sites, engaging in KSL SERVICES, JV business or operating KSL SERVICES, JV equipment.  Entry onto KSL SERVICES, JV premises or project sites constitutes consent to a search of the person and his/her personal effects, including, without limitation, packages, briefcases, purses, lunch boxes and vehicle, or any office, locker, closet or desk.  Refusal to cooperate shall be cause for not allowing that individual on KSL SERVICES, JV premises or project sites.

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SCREEN

Unless prohibited by applicable law, KSL SERVICES, JV may require SUBCONTRACTOR to conduct a controlled substance and/or alcohol screen on any of its employees or subcontractors’ employees while on KSL SERVICES, JV premises or project sites, engaged in KSL SERVICES, IV business, or operating KSL SERVICES, JV equipment.  In addition, KSL SERVICES, JV may require SUBCONTRACTOR to conduct a controlled substance and/or alcohol screen on any of its employees or its subcontractors’ employees before entering KSL SERVICES, IV premises or project sites, engaging in KSL SERVICES, JV business or operating KSL SERVICES, JV equipment.  Prior written consent shall be obtained from any person who is to be screened.  A positive screen on SUBCONTRACTOR or a subcontractor employee or failure to give written consent for a screen shall be cause for removal from KSL SERVICES, JV premises or project sites, and shall result in the SUBCONTRACTOR or subcontractor employee being restricted or disqualified from performing services for KSL SERVICES, JV.

NOTIFICATION OF SEARCH AND/OR SCREEN BY SUBCONTRACTOR

Prior to conducting a search and/or screen of its or its subcontractors’ employees on KSL SERVICES, JV premises, SUBCONTRACTOR shall notify GENERAL CONTRACTOR and the local KSL SERVICES, JV facility manager.

DEFINITIONS

As used herein, “controlled substance” specifically includes opiates, including heroin; hallucinogens, including marijuana, mescaline, and peyote; cocaine; PCP; and prescription drugs, including amphetamines and barbiturates, which are not obtained and used under a prescription lawfully issued to the person possessing them or which are not authorized by the KSL SERVICES, JV Medical Staff; and any other substance included in the Federal Controlled Substances Act or its regulations, or unlawful under applicable law.

As used herein, controlled substance or alcohol “screen” means any test using blood, urine, breath or other samples to determine the presence of controlled substances or alcohol in the body.

As used herein, “KSL SERVICES, JV premises” is used in the broadest sense, and includes, but is not limited .to, all land, property, buildings, structures, installations, KSL SERVICES, JV operated service stations (but not KSL SERVICES, JV owned stations operated by independent dealers), vehicles, equipment, aircraft, and water craft owned, leased, or in any other manner being used by KSL SERVICES, JV for any purpose.

As used herein, “KSL SERVICES, JV project site” is used in the broadest sense, and includes all sites or properties on which KSL SERVICES, JV its affiliates and/or associated firms, and/or SUBCONTRACTORS or other firms, are performing work or any kind.

DRUG AND ALCOHOL RANDOM SECURITY SEARCH POLICY

All SUBCONTRACTOR personnel assigned to KSL SERVICES, JV work shall be mentally and physically capable of performing their assigned duties competently and safely.  Therefore,

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SUBCONTRACTOR and its.  subcontractors shall have procedures which allow screening of all employees for controlled substances and alcohol while on KSL SERVICES, N premises or project sites, in KSL SERVICES, N.  equipment or while engaged in KSL SERVICES, JV business.  KSL SERVICES, JV “Illegal Drugs, Alcohol and Firearms Policy for Contractors” (Policy) is stated, and “Controlled Substances,” “Screen,” and “KSL SERVICES, JV premises” are defined, in the attached Notice to Contractor Employees.

KSL SERVICES, N has occasionally suffered the loss of equipment and confidential data from its work locations.  Such losses will not be tolerated.  Therefore, KSL SERVICES, N may conduct searches to ensure compliance with its Policy as outlined on the attached Notice to Subcontractor Employees.

To facilitate compliance with KSL SERVICES, N Policy, SUBCONTRACTOR should take the following steps:

1.Advise all employees and/or subcontractors of KSL SERVICES, N Policy of searches without prior notice and that any person found in violation of the Policy shall be denied access to KSL SERVICES, N premises and project sites.

2.Give to each employee and/or subcontractor, the enclosed Notice to Contractor Employees for his or her review.

3.Screen employees and subcontractors before assigning them to KSL SERVICES, N premises or project sites, bearing KSL SERVICES’S, JV Policy in mind.

SUBCONTRACTOR shall immediately remove from KSL SERVICES, JV premises any of its or its subcontractors’ personnel found to be in violation of the Policy.  Such personnel may be denied future access to KSL SERVICES, JV premises or project sites.  Any illegal or unauthorized drugs, intoxicating beverages, firearms, weapons, or KSL SERVICES, JV property discovered as a result of KSL SERVICES, JV searches may be confiscated and may be turned over to law enforcement agencies.

If your personnel fail to comply with KSL SERVICES, JV Policy, it may become necessary to take remedial action, including termination of this Subcontract.

Your cooperation in implementing and enforcing this Policy is appreciated.  Please execute and return.

Understood and accepted this         day of              , 2003

Firm Name:	By:
Date:	Title:

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INSERT CERTIFICATE LIABILITY OF INSURANCE

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GENERAL CONDITIONS
FOR
SUBCONTRACTED PROFESSIONAL SERVICES

1.WORK Of THE SUBCONTRACTOR

1.1All Work shall be performed in accordance with sound and generally accepted professional practices and industry standards by Professional, Managerial, and administrative personnel fully qualified in the respective disciplines required.

1.2Subcontractor shall have the complete Professional, Managerial, and Technical responsibility for the validity, accuracy and reliability of the work performed, and its work shall conform to all applicable codes, standards, statutes;_, rules and regulations and the Task Order and Contract design criteria and definition.

1.3Subcontractor shall designate a Manager in charge of the Work as a whole on a continuous basis and having authority with responsibility for providing adequate supervision or direction to take all action that may be required in performance of that Agreement.

1.4Subcontractor shall remove from the Work any person assigned whose work is not satisfactory to Prime Contractor, but Subcontractor shall not remove or reassign its Manager in charge of the Work or its other key personnel designated in the “Terms” of this Agreement without the approval of Prime Contractor unless such person is no longer employed by Subcontractor.

1.5The Work shall be performed at a location satisfactory to Prime Contractor and such location shall not be changed without approval of Prime Contractor.  Prime Contractor shall have access at all times to the location where Work is performed and to all of the drawings, specifications, data, calculations, models, test results and specimens, documents and other things related to the Work or to the Project as a whole.

2.SCHEDULING

2.1Subcontractor shall perform the Professional, Management or Technical work expeditiously with sufficient number of qualified personnel to conform to Prime Contractor’s schedule and progress with the Work on the individual Task Orders and the Contract as a whole.

2.2As required by the Project Manager, Subcontractor shall provide Prime Contractor a detailed Schedule for-performance of the Work and update such Schedule as work on each of the Task Orders progresses subject to revision or approval by Prime Contractor to coordinate the Work with the overall rate of Prime Contractor and other participants in the Task Order and Contract as a whole.

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3.PROJECT SITE

3.1Whenever Subcontractor has employees performing the Work subject of this Agreement, at any worksite, property of the Client, or of any third party.  Subcontractor shall comply with all government laws and regulations with regard to safety, security and sanitation, and shall be fully responsible for the safety of its personnel.  Subcontractor shall not create any hazards for others, or the work of others, and shall conduct its work in a manner which protects life, property and the environment.

3.2If Subcontractor is to furnish any items of equipment, machinery and materials which are to become a permanent part of a Project required by a Task Order, Subcontractor shall warrant that the equipment, machinery and materials will perform as specified and are free from defects in workmanship and materials for a period of one year after initial commercial operation of the equipment or completion of the relevant Task Order, whichever is later, unless a different period is stated in the “Terms” of this Agreement.  With respect to items of machinery, equipment, and materials manufactured by others, Subcontractor’s obligation shall be limited to the terms of the best warranty obtainable from the manufacturer.

4.STANDARD OF PERFORMANCE

In the event Subcontractor’s services hereunder should not prove satisfactory to Program Manager and Client, as a result of human error, omission or otherwise, Subcontractor’s obligation resulting therefrom shall be to perform corrective services of the type originally undertaken, provided such corrective services are requested in writing by Program Manager or Client, within the notice period and terms of compensation, if any, for such work to be as required by Owner or Program Manager under the Prime Contract.

5.CHANGES

Prime Contractor may order changes in the work or conditions under which the Work is to be performed or may increase or decrease the scope of work to be performed by Subcontractor.  Such additional work shall be performed under the same terms and conditions of the base Agreement.

6.DELAYS

Prime Contractor may require Subcontractor to suspend performance hereunder completely or partially for whatever length of time Client and Prime Contractor may elect.  The time for completion shall be extended by an appropriate period that Subcontractor is delayed by any cause beyond the Subcontractor’s reasonable control.  Prime Contractor and Client shall not be liable for any damages, direct, and consequential or otherwise, suffered by Subcontractor due to delays and suspensions.  Subcontractor shall be obligated to proceed with the work notwithstanding a dispute on reimbursement; such action shall not prejudice either party’s claim with respect to reimbursement.

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7.NOTICES

Notices of changes, deficiencies, delays, claims or disputes shall be in writing, and shall furnish full information to the extent available.  The party notified will acknowledge receipt by endorsement of a copy if requested, or will otherwise confirm receipt in writing.  To avoid difficulty in delivery of notice, sufficient notice shall be deemed to have been given by mailing by registered or certified mail or equivalent, to the address shown in the Subcontract “Terms.”

8.TERMINATION

8.1If, within seven (7) days written.  notice by Prime Contractor to Subcontractor specifying any deficiency in the Work or the promptness with which the Work is being performed, Subcontractor has not commenced to correct, and within a reasonable time has corrected, such deficiency to the satisfaction of the Prime Contractor, Prime Contractor may supplement the work of Subcontractor, or take over performance of the Work temporarily or completely, with Prime Contractor’s own forces, or by contract with others:

8.2Prime Contractor may terminate this , Subcontract for convenience in those cases where Client terminates the Prime Contract or the portion of the Prime Contract that includes the Work.

8.3If work of Subcontractor is suspended or terminated by Prime Contractor, Subcontractor will be paid for the work actually completed and accepted and for acceptable costs incurred for partially performing and closing out work not completed, but shall not be paid for the loss of profit or contribution to overhead of work not performed by.  Subcontractor.

9.ASSIGNMENT, SUBCONTRACTING

9.1Subcontractor shall not assign this Subcontract or any funds-due hereunder.

9.2Subcontractor shall not subcontract any portion of the Work without the prior written approval of Prime Contractor and without the prior written approval by the Prime Contractor of the form, terms and conditions of the lower-tier Subcontract.

9.3No assignment or subcontracting, even with Prime Contractor’s approval, shall _.relieve Subcontractor of any obligations hereunder, or create any contractual relationship between such Sub-Subcontractor and Prime Contractor or Client.

9.4Any lower-tier Subcontractor shall assume unto Prime Contractor all of the obligations of the Subcontractor as they relate to such portion of the Work.

9.5Prime Contractor may assign this Subcontractor to Client should the Prime Contract give the option and Client elects to exercise such right.

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10.RECORDS AND PAYMENTS

10.1Subcontractor shall maintain good accounting and personnel records reflecting performance of the Work and shall preserve such records for a period of two years after completion and acceptance of the Prime Contract as a whole.

10.1.1Client and Prime Contractor shall have the right to inspect and audit such part of the records as relate to cost reimbursement or performance of labor related provisions.  Such audit may also cover Subcontractor’s procedures and .  controls with respect to the cost of the Work.  Subcontractor shall assist in making the above audits.

10.1.2Copies of documents and records supporting requests for payment or compliance with labor related provisions’ shall be furnished to Prime Contractor with such request or at such other times as Prime Contractor directs.  Payments will be made by Prime Contractor to Subcontractor in accordance with the “Terms” of this Agreement

10.2The cost of the Work to be reimbursed under this Agreement shall be only that reasonably necessary to perform the, work in an efficient manner in accordance with the time schedule and shall not exceed the amount authorized by Prime Contractor in the “Terms” of this Agreement.

10.3Prime Contractor shall make progress payments to Subcontractor monthly or at other intervals specified in accordance with the Subcontract Terms.  Prime Contractor may withhold from those progress payments ten percent (100) of the amount earned until final completion and acceptance of the Work.

10.4Subcontractor shall submit with its request for final payment evidence, including affidavits and certificates, as may be requested by Prime Contractor, showing a) Work is completed b) compliance with all requirements c) Payment of all bills, and d) that no lien exists or could be claimed arising from the Work.

10.5Notwithstanding any other provision hereof, payment by Client to Prime Contractor is a condition precedent to any obligation of Prime Contractor to make payment hereunder.  Prime Contractor shall have no obligation to make payments to Subcontractor for any portion of the Work for which Prime Contractor has not received payment from the Client.

11.BENEFITS & PAYROLL TAXES

Subcontractor’s compensation ‘includes, and Subcontractor accepts exclusive liability for the payment of all benefit contributions and payroll taxes for all employees of Subcontractor engaged in the performance of this.  Agreement

12.INDEMNITY

Subcontractor hereby indemnifies, holds harmless and will defend Prime Contractor and Client from any loss, cost, damage, or liability from injury or death of any person, including Subcontractor or its employees, or damage to any ..property arising’ from or in

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connection with the Work whether or not there be concurring negligence by Prime Contractor or Client, but Subcontractor does not hereby assume responsibility for the sole negligence of Prime Contractor or Client.

13.INSURANCE

Without in any way limiting Subcontractor’s liability hereunder, Subcontractor shall maintain the following insurance in form and with underwriters satisfactory to ‘me Contractor:

13.1Worker’s Compensation as prescribed by applicable law.

13.2Employer’s Liability Insurance including insurance covering liability under the Longshoremen’s and Harbor Worker’s Act, the Jones Act, and the Outer Continental Shelf Land Act, if applicable.  The limits of liability of such insurance shall be not less than $1,000,000 per occurrence.

13.3Comprehensive or Commercial General Liability (Bodily Injury and Property Damage) Insurance including, but not limited to, the following supplementary coverage’s: (i) Contractual Liability to cover liability assumed under this Agreement, (ii) Product and Completed Operations Liability Insurance, (iii) Broad Form Property Damage Liability Insurance, and (iv) explosion, collapse and underground hazards.  The limit of the liability for such insurance shall not be less than $1,000,000 per occurrence for Bodily Injury and $1,000,000 per occurrence for Property Damage.  If a Combined Single Limit is provided, total coverage shall not be less than $2,000,000 per occurrence.

13.4Automobile Bodily Injury and Property Damage Liability Insurance.  Such insurance shall extend to owned, non-owned and hired automobiles used in the performance of this Agreement.  The limits of liability of such insurance shall be not less than $1,000,000 per occurrence for Bodily Injury and $1,000,000 per occurrence for Property Damage.  If a Combined Single Limit is provided, total coverage shall be not less than $2,000,000.

13.5Without in any affecting Subcontractor’s obligation above, if marine work is to be performed hereunder, Protection and Indemnity Insurance or equivalent insurance coverage, including coverage for injuries to or death of masters, mates and crews of vessels used in the performance of this Agreement.  The limits of liability of such insurance shall be not less than $1,000,000 per occurrence.

13.6Professional Liability insurance with an amount no less than $1,000,000.

The above insurance’s shall be on an occurrence basis, shall name Prime Contractor and Client as additional insured, and shall include a requirement that the insurer provide Prime Contractor with 30 days’ written notice prior to the effective date of any cancellation or material change of the insurance.  The insurance specified in 13.1 above shall contain waivers of subrogation in favor of Prime Contractor and Client and an assignment of statutory lien to Prime Contractor, if applicable.

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13.7The insurance specified in 13.2, 13.3, 13.4, 13.5, and 13.6 above shall:

13.7.1contain waivers of subrogation in favor of Prime Contractor and Client, and their respective subsidiaries, and

13.7.2provide that said insurance is primary coverage with respect to Subcontractor’s operations hereunder.

Subcontractor shall, before commencing the Work, provide Prime Contractor with a certificate of insurance evidencing all required coverage.

14.PATENTS AND PROPRIETARY RIGHTS

Subcontractor indemnifies Prime Contractor and Client against any loss, cost or liability for infringement of any patent or proprietary rights involving any information, items of equipment, materials, or services furnished hereunder.

15.LAWS

This Subcontract is entered into in Los Alamos, New Mexico and shall be construed and governed by the laws of the State of New Mexico.  Subcontractor shall comply with all laws, statutes, ordinances, rules and regulations of any governmental entity having jurisdiction, and Subcontractor shall indemnify and hold harmless the Client and Prime Contractor from any fines, penalties, costs or liability arising from Subcontractor” failure- to comply therewith.

16.TITLE

Title to all drawings, specifications, reports, test results and specimens, plans, data and work product of Subcontractor arising hereunder shall be in Prime Contractor, or if Prime Contractor so designates, in Client.

16.1All discoveries, inventions, patents, know-how, trade secrets, computer programs, or other proprietary information generated hereunder shall be the property of Prime Contractor, or if Prime Contractor so designates, of Client, and Subcontractor will take appropriate action to assign and transfer same to Prime Contractor or Client.

16.2Subcontractor will, if requested, execute Prime Contractor’s Standard Secrecy Agreement (a copy of which is available on, request) and will, if requested, cause each of its employees assigned to the Work to execute • Prime Contractor’s Standard Secrecy Agreement for Employees (a copy of which is available on request).

16.3Subcontractor and Subcontractor’s employees will limit access to Client’s and Prime Contractor’s technical information to Subcontractor’s employees who reasonably require the same for performance of work pursuant to this ‘Agreement.

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16.4At Prime Contractor’s request, Subcontractor will return to Engineer all drawings and written materials furnished to Subcontractor by Client or Prime Contractor, including all copies thereof, if any, made by Subcontractor except that Subcontractor may retain one copy of the same in its files for record purposes only.

17.INTEGRATION

17.1This Subcontract shall be valid and in force when signed by both parties and delivered and the parties understand that thereafter no person is authorized to amend this Subcontract except by agreement in writing and signed with equal formality.  These General Conditions may be modified by the Subcontract Terms, and as so modified it is intended that all Terms and Provisions of this Subcontract shall be construed in harmony and with equal dignity and effect.

17.2Headings of sections and other parts of this Agreement are for quick reference only and.  are not to be construed as a part of this Agreement.  In some instances, a section or part contains provisions not covered by the heading thereof.  In other instances, a section or part contains provisions that are described in the heading of another section or part.

18.AMENDMENTS

No representative of Prime Contractor, other than an officer, has authority to change, amend or supplement this Agreement of Contract or’ make any Agreement or Contract on behalf of Prime Contractor or Client, and no contractual relationship exists between Subcontractor and Client.

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KSL SERVICES JV

LOS ALAMOS NATIONAL LABORATORY
UNIVERSITY OF CALIFORNIA

SUBCONTRACT/PURCHASE ORDER SPECIAL CONDITIONS
in support of
SUBCONTRACT NO.  47394-001-03-C2

These Special Conditions are to be read in conjunction with the SUBCONTRACT GENERAL CONDITIONS (03-92), GENERAL CONDITIONS FOR SUBCONTRACTED PROFESSIONAL SERVICES (11-03), or PURCHASE ORDER TERMS AND CONDITIONS as appropriate.  These Special Conditions are supplementary to the SUBCONTRACT GENERAL CONDITIONS, GENERAL CONDITIONS FOR PROFESSIONAL SUBCONTRACTED PROFESSIONAL SERVICES, or PURCHASE ORDER TERMS AND CONDITIONS, except in those cases where there is a conflict, in which case, these Special Conditions take precedence.

1.0INCORPORATION OF FEDERAL ACQUISITION REGULATION (FAR) AND, DEPARTMENT OF ENERGY REGULATION (DEAR) CLAUSES

The Federal Acquisition Regulation (FAR) and the Department of Energy Acquisition Regulation (DEAR) clauses listed below, which are codified in Chapters 1 and 9, respectively, of Title 48 of the Code of Federal Regulations, are, as prescribed below, incorporated into this subcontract by reference as a part of these Special Conditions with the same force and effect as if they were given in full text.

As used in these clauses below, and unless otherwise indicated.  with respect to a particular clause, the terms identified below are for SUBCONTRACTING supplies/services:

“CONTRACTING OFFICER” shall mean “KSL SERVICES JV.”

“CONTRACTOR” shall mean “SUBCONTRACTOR.”

“SUBCONTRACTOR” shall mean “LOWER-TIER SUBCONTRACTOR.”

1.1THE FOLLOWING FAR CLAUSES ARE REQUIRED FOR ALL SUBCONTRACTS:

PARAGRAPH	TITLE
FAR 52.203-6	Restrictions on Subcontractor Sales to the Government (July 1995)
FAR 52.203-7	Anti-Kickback Procedures (July 1995), except for paragraph (c) (1), which is not incorporated into this subcontract.

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FAR 52.203-10	Price or Fee Adjustment for Illegal or Improper Activity (Jan. 1997)
FAR 52.203-12	Limitation on Payments to Influence Certain Federal Transactions (June 1997)
FAR 52.215-2	Audit and Records — Negotiations (June 1999)
FAR 52.215-10	Price Reduction for Defective Cost or Pricing Data (Oct. 1997)
FAR 52.215-12	Subcontractor Cost or Pricing Data (Oct. 1997)
FAR 52.215-17	Waiver of Facilities Capital Cost of Money (Oct. 1997)
FAR 52.219-8	Utilization of Small Business Concerns (Oct. 2000)
FAR 52.219-9	Small Business Subcontracting Plan (Jan. 2002)
FAR 52222-1	Notice to the Government of Labor Disputes (Feb. 1997)
FAR 52.222-4	Contract Work Hours and Safety Standards Act — Overtime Compensation (Sept. 2000)
FAR 52.222-6	Davis-Bacon Act (Feb. 1995)
FAR 52222-7	Withholding of Funds (Feb. 1988)
FAR 52.222-8	Payrolls and Basic Records (Feb. 1988)
FAR 52.222-9	Apprentices and Trainees (Feb. 1988)
FAR 52222-10	Compliance with Copeland Act (Feb. 1988)
FAR 52222-11	Subcontracts (Labor Standards) (Feb. 1988)
FAR 52.222-12	Contract Termination — Debarment (Feb. 1988)
FAR 52.222-13	Compliance with Davis-Bacon and Related Act Regulations (Feb. 1988)
FAR 52.222-14	Disputes Concerning Labor Standards (Feb. 1988)
FAR 52.222-15	Certification of Eligibility (Feb. 1988)
FAR 52.222-26	Equal Opportunity (Apr. 2000)
FAR 52.222-35	Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec. 2001)

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FAR 52222-36	Affirmative Action for Workers with Disabilities (June 1998)
FAR 52.222-37	Employment Reports on Special Disabled. Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec. 2001)
FAR. 52.222-41	Service Contract Act of 1965; as Amended (May 1989)
FAR 52.222-42	Statement of Equivalent Rates for Federal Hires (May 1989)
FAR 52.223-3	Hazardous Material Identification and Material Safety Data Sheets (Jan. 1997) with Alternate I (Jan. 1997)
FAR 52.223-10	Waste Reduction Program (August 2000)
FAR 52.224-1	Privacy Act Notification (Apr 1984)
FAR 52.224-2	Privacy Act (Apr. 1984) Buy American Act-North American Free Trade Agreement-)
FAR 52.225-3	Israeli Trade Act (May 2002)
FAR 52.225-5	Trade Agreements (Feb 2002)
FAR 52.225-11	Buy American Act-Construction Materials under Trade Agreements (July 2002)
FAR 52.225-13	Restrictions on Certain Foreign Purchases (Feb. 2000)
FAR 52.227-1	Authorization and Consent (July 1995)
FAR 52.227-3	Patent Indemnity (Apr. 1984)
FAR 52.227-10	Filing of Patent Applications — Classified Subject Matter (Apr. 1984)
FAR 52.227-23	Rights to Proposal Data (Technical) (June 1987)
FAR 52.229-10	State of New Mexico Gross Receipts and Compensating Tax (Oct. 1998)
FAR 52.230-2	Cost Accounting Standards (Apr. 1998), except for paragraph (b), which is not incorporated into this subcontract.
FAR 52.230-6	Administration of Cost Accounting Standards (Nov. 1999)
FAR 52.232-17	Interest (June 1996)
FAR 52.232-22	Limitation of Funds (Apr. 1984)

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FAR 52.232-23	Assignment of Claims (Jan. 1986)
FAR 52.237-3	Continuity of Service (Jan. 1991)
FAR 52.242-1	Notice of Intent to Disallow Costs (Apr. 1984)
FAR 52.242-15	Stop-Work Order (Aug. 1989), Alt. I (Apr 1984)
FAR 52.244-2	Subcontracts (Aug. 1998)
FAR 52.244-5	Competition in Subcontracting (Dec. 1996)
FAR 52.244-6	Subcontracts for Commercial Items and Commercial Components (Oct. 1998)
FAR 52.246-5	Inspection of Services-Cost Reimbursement (Apr. 1984)
FAR 52.247-63	Preference for U.S.— Flag Air Carriers (Jan. 1997)
FAR 52.247-64	Preference for Privately Owned U.S.- Flag Commercial-1 Vessels (June 2000)
FAR 52.249-1	Termination for Convenience of the Government (Fixed Price) (Short Form) (Apr. 1984)
FAR 52.249-2	Termination for Convenience of the Government (Fixed Price) (Sept. 1996)
FAR 52.249-4	Termination for Convenience of the Government (Services) (Short Form) (Apr. 1984)
FAR 52.249-6	Termination (Cost Reimbursement) (Sept. 1996)
FAR 52.249-7	Termination (Fixed-Price Architect-Engineer) (Apr. 1984)
FAR 52.249-8	Default (Fixed Price Supply and Service) (Apr. 1984)
FAR 52.249-10	Default (Fixed Price Construction) (Apr. 1984)
FAR 52.249-12	Termination (Personal Services) (Apr. 1984)
FAR 52.249-13	Failure to Perform (Apr. 1984)
FAR 52.249-14	Excusable Delays (Apr. 1984)
FAR 52.251-1	Government Supply Sources (Apr. 1984)

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1.2THE FOLLOWING DEAR CLAUSES ARE REQUIRED FOR ALL SUBCONTRACTS:

DEAR 952.203-70	Whistleblower Protection for Contractor Employees, (Dec. 2000)
DEAR 952.204-2	Security (Sept. 1997)
DEAR 952.204-70	Classification/Declassification (Sept. 1997)
DEAR 952.204-74	Foreign Ownership, Control, or Influence Over Contractor (Apr. 1984)
DEAR 952.209-72	Organizational Conflicts of Interest, Alternate I (June 1997)
DEAR 952.211-71	Priorities and Allocations (Atomic Energy) (June 1996)
DEAR 952.217-70	Acquisition of Real Property (Apr. 1984)
DEAR 952.226-74	Displaced Employee Hiring Preference (June 1997)
DEAR 952.247-70	Foreign Travel (Dec. 2000)
DEAR 952.250-70	Nuclear Hazards Indemnity Agreement (June 1996)
DEAR 970.5203-1	Management Controls (May 2000)
DEAR 970.5215-2	Make-or-Buy Plan (Dec. 2000)
DEAR 970.5215-3	Conditional Payment of Fee, Profit, or Incentives (Dec. 2000)
DEAR 970.5223-4	Workplace Substance Abuse Programs at DOE Sites (Dec. 2000)
DEAR 970.5226-2	Workforce Restructuring Under Section 3161 of the National Defense Authorization Act for Fiscal Year 1993 (Dec. 2000)
DEAR 970.5227-1	Rights in Data-Facilities (Dec. 2000)
DEAR 970.5227-5	Notice and Assistance Regarding Patent and Copyright Infringement (Dec. 2000)
DEAR 970.5227-8	Refund of Royalties (Dec. 2000)
DEAR 970.5229-1	State and Local Taxes (Dec. 2000)
DEAR 970.5231-4	Preexisting Conditions (Dec. 2000), Alt. II, (Dec. 2000) [insert “effective date of this Subcontract”)
DEAR 970.5232-3	Accounts, Records, and Inspection (Dec. 2000), Alt. II, (Dec. 2000)
DEAR 970.5243-1	Changes (Apr. 1984)
DEAR 970.5245-1	Property (Dec. 2000)

2.0ADDITIONAL DEFINITIONS:

As used throughout the SUBCONTRACT GENERAL CONDITIONS, GENERAL CONDITIONS FOR SUBCONTRACTED PROFESSIONAL SERVICES, and PURCHASE ORDER TERMS AND CONDITIONS, the following terms have the stated meanings:

“OWNER, CLIENT, or PROGRAM MANAGER” shall mean “UNIVERSITY OF CALIFORNIA, DEPARTMENT OF ENERGY OR GOVERNMENT.”

“CONTRACTOR, GENERAL CONTRACTOR, PRIME CONTRACTOR or BUYER” shall mean “KSL SERVICES JV.”

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“SUBCONTRACTOR” shall mean “SUBCONTRACTOR, LOWER-TIER SUBCONTRACTOR or SELLER.”

“SUBCONTRACTS” shall mean “SUBCONTRACTS, PURCHASE ORDERS, MASTER AGREEMENTS, WORK RELEASES, MODIFICATIONS AND CHANGE ORDERS”.

3.0ANTI-KICKBACK NOTICE

Your attention is directed to the prohibitions contained within the Anti-Kickback Act of 1986 (FAR Clause 52.203-7), highlights of which are: “Subcontractors and supplier are prohibited from offering any money, fee, commission, credit, gift, gratuity, thing of value or compensation of any kind directly to KSL Services JV employees for the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or in connection with a subcontract relating to a prime contract.”

4.0STOP-WORK ORDER

4.1CONTRACTOR may, at any time, by written order to the SUBCONTRACTOR, require the SUBCONTRACTOR to stop all, or any part, of the work called for by this contract for a period of 90 days after the order is delivered to the SUBCONTRACTOR, and for any further period to which the parties may agree.  The order shall be specifically identified as a stop-work order issued under this clause.  Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage.

Within a period of 90 days after a stop-work order is delivered to the SUBCONTRACTOR, or within any extension of that period to which the parties shall have agreed, the CONTRACTOR shall either

(1)Cancel the stop-work; or

(2)Terminate the work covered by the order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.

4.2If a stop-work order issued under this clause is canceled or the period of the order or any extension thereof expires, the SUBCONTRACTOR shall resume work.   The CONTRACTOR shall make an equitable adjustment in the delivery schedule or contract price, or both, and the contract shall be modified, in writing accordingly, if

(1)The stop-work order results in an increase in the time required for, or in the SUBCONTRACTOR’S cost properly allocable to, the performance of any part of this contract; and

(2)The SUBCONTRACTOR asserts a claim for the adjustment within 15 days after the end of the period of work stoppage; provided, that, if the CONTRACTOR

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decides the facts justify the action, the CONTRACTOR may receive and act upon the claim asserted at any time before final payment under this contract.

4.3If a stop-work order is not canceled and the work covered by the order is terminated for the convenience of the Government, the CONTRACTOR shall allow reasonable costs resulting from the stop-work order in arriving at the termination settlement.

4.4If a stop-work order is not canceled and the work covered by the order is terminated for default, the CONTRACTOR shall allow, by equitable adjustment or otherwise, reasonable costs resulting from the stop-work order.

4.5Notwithstanding the above, where the stop-work order is occasioned by the imposition of such stop-work order by the GOVERNMENT on the CONTRACTOR, SUBCONTRACTOR will be entitled to only such adjustment that is awarded to the CONTRACTOR to the extent such adjustment relates to this SUBCONTRACT.

5.0DISPUTES

(a)Definitions.  For purposes of this clause:

(1)“Claim” means a written demand or written assertion by either contracting party seeking as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of a contract term, or other relief arising under or relating to this subcontract.  A voucher, invoice, or other request for payment or equitable adjustment under the terms of the subcontract, that is not in dispute when submitted, is not a claim.  The Subcontractor may convert such submission into a claim if it is disputed either as to liability or amount, or is not acted upon in a reasonable time, by demanding a decision by the Contract Administrator.

(b)Nature of the Subcontract.  This subcontract is not a Government contract and, therefore, is not subject to the Contract Disputes Act of 1978 (41 U.S.C. §601-613).  The Subcontractor acknowledges that DOE and the University are not a parties to the subcontract and, for purposes of the subcontract, the University is not an agent of DOE.

(c)Scope of Clause.  The rights and procedures set forth in this clause are the exclusive rights and procedures for resolution of all claims and disputes arising under, or relating to, this subcontract, and no action based upon any claim or dispute arising under, or relating to, this subcontract shall be brought in any court except as provided in this clause.  The parties shall be bound by any arbitration decision rendered pursuant to this clause, which shall be vacated, modified, or corrected only as provided in the Federal Arbitration Act (9 U.S.C. § 1-16).  An arbitration decision maybe enforced in any court of competent jurisdiction.

(d)Claims asserting actions or inactions of the University.

(1)Unless otherwise provided in this subcontract, for claims asserting as the basis any action or inaction by the University the Subcontractor must file any claim with KSL Services JV, and KSL Services JV will present the

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claim to the University within 60 days after the Subcontractor knew or should have known the facts giving rise to the claim.  Failure to file a claim within the period prescribed by this paragraph shall constitute a waiver of the Subcontractor’s right, if any, to an equitable adjustment under the subcontract.

(2)The Subcontractor shall submit any claim identified in (1) above in writing to KSL Services N, and KSL Services N will present the claim to the University’s Contract Administrator who shall issue a decision on the matter within 60 days of receipt of the claim.  If the University’s Contract Administrator fails to issue a decision within 60 days, the Subcontractor may request that KSL Services N request mediation or a demand for arbitration as provided in KSL Services N contract with the University.

(3)The decision of the University’s Contract Administrator shall be final and conclusive unless the Subcontractor requests that KSL Services N requests mediation or demands arbitration in accordance with the terms of KSL Services JV contract with the University.

(4)The Subcontractor shall fully cooperate with KSL Services N in the pursuit and conduct of any mediation or arbitration requested by Subcontractor.  Any and all costs incurred by KSL Services N in sponsoring and participating with Subcontractor in any mediation or arbitration arising under this clause, shall be for the account of Subcontractor.

(e)Claims asserting actions or inactions on part of KSL Services JV.

(1)Unless otherwise provided in this subcontract, for claims asserting as the basis any action or inaction by KSL Services N the Subcontractor must file any claim with KSL Services JV within 60 days after the Subcontractor knew or should have known the facts giving rise to the claim.  Failure to file a claim within the period prescribed by this paragraph shall constitute a waiver of the Subcontractor’s right, if any, to an equitable adjustment under the subcontract.

(2)The Subcontractor shall submit any claim identified in (1) above in writing to KSL Services N, and KSL Services N’s Subcontract Administrator shall issue a decision on the matter within 60 days of receipt of the claim: If the KSL Services N’s Subcontract Administrator fails to issue a decision within 60 days, or such other time as deemed necessary by the Subcontract Administrator, the Subcontractor may request that KSL Services N may submit a demand for arbitration as provided herein.

(3)The decision of KSL Services JV’s Subcontract Administrator shall be final and conclusive unless the Subcontractor demands arbitration in accordance with the terms of this clause.

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(4)If the decision of the KSL Services N’s Subcontract Administrator is not satisfactory to the Subcontractor, the Subcontractor must submit to the Subcontractor Administrator a written demand for arbitration of the claim within 45 days after receipt of the Subcontract Administrator’s decision.

(f)Arbitration Procedures.

(1)The parties agree to first endeavor to settle the dispute in an amicable manner by mediation administered by the American Arbitration Association under its Commercial Mediation Rules before resorting to arbitration.  Thereafter, any unresolved controversy or claim arising out of or relating to this contract or breach thereof shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment upon the Award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

(2)The parties acknowledge that this contract evidences a transaction involving interstate commerce.  The United States Arbitration Act shall govern the interpretation, enforcement, and proceedings pursuant to the arbitration clause in this contract.

(3)The arbitration proceedings shall be conducted in Albuquerque, N.M.  The language of the arbitration shall be English.

(4)The governing law of this contrast shall be that body of common law relating to U.S. government procurement and where no such common law exists the law of the State of New Mexico excluding any conflict of laws provision which would lead to the application of a different body of law.

(5)The decision of a majority of the three (3) arbitrators shall be reduced to writing; final and binding without the right of appeal.  Judgment upon the award may be entered in any court having jurisdiction over the person or the assets of the Party owing the judgment or application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.

(6)Consequential, punitive or other similar damages shall not be allowed; provided, however, the award may include appropriate punitive damages where a Party has engaged in delaying and dilatory actions.

(g)Activities Pending Resolution of Disputes.

(1)The Subcontractor shall proceed diligently with performance of the subcontract and shall comply with any decision of the Subcontract Administrator pending final resolution of any claim or dispute arising under, or relating to, the Subcontract.

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6.0CHANGES

6.1KSL Services may at any time, without notice to the sureties, if any, by written order make changes in the work within the general scope of the SUBCONTRACT, including changes:

(1)In the method or manner of performance of the work.

(2)Time of performance (i.e., hours of the day, days of the week, etc.), including directing acceleration in the performance of the work.

(3)Place of performance of the services.

(4)Drawings, designs, or specifications when the supplies to be furnished are to be specially manufactured for KSL Services JV or the Government in accordance with the drawings, designs, or specifications.

(5)Method of shipment or packing of supplies.

(6)Place of delivery.

(7)Amount of KSL Services N or Government furnished property.

6.2Any other written or oral order (which, as used in this paragraph includes direction, instruction, interpretation, or determination) from the CONTRACTOR that causes a change shall be treated as a change order under this clause; provided, that the SUBCONTRACTOR gives the CONTRACTOR written notices stating (1) the _date, circumstances, and source of the order and (2) that the SUBCONTRACTOR regards the order as a change order.

6.3Except as provided in this clause, no order, statement, or conduct of the CONTRACTOR shall be treated as change order under this clause or entitle the SUBCONTRACTOR to an equitable adjustment.

6.4If any change under this clause causes an increase or decrease in the SUBCONTRACTOR’S cost of, or time required for, the performance of any part of the work under this SUBCONTRACT, whether or not changed by any such order, the CONTRACTOR shall make an equitable adjustment and modify the SUBCONTRACT in writing.  However, except for an adjustment based on defective specifications, no adjustment for any change under paragraph 6.2 of this clause shall be made for any costs incurred more than twenty (20) days before CONTRACTOR gives written notice as required under the Prime Contract to the Government.  In the case of defective specifications for which the CONTRACTOR is responsible, the equitable adjustment shall include any increased cost reasonably incurred by the SUBCONTRACTOR in attempting to comply with the defective specifications.

6.5The SUBCONTRACTOR must assert its right to an equitable adjustment under this clause within fifteen (15) days after (1) receipt of a written change order under paragraph 6.1

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of this clause, or (2) the furnishing of a written notice under paragraph 6.2 of this clause, by submitting to the CONTRACTOR a written statement describing the general nature and amount of the proposal including a detailed cost breakdown.  Included costs must conform to FAR, Part 31 (including the DEAR FAR Supplement).

The statement of proposal of adjustment may be included in the notice under paragraph 6.2 above.

6.6SUBCONTRACTOR shall not submit nor shall CONTRACTOR accept a proposal for an equitable adjustment if asserted after the fifteen- (15) day period set forth in paragraph 6.5 above.

6.7Failure to agree to any adjustment will be a dispute under the Disputes Clause.  However, nothing in this clause excuses the subcontractor from proceeding with subcontract as changed.

7.0COMMENCEMENT, PROSECUTION AND COMPLETION OF WORK

The SUBCONTRACTOR will be required to (a) commence work under this SUBCONTRACT on the required Start Date as stated in the Subcontract Terms, (b) prosecute the work diligently, and (c) complete the entire work ready for use (including completion of all punchlist items and clean-up) not later than the Completion Date as stated in the Subcontract Terms.  However, any delays in giving notice to proceed, attributable to SUBCONTRACTOR’S failure to execute the subcontract and give the required performance and payment bonds (if any) will be deducted from the number of days allowed for completion in the Subcontract Terms.

8.0PERFORMANCE EVALUATION OF SUBCONTRACTOR

8.1SUBCONTRACTOR’S performance will be evaluated upon final acceptance of the work.  However, interim evaluation may be prepared at any time during the subcontract performance when determined to be in either the best interest of the CONTRACTOR or the Government.

8.2CONTRACTOR will use whatever format for evaluation it chooses, including the SF 1420.  CONTRACTOR reserves the right, to forward its evaluation to the Government if so requested by the Government’s Contracting Officer.

9.0CONTRACTUAL RELATIONSHIP

There is no privity of contract between the SUBCONTRACTOR and the Government (Owner).  All communication on this project (oral or written) shall be addressed to the CONTRACTOR.

10.0LOWER-TIER SUBCONTRACT CONDITIONS

SUBCONTRACTOR shall include in its lower-tier subcontracts (including purchase orders) all Government Contracting clauses as detailed in Paragraph 1.0.

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11.0CONFLICTING REQUIREMENTS

Any conflict between the specifications, data sheets, drawings, referenced national standards, and codes shall be brought to the CONTRACTOR’s attention, and approved written clarification shall be obtained before proceeding.

12.0EXPEDITING AND INSPECTION

CONTRACTOR reserves the right to expedite and/or inspect equipment, materials and services covered by any resultant SUBCONTRACT at any location, including lower-tier subcontracts.  Access shall be given to representatives of CONTRACTOR and its client at all reasonable times under adequate notice to SUBCONTRACTOR, so that SUBCONTRACTOR may advise any involved lower-tier subcontractor.  The SUBCONTRACTOR shall ensure that all of the expediting and inspection clauses included in this SUBCONTRACT are made part of any lower-tier subcontract.

13.0INVOICING

Invoices received that do not agree with the provisions of this SUBCONTRACT will be returned for correction.  Invoices shall reference this SUBCONTRACT number and shall show shipping point, quantities shipped and description, as well as price.  SUBCONTRACTOR’S failure to provide specified vendor data requirements will result in payment of invoices being delayed.

14.0PERMITS AND RESPONSIBILITIES AND LAWS, REGULATIONS, AND DOE DIRECTIVES

(a)The Subcontractor shall, without additional expense to KSL Services JV or the University, be responsible for obtaining any necessary licenses and permits; for complying with any Federal, State, and local laws and regulations applicable to the performance of the work; and for the compliance of its lower-tier subcontractors with such laws and regulations.

(b)In accordance with the DEAR Clause 970.5245-1, Property, the Subcontractor shall be responsible for all damages to persons or property, including damages to existing buildings, equipment and vegetation at the Laboratory, that occur as a result of the Subcontractor’s fault or negligence.  The Subcontractor shall be responsible for replacing or repairing such damage at no cost to the University and for indemnifying the University and the Government against claims arising from such damages as described in the Special Conditions clause entitled, Indemnification and Hold Harmless.

(c)The Subcontractor shall be responsible for all materials delivered and work performed until completion and acceptance of the entire work, except for any completed unit of work, which may have been accepted under the Subcontract.

(d)The Subcontractor shall be responsible for compliance with the requirements of all DOE Directives, compliance with which is required by other provisions of the Special Conditions of the Subcontract, and with those DOE Directives, if any, which are listed in

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the Special Conditions as applicable to the subcontract.  Copies of all such DOE Directives may be obtained from the CONTRACTOR.

15.0INTEGRATION OF ENVIRONMENT, SAFETY, AND HEALTH INTO WORK PLANNING AND EXECUTION

(a)For the purposes of this clause,

(1)safety encompasses environment, safety and health, including property protection, pollution prevention and waste minimization; and

(2)employees include subcontractor employees at any tier.

(b)In performing work under this subcontract, the Subcontractor shall perform work safely, in a manner that ensures adequate protection for employees, the public, property and the environment, and shall be accountable for the safe performance of work.  The Subcontractor shall exercise a degree of care commensurate with the work and the associated hazards.  The Subcontractor shall ensure that management of environment, safety and health (ES&H) functions and activities becomes an integral but visible part of the Subcontractor’s work planning and execution processes.  The Subcontractor shall, in the [safe] performance of work, ensure that:

(1)Managers are visibly committed and works are continually involved.

(2)Line management is responsible for the protection of employees, the public, and the environment.  Line management includes those Subcontractor and Subcontractor employees, at whatever tier, managing or supervising employees performing work.

(3)Clear and unambiguous lines of authority and responsibility for ensuring (ES&H) are established and maintained at all organizational levels.

(4)Personnel possess the experience, knowledge, skills, and abilities that are necessary to discharge their responsibilities.

(5)Resources are effectively allocated to address ES&H, programmatic, and operational considerations.  Protecting employees, the public, and the environment is a priority whenever activities are planned and performed.

(6)Before work is performed, the associated hazards are evaluated and an agreed-upon set of ES&H standards and requirements are established which, if properly implemented, provide adequate assurance that employees, the public, and the environment are protected from adverse consequences.

(7)Administrative and engineering controls to prevent and mitigate hazards are tailored -to the work being performed and associated hazards.

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Emphasis should be on designing the work and/or controls to reduce or eliminate the hazards and to prevent accidents and unplanned releases and exposures.

(8)The conditions and requirements to be satisfied for operations to be initiated and conducted are established and agreed-upon by DOE and the Subcontractor.  These agreed-upon conditions and requirements are requirements of the subcontract and binding upon the Subcontractor.  The extent of documentation and level of authority for agreement shall be tailored to the complexity and hazards associated with the work and shall be established in a Safety Management System.

(c)The Subcontractor shall manage and perform work in accordance with a documented Safety Management System (System) that fulfills all conditions in paragraph (b) of this clause at a minimum.  Documentation of the System shall describe how the Subcontractor will:

(1)Define the scope of work;

(2)Identify and analyze hazards associated with the work;

(3)Develop and implement hazard controls;

(4)Perform work within controls; and

(5)Provide feedback on adequacy of controls and continue to improve safety management.

(d)The System shall describe how the Subcontractor will establish, document, and implement safety performance objectives, performance measures, and commitments in response to Laboratory program and budget execution guidance while maintaining the integrity of the System.  The System shall also describe how the Subcontractor will measure system effectiveness.

(e)The Subcontractor shall submit to the Contract Administrator documentation of its System for review and approval.  Dates for submittal, discussions, and revisions to the System will be established by the Contract Administrator.  Guidance on the preparation, content, review, and approval of the System will be provided by the Contract Administrator.  On an annual basis, the Subcontractor shall review and update, for Laboratory approval, its safety performance objectives, performance measures, and commitments consistent with and in response to the Laboratory’s program and budget execution guidance and direction.  Resources shall be identified and allocated to meet the safety objectives and performance commitments as well as to maintain the integrity of the entire System.  Accordingly, the System shall be integrated with the Subcontractor’s business processes for work planning, budgeting, authorization, execution, and change control.

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(f)The Subcontractor shall comply with, and assist the Laboratory in complying with, ES&H requirements of all applicable laws and regulations, and applicable directives identified in the Special Conditions clause entitled Permits and Responsibilities and Laws, Regulations, and DOE Directives.  The Subcontractor shall cooperate with Federal and non-Federal agencies having jurisdiction over ES&H matters under this subcontract.

(g)The Subcontractor shall promptly evaluate and resolve any, noncompliance with applicable ES&H requirements and the System.  If the Subcontractor fails to provide resolution or if, at any time, the Subcontractor’s acts or failure to act causes substantial harm or an imminent danger to the environment or health and safety of employees or the public, the Contract Administrator may issue an order stopping work in whole or in part.  Any stop work order issued by the Contract Administrator under this clause (or issued by the Subcontractor to a lower-tier subcontractor in accordance with paragraph (i) of this clause) shall be without prejudice to any other legal or contractual rights of the Government.  In the event that the Contract Administrator issues a stop work order, an order authorizing the resumption of the work may be issued at the discretion of the Contact Administrator.  The Subcontractor shall not be entitled to an extension of time or additional fee or damages by reason of, or in connection with, any work stoppage ordered in accordance with this clause.

(h)Regardless of the performer of the work, the” Subcontractor is responsible for compliance with the ES&H requirements applicable to this subcontract.  The Subcontractor is responsible for flowing down the ES&H requirements applicable to this subcontract to subcontracts at any tier to the extent necessary to ensure the lower-tier contractor’s compliance with the requirements.

(i)The Subcontractor shall include a clause substantially the same as this clause in subcontracts involving complex or hazardous work on site at a DOE-owned or -leased facility.  Such subcontracts shall provide for the right to stop work under the conditions described in paragraph (g) of this clause.  Depending on the complexity and hazards associated with the work, the Subcontractor may choose not to require the subcontractor to submit a Safety Management System for the Subcontractor’s review and approval.

16.0HEALTH AND SAFETY

The Subcontractor shall take reasonable precautions in the performance of the work under the subcontract to protect the safety and health of employees and of members of the public and shall comply with all applicable safety and health regulations and requirements (including reporting requirements) of KSL Services JV, the University and DOE.  If required, the Subcontractor shall submit a management program and implementation plan for review and approval within 30 days after the date of award of the order.  KSL Services JV shall notify the Subcontractor in writing of any noncompliance with the provisions of this article and the corrective action to be taken.  After receipt of such notice, the

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Subcontractor shall immediately take corrective action.  If the Subcontractor fails to comply with said regulations or requirements of KSL Services) JV, the University and DOE, KSL Services N may, without prejudice to any other legal or contractual rights of KSL Services N, issue a Stop Work Order stopping all or any part of the work; thereafter, a start-work order for resumption of the work may be issued at the discretion of KSL Services N.  The Subcontractor shall make no claim for an extension of time or for compensation for damages by reason of or in connection with such work stoppage.

17.0FAILURE TO COMPLY WITH HEALTH AND SAFETY REQUIREMENTS

In performing work pursuant to this Subcontract, the Subcontractor and its lower-tier subcontractors shall comply with all health and safety requirements of KSL Services N, the University and the standards of the Occupational Safety and Health Administration (OSHA) referenced in this Subcontract.  Any failure of the Subcontractor, its employees, its lower-tier subcontractors, or their employees to comply with such requirements and standards that results in a serious injury or fatality or reflects a persistent disregard for health and safety shall be cause for KSL Services N at its sole discretion, to require corrective action, to suspend work under this Subcontract until corrective action has been completed, or to terminate this Subcontract for default.  If KSL Services N suspends work pursuant to this clause, the Subcontractor shall not be entitled to an extension of time, compensation, or damages with respect to, or resulting from, the suspension.  The General Provision entitled Default shall apply to any termination pursuant to this clause.  A termination pursuant to this clause shall be considered in determining whether the Subcontractor or any lower-tier subcontractor whose acts or omissions were the basis for the termination is a responsible bidder for any subsequent subcontract with KSL Services JV.

18.0REMOVAL OF EMPLOYEE

KSL Services JV, and the University in its sole discretion, may temporarily or permanently bar from the Laboratory site any Subcontractor employee or lower-tier subcontractor employee who does not work in a safe manner, as demonstrated either by repeated violations or single serious violation of applicable safety requirements.  The Subcontractor will not be compensated for any costs resulting from the barring of an employee under this provision.

The Subcontractor shall be responsible for maintaining satisfactory standards of employee competency, conduct, integrity and compliance with the Contract requirements, including site-specific requirements.  Should the Subcontract Administrator determine that an employee of the Subcontractor or one of its lower-tier subcontractors at any tier fails to meet any of these standards, the Subcontractor shall immediately remove such person from the work site and that person shall not again, without written permission of the Subcontract Administrator, be allowed back on the work site.

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The Subcontractor shall cause this requirement to be included in all subcontracts of everytier.

19.0RESPONSIBILITY FOR TECHNOLOGY EXPORT CONTROL

(a)The Subcontractor shall comply with all applicable United States export control laws and regulations, including the International Traffic in Arms Regulations (ITAR), 22 CFR Parts 120 through 130, and the Export Administration Regulations (EAR), 15 CFR Parts 730 through 799, in the performance of this Subcontract.  In the absence of available license exemptions/exceptions, the Subcontractor shall be responsible for obtaining the appropriate licenses or other approvals, if required, for exports of hardware, technical data and software, or for the provision of technical assistance.

(b)The Subcontractor shall be responsible for obtaining export licenses, if required, before exporting or allowing access to export-controlled technical data or software to foreign nationals in the performance of this subcontract.

(c)The Subcontractor shall be responsible for all regulatory record-keeping requirements.

(d)The Subcontractor shall be responsible for ensuring that this clause, including this paragraph (d), is included in all appropriate lower-tier subcontracts.

20.0ORDER OF PRECEDENCE

In case of conflicts between various Subcontract documents, the following order of precedence shall be used to settle said conflicts:

Change Order(s) (latest one issued)

Subcontract Terms

Subcontract/Purchase Order Special Conditions

Subcontract General Conditions/General Conditions for Subcontracted Professional Services Purchase Order Terms and Conditions

Specifications (unless specifically stated otherwise within the Subcontract documents) Drawings

21.0COST ACCOUNTING STANDARDS LIABILITY

Reference is made to the Cost Accounting Standards (CAS) clause(s) of the Subcontract.  Notwithstanding the provisions of those clause(s), or of any other provision of the subcontract, the Subcontractor shall be liable to the Government for any increased costs, or interest thereon, resulting from.  any failure of the Subcontractor, with respect to activities carried on at the site of the work, or of a lower-tier subcontractor, to comply with applicable cost accounting standards or to follow any practices disclosed pursuant to the requirements of such CAS clause(s).

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22.0CONFIDENTIALITY OF INFORMATION

(a)To the extent that the work under this Subcontract requires that the Subcontractor be given access to confidential or proprietary business or financial information belonging to KSL Service JV, the University, or other companies, the Subcontractor shall, after receipt thereof, treat such information as confidential and agrees not to appropriate such information to its own use or to disclose such information to third parties, including its corporate parent, unless specifically authorized by the KSL Service JV or the Government in writing.  The foregoing obligations, however, shall not apply to:

(1)Information which, at the time of receipt by the Subcontractor, is in public domain;

(2)Information which is published after receipt thereof by the Subcontractor or otherwise becomes part of the public domain through no fault of the Subcontractor,

(3)Information which the Subcontractor can demonstrate was in its possession at the time of receipt thereof and was not acquired directly or indirectly from the University or other companies;

(4)Information which the Subcontractor can demonstrate was received by it from a third party who did not require the Subcontractor to hold it in confidence:

(b)The Subcontractor shall obtain the written agreement, in a form satisfactory to the Contract Administrator, of each employee permitted access, whereby the employee agrees that he will not discuss, divulge or disclose any such information to any person or entity except those persons within the Subcontractor’s organization directly concerned with the performance of the Subcontract.

(c)The Subcontractor agrees, if requested by KSL Services or the University, to sign an agreement identical, in all material respects,’ to the provisions of this clause, with each company supplying information to the Subcontractor under this Subcontract, and to supply a copy of such agreement to KSL Services JV.

(d)The Subcontractor agrees that upon request by KSL Services JV or the University, it will execute a KSL Services JV or University-approved agreement with any party whose facilities or information it is given access to or is furnished, restricting use and disclosure of the information obtained from the facilities.  Upon request by KSL Services or the University, such an agreement shall also be signed by Subcontractor personnel.

(e)This clause shall flow down to all appropriate subcontracts.

(f)To the extent that KSL Services JV or the University are given access to confidential or Proprietary business or financial information belonging to Subcontractor, such information shall be accorded the same treatment as provided for (a) above.

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23.0CONTROL OF SUBCONTRACTOR EMPLOYEES WORKING ON SITE

(a)The Subcontractor shall be responsible for maintaining satisfactory standards of employee competency, conduct, integrity, and compliance with subcontract requirements including site-specific requirements.  Should KSL Services JV or the Government determine that an employee of a subcontractor at any tier fails to meet any of these standards, the Subcontractor shall immediately remove such person from the work site, and that person shall not again, without written permission of KSL Services JV or the Government, be allowed back on the work site.

(b)The Subcontractor shall include this provision in all lower-tier subcontracts, which require work to be performed on the LANL site.

24.0SECURITY

(a)Non-U.S. Citizens on the Work Site.  The Subcontractor shall take effective measures to determine the citizenship of all of its employees and those of its lower-tier subcontractors who will be assigned to work at the LANL work site (for purposes of this clause, hereinafter “Subcontract Workers”), and shall not permit persons who are not United States citizens to enter such sites except as provided in this clause.  If the Subcontractor intends to employ non-U.S. citizens, the Subcontractor must comply with DOE, and LANL Foreign Visits and Assignments procedures and obtain approval for such individuals to enter the work site pursuant to those procedures.  Copies of the requirements and procedures associated with Foreign Visits and Assignments may be obtained from the KSL Services N.  There is no assurance KSL Services JV or the University will grant any particular request for access by a non-U.S. citizen pursuant to these procedures.  The presence of non-U.S. citizens on the work site without appropriate approval could result in termination of the Subcontract.

(b)The Subcontractor shall provide upon request from.  KSL Services JV or the Government the name of any Subcontract Worker together with the individual’s address and citizenship.

(c)Any digging of holes under security fencing,_, cutting or removing of security fencing, altering of gates or otherwise providing access into security areas by means other than established access points shall be accomplished only in the presence of a Protective Force Security Inspector and only after obtaining approval from the KSL Services’ N or the Government 48 hours in advance.  At the end of each work day, the Subcontractor shall repair, replace, or provide adequate barriers to preclude unauthorized entry into Security Areas through the holes dug or cuts in security fences or through modified gates or other alteration of the security perimeters.  Such barriers shall be inspected and approved by KSL Services or the Government.  The Subcontractor shall make arrangements through KSL Services or the Government to assure that a LANL Protective Force Security Inspector is on site to guard any temporary opening during the work day.

(d)All persons, vehicles, parcels, etc., are subject to search when entering or leaving any posted Government property at LANL.

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(e)Access to Areas Requiring “L” or “Q” Clearances:

1)Prior to commencing work, the Subcontractor shall meet with University security representatives to review security measures that apply to the Subcontract work and Subcontract Workers.

2)All Subcontract Workers must be U.S. citizens and must possess DOE “L” or “Q” access authorizations as indicated in Paragraph A above or have been issued an “Escort Required” badge and be escorted at all times while within the area by a person possessing a DOE “Q” or “L”‘ access authorization.

3)Escorts for entry of uncleared Subcontract Workers into security areas shall be arranged with the Contract Administrator.

4)The number of escorts required for a given project shall be based on the number of uncleared personnel working within an area and the capability for visual contact with all uncleared personnel at all times by the escort or escorts.  A general rule of thumb is that an escort can act as escort for a maximum of 4 or 5 people who require escorting.

5)Prior to the issuance of an “L” or “Q” badge to Subcontract Workers, the Subcontractor shall have submitted and obtained a favorable Foreign Ownership, Control, or Influence (FOCI) determination.

6)For each Subcontract Worker to be processed for an “L” or “Q” access authorization, the following information shall be provided:

a)Completed Personnel Security Questionnaire (Form SF-86), Parts I and II.

b)One Security Acknowledgment (DOE F-5631.18).

c)Two Fingerprint Cards (FD-258).

d)If the employee is a military veteran, one copy of Separation from Military Senate (DD Form 214) or other acceptable evidence of military service.

e)Authority for Release of Information (DOE F-5637.1).

f)Two Fair Credit Release Act forms

g)Other forms as required by DOE

7)If a clearance is granted, the cleared Subcontract Worker shall attend an indoctrination security lecture at the LANL Badge Office before issuance of badge.  Badges will be valid for the duration of the Subcontract or the duration of employment, whichever is shorter.

8)All personnel shall display security badges on their outer clothing above the waistline while in Security Areas and shall remain within their assigned work areas.

9)Terminations for “Q” or “L” cleared employees shall be reported to S-6 Clearance Processing within two days.

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10)Vehicles driven by uncleared drivers delivering construction materials will be permitted to enter Security Areas provided they have been issued an “Escort Required” badge and are under escort of personnel possessing “Q” or “L” access authorization as appropriate for the delivery site.

(f)Escort-Required Badging.  See Security and Safeguards Division Notice 0088 at http://lln.lanl.gov/notice/notice0088.pdf for policy and procedures or contact the Contract Administrator for a copy.

(g)The requirements for securing eligible personnel and proper personnel security clearances for work within “L” and “Q” clearance areas and for complying with other security regulations and procedures shall not be considered cause for an extension of time for performance of the Subcontract work or for extra payments under the Subcontract.  The cost of processing DOE “Q” or “L” access authorizations, however, will be borne by the Government.

(h)Whenever the work under this Subcontract requires the issuance of badges of any kind, KSL Services N or the Government may withhold final payment to the Subcontractor until all such badges are returned to KSL Services JV or the Government.

(i)Notwithstanding the fact that the Subcontract work is being performed within a DOE-posted area, a “Q” Cleared Area, or an “L” Cleared area, the responsibility for protection of property associated with the Subcontract work rests with the Subcontractor.

(j)Security Termination Process.  Within 2 working days of an event described in the figure below, the Subcontractor shall take the corresponding action in the same figure:

Event	Do Termination Briefing & Submit DOE Form 5631:29 for	Return These Badges
Terminate Employment	Individual Subcontract Personnel	Individual’s, whether cleared or uncleared, including expired
Transfer individual from Subcontract	Individual Subcontract Personnel	Individual’s, whether cleared or uncleared, including expired
Clearance no longer required	All cleared Subcontract Personnel	All cleared badges, including expired
FOCI approval withdrawn	All cleared Subcontract Personnel	All cleared badges, including expired
Subcontract completed/terminated	All Subcontract Personnel	All badges, whether cleared or uncleared, including expired

DOE Form 5631.29 shall be submitted and all badges retrieved from Subcontract Personnel as described in the figure above shall be turned in at the LANL Clearance Processing Office.

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The Subcontractor shall conduct or have conducted by its subcontractors, for each individual who has been issued a cleared badge, a Security Termination Briefing and shall obtain a Security Termination Statement, DOE Form 5631.29.

(k)Lost or Stolen Badges.  If a badge is lost, the Subcontractor shall ensure that the individual badgeholder comes to the Badge Office and files a written affidavit of such, using a Notification of Permanent Inactivation of Badge form (Laboratory Form 1672, or as amended or superceded), in order to obtain a replacement badge.  If a badge is stolen, the individual badgeholder must file Laboratory Form 1672 as above and also report the theft to KSL Services JV or the Government.

25.0UNCLASSIFIED CONTROLLED NUCLEAR INFORMATION (UCNI)

(a)Documents originated by the subcontractor or furnished by the Government through KSL Services JV to the subcontractor in connection with this project may contain Unclassified Controlled Nuclear Information (UCNI) as defined in Section 148 of the Atomic Energy Act of 1954, as amended.  Therefore, the following limitation notice is stamped or typed on the cover of the documents:

“NOT FOR PUBLIC DISSEMINATION THIS DOCUMENT CONTAINS INFORMATION THAT MAY BE SUBJECT TO SECTION 148 OF THE ATOMIC ENERGY ACT, AS AMENDED.”

The subcontractor shall be responsible for protecting such information from unauthorized dissemination in accordance with DOE regulations, requirements, and instructions.

(b)UCNI may only be made available to authorized individuals.  “Individuals” for purposes of this subcontract, means only U.S. citizens who have a need to know in the performance of official duties or DOE authorized activities and who are employees of the Government, employees of a Government contractor or subcontractors, or employees of a prospective Government contractor or subcontractor for the purpose of bidding on a Government contract.

(c)All parties receiving UCNI shall be obliged under penalty of law to protect such information as required by 10 CFR 1017.17, such responsibility including but not limited to the following:

(1)General

UCNI requires protection from unauthorized dissemination.  UCNI must be protected and controlled in a manner consistent with that customarily accorded other types of unclassified but sensitive information (e.g., proprietary business information, personnel, or medical records of employees, attorney-client information).  The subcontractor shall establish and maintain a system for the protection of UCNI in its possession or under its control that is consistent with the physical protection standards established in this section.  Each authorized individual or person granted special access to UCNI who receives, acquires, or produces UCNI or a

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document or material containing UCNI shall take reasonable and prudent steps to ensure that it is protected from unauthorized dissemination.

(2)Protection in Use or Storage

An authorized individual or a person granted special access to UCNI shall maintain physical control over any document or material containing an UCNI notice that is in use so as to prevent unauthorized access to it.  When any document or material containing an UCNI notice is not in use, it must be stored in a secure container (e.g., locked desk or file cabinet) or in a location where access is limited (e.g., locked or guarded office or controlled access facility).

(3)Reproduction

A document or material containing an UCNI notice may be reproduced to the minimum extent necessary consistent with the need to carry out official duties, without permission of the originator, provided that the reproduced document or material is marked and protected in the same manner as the original document or materials.

(4)Destruction

A document of material containing an UCNI notice may be disposed of by any method that ensure sufficiently complete destruction to prevent its retrieval (provided that the disposal is authorized by the Archivist of the United States under 41 CFR 101-11.4 and by agency records disposition schedules).

(5)Transmission

(A)A document or material containing an UCNI notice must be packaged to prevent disclosure of the presence of UCNI when transmitted by a means that could allow access to the document or material by a person who is not an authorized individual or a person granted special access to UCNI.  The address and return address must be indicated on the outside of the package.

(B)A document or material containing an UCNI notice may be transmitted by the following means:

(i)U.S. first class, express, certified or registered mail;

(ii)Any means approved for the transmission of classified documents or material;

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(iii)An authorized individual or a person granted special access to UCNI when he or she can control access to the document or material being transmitted; or

(iv)Any other means determined by the Assistant Secretary for Defense Programs to be sufficiently secure.

(C)UCNI may be discussed or transmitted over an unprotected telephone or telecommunications circuit when required by operational .considerations.  More secure means of communication should be used whenever possible.

(6)Automated Data Processing (ADP)

UCNI may be processed or produced on any ADP system that is certified for classified information or that complies with the guidelines of Office of Management and Budget Circular No.  A-71, “Security of Federal Automated Information Systems, or that has been approved for such use in accordance with the provisions of applicable DOE directives.

(7)Civil Penalty

Any person who violates Section 148 of the Atomic Energy Act or any regulation or order of the Secretary issued under Section 148 of the Atomic Energy Act, including these regulations, is subject to a civil penalty.  The Assistant Secretary for Defense Programs may recommend to the Secretary imposition of this civil penalty, which shall not exceed $100,000 for each violation.

26.0COLLECTIVE BARGAINING AGREEMENTS

(a)When negotiating collective bargaining agreements applicable to the work force under this Subcontract, the Subcontractor shall use its best efforts to ensure such agreements contain provisions designed to assure continuity of services.  All such agreements entered into during the contract period of performance should provide that grievances and disputes involving the interpretation or application of the agreement will be settled without resorting to strike, lockout, or other interruption of normal operations.  For this purpose, each collective bargaining agreement should provide an effective grievance procedure with arbitration as its final step, unless the parties mutually agree upon some other method of assuring continuity of operations.  As part of such agreements, management and labor should agree to cooperate fully with the Federal Mediation and Conciliation Service.

(b)The Subcontractor shall provide the KSL Services or the Government with copies of all collective bargaining agreements, including any amendments, supplements or modifications thereto, or any other bargaining agreements that arise during the course of this Subcontract and that apply to Subcontractor employees working under this Subcontract.

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(c)The Subcontractor is required to recognize existing bargaining representatives, and comply with existing Collective Bargaining Agreements as permitted by law.

27.0LABOR RELATIONS

(a)The Subcontractor will respect the rights of employees (i) 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, and (ii) to refrain from such activities.

(b)To the extent required by law, the Subcontractor shall give notice to any lawfully designated representatives 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.

(c)The Subcontractor shall promptly advise the Contract Administrator of, and provide all appropriate documentation regarding, any labor relations developments that involve or appear likely to involve:

(1)Possible strike situations affecting the facility;

(2)Referral to the Energy Labor-Management Relations Panel;

(3)The National Labor Relations Board at any level;

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

(5)Any grievance which may reasonably be assumed will be arbitrated under Collective Bargaining Agreement.

28.0INDEMNIFICATION AND HOLD HARMLESS

(a)The Subcontractor shall indemnify KSL Services JV, the University, the Government, and their agents and employees and shall hold them harmless from all claims and demands of third parties arising out of the Subcontractor’s, or any of its lower-tier subcontractors’ performance of this subcontract, to which KSL Services JV, the University, the Government, or their agents or employees may be subject by reason of any negligent acts, on the part of the Subcontractor, any of its lower-tier subcontractors, or their respective officers, agents, or employees; provided, however, where such claims and demands result from the negligence or willful misconduct of KSL Services JV, the University or its other subcontractors, or their respective employees, the Subcontractor’s liability for such claims and demands shall be in proportion to its and its lower-tier subcontractors’ share of fault in the events giving rise to the claim or demand.

(b)The Subcontractor shall promptly notify KSL Services JV in writing of any claim or demand related to performance of this subcontract that the Subcontractor becomes aware of The Subcontractor shall cooperate with KSL Services JV and the University in the defense of claims and demands described in this clause.

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29.0INSURANCE

(a)The Subcontractor shall provide and maintain during the entire period of performance of the subcontract insurance in amounts sufficient to cover the perils to which the Subcontractor is exposed and to protect KSL Services JV, the University’s and the Government’s interests, but, in no event less than the kinds and minimum amounts of insurance required by this clause and such other insurance as the Subcontract Administrator may require under this Subcontract.  The Subcontractor’s liability is not limited by the kinds and minimum amounts of insurance required by this clause.

(b)Before commencing the subcontract work, the Subcontractor shall provide the Subcontract Administrator a copy of certificates or policies of insurance required by this clause.  These policies shall name KSL Services JV, the University of California and the U.S. Government as an additional Insured, provide a Waiver of Subrogation in favor of KSL Services JV, the University of California and the U.S. Government, and shall contain an endorsement to the effect that any cancellation or any material change adversely affecting KSL Services N interests shall not be effective—

(1)For such period as the laws of the State in which this subcontract is to be performed prescribe; or

(2)Until 30 days after the insurer or the Subcontractor gives written notice to the Subcontract Administrator, which ever period is longer.

(c)The Subcontractor shall insert the substance of this clause, including this paragraph (c), in lower-tier subcontracts under this Subcontract.  The Subcontractor shall maintain copies of all subcontractors’ proofs of required insurance and shall provide copies to the Subcontract Administrator upon request.

(d)Without in any way limiting Subcontractor’s liability hereunder, Subcontractor shall maintain the following insurance in form and with underwriters satisfactory to KSL Services JV:

(1)Workers’ Compensation and Occupational Disease coverage as required by Federal and State law;

(2)Employer’s Liability insurance of at least $100,000.

(3)General Liability insurance for bodily injury written on a comprehensive form of policy of at least $500,000 per occurrence;

(4)Automobile Liability insurance written on a comprehensive form of policy providing for minimum coverage in the amounts of $200,000 per person and $500,000 per occurrence for bodily injury and of $20,000 per occurrence for property damage in connection with the operation of all automobiles used in connection with subcontract performance.

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(5)Professional Liability insurance with an amount no less than $1,000,000 if the Subcontract is for professional services such as those performed by doctors, lawyers, and architect-engineers or as required by the Subcontract Administrator.

30.0UNIVERSITY’S RIGHT TO OFFSET

KSL Services JV may collect any amount determined by the KSL Subcontract Administrator to be owed to KSL Services JV or the University by the Subcontractor by offsetting the amount against any payment due to the Subcontractor under any subcontract it has , with KSL Services JV or the University issued pursuant the University’s contract with DOE for management and operation of LANL.  Any challenge to the amount of an offset under this clause shall be resolved under the Disputes clause of this subcontract.

31.0ALTERATION OF CLAUSE ENTITLED “STATE OF NEW MEXICO GROSS RECEIPTS AND COMPENSATING TAX”.  FAR 52.229-10

Change all references to “Type 15 NonTaxable Transaction Certificate” in the clause entitled “State of New Mexico Gross Receipts and Compensating Tax” to “Type 5 NonTaxable Transaction Certificate, Resale of Services” or the applicable Type of Certificate as required by the State of New Mexico.

32.0ACCESS TO AND OWNERSHIP OF RECORDS

(a)Government-owned records.  Except as provided in paragraph (b) of this clause, all records acquired or generated by the Subcontractor in its performance of this subcontract shall be the property of the Government - -and shall be delivered to the Government or otherwise disposed of by the Subcontractor either as the Contract Administrator may from time to time direct during the progress of the work or, in any event, as the Contract Administrator shall direct upon completion or termination of the subcontract.

(b)Subcontractor-owned records.  The following records are considered the property of the Subcontractor and are not within the scope of paragraph (a) of this clause.

(1)Employment-related records (such as workers’ compensation files; employee relations records, records on salary and employee benefits; drug testing records, labor negotiation records; records on ethics, employee concerns, and other employee-related investigations conducted under an expectation of confidentiality; employee assistance program records; and personnel and medical health-related records and similar files), and non-employee patient medical/health related records, except for those records described by the contract as being maintained in Privacy Act systems of records.

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

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(3)Records relating to any procurement action by the Subcontractor, except for records that under the DEAR 970.5232-3 clause entitled, Accounts, Records, and Inspection, are described as the property of the Government; and

(4)Legal records, including legal opinions, litigation files, and documents covered by the attorney-client and attorney work product privileges; and

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

(i)Executed license agreements, including exhibits or appendices containing information on royalties, royalty rates, other financial information, or commercialization plans, and all related documents, notes and correspondence.

(ii)The Subcontractor’s protected Cooperative Research and Development Agreement (CRADA) information and appendices to a CRADA that contain licensing terms and conditions, or royalty or royalty rate information.

(iii)Patent, copyright, mask work, and trademark application files and related contractor invention disclosures, documents and correspondence, where the Subcontractor has elected rights or has permission to assert rights and has not relinquished such rights or turned such rights over to the Government.

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

(d)Inspection, copying, and audit of records.  All records acquired or generated by the Subcontractor under this subcontract in the possession of the Subcontractor, 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 Subcontractor shall afford the Government or its designees reasonable facilities for such inspection, copying, and audit; provided, however, that upon request by the Contract Administrator, the Subcontractor shall deliver such records to a location specified by the Contract Administrator 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.

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

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(f)Records retention standards.  Special records retention standards, described at DOE Order 200.1, Information Management Program (version in effect on effective date of subcontract), are applicable for the classes of records described therein, whether or not the records are owned by the Government or the Subcontractor.  In addition, the Subcontractor shall retain individual radiation exposure records generated in the performance of work under this subcontract until the Government authorizes disposal.  The Government may waive application of these record retention schedules, if, upon termination or completion of the subcontract, 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.

(g)Subcontracts.  The Subcontractor 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:

(1)The value of the subcontract is greater than $2 million (unless specifically waived by the Contract Administrator);

(2)The Contract Administrator determines that the subcontract is, or involves, a critical task related to the subcontract; or

(3)The subcontract includes 48 CFR 970.5223-1, Integration of Environment, Safety, and Health into Work Planning and Execution, or similar clause.

33.0ALLOWABLE COST AND PAYMENT

(a)Invoicing.

(1)KSL Services N will make payments to the Subcontractor in accordance with the Prime Subcontract between KSL Services JV, the University and this clause.

(2)Subcontract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act.  Interim payments made prior to the final payment under the subcontract are contract financing payments.

(3)In the event that the University requires an audit or other review of a specific payment to ensure compliance with the terms and conditions of the subcontract, the KSL Services JV may withhold payment for the cost in question.

(b)Reimbursing costs.

(1)For the purpose of paying allowable costs (except as provided in paragraph (b)(2) of this clause, with respect to pension, deferred profit sharing, and employee stock ownership plan contributions), the term “costs” includes only

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(i)Those recorded costs that, at the time of the request for reimbursement or withdrawal from the Special Financial Institution Account, the Subcontractor has paid by cash, check, or other form of actual payment for items or services purchased directly for the contract;

(ii)When the Subcontractor is not delinquent in paying costs of subcontract performance in the ordinary course of business, costs incurred, but not necessarily paid, for

(A)Supplies and services purchased directly for the subcontract and associated financing payments to lower tier subcontractors, provided payments will be made

(1)In accordance with the terms and conditions of a lower tier subcontract or invoice; and

(2)Ordinarily prior to the submission of KSL Services ‘IV next monthly certified invoice to the University;

(B)Materials issued from the Subcontractor’s inventory and placed in the production process for use on the subcontract;

(C)Direct labor;

(D)Direct travel;

(E)Other direct in-house costs; and

(F)Properly allocable and allowable indirect costs, as shown in the records maintained by the Subcontractor for purposes of obtaining reimbursement under the subcontract;

(iii)The amount of financing payments that have been paid by cash, check, or other forms of payment to lower-tier subcontractors.

(2)Accrued costs of Subcontractor contributions under employee pension plans shall be excluded until actually paid unless

(i)The Subcontractor’s practice is to make contributions to the retirement fund quarterly or more frequently; and

(ii)The contribution does not remain unpaid 30 days after the end of the applicable quarter or shorter payment period (any contribution remaining unpaid shall be excluded from the Subcontractor’s indirect costs for payment purposes).

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(3)Notwithstanding the audit and adjustment of invoices or vouchers under paragraph (e) of this clause, allowable indirect costs under this subcontract shall be obtained by applying indirect cost rates established in accordance with paragraph (c) of this clause.

(4)Any statements in specifications or other documents incorporated in this subcontract by reference designating performance of services or furnishing of materials at the Subcontractor’s expense or at no cost to the University or the Government shall be disregarded for purposes of cost-reimbursement under this clause.

(c)Final indirect cost rates.

(1)Final annual indirect cost rates and the appropriate bases shall be established in accordance with Subpart 42.7 of the Federal Acquisition Regulation (FAR) in effect for the period covered by’ the indirect cost rate proposal.

(2)(i)The Subcontractor shall submit an adequate final indirect cost rate proposal to KSL Services JV within the 6-month period following the expiration of each of Government’s fiscal years.  Reasonable extensions, for exceptional circumstances only, may be requested in writing by the Subcontractor through KSL Services N and granted in writing by the Contract Administrator.  The Subcontractor shall support its proposal with adequate supporting data.

(ii)The proposed rates shall be based on the Subcontractor’s actual cost experience for that period.  The Contract Administrator and the Subcontractor shall establish the final indirect cost rates as promptly as practical after receipt of the Subcontractor’s proposal.

(3)The Subcontractor and Contract Administrator shall execute a written understanding setting forth the final indirect cost rates.  The understanding shall specify

(i)the agreed-upon final annual indirect cost rates,

(ii)the bases to which the rates apply,

(iii)the periods for which the rates apply,

(iv)any specific indirect cost items treated as direct costs in the settlement, and

(v)the affected subcontract, identifying any with advance agreements or special terms and the applicable rates.  The understanding shall

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not change any monetary ceiling, subcontract obligation, or specific cost allowance or disallowance provided for in this subcontract.  The understanding is incorporated into this subcontract upon execution.

(4)Failure by the parties to agree on a final annual indirect cost rate shall be a dispute within the meaning of the Disputes clause.

(5)Within 120 days (or longer period if approved in writing by the Contract Administrator) after settlement of the final annual indirect cost rates for all years of a physically complete subcontract, the Subcontractor shall submit to KSL Services JV a completion invoice or voucher to reflect the settled amounts and rates.

(6)(i)If the Subcontractor fails to submit a completion invoice or voucher to KSL Services JV within the time specified in paragraph (c)(5) of this clause, the Contract Administrator may

(A)Determine the amounts due to the Subcontractor under the subcontract; and

(B)Record this determination in a unilateral modification to the subcontract.

(ii)This determination constitutes the final decision of the Contract Administrator in accordance with the Special Conditions, Paragraph 29, entitled “Disputes.

(d)Billing rates.  Until final annual indirect cost rates are established for any period, the Government shall reimburse the Subcontractor at billing rates established by the Contract Administrator or by an authorized representative (the cognizant auditor), subject to adjustment when the final rates are established.  These billing rates-

(1)Shall be the anticipated final rates; and

(2)May be prospectively or retroactively revised by mutual agreement, at either party’s request, to prevent substantial overpayment or underpayment.

(e)Audit.  At any time or times before final payment, the Contract Administrator may have the Subcontractor’s invoices or vouchers and statements of cost audited.  Any payment may be—

(1)Reduced by amounts found by the Contract Administrator not to constitute allowable costs; or

(2)Adjusted for prior overpayments or underpayments.

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(f)Final payment.

(1)Upon approval of a completion invoice or voucher submitted by the Subcontractor in accordance with paragraph (c)(5) of this clause, and upon the Subcontractor’s compliance with all terms of this subcontract, the University shall promptly pay any balance of allowable costs and that part of the fee (if any) not previously paid.

(2)The Subcontractor shall pay to KSL Services JV any refunds, rebates, credits, or other amounts (including interest, if any) accruing to or received by the Subcontractor or any assignee under this subcontract, to the extent that those amounts are properly allocable to costs for which the Subcontractor has been reimbursed by KSL Services JV from the University.  Reasonable expenses incurred by the Subcontractor for securing refunds, rebates, credits, or other amounts shall be allowable costs if approved by the Contract Administrator.  Before final payment under this subcontract, the Subcontractor and each assignee whose assignment is in effect at *the time of final payment shall execute and deliver

(i)An assignment to the Government, in.  form and substance satisfactory to the Contract Administrator, of refunds, rebates, credits, or other amounts (including interest, if any) properly allocable to costs for which the Subcontractor has been reimbursed by KSL Services JV, the University, or government under this subcontract; and

(ii)A release discharging KSL Services JV, the University and the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this subcontract, except

(A)Specified claims stated in exact amounts, or in estimated amounts when the exact amounts are not known;

(B)Claims (including reasonable incidental expenses) based upon liabilities of the Subcontractor to third parties arising out of the performance of this subcontract; provided, that the claims are not known to the Subcontractor on the date of the execution of the release, and that the Subcontractor gives notice of the claims in writing to KSL Services JV, within 6 years following the release date or notice of final payment date, whichever is earlier; and

(C)Claims for reimbursement of costs, including reasonable incidental expenses, incurred by the Subcontractor under the patent clauses of this subcontract, excluding, however,

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any expenses arising from the Subcontractor’s indemnification of KSL Services JV, the University or the Government against patent liability.

34.0FIXED FEE

(a)KSL Services JV shall pay the Subcontractor for performing this subcontract the fixed fee specified in Exhibit B Pricing Schedule.

(b)Payment of the fixed fee shall be made as specified in the Schedule; provided that after payment of 85 percent of the fixed fee, KSL Services JV may withhold further payment of fee until a reserve is set aside in an amount that KSL Services JV considers necessary to protect the Government and KSL Services JV interest.  This reserve shall not exceed 15 percent of the total fixed fee or $100,000, whichever is less.  KSL Services JV shall release 75 percent of all fee withholds under this subcontract after receipt of the certified final indirect cost rate proposal covering the year of physical completion of this subcontract, provided the Subcontractor has satisfied all other subcontract terms and conditions, including the submission of final patent and royalty reports, and is not delinquent in submitting final vouchers on prior years’ settlements.  KSL may release up to 90 percent of the fee withholds under this contract based on the Subcontractor’s past performance related to the submission and settlement of final indirect cost rate proposals with the Government.

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Attachment 1

KSL Statement of Work

This Statement of Work (SOW) establishes the general scope of work for the Support Services Subcontractor (SSS) responsible for providing the management, administrative, and technical functions and expertise necessary for the effective and timely delivery of facility support services to Los Alamos National Laboratory.  The Subcontractor shall perform all work requirements in accordance with the contract documents and with the Laboratory, Department of Energy (DOE), and other specified policies, directives, and laws.

The Subcontractor shall comply with all applicable Laws, Laboratory Performance Requirements (LPR), Laboratory Implementing Requirements (LIR), Notices, Alerts, and Urgent Memorandums in the performance of the following.  Statement of Work.

Management and Administration

General

The primary purpose of Management and Administration activities under this subcontract is to support the Subcontractor’s service functions performed in fulfillment of this SOW.  Therefore, Subcontractor management and administration functions will be performed in accordance with procedures and policies developed and maintained by the Subcontractor, and will provide the Laboratory and the Subcontractor assurance that applicable codes, standards (including Laboratory standards), regulations, and objectives are recognized, and objectives are achieved in the performance of the services provided.  Data and reports will be provided consistent with standing practices and evolving needs.  Providing economic stability, community economic development opportunities, and being a good corporate citizen are important to Northern New Mexico (NNM) and the University.  The Subcontractor will be expected to become a vital part of northern New Mexico communities through a variety of means, and to plan and implement business decisions and practices that contribute in meaningful and measurable ways to regional economic development.

Financial Management

The Subcontractor will budget for, accumulate, control, and provide reporting’ systems for all costs (labor, materials, overhead, etc.) and government property associated with subcontract activities.  The Subcontractor shall manage and maintain a financial management system in accordance with GAAP that provides timely and accurate cost data; provides for comparison of these costs with budget forecasts; provides rationale for deviation, variance analyses, and other supporting data; and integrates with Laboratory systems.  The Subcontractor shall reconcile: 1) the Laboratory’s monthly cost transfer to the Subcontractor, accounting for all equipment, material, rental, and service charges; and 2) daily electronic receipt transactions and exception processing between the Subcontractor’s financial system and the Laboratory’s financial system.

The Subcontractor will maintain a separate and distinct set of accounts, records, documents, and other .  evidence showing and supporting all costs incurred, revenues, or other applicable credits, and the receipt, use, and disposition of all government property coming into the possession of the

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Subcontractor under this subcontract.  The Subcontract shall comply with the requirements associated with the accounting, billing, and transfer activities of a DOE Integrated Contractor.

The system of accounts maintained shall be subject to the approval of the Laboratory and shall conform to generally accepted accounting principles and to requirements outlined in the DOE Accounting Practices and Procedures Handbook that are applicable to Integrated Contractors of the DOE.

The Laboratory shall provide to the Subcontractor adequate computer links, equipment and software to access the Laboratory’s Financial Management Information System.  (FMIS).  The Laboratory shall provide to the Subcontractor all necessary software to accomplish the accrual and transmission of cost and budgetary.  data.  At the appropriate time each year, and as major changes occur, the Subcontractor will petition various Laboratory entities to obtain the volume of services expected to be required.  Laboratory personnel will provide their best estimate, which will be validated by the Laboratory Contract Administrator.  The Subcontractor shall be responsible for formulating (and reviewing with the Laboratory) budgets that include general estimates of the work volume in each major activity and proposed overhead budgets and rates for the ensuing year.

The Subcontractor will provide to the Laboratory financial reports, data, and records that will permit the DOE and the Laboratory’s organizations to integrate Subcontractor’s costs into the Laboratory’s financial management system on a .  daily basis.  This information shall be submitted electronically, so that costs are accumulated and reported in accordance with Laboratory requirements.  As a minimum, the Subcontractor will provide the following deliverables: 1) Accounts Receivable Aging Report; 2) Voucher Accounting for Net Expenditures Accrued; 3) Financial Statements and Narrative Analysis; 4) Cost Report Form 1081 - Modified Billing Balance Sheet and Trial Balance; 5) DOE Form 325 Transfer Vouchers; 6) DOE Expense Report No.  703, GL35; 7) Subcontractor’s Report 07C Operating Statement; and 8).  Detailed Transfers/Activities Cost Report.

Human Resources

The Subcontractor shall manage and administer a human resources program that enhances achievement of the Subcontractor’s mission, promotes diversity, employee development, and contributes to improved utilization and productivity of personnel.  The Subcontractor shall perform the following:

1.Implement and manage a program and appropriate policy and procedure for human resources that includes the following elements:

•Compensation for non-represented employees;

•Fringe benefits and other benefits for non-represented employees;

•Labor-management relations;

•Affirmative Action and Equal Employment Opportunity;

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•Recruitment, selection, placement, utilization, development, and advancement;

•Counseling, rehabilitation, complaint resolution, and discipline.;

•Training;

•Substance abuse policy:

•Employee performance appraisal and monitoring;

•Management/employee communication;

•Periodic medical examinations and physicals;

•Workforce restructuring plans (per Section 3161 of the Defense Authorization Act); and

•Workers’ compensation administration.

2.Submit for approval by August 15th of each year, an annual salary fund proposal for implementation during the ensuing fiscal year.  The purpose of this proposal is to establish wage and salary increases for both merit and promotional reasons for non-represented personnel.  This request shall include a proposed budget and distribution plan supported by relevant market data and analysis, the contents of which shall have been previously approved by the Laboratory.

3.Submit for approval any changes to employee’s benefits packages that adversely affect the direct mark of labor costs paid by LANL.

4.Disclose all facts and circumstances concerning any labor matters ( including, but not limited to, charges/complaints/representation issues) involving the National Labor Relations Board (NLRB), litigation in any court, grievances, workers’ compensation cases, arbitration cases, and labor issues that have the potential for site-wide or DOE system-wide impacts, and any threatened or potential labor stoppages.

5.Utilize and support Department of Labor apprenticeship and training programs and local union training efforts.

6.Maintain automated training and qualification records for Subcontractor personnel, make the information available on the Laboratory’s integrated training and certification database (the Employee.  Development System, or EDS), and ensure that personnel are qualified to perform assigned tasks.  .

Environment, Safety, and Health

The Subcontractor shall manage, implement, support, and continuously improve an Environment, Safety and Health (ES&H) program that is in compliance with all governing laws and Laboratory requirements; satisfies LANL facility and programmatic needs; strives to eliminate injuries and reduce adverse environmental and health impacts; proactively conforms to applicable regulations; conserves natural resources; and is responsive to the public’s expectations

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for safety and for protection of the environment.  At a minimum the program must provide for environmental protection and pollution prevention at the Federal norm and ensure the health and safety of workers, the Laboratory workforce, and the public arising from the activities encompassed by this SOW.  The Subcontractor performs services and activities in Laboratory-operated facilities or locations.  In these situations Subcontractor personnel may be exposed to hazards not normally encountered in routine construction and maintenance (e.g., ionizing radiation, radioactive contamination, lasers, hazardous and toxic chemicals, high pressure, stored high voltage; high explosives, and often unidentified site hazards associated with an aging facility).  The Subcontractor’s program must recognize these possibilities and must provide the necessary Laboratory support and accommodate all interfaces required between the Subcontractor and the Laboratory’s established ES&H program.

Quality

The Subcontractor shall develop, implement, and manage a comprehensive Quality Management program consisting of two key elements: (1) a quality assurance component for formality of operations and assurance where appropriate, and (2) a quality improvement component to facilitate customer satisfaction by enhancing work processes and continually improving on quality, cost, and cycle time in all operations.

The level of rigor associated with Quality Assurance should vary depending upon associated Laboratory requirements; the consequence of failure associated with the activity, the facilities where the work is being performed (nuclear and non-nuclear), and the nature of the work itself.  The Subcontractor’s Quality Assurance (QA) and Quality Control (QC) plans and programs must be tailored to meet the varying needs of the Laboratory organizations it services and reinforce configuration management and conduct of operations principles.  Quality improvement principles should be employed in all aspects of the Subcontractor’s operations to identify and improve cost, cycle time, and customer satisfaction.  Subcontractor activities should reflect process consistency and formality and demonstrate statistical control.

Work Management

The Subcontractor shall implement and maintain a work management process that provides for orderly and efficient processing of work.  This process shall provide the estimating, scheduling, load leveling, materials management, and controls for both centralized and decentralized work.  Work management” processes will comply with the Laboratory’s Work Control LIR.

Information and Data Management

The Subcontractor shall perform information and data management functions necessary to operate, maintain, modify, or introduce information systems supporting Subcontractor functions, such as payroll, financial accounting, data and reports, performance measures, and other necessary activities.  The Subcontractor shall assist, when re quested by the Laboratory, in managing the facility data and information systems support effort.  The policies, standards, and procedures shall meet generally accepted industry practices, and resulting systems will be compatible with and interface effectively and efficiently with the Laboratory’s automated systems, including the computerized maintenance management system (CMMS).  On-site

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systems shall be modified or replaced consistent with the Laboratory’s Information Architecture standards.  Particular emphasis shall be placed on accuracy and auditability of data.  Where appropriate, databases shall be established and maintained in a manner that permits access by the Laboratory.

Security

The Subcontractor shall establish, implement, and manage an operational security program that incorporates employee security awareness and human reliability, including the safeguarding of government property, information, facilities, and equipment in accordance with applicable policies, orders, and regulations.  The Subcontractor shall maintain a program for management and operation of the Laboratory Lock-shop and the Laboratory’s bulk classified document destruction facility that meets DOE and Laboratory requirements.  When requested, the Subcontractor shall also provide expeditious assistance to the Security & Safeguards Special Projects Office and the Los Alamos Police Department in conducting inquiries and/or investigations into criminal or illegal activity including, but not limited to, providing documents, arranging employee interviews, and providing personnel information.

Procurement

The Subcontractor shall provide procurement capability in support of Subcontractor material and service requirements to meet specific programmatic and project requirements at the lowest practicable cost to the Laboratory.  The Laboratory provides Just In Time (JIT) and blanket contracts to support Laboratory and Subcontractor material requirements as well as a full suite of procurement-related services.  All items acquired through Laboratory procurement services will be charged to the Subcontractor, who, in turn will charge the customer.  The Subcontractor and the Laboratory will coordinate contract makeup, coverage, usage, item identification, and electronic catalog files and updates on JIT contracts that support the Subcontractor’s specific needs.  The Subcontractor shall maintain coordination of the electronic interface for transmission of orders for JIT, direct purchase, purchase cards, local vendor agreements, TIPS and stores issues.

Property Management

The Subcontractor shall be responsible and accountable for all government property in the Subcontractor’s possession.  Responsibility includes maintaining, administering, warehousing, controlling, and annually reconciling all assigned government property and may involve reimbursement for property losses under_.  circumstances within the control of the Subcontractor.  The Subcontractor shall provide the Laboratory, through established data deliverables the financial accountability reports on excess equipment transferred to the Subcontractor for reutilization and disposal.  The Subcontractor shall submit monthly status reports for 1) property numbered, controlled, or sensitive items, or 2) expense items that are not otherwise property numbered, controlled, or sensitive that were previously reports as suspected theft, lost, damaged.

The Laboratory, either directly or through the Subcontractor on a cost reimbursable basis, will provide all government Furnished Property (GFP), including special and general tools, equipment, materials, and facilities (except as may be stated and agreed to elsewhere), to support

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the subcontract effort, all of which must be appropriately controlled by the Subcontractor.  The Subcontractor shall report to the Laboratory all cases of theft, loss, or destruction of or damage to government property in the Subcontractor’s possession or control within 24 hours of knowledge of the incident.

Property Disposal

The Subcontractor shall maintain, and where possible, improve reutilization/recycle/resale/destruction processes for excess government equipment and materials released to the Subcontractor.  The Subcontractor’s responsibilities include receiving or picking up excess Laboratory property, and maintaining, administering, and controlling it as it is either reused, recycled, resold, or destroyed.  Services encompass high-risk property items.  High-risk property is considered to be that property which could pose risks to the public  environment, or the national security interests or proliferation concerns of the United States.  The Subcontractor shall ensure proper handling, documentation, and compliance with Department of Transportation requirements for property during transport, receiving, and storage to ensure protection from damage, destruction, or theft.

Maintenance

The Subcontractor shall provide appropriately trained and qualified personnel for broad range of preventive, predictive, and corrective maintenance services for government Real Property and Installed Equipment (RPIE) at the Laboratory.  The general requirements of this section also includes buildings, facilities, and equipment associated with the operation, transmission, distribution, or generation of utilities services, and should be considered in conjunction with 4.4, Utilities Operations and Maintenance.  In scope services and expectations shall include those defined in DOE 0 433.1 and maintenance-related Laboratory LPRs and LIRs.

Small Projects and Decommissioning

The Subcontractor shall provide installation, alteration, engineering, and construction services to the Laboratory.  These services are generally defined as expense funded facility and infrastructure projects and encompass a wide range of activities, from minor (less than $2,000) tasks to larger renovations, alterations, equipment installations, and new construction (which may involve asbestos abatement and related issues).  This work scope includes demolition.  and decommissioning activities that may include radiological and/or hazardous contaminants.

In executing these activities it is incumbent upon the Subcontractor to achieve the lowest practicable costs, prompt delivery of services, consistent quality, and acceptable levels of risk to the worker, public, and environment.

Utilities Operations and Maintenance

The Subcontractor shall operate and maintain the DOE-owned utility systems at the Laboratory, including on-site electric production, electric transmission and distribution, water distribution, sanitary wastewater collection and treatment, steam production and distribution, and natural gas distribution.  The Subcontractor shall operate the Power Control Dispatch Center 24 hours/day 7 days/week.  The Subcontractor shall provide personnel to respond and evaluate after-hours

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trouble calls and arrange for repair personnel, if required.  Primary and secondary utility as-built mapping shall also be provided.  The services shall include such elements as sales and billing, operation maintenance, alterations, repairs, upgrading, and budgeting.  In providing these services, the Subcontractor shall comply with the Laboratory standards; all applicable federal, state and local laws, codes and regulations; applicable DOE Orders; and acceptable utility practices.

The Subcontractor should strive to efficiently and effectively manage_., operate, monitor, and extend the useful life of the utility systems while meeting the stated performance criteria for each utility.

Facility and Infrastructure Improvements

Upon request by the Laboratory, the Subcontractor shall review and submit proposals to enter into Subcontractor/third-party financed projects that increase efficiency and reduce ongoing operational, commodity, and maintenance costs.  Examples of potential projects include facilities and infrastructure such as electrical, steam, heating, lighting, motor control, and HVAC systems.  Specific initiatives, if requested, negotiated and approved by the Laboratory and the Subcontractor, would be paid for from the annual savings generated after completion of the project.  Projects are typically fixed price, generate guaranteed savings, and are accounted for separately from the balance of this Subcontract.

Engineering Services

In support of its responsibilities in executing this SOW, the Subcontractor shall maintain an architectural, engineering, design and land surveying capability as well as material testing, inspections, and geotechnical evaluations and provide these professional services to its own organizations and the Laboratory when requested.

As-Built Services

The Subcontractor shall provide as-built drawing services to the Laboratory for existing structures and systems.  A complete set of records associated with the physical plant, systems, and equipment does not uniformly exist for all Laboratory facilities.  The Subcontractor is responsible for providing services as_.  requested by the Laboratory to establish the as-built condition.  The work involves records research, field survey and verification, drawing/information development, field labeling, discrepancy resolution, and configuration management: Where applicable, the Subcontractor shall use a computer-aided design (CAD) and Geographic Information System (GIS) that is compatible with Laboratory Standard systems and that ensure efficient inter-operability.  Facility Inspections and Condition Assessments

The Subcontractor shall provide facility inspection services to document existing conditions of Laboratory structures, systems, and components.  Upon request, the Subcontractor shall inspect facilities and integral components and system elements to identify and document all architectural, civil, structural, mechanical, and electrical deficiencies, including a thorough evaluation of the overall facility and the estimated cost to repair and total replacement cost.  Where applicable, the Subcontractor shall provide qualified inspectors, certified by International Conference of Building Officials (ICBO) in their discipline as a minimum qualification.

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Fabrication Support

The Subcontractor shall fabricate, paint, and ship items/structures in accordance with plans and specifications provided by the Laboratory.  Typical Laboratory and Subcontractor projects include equipment racks, wire rope harnesses, and other specially fabricated materials required for the Laboratory’s test program at the Nevada Test Site (NTS).  Most of the work is in direct support of the DX Division programs.  In accomplishing the tasks outlined in this section, the Subcontractor shall comply with established standards of the American Society of Testing Materials (ASTM), standards of the American Welding Society (AVVS), and Laboratory requirements.  The Subcontractor shall provide qualified welders and machinists to complete all fabrication requirements.

The Subcontractor shall establish and implement quality assurance procedures that address at least the following:

1.Maintenance of inventory and segregated storage and issue areas for all metals and other NTS support material

2.Audit procedures that allow material-tracking from source to final assembly and checkout

3.Verification of material composition

4.Source certification of material composition

5.Calibration requirement for pull test facility

6.Welders, machinists, crane operators, and other equipment personnel

7.Nondestructive test and inspections

8.Source inspection of specialty items such as wire rope sockets.

Waste Removal and Special Custodial Services

The Subcontractor shall provide removal, handling, and disposition services for normal building waste, source separated materials destined for recycling, radioactive waste, and high-explosive contaminated waste.  Tasks encompassed in this area include the provision of the necessary equipment, material, and trained.  and certified personnel to provide clean-up services involving radioactive and non-radioactive spills.  The Subcontractor shall perform a variety of general and special services for waste removal that include, but are not limited to, the disposal of regular non-contaminated building waste, possible high-explosive contaminated waste, low-level radioactive contaminated waste, and recyclable scrap metal.

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The Subcontractor is responsible for the collection and disposal Laboratory generated solid wastes (of an office and industrial nature typical of a large research and development complex).  Non-contaminated solid waste is disposed of at the Los Alamos County operated sanitary landfill, where it is weighed and costs recorded.  In addition, exceptional materials such as radioactive, blood pathogen and other biological waste in small quantities may require collection, packaging, and disposal.  The removal of these waste materials is the responsibility of the Subcontractor.  The Subcontractor shall.  provide routine custodial services to typical office and general industrial facilities, as well as special custodial services in buildings requiring special services including clean-up of beryllium, blood and blood-borne pathogens, lead, tritium, and decontamination of radioactive controlled areas.

Transportation

The Subcontractor shall manage a vehicle management and maintenance program for the DOE fleet, which includes a variety of heavy equipment in various locations.  This includes performance of all phases of vehicle acquisition, maintenance, repair, inspection, and documentation on a wide variety of motor vehicles and heavy equipment including sedans, buses, emergency vehicles such as ambulances and fire protection vehicles, wreckers, protective force vehicles, and other vehicles as designated by the Laboratory.

The Subcontractor shall also maintain a storage and alternate warehousing operation (as necessary) for the receipt, storage, issue, safekeeping, and protection of automotive and heavy equipment parts and tires; operate, administer, and maintain a used-oil recycling facility in accordance with all applicable environmental and safety requirements; manage the acquisition and disposal of Laboratory, DOE, Subcontractor, and other vehicles not otherwise provided for and disposed of by GSA; operate and be certified as a DOT carrier under Interstate Regulations, in accordance with 49 CFR and Federal Motor Carrier Safety Regulations; and provide (directly or via others) a professional, on-site taxi service that provides services on-site and off-site (as required) including Los Alamos County, Espanola, Santa Fe, and Albuquerque.

Roads

The Subcontractor shall develop, implement, maintain, and continuously improve a maintenance program to inspect, maintain (routine and emergency)_., and improve Laboratory roads, associated infrastructure, and traffic controls, including dirt roads, fire roads, and dirt structures; curbs and gutters, and sidewalks; traffic signals; paved roads, parking lots, and asphalt/concrete structures; traffic-related signs and markers, TA signs and “No Trespassing” signs; bridges; guardrails; and barricades.  Snow and ice control is also included^. in the scope of work.  The Subcontractor shall also provide for the operation of the asphalt plant (or outsource product) and any and all equipment, labor, and materials necessary for paving and general asphalt work.

The Subcontractor shall perform all work in accordance with applicable standards, including: 1) Manual on Uniform Traffic Control Devices; 2) Standard Specifications for Highway and Bridge Construction, published by the New Mexico State Highway and Transportation Department; and 3) Traffic Signal Installation and Maintenance Manual.  East Jemez Road, West Jemez Road, West Road, Diamond Drive, and Pajarito Road are all open to the public and heavily used, therefore, it is mandatory that these roads, in particular, be maintained to State and County

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standards to ensure the safety and well being of motorists and pedestrians, While not designated public, all paved roads and^. parking lots must be maintained to minimum acceptable safety standards.

Grounds

The Subcontractor shall provide general landscaping maintenance services, operation and maintenance of irrigation systems, grounds trash pickup, maintenance of exterior wood structures such as decks and planters, benches, vegetation and pest control services, erosion control, storm drain maintenance, and fence and gate maintenance across the Laboratory’s facilities.  Inherent in this work scope is the expectation that the Subcontractor will place a high priority on reducing water usage and minimizing costs through innovative maintenance practices and use of native landscaping, xeriscaping, and other specialized grounds management techniques where appropriate.

Fire Protection

The Subcontractor shall provide program management, administrative, and technical support and personnel necessary to support the Laboratory’s fire protection systems and satisfy regulatory requirements and obligations.  In scope services include inspection, test, and maintenance (ITM), and documentation of a wide variety of systems and components, and include all fixed fire suppression systems and appurtenances, fire initiating device systems (automatic and manual), occupant notification and devices, fire control panels, and associated wiring to the interface with the Central Alarm system receiving equipment.  The work also includes the maintenance of fire extinguishers installed in buildings and mobile units as designated by the Laboratory and kitchen hood suppression systems.

The Subcontractor shall provide dedicated, trained, and qualified workforce to perform ITM and repair of all fire protection systems and components.  The Subcontractor shall provide and maintain fire protection databases and records including (a) building inventory, (b) systems inventor, (c) fire control panel inventory, (d) fire control panel zone information, (e) fire control valve inventory (continuing the existing numbering system), and (f) fire hydrant inventory and numbering.

DOE Orders applicable to these fire protection requirements include 5480.7a, 4330.4b, and 6430.1a.  In addition, Laboratory maintenance policy documents and National Fire Protection Association (NFPA) Inspection, Testing and Maintenance codes are applicable and shall be followed in performing this work, including NFPA Standards 12, 12a., 13, 15, 16a, 17, 20, 25, 70, 72, 80, 90A and 221.

Transformation and Process Improvement

Purpose and Scope

As part of the Site Support Services Contract, the Subcontractor will establish a Transformation Office responsible for identifying and implementing significant process improvements to increase service effectiveness and cost efficiency at LANL.  The transformation effort will evaluate current business practices and identify significant changes in doing business that will

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optimize facility management cost-effectiveness, efficiency, safety, and security.  The Subcontractor will match SSS structure, procedures, processes and policies with the on-going LANL realignment of FMUs.

Within 90 days of contract commencement, the subcontractor will submit to LANL a Transformation Plan that fully evaluates and explores the major focus area and associated process improvements listed in items 15.1.1.1 through 15.1.1.8.  The Transformation Plan shall only address those major initiatives that require significant realignment or modification of LANL organizations, procedures, practices, business processes, or have a potential for additional cost impact to LANL.  Upon approval of specific initiatives in the Transformation Plan, the Subcontractor Transformation Office will identify the SSS champions to lead each specific initiative.  The transformation office will ensure that the initiatives are implemented in an orderly process, are prioritized and scheduled with respect to other ongoing activities and that performance metrics are developed and monitored.

As a minimum, the Transformation Plan will include the following:

•A detailed description of each new initiative, with an outline of the existing condition, the end state and giving the rationale and benefits for the change.  A summary of the subcontractor experience as well as any lessons learned will be provided.  The specific transformation initiative will also be discussed with respect to other transformation initiatives to assist the approval process and allocation of the Subcontractor’s and LANL resources subsequent to LANL approval to proceed.

•A description of the roles, responsibilities and stakeholder interfaces of LANL, the Subcontractor and other parties to both implement the initiative and during the steady state and after it is fully operational.  A project management approach using and integrated project team (IPT) led by a project manager assigned to implement the initiative.  An organization chart will provide a description of the accountabilities and responsibilities of the IPT.

•A description and road map of the implementation process which will outline the scope, methodology, timing, as well-subcontractor, equipment, hardware/software and training programs required.

•A preliminary schedule for each initiative shall be developed at a work break down structure of sufficient detail to promote analysis.  The schedule shall show key milestones, durations, float, deliverables, including procurement, testing, and training programs.  After approval for implementation, a detailed resource loaded schedule will be prepared for reporting and monitoring.

•An overall schedule integrating the major initiatives for potential implementation.  The overall schedule is a summary level schedule giving key milestones for each of the major initiatives identified in the Transformation Plan.

•The Subcontractor will work with LANL to develop initial conceptual or order of magnitude estimates of cost and resources sufficient to support LANL approval of

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transformation plans.  Those estimates will be further refined - subsequent to LANL approval to proceed to provide detail appropriate for implementation, monitoring and reporting.  Both Preliminary and Detailed Estimate costs and resources will be loaded with the schedule.

•A Risk Analysis enumerating, describing and quantifying potential risks to orderly implementation, delay and cost overruns will be prepared for each major initiative.  Where available, strategies to mitigate risk will be identified.  Risk Analyses will be monitored during execution of transformation plans and updated should conditions change.

Transformation Initiatives

Work Management and Work Control

Develop and implement a standards and risk-based Integrated Work Control Program (WCP) as a single work management process for use at all LANL facilities.  This program will be utilized for managing work activities for maintenance, engineering, construction,’ and utility work activities.  The work control process shall appropriately identify and address job hazards to help ensure work is performed safely.  Ensure that Work Control Processes are integrated with an effective Enterprise Asset Management (EAM) system applicable across LANL facilities.

•Establish standard estimating protocols

•Include scheduling of support organization resources as part of a rolling calendar schedule to optimally match activities and resources

•Increase granularity of WBS time and cost reporting protocols to capture costs at the facility level and implement elements of activity based cost management.

•Incorporate duplicate work control requirements into one document, the maintenance work order and eliminate duplicate work control processes, i.e., bum or hot work permits, confined space permits, radiation work permits, combustible materials transport permit, personnel^. protective equipment exemptions, scaffold permits

•Institute a Central call center that serves the contractor community as a single point of contact for all questions and concerns addressing the subcontractor’s work activities with immediate access and use of job history files for work templates and models.  Assume control for entering all data into the computerized maintenance management system (CMMS), provide LANL with easily accessible way to request work.

•Institute a standardized, risk-based work process for planning, estimating, and scheduling that will be used for projects, facilities maintenance, construction projects, and operational support activities requested by the contractor.  Assign a work priority code (summation of significance index and hazard index) for work as part of this program.

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Establish available parts for repair activities based on usage to minimize delays in scheduling work due to missing parts.  Purchase parts early enough in work planning process

Increase use of system outages to improve system and building availability and minimize support required to perform work and to minimize impact to facility operations.

Maintenance and Operations

Provide, manage, and implement an integrated maintenance management program (IMMP) in accordance with contractor requirements and applicable standards.  Utilize a risk and standards-based approach that optimizes ISSM methodologies, service availability, best practices, cost savings, and related efficiencies.

This shall include:

•Perform equipment labeling of components and systems utilizing bar code / scanning technologies for enhanced material and property control

•Assume direct facility management responsibility for administrative and support facilities

•Develop fixed price contracts for specified facilities after risk assessment and a review of historical maintenance data

•Develop principles, processes, and templates to prepare and assume responsibility for annual maintenance plans.

•Assume management oversight of activities that are integral to maintenance work.  Examples include the Subcontractor management of RP technicians and supervisors to provide radiological controls, QA of work performed and parts and supplies necessary accomplish assigned work.

Engineering and Construction services

Establish a single Engineering/Construction Office to provide design and construction services for both major and minor construction across the facility.  The office will include the letting of all contracts, BOA and procurements.

•Develop SSS/LANL engineering and construction standards and associated procedures for use in estimating, planning, and scheduling approach to construction of small and large projects, including demolition and decommissioning projects.  Provide processes to estimate and perform small projects in a responsive and cost-effective manner.  Provide and support alternate types of contract options for small projects.

•Establish single work management process for engineering and construction.

•Work with IT to provide one standard project controls process

•Establish procurement engineering services to resolve procurement issues

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•Establish field engineering services in support of maintenance work process to minimize delays to work-in-progress

•Increase the use of fixed price contracting including the use Job Order Contracts

Document Control

Assume configuration management responsibilities for engineering and construction drawings, including drawing revisions.

Procurement

Provide procurement services.  The subcontractor will incorporate best commercial procurement practices to the maximum extent possible to avoid duplication of effort.  The subcontractor will provide a centralized coordination point for purchasing, receipt, inspection, and delivery activities with the contractor.  Supply chain management from procurement to receipt to disposition will be integrated into CMMS.  Quality controls will be established as part of the procurement process to ensure quality assurance of materiel procurements.  ‘Introduce a University-approved procurement and property management systems and associated procedures.  Explore/expand the use of commercially available plan rooms and/or development of own virtual plan room.

Information Technology

Establish open IT architecture that is web-based and transparent to provide near-real-time available information for status and reporting.  This system will include appropriate security controls for access and ensure progress reporting and financials are available to the contractor and subcontractor as needed for asset management.

•Maximize Utilization of Existing Technology

•Participate in LANL Enterprise Resource Planning (ERP) review to determine long-term needs and solutions that integrate LANL and the Subcontractor activities and support structures.  Parallel evaluation of alternative technologies to meet overall need of the facility management program and ERP.

•Assess present CMMS system to determine appropriateness, efficiency cost and applicability to SSS and LANL needs.  Explore the possibility of the SSS owning, managing, and/or maintaining CMMS and other related areas that may provide potential for cost savings and improvements in efficiency.

Skills Development and Qualification

Re-baseline requirements and resources of all non-craft activity to include management span of control

•Reconcile concept of operation to at least WBS level 4, to ensure proper alignment of resources.

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•Assess the workforce capabilities and determine the optimal toolsets required for workers.  Perform a gap analysis against the existing skills in the workforce and Provide requisite skills to allow employees to meet their performance goals including:

•Establish the People, Performance, Results (PPR) evaluation process.  Clearly define career paths with skill requirements, and openly define consequences for failure to perform to the specified standards and goals.

•Train supervisors in motivational techniques and implement a daily observation program to be internalized as a positive experience.

•Implement and support apprenticeship and training programs and local union training efforts.

•Maintain automated training and qualification records for personnel, make the information available on the contractor’s integrated training and certification database (the employee development system, or EDS), and ensure that personnel are qualified to perform assigned tasks.

•Develop and implement a qualification enhancement program (QEP) for subcontractor personnel.

Relocate SSS Offices and Shops

Assess and propose options to lease, buy or build new SSS offices and shops either on or off the LANL Site.  Relocation plan should allow TA-3-SM38 and associated buildings to be returned to UC for use/disposition.

Technical Approach for Transformation Plan Development

Baseline Current Conditions and Identify Issues

•Interview departing JCNNM personnel and new on-site staff members to better understand current conditions from the incumbent SSS viewpoint.

•Interview LANL management to better understand current_.  conditions from the LANL viewpoint.

•Review recent reviews and audits (e.g., BWXT nuclear facility operations assessment, AA reports, DOE OA Audit, etc.)

•Review current JCNNM and LANL Lessons-Learned.

•Review current performance metrics and cost data.

•Review current LANL and SSS organization structure.

•Review current LPRs, LIRs, and implementing procedures.

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•Document current conditions and identify performance/safety/accountability issues.

Identify Industry Best Practices

•Compare LANL practices vs.  other DOE sites complex-wide.

•Review practices, lessons learned among the numerous Subcontractor facilities and projects worldwide.

•Benchmark other industries.  to identify best practices that may be applicable to LANL processes and programs

•Develop recommendations to help align LANL with industry best practices.

Coordinate Transformation Planning with LANL Transformation Direction and Initiatives

•Planned LANL organizational model (e.g., FMU realignment, No.  of FMUs)

•Planned LANL facility services model (core vs.  deployed vs.  divested)

•Planned LANL integrated facility management program

•Planned LANL information management program

Identify Initiatives within Each Transformation Focus Area

•Proposed by Subcontractor in offer dated June 11, 2002

•Identified during base-lining and issue identification effort (Section 15.2.1)

Evaluate Initiatives within Each Transformation Focus Area

•The SSS and LANL roles, responsibility, authority, and accountability (R2A2)

•Optimized cost and fee structures based on different performance evaluation structures (e.g., $/sqft, $/unit, $/% availability, operating vs capital, etc.)

•Cost/benefit analysis (including start-up vs.  annual costs)

•FTE and Space

•Subcontractor support

•LANL interface

•Performance Metrics

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Prioritize Initiatives

•Risk (status quo vs.  implementation)

•Return on investment

•Functional and organizational inter-relationships

Develop Transformation Schedule

•Critical milestones

•Key precedents and inter-relationships with LANL transformation effort

•Deliverables

(See Appendix A Attachment 1 for data deliverables.) Schedule

Day 1:	Initiate Transformation evaluation effort
Day 90:	Submit Transformation Plan
Day 120:	LANL Approve Final Transformation Plan

Transformation Project Team

The Transformation Team will be lead by a full time dedicated Transformation Director and Transformation Manager.  The transformation team will provide focus while utilizing other key managers and staff of the Subcontractor’s leadership team on as a required basis.  Transformation is recognized by all members of the Subcontractor’s leadership team as an overarching responsibility that is integral to the management and operation of the SSS.  Additional support of the Subcontractor’s parent companies will be utilized as necessary to ensure transformation plans reflect current industry best practices, are achievable and appropriate to the Subcontractor’s skills and experience.  It is assumed that LANL support is provided as requested by the Subcontractor to assist development of transformation plans.

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KSL SERVICES JV

LOS ALAMOS NATIONAL LABORATORIES
UNIVERSITY OF CALIFORNIA

SUBCONTRACT/PURCHASE ORDER SPECIAL CONDITIONS
in support of
SUBCONTRACT NO.  47394-001-03-C2

These Special Conditions are to be read in conjunction with the SUBCONTRACT GENERAL CONDITIONS (03-92), GENERAL CONDITIONS FOR SUBCONTRACTED PROFESSIONAL SERVICES (10-02), or PURCHASE ORDER TERMS AND CONDITIONS as appropriate.  These Special Conditions are supplementary to the SUBCONTRACT GENERAL CONDITIONS, GENERAL CONDITIONS FOR “ PROFESSIONAL SUBCONTRACTED PROFESSIONAL SERVICES, or PURCHASE ORDER TERMS AND CONDMONS, except in those cases where there is a conflict, in^. which case, these Special Conditions take precedence.

1.0INCORPORATION OF FEDERAL ACQUISITION REGULATION (FAR) AND DEPARTMENT OF ENERGY REGULATION (DEAR) CLAUSES

The Federal Acquisition Regulation (FAR) and the Department of Energy Acquisition Regulation (DEAR) clauses listed below, which are codified in Chapters 1 and 9, respectively, of Title 48 of the Code of Federal Regulations, are, as prescribed below, incorporated into this subcontract by reference as a part of these Special Conditions with the same force and effect as if they were given in full text.

As used in these clauses below, and unless otherwise indicated with respect to a particular clause, the terms identified below are for SUBCONTRACTING supplies/services:

“CONTRACTING OFFICER” shall mean “KSL SERVICES JV.”

“CONTRACTOR” shall mean “SUBCONTRACTOR.”

“SUBCONTRACTOR” shall mean “LOWER-TIER SUBCONTRACTOR.”

1.1THE FOLLOWING FAR CLAUSES ARE REQUIRED FOR ALL SUBCONTRACTS:

PARAGRAPH	TITLE
FAR 52.203-6	Restrictions on Subcontractor Sales to the Government (July 1995)
FAR 52.203-7	Anti-Kickback Procedures (July 1995), except for paragraph (c) (1), which its not incorporated into this subcontract.
FAR 52203-10	Price or Fee Adjustment for Illegal or Improper Activity (Jan. 1997)

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FAR 52.203-12	Limitation on Payments to Influence Certain Federal Transactions (June 1997)
FAR 52.215-2	Audit and Records — Negotiations (June 1999)
FAR 52215-10	Price Reduction for Defective Cost or Pricing Data (Oct. 1997)
FAR 52.215-12	Subcontractor Cost or Pricing Data (Oct. 1997)
FAR 52.215-17	Waiver of Facilities Capital Cost of Money (Oct. 1997)
FAR 52219-8	Utilization of Small Business Concerns (Oct. 2000)
FAR 52219-9	Small Business Subcontracting Plan (Jan. 2002)
FAR 52.222-1	Notice to the Government of Labor Disputes (Feb. 1997)
FAR.52.222-4	Contract Work Hours and Safety Standards Act - Overtime Compensation (Sept. 2000)
FAR 52.222-6	Davis-Bacon Act (Feb. 1995)
FAR 52.222-7	Withholding of Funds (Feb. 1988)
FAR 52.222-8	Payrolls and Basic Records (Feb. 1988)
FAR 52.222-9	Apprentices.and Trainees (Feb. 1988)
FAR 52.222-10	Compliance with Copeland Act (Feb. 1988)
FAR 52.222-11	Subcontracts (Labor Standards) (Feb. 1988)
FAR 52.222-12	Contract Termination — Debarment (Feb. 1988)
FAR 52.222-13	Compliance with Davis-Bacon and Related Act Regulations (Feb. 1988)
FAR 52.222-14	Disputes Concerning Labor Standards (Feb. 1988)
FAR 52222-15	Certification of Eligibility (Feb. 1988)
FAR 52.222-26	Equal Opportunity (Apr. 2000)
FAR 52.222-35	Equal Opportunity for Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec. 2001)
FAR 52.222-36	Affirmative Action for Workers with Disabilities (June 1998)

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FAR 52.222-37	Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec. 2001)
FAR 52.222-41	Service Contract Act of 1965, as Amended (May 1989)
FAR 52.222-42	Statement of Equivalent Rates for Federal Hires (May 1989)
FAR 52.223-3	Hazardous Material Identification and Material Safety Data Sheets (Jan. 1997) with Alternate I (Jan. 1997)
FAR 52.223-10	Waste Reduction Program (August 2000)
FAR 52.224-1	Privacy Act Notification (Apr 1984)
FAR 52.224-2	Privacy Act (Apr. 1984)
FAR 52.225-3	Buy American Act-North American Free Trade’ Agreement-Israeli Trade Act (May 2002)
FAR 52.225-5	Trade Agreements (Feb 2002)
FAR 52225-11	Buy American Act-Construction Materials under Trade Agreements (July 2002)
FAR 52.225-13	Restrictions on Certain Foreign Purchase (Feb. 2000)
FAR 52.227-1	Authorization and Consent (July 1995)
FAR 52.227-3	Patent Indemnity (Apr. 1984)
FAR 52.227-10	Filing of Patent Applications – Classified Subject Matter (Apr. 1984)
FAR 52.227-23	Rights to Proposal- Data (Technical) (June 1987)
FAR 52.229-10	State of New Mexico Gross Receipts and Compensating Tax (Oct. 1998)
FAR 52.230-2	Cost Accounting Standards (Apr. 1998), except for paragraph (b), which is not incorporated into this subcontract.
FAR 52.230-6	Administration of Cost Accounting Standards (Nov. 1999)
FAR 52.232-17	Interest (June 1996)
FAR 52.232-22	Limitation-of Funds (Apr. 1984)
FAR 52.232-23	Assignment of Claims (Jan. 1986)

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FAR 52.237-3	Continuity of Service (Jan. 1991)
FAR 52.242-1	Notice of Intent to Disallow Costs (Apr. 1984)
FAR 52.242-15	Stop-Work Order (Aug. 1989), Alt. I (Apr 1984)
FAR 52.244-2	Subcontracts (Aug. 1998)
FAR 52.244-5	Competition in Subcontracting (Dec. 1996)
FAR 52.244-6	Subcontracts for Commercial Items and Commercial Components (Oct. 1998)
FAR 52.246-5	Inspection of Services-Cost Reimbursement (Apr. 1984)
FAR 52.247-63	Preference for U.S. Flag Air Carriers (Jan. 1997)
FAR 52.247-64	Preference for Privately Owned U.S. Flag Commercial-1 Vessels (June 2000)
FAR52-249-6	Termination (Cost Reimbursement) (Sept. 1996)
FAR 52.249-13	Failure to Perform (Apr. 1984)
FAR 52.249-14	Excusable Delays (Apr. 1984)
FAR 52.251-1	Government Supply Sources (Apr. 1984)

1.0INCORPORATION OF FEDERAL ACQUISITION REGULATION (FAR) AND DEPARTMENT OF ENERGY REGULATION (DEAR) CLAUSES

1.2THE FOLLOWING DEAR CLAUSES ARE REQUIRED FOR ALL SUBCONTRACTS:

DEAR 952.203-70	Whistleblower Protection for Contractor Employees, (Dec. 2000)
DEAR 952.204-2	Security (Sept. 1997)
DEAR 952.204-70	Classification/Declassification (Sept. 1997)
DEAR 952.204-74	Foreign Ownership, Control, or Influence Over Contractor (Apr.1984)
DEAR 952.209-72	Organizational Conflicts of Interest, Alternate I (June 1997)
DEAR 952.211-71	Priorities and Allocations (Atomic Energy) (June 1996)

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DEAR 952.217-70	Acquisition of Real Property (Apr. 1984)
DEAR 952.226-74	Displaced Employee Hiring Preference (June 1997)
DEAR 952.247-70	Foreign Travel (Dec. 2000)
DEAR 952.250-70	Nuclear Hazards Indemnity Agreement (June 1996)
DEAR 970.5204-11	Changes (Apr. 1984)
DEAR 970.5204-20	Management Controls (May 2000)
DEAR 970.5215-2	Make-or-Buy Plan (Dec. 2000)
DEAR 970.5215-3	Conditional Payment of Fee, Profit, or Incentives (Dec. 2000)
DEAR 970.5223-4	Workplace Substance Abuse Programs at DOE Sites (Dec. 2000)
DEAR 970.5226-2	Workforce Restructuring Under Section 3161 of the National Defense Authorization Act for Fiscal Year 1993 (Dec. 2000)
DEAR 970.5227-1	Rights in Data Facilities (Dec. 2000)
DEAR 970.5227-5	Notice and Assistance Regarding Patent and Copyright Infringement (Dec. 2000)
DEAR 970.5227-8	Refund of Royalties (Dec. 2000)
DEAR 970.5229-1	State and Local Taxes (Dec. 2000)
DEAR 970.5231-4	Pre-existing Conditions (Dec. 2000), Alt. II, (Dec. 2000) [insert] “effective date of this Subcontract”]
DEAR 970.5232-3	Accounts, Records and Inspection (Dec. 2000), Alt. II (Dec. 2000)
DEAR 970.5245-1	Property (Dec. 2000)

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2.0          ADDITIONAL DEFINITIONS:

As used throughout the SUBCONTRACT GENERAL CONDITIONS, GENERAL CONDITIONS FOR SUBCONTRACTED PROFESSIONAL SERVICES, and PURCHASE ORDER TERMS AND CONDITIONS, the following terms have the stated meanings:

“OWNER, CLIENT, or PROGRAM MANAGER” shall mean “UNIVERSITY OF CALIFORNIA, DEPARTMENT OF ENERGY OR GOVERNMENT.”

“CONTRACTOR, GENERAL CONTRACTOR, PRIME CONTRACTOR or BUYER” shall mean “KSL SERVICES JV.”

“SUBCONTRACTOR” shall mean ‘LOWER-TIER SUBCONTRACTOR or SELLER.”

3.0          ANTI-KICKBACK NOTICE

Your attention is directed to the prohibitions contained within the Anti-Kickback Act of 1986 (FAR Clause 52.203-7), highlights of which are: “Subcontractors and supplier are prohibited from offering any money, fee, commission, credit, gift, gratuity, thing of value or compensation of any kind; directly to Brown & Root Services employees for_, the purpose of improperly obtaining or rewarding favorable treatment in connection with a prime contract or in connection with a subcontract relating to a prime contract.”

4.0          STOP-WORK ORDER

4.1           CONTRACTOR may, at any time, by written order to the SUBCONTRACTOR, require the SUBCONTRACTOR to stop all, or any part, of the work called for by this contract for a period of 90’ days after the order’ is delivered to the SUBCONTRACTOR, and for any further period to which the parties may agree. The order shall be specifically identified _ as a stop-work order issued under this clause. Upon receipt of the order, the Contractor shall immediately comply with its terms and take all reasonable steps to minimize the incurrence of costs allocable to the work covered by the order during the period of work stoppage.

Within a period of 90 days after a stop-work order is delivered to the SUBCONTRACTOR, or within any extension of that period to which the parties shall have agreed, the CONTRACTOR shall either

(1)           Cancel the stop-work; or

(2)Terminate the work covered by the order as provided in the Default, or the Termination for Convenience of the Government, clause of this contract.

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4.2           If a stop-work order issued under this clause is canceled or the period of the order or any extension thereof expires, the SUBCONTRACTOR shall resume work. The CONTRACTOR shall make an equitable adjustment in the delivery schedule or contract price, or both, and the contract shall be modified, in writing accordingly, if—

(1)The stop-work order results in an increase in the time required for, or in the^. SUBCONTRACTOR’S cost properly allocable to, the performance of any part of this contract; and

(2)The SUBCONTRACTOR asserts a claim for the adjustment within 15 days after the end of the period of work stoppage; provided that, if the CONTRACTOR decides the facts justify the action, the CONTRACTOR may receive and act upon the ‘claim asserted at any time before final payment under this contract.

4.3           If a stop-work order is not canceled and the work covered by the order is terminated for the convenience of the Government, the CONTRACTOR shall allow reasonable costs resulting from the stop-work order in arriving at the termination settlement.

4.4           If a stop-work order is not canceled and the work covered by the order is terminated for default, the CONTRACTOR shall allow, by equitable adjustment or otherwise, reasonable costs resulting from the stop-work order.

4.5           Notwithstanding the above, where the stop-work order is occasioned by the imposition of such stop-work order by the GOVERNMENT on the CONTRACTOR, SUBCONTRACTOR will be entitled to only such adjustment that is awarded to the CONTRACTOR to the extent such adjustment relates to this SUBCONTRACT.

5.0          DISPUTES

5.1           Notwithstanding any other provision in this SUBCONTRACT, any decision of the Government’s Contracting Officer pursuant to the contract between CONTRACTOR and the U.S. Department of Energy (Prime Contract) which binds CONTRACTOR shall bind both CONTRACTOR and SUBCONTRACTOR to the extent that it relates to the - Subcontract, provided (1) CONTRACTOR promptly notifies SUBCONTRACTOR of the decision, and (2) if requested by the SUBCONTRACTOR, CONTRACTOR appeals the decision in accordance with the Disputes clause of the Prime Contract and takes whatever further action is required under this clause.

5.2           Any decision on the appeal, or any other decision of the Government under the Prime Contract that is binding on the CONTRACTOR and cannot be appealed under the Disputes clause of the Prime Contract, shall also bind the CONTRACTOR and the SUBCONTRACTOR to the extent that it relates to the Subcontract, provided CONTRACTOR promptly  notifies SUBCONTRACTOR of the’ decision, and, if requested by the SUBCONTRACTOR, brings suit or files a claim, as appropriate, against the Government. A final judgment in the suit shall be conclusive upon the CONTRACTOR and SUBCONTRACTOR.

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5.3           If requested by the CONTRACTOR, SUBCONTRACTOR shall assume the burden of prosecuting for CONTRACTOR any appeal, suit, or claim initiated by CONTRACTOR at SUBCONTRACTORS request. Each party shall^. cooperate fully in assisting the other party in the proceedings. If any appeal, suit, or claim is prosecuted by CONTRACTOR under this clause, SUBCONTRACTOR shall be permitted to participate fully in the prosecution for the purpose of protecting its interests.

5.4           Pending any decision, appeal, suit or claim pursuant to this clause, SUBCONTRACTOR  shall proceed diligently with performance of this SUBCONTRACT. All costs and expenses incurred by SUBCONTRACTOR and CONTRACTOR in prosecuting any appeal, suit or claim initiated by CONTRACTOR at SUBCONTRACTORS request shall be paid by SUBCONTRACTOR. The rights and obligations of CONTRACTOR and SUBCONTRACTOR under this SUBCONTRACT shall survive completion of, and final payment under, this SUBCONTRACT.

6.0          CHANGES

6.1           CONTRACTOR may, at any time, without notice to the sureties, if any, by written order designated or indicated to be a change order, make changes in the work within the general scope of the SUBCONTRACT, including changes:

(1)           in the specifications (including drawings and designs);

(2)           in the method or manner of performance of the work;

(3)           in the Government-furnished facilities, equipment, materials, services, or site; or,

(4)           directing acceleration in the performance of the work.

6.2           Any other written or oral order (which, as used in this paragraph includes direction, instruction, interpretation, or determination) from the CONTRACTOR that causes a change shall be treated as a change order under this clause;_. provided, that the SUBCONTRACTOR gives the CONTRACTOR written notices stating (1) the date, circumstances, and source of the order and (2) that the SUBCONTRACTOR regards the order as a change order.

6.3           Except as provided in this clause, no order, statement, or conduct of the CONTRACTOR shall be treated as change order under this clause or entitle the SUBCONTRACTOR to an equitable adjustment.

6.4           If any change under this clause causes an increase or decrease in the SUBCONTRACTOR’S cost of, or time required for, the performance of any part of the work under this SUBCONTRACT, whether or not changed by any such order, the CONTRACTOR shall make an equitable adjustment and modify the SUBCONTRACT in writing. However, except for an adjustment based on defective specifications, no adjustment for any change under paragraph 6.2 of this clause shall be made for any costs incurred more than twenty (20) days before CONTRACTOR gives written notice as required under the Prime Contract to the Government. In the case of defective specifications for which the CONTRACTOR is

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responsible, the equitable adjustment shall include any increased cost reasonably incurred by the SUBCONTRACTOR in attempting to comply with the defective specifications.

6.5           The SUBCONTRACTOR must assert its right to an equitable adjustment under this clause within fifteen (15) days after (1) receipt. of a written change order under paragraph 6.1 of this clause, or (2) the furnishing of a written notice under paragraph 6.2 of this clause, by submitting to the CONTRACTOR a written statement describing the general nature and amount of the proposal including a detailed cost breakdown. Included costs must conform to FAR, Part 31 (including the DEAR FAR Supplement). As required by the FAR supplement no profit on  General & Administrative Overhead may be included. The statement of proposal of adjustment may be included in the notice under paragraph 6.2 above.

6.6           SUBCONTRACTOR shall not submit nor shall CONTRACTOR accept a proposal for an equitable adjustment if asserted after the fifteen (15) day period set forth in paragraph 5.5 above.

7.0          COMMENCEMENT. PROSECUTION AND COMPLETION OF WORK

The SUBCONTRACTOR will be required to (a) commence work under this SUBCONTRACT on the required Start Date as stated in the Subcontract Terms, (b) prosecute the work diligently, and (c) complete the entire work ready for use (including completion of all punchlist items and clean-up) not later than the Completion Date as stated in the Subcontract Terms. However, any delays in giving notice to proceed, attributable to SUBCONTRACTOR’S failure to execute the subcontract and give the required performance and payment bonds (if any) will be deducted from the number of days allowed for completion in the Subcontract Terms.

8.0          PERFORMANCE EVALUATION OF SUBCONTRACTOR

8.1           SUBCONTRACTOR’S performance will be evaluated upon final acceptance of the work. However, interim evaluation may be prepared at any time during the subcontract performance when determined to be in either the best interest of the CONTRACTOR or the Government.

8.2           CONTRACTOR will use whatever format for evaluation it chooses, including the SF1420. CONTRACTOR reserves the right to forward its evaluation to the Government if so requested by the Government’s Contracting Officer.

9.0          CONTRACTUAL RELATIONSHIP

There is no privity of contract between the SUBCONTRACTOR and the Government (Owner). All communication on this project (oral or written) shall be addressed to the CONTRACTOR.

10.0        LOWER-TIER SUBCONTRACT^. CONDITIONS

SUBCONTRACTOR shall include in its lower-tier subcontracts (including purchase orders) all Government Contracting clauses as detailed in Paragraph 1.0.

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11.0        CONFLICTING REQUIREMENTS

Any conflict between the specifications, data sheets, drawings, referenced national standards, and codes shall be brought to the CONTRACTOR’s attention, and approved written clarification shall be obtained before proceeding.

12.0        EXPEDITING AND INSPECTION

CONTRACTOR reserves the right to expedite and/or inspect equipment, materials and services covered by any resultant SUBCONTRACT at any location, including lower-tier subcontracts. Access shall be given to representatives of CONTRACTOR and its client at all reasonable times under adequate notice to SUBCONTRACTOR, so that SUBCONTRACTOR may advise any involved lower-tier subcontractor. The SUBCONTRACTOR shall ensure that all of the expediting and inspection clauses included in this SUBCONTRACT are made part of any lower-tier subcontract.

13.0        INVOICING

Invoices received that do not agree with the provisions of this SUBCONTRACT will be returned for correction. Invoices shall reference this SUBCONTRACT number and shall show shipping point, quantities shipped and description, as well as price. SUBCONTRACTOR’S failure’ to’ provide specified vendor data requirements will result in payment of invoices being delayed.

14.0PERMITS AND RESPONSIBILITIES AND LAWS, REGULATIONS, AND DOE DIRECTIVES

(a)           The Subcontractor shall, without additional expense to the University, be responsible for obtaining any necessary licenses and permits; for complying with any Federal, State, and local laws and regulations applicable to the performance of the work; and for the compliance of its lower-tier subcontractors with such laws and regulations.

(b)           In accordance with the General Provision clause entitled, Property, the Subcontractor shall be responsible for all damages to persons or property, including damages to existing buildings, equipment and vegetation at the Laboratory, that occur as a result of the Subcontractor’s fault or negligence. The Subcontractor shall be responsible for replacing or repairing such damage at no cost to the University and for indemnifying the University and the Government against claims arising from such damages as described in the General Provision clause entitled, Indemnification and Hold Harmless.

(c)           The Subcontractor shall be responsible for all materials delivered and work performed until completion and acceptance of the entire work, except for any completed unit of work, which may have been accepted under the Subcontract.

(d)           The ‘Subcontractor shall be responsible for compliance with the requirements of all DOE Directives, compliance with which is required by other provisions of the General Provisions of the. Subcontract, and with those DOE Directives, if any, which are listed in the Special Provisions as applicable to the subcontract. Copies of all such DOE Directives may be obtained from the CONTRACTOR.

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15.0INTEGRATION OF ENVIRONMENT, SAFETY, AND HEALTH INTO WORK PLANNING AND EXECUTION

(a)           For the purposes of this clause,

(1)           safety encompasses environment, safety and health, including property protection, pollution prevention and waste minimisation; and

(2)           employees include subcontractor employees.

(b)           In performing work under this subcontract, the Subcontractor shall perform work safely, in a manner that ensures adequate protection for employees, the public, property and the environment, and shall be accountable for the safe performance of work. The Subcontractor shall exercise a degree of care commensurate with the work -and the associated hazards. The Subcontractor shall ensure that management of environment, safety and health (ES&H) functions and activities becomes an integral but visible part of the Subcontractor’s work planning and execution processes. The Subcontractor shall, in the [safe] performance of work; ensure that:

(1)Managers are visibly committed and works are continually involved.

(2)Line management is responsible for the protection of. employees, the public, and the environment. Line management includes those Subcontractor and Subcontractor employees managing or supervising employees performing work

(3)Clear and unambiguous lines of authority and responsibility for ensuring (ES&H) are established and maintained at all organizational levels.

(4)Personnel possess the experience, knowledge, skills, and abilities that are necessary to discharge their responsibilities.

(5)Resources are effectively allocated to address ES&H, programmatic, and operational considerations. Protecting employees, the public, and the environment is a priority whenever activities are planned and performed.

(6)Before work is performed, the associated hazards are evaluated and an agreed-upon set of ES&H standards and requirements are established^. which, if properly implemented, provide adequate assurance that employees, the public, and the^. environment are protected from adverse consequences.

(7)Administrative and engineering^. controls to prevent and mitigate hazards are tailored to the work being performed and associated hazards. Emphasis should be on designing the work and/or controls to reduce or eliminate the hazards and to prevent accidents and unplanned releases and exposures.

(8)The conditions and requirements to be satisfied for operations to be initiated and conducted are established and agreed-upon by DOE and the Subcontractor. These agreed-upon conditions and requirements are requirements of the subcontract and binding upon the Subcontractor. The extent of documentation and level of

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authority for agreement shall be tailored to the complexity and hazards associated with the work and shall be established in a Safety Management System.

(c)           The Subcontractor shall manage and perform work in accordance with a documented Safety Management System (System) that fulfills all conditions in paragraph (b) of this clause at a minimum. Documentation of the System shall describe how the Subcontractor will:

(1)Define the scope of work;

(2)Identify and analyze hazards associated with the work;

(3)Develop and implement hazard controls;

(4)Perform work within controls; and

(5)Provide feedback on adequacy of controls and continue to improve safety management.

(d)           The System shall describe how the Subcontractor will establish, document, and implement safety performance objectives, performance measures, and commitments in response to Laboratory program and budget execution guidance while maintaining the integrity of the System. The System shall also describe how the Subcontractor will measure system effectiveness.

(e)           The Subcontractor shall submit to the Contract Administrator documentation of its System for review and approval. Dates for submittal, discussions, and revisions to the System will be established by the Contract Administrator. Guidance on the preparation, content, review, and approval of the System will be provided by the Contract Administrator. On an annual basis, the Subcontractor shall review and update, for Laboratory approval, its safety performance objectives, performance measures, and commitments consistent with and in response to the Laboratory’s program and budget execution guidance and direction. Resources shall be identified and allocated to meet the safety objectives and performance commitments as well as to maintain^. the integrity of the entire System. Accordingly, the System shall be integrated with the Subcontractor’s business processes for work planning, budgeting, authorization, execution, and change control.

(f)            The Subcontractor shall comply with, and’ assist the Laboratory in complying with, ES&H requirements of all applicable laws. and regulations, and applicable directives identified in the General Provisions clause entitled Permits and Responsibilities and Laws, Regulations, and DOE Directives. The Subcontractor shall cooperate with Federal and non Federal agencies having jurisdiction over ES&H matters under this subcontract.

(g)           The Subcontractor shall promptly evaluate and resolve any noncompliance with applicable ES&H requirements and the System. If the Subcontractor fails to provide resolution or if, at any time, the Subcontractor’s acts or failure to act causes substantial harm or an imminent danger to the environment or health and safety of employees or the public, the Contract Administrator may issue an order stopping work in whole -or-in part. Any stop work order issued

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by the Contract Administrator under this clause (or issued by the Subcontractor to a lower-tier subcontractor in accordance with paragraph (i) of this clause) shall be without prejudice to any other legal or contractual rights of the Government. In the event that the Contract Administrator issues a stop work order, an order authorizing the resumption of the work may be issued at the discretion of the Contact Administrator. The Subcontractor shall not be entitled to an extension of time or additional fee or damages by reason of, or in connection with, any work stoppage ordered in accordance with this clause.

(h)           Regardless of the performer of the work, the Subcontractor is responsible for compliance with the ES&H requirements applicable to this subcontract. The Subcontractor is responsible for flowing down the ES&H requirements’ applicable to this subcontract to subcontracts at any tier to the extent necessary to ensure the lower-tier contractor’s compliance with the requirements.

(i)            The Subcontractor shall include a clause substantially the same as this clause in subcontracts involving complex or hazardous work on site at a DOE-owned or -leased facility. Such subcontracts shall provide for the right to stop work under the conditions described in paragraph (g) of this clause. Depending on the complexity and hazards associated with the work, the Subcontractor may choose not to require the subcontractor to submit a Safety Management System for the Subcontractor’s review and approval.

16.0        RESPONSIBILITY FOR TECHNOLOGY EXPORT CONTROL

(a)           The Subcontractor shall comply with all applicable United States export control laws and regulations, including the International Traffic in Arms Regulations_, (ITAR), 22 CFR Parts 120 through 130, and the Export Administration Regulations (EAR), 15 CFR Parts 730 through 799, in the performance of this Subcontract. In the absence of available license exemptions/exceptions, the Subcontractor shall be responsible for obtaining the appropriate licenses or other approvals, if required, for exports of hardware, technical data and software, or for the provision of technical assistance.

(b)           The Subcontractor shall be responsible for obtaining export licenses, if required, before exporting or allowing access to export-controlled technical data or software to foreign nationals in the performance of this subcontract.

(c)           The Subcontractor shall be responsible for all regulatory record-keeping requirements.

(d)           The Subcontractor shall be responsible for ensuring that this clause, including this paragraph (d), is included in all appropriate lower-tier subcontracts.

17.0        ORDER OF PRECEDENCE

In case of conflicts between various Subcontract documents, the following order of precedence shall be used to settle said conflicts:

Change Order(s) (latest one issued)

Subcontract Terms

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Subcontract/Purchase Order Special Conditions

Subcontract General Conditions/General Conditions for Subcontracted Professional Services Purchase Order Terms and Conditions

Specifications (unless specifically stated otherwise within the Subcontract documents) Drawings

18.0COST ACCOUNTING STANDARDS LIABILITY

Reference is made to the Cost Accounting Standards (CAS) clause(s) of the Subcontract. Notwithstanding the provisions of those clause(s), or of any other provision of the subcontract, the Subcontractor shall be liable to the Government for any increased costs, or interest. thereon, resulting from any failure of the Subcontractor, with respect to activities carried on at the site of the work, or of a lower-tier subcontractor, to comply with applicable cost accounting standards or to follow any practices disclosed pursuant to the requirements of such CAS clause(s).

19.0CONFIDENTIALITY OF INFORMATION

(a)To the extent that the work under this Subcontract requires that the Subcontractor be given access to confidential or proprietary business or financial information belonging to KSL Service JV, the University, or other companies, the Subcontractor shall, after receipt thereof, treat such information as confidential and agrees not to appropriate such information to its own use or to disclose such information to third parties, including its corporate parent, unless specifically authorized by the KSL Service JV or the Government in writing. The foregoing obligations, however, shall not apply to:

(1)Information which, at the time of receipt by the Subcontractor, is in public domain;

(2)Information which is published after receipt thereof by the Subcontractor or otherwise becomes part of the public domain through no fault of the Subcontractor;

(3)Information which the Subcontractor can demonstrate was in its possession at the time of receipt thereof and was not acquired directly or indirectly from the University or other companies;

(4)Information which the Subcontractor can demonstrate was received by it from a third party who did not require the Subcontractor to hold it in confidence.

(b)The Subcontractor shall obtain the written agreement, in a form satisfactory to the Contract Administrator, of each employee permitted access, whereby the employee agrees that he will not discuss, divulge or disclose any such information to any person or entity except those persons within the Subcontractor’s organization directly concerned with the performance of the Subcontract.

(c)The Subcontractor agrees, if requested by KSL Services or the University, to sign an agreement identical, in all material respects, to the provisions of this clause, with each

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company supplying information to the Subcontractor under this Subcontract, and to supply a copy of such agreement to KSL Services JV.

(d)The Subcontractor agrees that upon request by KSL Services JV or the University, it will execute a KSL Services JV or University-approved agreement with any party whose facilities or information it is given access to or is furnished, restricting use and disclosure of the information obtained from the facilities. Upon request by KSL Services or the University, such an agreement shall also be signed by Subcontractor personnel.

(e)This clause shall flow down to all appropriate subcontracts.

20.0CONTROL OF SUBCONTRACTOR EMPLOYEES WORKING ON SITE

(a)The Subcontractor shall be responsible for maintaining satisfactory standards of employee competency, conduct, integrity, and compliance with subcontract requirements including site-specific requirements. Should KSL Services JV or the Government determine that an employee of a subcontractor at any tier fails to meet any of these standards, the Subcontractor shall immediately remove such person from the work site, and that person shall not again, without written permission of KSL Services JV or the Government, be allowed back on the work site.

(b)The Subcontractor shall include this provision in all lower-tier subcontracts, which require work to be performed on the LANL site.

21.0SECURITY

(a)Non-U.S. Citizens on the Work Site. The Subcontractor shall take effective measures to determine the citizenship of all of its employees and those of its lower-tier subcontractors who will be assigned to work at the LANL work site (for purposes of this clause, hereinafter “Subcontract Workers”), and shall not permit persons who are not United States citizens to enter such sites ‘except as provided in this clause. If the Subcontractor intends to employ non-U.S. citizens, the Subcontractor must comply with DOE and LANL Foreign Visits and Assignments procedures and . obtain approval for such individuals to enter the work site pursuant to those procedures. Copies of the requirements and procedures associated with Foreign Visits and Assignments may be obtained from the KSL Services JV. There is no assurance KSL Services JV or the University will grant any particular request for access by a non-U.S. citizen pursuant to these procedures. The presence of non-U.S. citizens on the work site without appropriate approval could result in termination of the Subcontract.

(b)The Subcontractor shall provide upon request from KSL Services JV or the Government the name of any Subcontract Worker together with the individual’s address and citizenship.

(c)Any digging of holes under security fencing, cutting or removing of security fencing, altering of gates or otherwise providing’ access into security areas by means other than established access points shall be accomplished only in the presence of a Protective Force Security inspector and only after obtaining approval from the KSL Services JV or the Government 48 hours in advance. At the end of each work day, the Subcontractor shall repair,

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replace, or provide adequate barriers to preclude unauthorized entry into Security Areas through the holes dug or cuts in security fences or through modified gates or other alteration of the security perimeters. Such barriers shall be inspected and approved by KSL. Services or the Government. The Subcontractor shall make arrangements through KSL Services or the Government to assure that a LANL Protective Force Security Inspector is on site to guard any temporary opening during the work day.

(d)All persons, vehicles, parcels, etc., are subject to search when entering or leaving any posted Government property at LANL.

(e)Access to Areas Requiring “L” or “Q” Clearances

(1)Prior to commencing work, the Subcontractor shall meet with University security representatives to review security measures that apply to the Subcontract work and Subcontract Workers.

(2)All Subcontract Workers must be U.S. citizens and must possess DOE “L” or “Q” access authorizations as indicated in Paragraph A. above or have been issued an “Escort Required” badge and be escorted at all times while within the area by a person possessing a DOE “Q” or “L:” access authorization.

(3)Escorts for entry of uncleared Subcontract Workers into security areas shall be arranged with the Contract Administrator.

(4)The number of escorts required for a given project shall be based on the number of uncleared personnel working within an area and the capability for visual contact with all uncleared personnel at all times by the escort or escorts. A general rule of thumb is that an escort can act as escort for a maximum of 4 or 5 people who require escorting.

(5)Prior to the issuance of an “L” or “Q” badge to Subcontract Workers, the Subcontractor shall have submitted and obtained a favorable Foreign Ownership, Control, or Influence (FOCI) determination.

(6)For each Subcontract Worker to be processed for an “L” or “Q” access authorization, the following information shall be provided:

a)Completed Personnel Security Questionnaire (Form SF-86), Parts I and II.

b)One Security Acknowledgment (DOE F-5631.18).

c)Two Fingerprint Cards (FD-258).

d)If the employee is a military veteran, one copy of Separation from Military Senate (DD Form 214) or other acceptable evidence of military service.

e)Authority for Release of Information (DOE F-5637.1).

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f)Two Fair Credit Release Act forms

g)Other forms as required by DOE

(7)If a clearance is granted, the cleared Subcontract Worker shall attend an indoctrination security lecture at the LANL Badge Office before issuance of badge. Badges will be valid for the duration of the Subcontract or the duration of employment, whichever is shorter.

(8)All personnel shall display security badges on their outer clothing above the waistline while in Security Areas and shall remain within their assigned work areas.

(9)Terminations for “Q” or “L” cleared employees shall be reported to S-6 Clearance Processing within two days.

(10)Vehicles driven by uncleared drivers delivering construction materials will be permitted to enter Security Areas provided they have been issued an “Escort Required” badge and are under escort of personnel possessing “Q” or “L” access authorization as appropriate for the delivery site.

(f)Escort-Required Badging. See Security and Safeguards Division Notice 0088 at http://lln.lanl.gov/notice/notice0088.pdf for policy and procedures or contact the Contract Administrator for a copy.

(g)The requirements for securing eligible personnel and proper personnel security clearances for work within “L” and “Q” clearance areas and for complying with other security regulations and procedures shall not be considered cause for an extension of time for performance of the Subcontract work or for extra payments under the Subcontract. The cost of processing DOE “Q” or “L” access authorizations, however, will be borne by the Government.

(h)Whenever the work under this Subcontract requires the issuance of badges of any kind, KSL Services JV or the Government may withhold final payment to the Subcontractor until all such badges are returned to KSL Services JV or the Government.

(i)Notwithstanding the fact that the Subcontract work is being performed within a DOE-posted area, a “Q” Cleared Area, or an “L” Cleared area, the responsibility for protection of property associated with the Subcontract work rests with the Subcontractor.

(j)Security Termination Process. Within 2 working days of an event described in the figure below, the Subcontractor shall take the corresponding action in the same figure:

Event	Do Termination Briefing & Submit DOE Form 5631.29 for	Return These Badges
Terminate Employment	Individual Subcontract Personnel	Individual’s, whether cleared or uncleared, including

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		expired
Transfer individual from Subcontract	Individual Subcontract Personnel	Individual’s, whether cleared or uncleared, including expired
Clearance no longer required	All cleared Subcontract Personnel	All cleared badges, including expired
FOCI approval.withdrawn	All cleared Subcontract Personnel	All cleared badges, including expired
Subcontract completed/terminated	All Subcontract Personnel	All badges, whether cleared or uncleared, including expired

DOE Form 5631.29 shall be submitted and all, badges retrieved from Subcontract Personnel as described in the figure above shall be turned in at the LANL Clearance Processing Office.

The Subcontractor shall conduct or have conducted by its subcontractors, for each individual who has been issued a cleared badge, a Security Termination Briefing and shall obtain a Security Termination Statement, DOE Form 5631.29:

(k)Lost or Stolen Badges. If a badge is lost, the Subcontractor shall ensure that the individual badgeholder comes to the Badge Office and files a written affidavit of such, using a Notification of Permanent Inactivation of Badge form (Laboratory Form 1672, or as amended or superceded), in order to obtain a replacement badge: If a badge is stolen, the individual badgeholder must file Laboratory Form 1672 as above and also report the theft to KSL Services JV or the Government.

22.0COLLECTIVE BARGAINING AGREEMENTS

(a)When negotiating collective bargaining agreements applicable to the work force under this Subcontract, the Subcontractor shall use its best’ efforts to ensure such agreements ‘ contain provisions designed to assure continuity of services. All such agreements entered into during the contract period of performance should provide that grievances and disputes involving the interpretation or application of the agreement will be settled without resorting to strike, lockout, or other interruption of normal operations. For this purpose, each collective bargaining agreement should provide an effective grievance procedure with arbitration as its final step, unless the parties mutually agree upon some other method of assuring continuity of operations. As ‘part of such agreements, management and labor should agree to cooperate fully with the Federal Mediation and Conciliation Service.

(b)The Subcontractor shall provide the KSL Services or the Government with copies of all collective bargaining agreements, including any amendments, supplements or modifications thereto, or any other bargaining agreements that arise during the course of this Subcontract and that apply to Subcontractor employees working under this Subcontract.

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(c)The Subcontractor is required to recognize existing bargaining representatives, and comply with existing Collective Bargaining Agreements as permitted by law.

23.0LABOR RELATIONS

(a)The Subcontractor will respect the rights of employees (i) 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, and (ii) to refrain from such activities.

(b)To the extent required by law, the Subcontractor shall give notice to any lawfully designated representatives 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.

(c)The Subcontractor shall promptly advise the Contract Administrator of, and provide all appropriate documentation regarding, any labor relations developments that involve or appear likely to involve:

(1)Possible strike situations affecting the facility;

(2)Referral to the Energy Labor-Management Relations Panel;

(3)The National Labor Relations Board at any level;

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

(5)Any grievance which may reasonably be assumed will be arbitrated under a Collective Bargaining Agreement.

24.0INDEMNIFICATION AND HOLD HARMLESS

(a)The Subcontractor shall indemnify the University, the Government, and their agents and employees and shall hold them harmless from ‘all claims and demands of third parties arising out of the Subcontractor’s, or any of its lower-tier subcontractors’ performance of this subcontract, to which the University . the Government, or their agents or employees may be subject by reason of any negligent acts ((Delete...action, neglect or omission) on the part of the Subcontractor, any of its lower-tier subcontractors, or their respective officers, agents, or employees provided, however, where such claims and demands result from the negligence or willful misconduct of the University or its other subcontractors, or their respective employees, the Subcontractor’s liability for such claims and demands shall be in proportion to its and its lower-tier subcontractors’ share of fault in the events giving rise to the claim or demand.

(b)The Subcontractor shall promptly notify the University in writing of any claim or demand related to performance of this subcontract that the Subcontractor becomes aware of. The Subcontractor shall cooperate with the University in the defense of claims and demands described in this clause.

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25.0INSURANCE-LIABILITY TO THIRD PERSONS

(a)(1)Except as provided in paragraph (a)(2) of this clause, the Subcontractor shall provide and maintain workers’ compensation, employer’s liability, comprehensive general liability (bodily injury), comprehensive automobile liability (bodily injury and property damage) insurance, and such other insurance as the Contract Administrator may require under this subcontract.

(2)The Subcontractor shall develop a self-insurance program for general liability, auto liability and workers’ compensation unless otherwise directed by the Contract Administrator, provided that the Subcontractor is authorized to operate self-insured pursuant to New Mexico statutory authority. In the event the Subcontractor becomes ineligible to operate on a self-insured basis, or in the event the University elects to discontinue reimbursement under the Subcontractor’s self-insurance program, the Subcontractor agrees to purchase such insurance as is required by law and is acceptable to the University, and the cost of such insurance will be allowable under the subcontract.

(3)All insurance required by this paragraph shall be in a form and amount and for those periods as the Contract Administrator may require or approve and with insurers approved by the Contract Administrator.

(b)The Subcontractor agrees to submit for the Contract Administrator’s approval, to the extent and in the manner required by the Contract Administrator, any other insurance that is maintained by the Subcontractor in connection with the performance of this subcontract and for which the Subcontractor seeks reimbursement.

(c)The Subcontractor shall be reimbursed –

(1)For that portion –

(i)Of the reasonable cost of insurance allocable to this subcontract; and

(ii)Required or approved under this clause; and

(2)For certain liabilities (and expenses incidental to such liabilities) to third persons not compensated by insurance or otherwise without regard to and as an exception to the Limitation of Funds clause of this subcontract. These liabilities must arise out of the performance of this subcontract, whether or not caused by the negligence of the Subcontractor or of the Subcontractor’s agents, servants, or employees, and must be represented by final judgments or settlements approved in writing by the Government. These liabilities are for-

(i)Loss of or damage to property (other than property owned, occupied, or used by the Subcontractor, rented to the Subcontractor, or in the care, custody, or control of the Subcontractor); or

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(ii)Death or bodily injury.

(d)The Government’s liability under paragraph (c) of this clause is subject to the availability of appropriated funds at the time a contingency. occurs. Nothing in this subcontract shall be construed as implying that the Congress will, at a later date, appropriate funds sufficient to meet deficiencies.

(e)The Subcontractor shall not be reimbursed for liabilities (and expenses incidental to such liabilities)-

(1)For which the Subcontractor is responsible under the Indemnification and Hold Harmless clause of the subcontract;

(2)For which the Subcontractor is otherwise responsible under the express terms of any other clause specified in the Schedule or elsewhere in the subcontract;

(3)For which the Subcontractor has failed to insure or to maintain insurance as required by the Contract Administrator;

(4)For any award of punitive damages against the Subcontractor; or

(5)That result from willful misconduct or lack of good faith on the part of any of the Subcontractor’s directors, officers, managers, superintendents, or other representatives who have supervision or direction of:

(i)All or substantially all of the Subcontractor’s, business;

(ii)All or substantially all of the Subcontractor’s operations at any one plant or separate location in which this subcontract is being performed; or

(iii)A separate and complete major industrial operation in connection with the performance of this subcontract.

(f)The provisions of paragraph (e) of this clause shall not restrict the right of the Subcontractor to be reimbursed for the cost of insurance maintained by the Subcontractor in connection with the performance of this subcontract, other than insurance required in accordance with this clause; provided, that such cost is allowable under the Allowable Cost and Payment clause of this subcontract.

(g)If any suit or action is filed or any claim is made against the Subcontractor, the cost and expense of which may be reimbursable to the Subcontractor under this subcontract, and the risk of which is then uninsured or is insured for less than the amount claimed, the Subcontractor shall-

(1)Immediately notify the Contract Administrator and promptly furnish copies of all pertinent papers received;

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(2)Authorize University representatives to collaborate with counsel for the insurance carrier in settling or defending the claim when the amount of the liability claimed exceeds the amount of coverage; and

(3)Authorize University representatives to settle or defend the claim and to represent the Subcontractor in or to take. charge of any litigation, if required by the University, when the liability is not insured or covered by bond. The Subcontractor may, a i own expense, be associated with the University representatives in any such claim or litigation.

26.0UNIVERSITY’S RIGHT TO OFFSET

The Prime Contractor may collect any amount determined by the Contract Administrator to be owed to the University by the Subcontractor by offsetting the amount against any payment due to the Subcontractor under any subcontract it has with the University issued pursuant the University’s contract with DOE for management and operation of LANL. Any challenge to the amount of an offset under this clause shall be resolved under the Disputes clause of this subcontract.

27.0ALTERATION OF CLAUSE ENTITLED “STATE OF NEW MEXICO GROSS RECEIPTS AND COMPENSATING TAX”. FAR 52.229-10

Change all references to “Type 15 NonTaxable Transaction Certificate” in the clause entitled “State of New Mexico Gross Receipts and Compensating Tax” to “Type 9 NonTaxable Transaction Certificate.”

28.0ACCESS TO AND OWNERSHIP OF RECORDS

(a)Government-owned records. Except as provided in paragraph (b) of this clause, all records acquired or generated by the Subcontractor in its performance of this subcontract shall be the property of the Government and shall be delivered to the Government or otherwise disposed of by the Subcontractor either as the Contract Administrator may from time to time direct during the progress of the work or, in any event, as the Contract Administrator shall direct upon completion or termination of the subcontract.

(b)Subcontractor-owned records. The following records are considered, the property of the Subcontractor and are not within the scope of paragraph (a) of this clause.

(1)Employment-related records (such as workers’ compensation files; employee relations records, records on salary and employee benefits; drug testing records, labor negotiation records; records on ethics, employee concerns, and other employee-related investigations conducted under an expectation of confidentiality; employee assistance program records; and personnel and medical/ health-related records and similar files), and non-employee patient medical/health related records, except for those records described by the contract as being maintained in Privacy Act systems of records.

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

(3)Records relating to any procurement action by the Subcontractor, except for records that under the General Provision clause entitled, Accounts, Records, and Inspection, are described as the property of the Government; and

(4)Legal records, including legal opinions, litigation files, and documents covered by the attorney-client and attorney work product privileges; and

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

(i)Executed license agreements, including exhibits or appendices containing information on royalties, royalty rates, other financial information, or commercialization plans, and all related documents, notes and correspondence.

(ii)The Subcontractor’s protected Cooperative Research and Development Agreement (CRADA) information and appendices to a CRADA that contain licensing terms and conditions, or royalty or royalty rate information.

(iii)Patent, copyright, mask work, and trademark application files and related contractor invention disclosures, documents and correspondence, where the Subcontractor has elected rights or has permission to assert rights and has not relinquished such fights or turned such rights over to the Government.

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

(d)Inspection, copying, and audit of records. All records acquired or generated by the Subcontractor under this subcontract in the possession of the Subcontractor, 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 Subcontractor shall afford the Government or its designees reasonable facilities for such inspection, copying, and audit; provided, however, that upon request by the Contract Administrator, the Subcontractor shall deliver such records to a location specified by the Contract Administrator 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.

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

(f)Records retention standards. Special records retention standards, described at DOE Order 200.1, Information Management Program (version in effect on effective date of subcontract), are applicable for the classes of records described therein, whether or not the records are owned by the Government or the Subcontractor. In addition, the Subcontractor shall retain individual radiation exposure records generated in the performance of work under this subcontract until the Government authorizes disposal. The Government may waive application of these record retention schedules, if, upon termination or completion of the subcontract, 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.

(g)Subcontracts. The Subcontractor 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:

(1)The value of the subcontract is greater than $2 million (unless. specifically waived by the Contract Administrator);

(2)The Contract Administrator determines that the subcontract is, or involves, a critical task related to the subcontract; or

(3)The subcontract includes 48 CFR 970.5223-1, Integration of Environment, Safety, and Health into Work Planning and Execution, or similar clause.

29.0DISPUTES

(a)Definitions. For purposes of this clause:

(1)“Claim” means a written demand or written assertion by either contracting party seeking as a matter of right, the payment of money in a sum certain, the adjustment or interpretation of a contract term, or other relief arising under or relating to this subcontract. A voucher, invoice, or other request for payment or equitable adjustment under the terms of the subcontract, that is not in dispute when submitted, is not a claim. The Subcontractor may convert such submission into a claim if it is disputed either as to liability or amount, or is not acted upon in a reasonable time, by demanding a decision by the Contract Administrator.

(b)Nature of the. Subcontract. This subcontract is not a Government contract and, therefore, is not subject to the Contract Disputes Act of 1978 (41 U.S.C. §§601-613). The Subcontractor acknowledges that DOE and the University are not a parties to the subcontract and, for purposes of the subcontract, the University is not an agent of DOE.

(c)Scope of Clause. The rights and procedures set forth in this clause are the exclusive rights and procedures for resolution of all claims and disputes arising under, or relating to, this subcontract, and no action based upon any claim or dispute arising under, or relating to, this subcontract shall be brought in any court except as provided in this clause. The parties shall be bound by any arbitration decision rendered pursuant to this clause, which shall be vacated,

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modified, or corrected only as provided in the Federal Arbitration Act (9 U.S.C. §§1-16). An arbitration decision may be enforced in any court of competent jurisdiction.

(d)Claims asserting actions or inactions of the University.

(1)Unless otherwise provided in this subcontract, for claims asserting as the basis any action or inaction by the University the Subcontractor must file any claim with KSL Services JV, and KSL Service JV will present the claim to the University within 60 days after the Subcontractor knew or should have known the facts giving rise to the claim. Failure to file a claim within the period prescribed by this paragraph shall constitute a waiver of the Subcontractor’s right, if any, to an equitable adjustment under the subcontract.

(2)The Subcontractor shall submit any claim identified in (1) above in writing to KSL Services JV, and KSL Services JV will present the claim to the University’s Contract Administrator who shall issue a decision on the matter within 60 days of receipt of the claim. If the University’s Contract Administrator fails to issue a decision within 60 days, the Subcontractor may request that KSL Services JV request mediation or a demand for arbitration as provided in KSL Services TV contract with the University.

(3)The decision of the University’s Contract Administrator shall be final and conclusive unless the Subcontractor requests that KSL Services JV requests mediation or demands arbitration in accordance with the terms of KSL Services JV contract with the University.

(4)The Subcontractor shall fully cooperate with KSL Services JV in the pursuit and conduct of any mediation or arbitration requested by Subcontractor. Any and all costs incurred by KSL Services JV in sponsoring and participating with Subcontractor in any mediation or arbitration arising under this clause, shall be for the account of Subcontractor.

(e)Claims asserting actions or inactions on part of KSL Services JV.

(1)Unless otherwise provided in this subcontract, for claims asserting as the basis any action or inaction by KSL Services JV the Subcontractor must file any claim with KSL Services JV within 60 days after the Subcontractor knew or should have known the facts giving rise to the claim. Failure to file a claim within the period prescribed by this paragraph shall constitute a waiver of the Subcontractor’s right, if any, to an equitable adjustment under the subcontract.

(2)The Subcontractor shall submit any claim identified in (1) above in writing to KSL Services JV, and KSL Services JV’s Subcontract Administrator shall issue a decision on the matter within 60 days of receipt of the claim. If the KSL Services JV’s Subcontract Administrator fails to issue a decision within 60 days, or such other time as deemed necessary by the Subcontract Administrator, the

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Subcontractor may request that KSL Services JV may submit a demand for arbitration as provided herein.

(3)The decision of KSL Services JV’s Subcontract Administrator shall be final and conclusive unless the Subcontractor demands arbitration in accordance with the terms of this clause.

(4)If the decision of the KSL Services JV’s Subcontract Administrator is not satisfactory to the Subcontractor, the Subcontractor must submit to the Subcontractor Administrator a written demand for arbitration of the claim within 45 days after receipt of the Subcontract Administrator’s decision.

(f)Arbitration Procedures.

(1)The parties agree to first endeavor to settle the dispute in an amicable mariner by mediation administered by the American Arbitration Association under its Commercial Mediation Rules before resorting to arbitration. Thereafter, any unresolved controversy or claim arising out of or relating to this contact or breach thereof shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and judgment upon the Award rendered by the arbitrators) may be entered in any court having jurisdiction thereof.

(2)The parties acknowledge that this contract evidences a transaction involving interstate commerce. The United States Arbitration Act shall govern the interpretation, enforcement, and proceedings pursuant to the arbitration clause in this contract.

(3)The arbitration proceedings shall be conducted in Albuquerque, NM. The language of the arbitration shall be English.

(4)The governing law of this contract shall, be that body of common law relating to U.S. government procurement and where no such common law exists the law of the State of New Mexico, excluding any conflict of laws provision which would lead to the application of a different body of law.

(5)The decision of a majority of the three (3) arbitrators shall be reduced to writing; final and binding without the right of appeal. Judgment upon the award may be entered in any court having jurisdiction over the person or the assets of the Party owing the judgment or application may be made to . such court for a judicial acceptance of the award and an order of enforcement, as the case may be.

(6)Consequential, punitive or other similar damages shall not be’ allowed; provided, however, the award may include appropriate punitive. damages where a Party has engaged in delaying and dilatory actions.

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30.0ALLOWABLE COST AND PAYMENT

(a)Invoicing.

(1)KSL Services JV will make payments to the Subcontractor in accordance with the Prime Subcontract between KSL Services JV, the University and this clause.

(2)Subcontract financing payments are not subject to the interest penalty provisions of the Prompt Payment Act. Interim payments made prior to the final payment under the subcontract are contract financing payments.

(3)In the event that the University requires an audit or other review of a specific payment to ensure compliance with the terms and conditions of the subcontract, the KSL Services JV may withhold payment for the cost in question.

(b)Reimbursing costs.

(1)For the purpose of paying allowable costs (except as provided in paragraph (b)(2) of this clause, with respect to pension, deferred profit sharing, and employee stock ownership plan contributions), the term “costs” includes only-

(i)Those recorded costs that, at the time of the request for reimbursement or withdrawal from the Special Financial Institution Account, the Subcontractor has paid by cash, check, or other form of actual payment for items or services purchased directly for the contract;

(ii)When the Subcontractor is not delinquent in paying costs of subcontract performance in the ordinary course of business, costs incurred, but not necessarily paid, for-

(A)Supplies and services purchased directly for the subcontract and associated financing payments to lower tier subcontractors, provided payments will be made-

(1)In accordance with the terms and conditions of a lower tier subcontract or invoice; and

(2)Ordinarily prior to the submission of KSL Services JV next monthly certified invoice to the University;

(B)Materials issued from the Subcontractor’s inventory and placed in the production process for use on the subcontract;

(C)Direct labor;

(D)Direct travel;

(E)Other direct in-house costs; and

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(F)Properly allocable and allowable indirect costs, as shown in the records maintained by the Subcontractor for purposes of obtaining reimbursement under the subcontract;

(iii)The amount of financing payments that have been paid by cash, check, or other forms of payment to lower-tier subcontractors.

(2)Accrued costs of Subcontractor contributions under employee pension plans shall be excluded until actually paid unless-

(i)The Subcontractor’s practice is to make contributions to the retirement fund quarterly or more frequently; and

(ii)The contribution does not remain unpaid 30 days after the end of the applicable quarter or shorter payment period (any contribution remaining unpaid shall be excluded from the Subcontractor’s indirect costs for payment purposes).

(3)Notwithstanding the audit and adjustment of invoices or vouchers under paragraph (e) of this clause, allowable indirect costs under this subcontract shall be obtained by applying indirect cost rates established in accordance with paragraph (c) of this clause.

(4)Any statements in specifications or other documents incorporated in this subcontract by reference designating performance of services or furnishing of materials at the Subcontractor’s expense or at no cost to the University or the Government shall be disregarded for purposes of cost reimbursement under this clause.

(c)Final indirect cost rates.

(1)Final annual indirect cost rates and the appropriate bases shall be established in accordance with Subpart 42.7 of the Federal Acquisition Regulation (FAR) in effect for the period covered by the indirect-cost rate proposal.

(2)(i)The Subcontractor shall submit ‘an adequate final indirect cost rate proposal to KSL Services JV within the 6-month period following the expiration of each of Government’s fiscal years. Reasonable extensions, for exceptional circumstances only, may be requested in writing by the Subcontractor through KSL Services JV and granted in writing by the Contract Administrator. The Subcontractor shall support its proposal with adequate supporting data.

(ii)The proposed rates shall be based on the Subcontractor’s actual cost experience for that period. The Contract Administrator and the ‘Subcontractor shall establish the final indirect cost rates as promptly as practical after receipt of the Subcontractor’s proposal.

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(3)The Subcontractor and Contract Administrator shall execute a written understanding setting forth the final indirect cost rates. The understanding shall specify

(i)the agreed-upon final annual indirect cost rates,

(ii)the bases to which the rates apply,

(iii)the periods for which the rates apply,

(iv)any specific indirect cost items treated as direct costs in the settlement, and

(v)the affected subcontract, identifying any with advance agreements or special terms and the applicable rates. The understanding shall not change any monetary ceiling, subcontract obligation, or specific cost allowance or disallowance provided for in this subcontract. The understanding is incorporated into this subcontract upon execution.

(4)Failure by the parties to agree on a final annual indirect cost rate shall be a dispute within the meaning of the Disputes clause.

(5)Within 120 days (or longer period if approved in writing by the Contract Administrator) after settlement of the final annual indirect cost rates for all years of a physically complete subcontract, the Subcontractor shall submit to KSL Services JV a completion invoice or voucher to reflect the settled amounts and rates.

(6)(i)If the . Subcontractor fails to submit a completion invoice or voucher to KSL Services JV within the time specified in paragraph (c)(5) of this clause, the Contract Administrator may-

(A)Determine the amounts due to the Subcontractor under the subcontract; and

(B)Record this determination in.a unilateral modification to the subcontract.

(ii)This determination constitutes the final decision of the Contract Administrator in accordance with the Special Conditions, Paragraph 29, entitled “Disputes.”

(d)Billing rates. Until final annual indirect cost rates are established for any period, the Government shall reimburse the Subcontractor at billing rates established by the Contract Administrator or by an authorized representative (the cognizant auditor), subject to adjustment when the final rates are established. These billing rates-

(1)Shall be the anticipated final rates; and

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(2)May be prospectively or retroactively revised by mutual agreement, at either party’s request, to prevent substantial overpayment or underpayment.

(e)Audit. At any time or times before final payment, the Contract Administrator may have the Subcontractor’s invoices or vouchers and statements of cost audited. Any payment may be-

(1)Reduced by amounts found by the Contract Administrator not to constitute allowable costs; or

(2)Adjusted for prior overpayments or underpayments.

(f)Final payment.

(1)Upon approval of a completion invoice or voucher . submitted by the Subcontractor in accordance with paragraph (c)(5) of this clause, and upon the Subcontractor’s compliance with all terms of this subcontract, the University shall promptly pay any balance of allowable costs and that part of the fee (if any) not previously paid.

(2)The Subcontractor shall pay to KSL Services JV any refunds, rebates, credits, or other amounts (including interest, if any) accruing to or received by the Subcontractor or any assignee under this subcontract, to the extent that those amounts are properly allocable to costs for which the Subcontractor has been reimbursed by KSL Services JV from the University. Reasonable expenses incurred by the Subcontractor for securing refunds, rebates, credits, or other amounts shall be allowable costs if approved by the Contract Administrator. Before final payment under this subcontract, the Subcontractor and each assignee whose assignment is in effect at the time of final payment shall execute and deliver-

(i)An assignment to the Government, in form and substance satisfactory to the Contract Administrator, of refunds, rebates, credits, or other amounts (including interest, if any) properly allocable to costs for which the Subcontractor has been reimbursed by KSL Services JV, the University, or government under this subcontract; and

(ii)A release discharging KSL Services JV, the University and the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this subcontract, except-

(A)Specified claims stated in exact amounts, or in estimated amounts when the exact amounts are not known;

(B)Claims (including reasonable incidental expenses) - based upon liabilities of the Subcontractor to third parties arising

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out of the performance of this subcontract; provided, that the claims are not known to the Subcontractor on the date of the execution of the release, and that the Subcontractor gives notice of the claims in writing to KSL Services JV, within 6 years following the release date or notice of final payment date, whichever is earlier, and

(C)Claims for reimbursement of costs, including reasonable incidental expenses, incurred by the Subcontractor under the patent clauses of this subcontract, excluding, however, any expenses arising from the Subcontractor’s indemnification of KSL Services JV, the University or the Government against patent liability.

31.0FIXED FEE

(a)KSL Services JV shall pay the Subcontractor for performing this subcontract the fixed fee specified in the Schedule.

(b)Payment of the fixed fee shall be made as specified in the Schedule; provided that after payment of 85 percent of the fixed fee, KSL Services JV may withhold further payment of fee until a reserve is set aside in an amount that KSL Services JV considers necessary to protect the Government and KSL Services JV interest. This reserve shall not exceed 15 percent of the total fixed fee or $100,000, whichever is less. KSL Services JV shall release 75 percent of all fee withholds under this subcontract after receipt of the certified final indirect cost rate proposal covering the year of physical completion of this subcontract, provided the Subcontractor has satisfied all other subcontract terms and conditions, including the submission of final patent and royalty reports, and is not delinquent in submitting final vouchers on prior years’ settlements. KSL may release up to 90 percent of the fee withholds under this contract based on the Subcontractor’s past performance related to the submission and settlement of final indirect cost rate proposals with the Government.

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STATEMENT OF WORK

Environmental Services

(Eligible NAICS Codes-562910, 541620, 541330,
562910, 541380, 561210)

Introduction. The subcontractor is responsible for providing KSL with, operational and quality services to ensure site-wide environmental compliance with laws and regulations of the U.S. Government, State of New Mexico, Los Alamos National Laboratory, and other relevant authorities.

Please refer to attachment 1 for a description of the KSL work at LANL.

The Subcontractor must be able to obtain a favorable DOE Foreign Ownership, Control or Influence determination from the Department of Energy.

The Subcontractor’s Project Manager and essential personnel must be able to obtain DOE security clearances at the “L” or “Q” level.

The Subcontractor is expected to provide expertise in each of the major environmental program areas described below, and to have sufficient qualified staff available to accomplish the anticipated tasks.

The Subcontractor’s work consists of a Base Program and Work for Others Program. The Base Program is currently funded at $1.2 million for FY 03 and consists of work that is in direct support of KSL organizations. The Work for Others Program is incrementally funded by LANL work orders and consists of environmental services that are ordered by LANL organizations. Funding for the Work for Others Program can vary significantly from year-to-year depending on LANL needs, budgets, priorities, and other factors.

The work to be accomplished each year for the Base Program will- be defined in an Annual Management Plan (AMP). The AMP will consist of the Subcontractor’s approved budget for the year, and a description of the performance goals to be achieved in each of the major program areas. The Subcontractor should be . aware that budgets and performance goals may change during the course of the year because of operational emergencies, LANL direction, funding shortfalls, enactment of new laws, and other factors.

The KSL Technical Representative will provide oversight and approval of contractor activities and will be the point of contact for programmatic task review, annual management plan implementation and project performance evaluation. A review of performance against goals will be conducted quarterly.

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Major Environmental Program Areas of the
Base Program and the Work for Others Program

1.Water and Wastewater

Maintain and improve operation of the KSL operated, State-certified laboratory for coliform analyses that supports the Laboratory’s drinking water program by providing the capability to perform coliform sampling, membrane filtration tests, coliform confirmation testing, utilizing required quality assurance practices, as specified by the New Mexico Regulations Governing Water Supply.

Conduct studies on water complaints and stagnation problems as directed to KSL by the Laboratory to assess microbiological quality, develop data, and generate and implement recommendations.

Support DOE and the Laboratory’s National Pollutant Discharge Elimination System (NPDES) permit compliance program by providing the capability to perform sanitary wastewater analyses, including pH, BOD, COD, TSS, and fecal coliform analyses, and to provide collection of sanitary samples (wastewater and sludge), quality control, and operational monitoring of NPDES sanitary wastewater discharges. These tests will adhere to the methodology in the specified editions of Standard Methods for the Analysis of Water and Wastewater.

2.Hazardous and Solid Waste

Comply with applicable hazardous waste regulations by conducting inspections, maintaining documentation, and following Subcontractor and Laboratory procedures for the storage and disposal of waste.

3.Storm Water and Spill Prevention, Control, Containment (SPCC)

Develop, maintain, revise and monitor SPCC plans for KSL managed facilities and work. Provide inspection services to assure operational compliance with approved plans. Provide assistance to the KSL Engineering and Construction departments for developing storm water plans for construction activities.

4.Spill Response and Mitigation

Provide trained personnel to respond to both post-emergency response operations and non-emergency spills. Personnel will provide support on an as-needed basis at the direction of the Laboratory’s Emergency Management and Response group or the designated “Recovery Manager” for both post and non-emergency events.

5.Pollution Prevention and Waste Minimization

Implement pollution prevention plans and programs that comply with applicable regulatory requirements. Examples include, but are not limited to, pollution prevention/waste minimization strategies (such as chemical and solvent substitution,

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source reduction and segregation), and recycling. The contractor will support LANL programs for P2 (Pollution Prevention) and proactively integrate P2 strategies into KSL’s work control process.

6.Environmental Management System

Complete development of, and implement the existing KSL environmental management system (EMS). The EMS is intended to be consistent with the requirements of ISO 14001. The EMS is approximately 90% complete.

7.Air Quality

Implement a written Air Quality Management Program to comply with Clean Air Act requirements as defined in the Laboratory’s Title V Operating Permit.

Provide trained personnel to support the LANL Air Quality Group’s stack monitoring program. Program responsibilities are to record airflow measurements using properly calibrated measuring equipment.

8.Radiological characterization and sample preparation (This work is not currently performed by KSL or the incumbent subcontractor, however, KSL anticipates that this work may be performed in the future.)

Provide support to LANL groups by developing unique sampling protocols for the preparation of sediment samples for radiological analyses.

Provide characterization and sample preparation services. in contaminated facilities that are scheduled for decommissioning, decontamination, or demolition. Related services may include establishing characterization baselines, writing SOWs for D&D work, and developing plans related to D&D procurements. Provide environmental support to hazardous operations such as clean up of radiological liquid waste tanks.

The work may also include providing Radiological Control Technicians (RCT) who work under the LANL radiation protection program and provide radiation protection services to KSL work activities.

Anticipated Tasks (to be defined and prioritized in an Annual Management Plan)

1.Operate the NMED-certified microbiology laboratory (approximately 1100 square feet). Perform operational and perform compliance testing on drinking water and wastewater. Collect and analyze on average 46 membrane filtration samples per month, perform BOD (biological oxygen demand), TSS (total suspended solids), pH, and fecal coliform samples for NPDES compliance.

2.Perform RCRA inspections, site self-assessments. Monthly storage area compliance verification for 12-to 16 sites.

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3.Coordinate KSL activities with LANL’s storm water permit. Write storm water plans, verify implementation and perform inspections on impacted projects as projects arise (number varies but can be as many as six at a time during the July through September construction season).

4.Provide support to D&D, construction, and HAZWOPER Projects. Implement Site Health and Safety Plans (SHASP), complete waste profiles, and manage waste for about 1,000 small construction projects per year.

5.Environmental Management System and ISO 14001 development and operation. Complete the KSL EMS plan and implement company wide. The EMS plan is about 90% complete.

6.Line disinfections and construction project support services. The number to be performed varies based on construction activities but could be as high as 100 per year, including 1 or 2 major projects related to new construction of LANL facilities.

7.NPDES compliance and Wastewater Treatment Facilities support. Collect Wastewater Treatment Plant acceptance criteria samples, perform upstream monitoring, trouble shoot WWTP problems, and maintain NMED Level 4 certifications. The WWTP has a design flow of 600,000 gallons per day and supports a site population of about 15,000 people during normal working hours.

8.Chemical Inventory Surveillance and Review. Assess opportunities for hazardous waste reduction and elimination in all areas of KSL work.

9.Design Review for construction projects. Engage in up-front planning and design of 10-20 projects per year to incorporate pollution prevention methodologies. Design reviews will be based on potential environmental impacts including energy use, water use, waste streams, and compliance with CAA and CWA.

10.Spill response plans, SPCC implementation and oversight. Provide 24-hour response capability, support the KSL environmental response and recovery team (ERRT), and confirm SPCC compliance. Currently there are 6 SPCC

11.Radiological characterization and sample preparation (optional). Support LANL groups and/or KSL on special projects, D&D, ER as requested. Currently, there are no requirements for this work.

12.Waste management coordination. Support KSL departments that generate waste to comply with requirements. Most KSL waste streams are generated by Roads and Grounds Department, Metal Fabrication Shop, Heavy Equipment Shop, Stationary Equipment Shop, and the following craft work: carpentry, facility mechanical work, electrical work, painting, and insulating.

13.Radiological Control Technicians (optional). ACT’s may be requested to support special projects in LANL nuclear facilities. Currently, there are no requirements for this work.

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14.Pollution Prevention (P2) initiatives. This work includes waste reduction, reuse, and recycling. Apply P2 initiative to all aspects of KSL operations. Ensure generators properly characterize waste prior to disposal, (2 to 4 metric tons were generated in FY02). Develop waste stream reduction strategies. Review and implement strategies to eliminate or reduce waste.

15.Air emissions inventories and surveys. Oversee KSL operations for compliance with CAA and Title V permit requirements. KSL operates an asphalt plant and a steam-electric cogeneration plan with nominal output of 10MW.

16.Pesticide usage and reporting guidance. Provide oversight of certified applicator activities and tracking of annual usage.

17.Material reuse and recycling. Ensure compliance with Executive Order 13101 “Greening the Government Through Waste Prevention, Recycling, and Federal Acquisition Regulations”, and oversee salvage operations.

18.Oil reuse and recycling. Develop a site-wide waste oil recycling program. The current program supports the Heavy Equipment and Stationary Equipment shops. KSL desires to offer this service to all LANL organizations.

19.Underground and above ground storage tank management (UST, AST). Ensure compliance with 40 CFR 280. KSL owns one UST and two AST’s. Ensure implementation of SPCC plans for 2 >150K gallon ASTs.

20.Cooling tower management. Provide technical oversight for waste disposal, NPDES compliance, and water conservation.

21.Refrigerant Program oversight. Provide services for CM Title VI CFC management in accordance with LANL procedures.

22.LANL stack monitoring measurements. Measurements are taken about 60 times per year. Equipment is calibrated monthly and measurements are coordinated through LANL.

23.Liaison with LANL, DOE, NMED, EPA, and other regulatory agencies. Maintain regular communication with relevant regulatory agencies to provide updates on environmental programs and accomplishments.

Subcontract Deliverables

1.Annual Price Proposal to be submitted by August 30, of each subcontract base period beginning in 2004

2.Quarterly Contract Review

3.Quarterly EEO/AA Status Report

4.Annual Salary Increase Authorization request by August 30, 2003

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5.Federal Insecticide, Fungicide, Rodenticide Act (FIFRA) Compliance Report

6.National Pollutant Discharge Elimination System (NPDES) Sanitary Wastewater Test Results

7.Los Alamos National Laboratory Air Quality Operating Permit Reports

8.Annual overhead budget report to be submitted by August 1, of each year

9.OSHA 200 Log — monthly and annual summary

10.Monthly Subcontractor Injury/Illness Report

Ad hoc reports, special management reports, and other management information will be required from time to time.

Attachment:

1) KSL Statement of Work

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MODIFICATIONS

1.Increase funding by $16,643.00

2.Revise designated Subcontractor Representative

3.Increase funding by $7,889.00

4.Increase funding by $54,298.00

5.Exercise Option Period One (December 1, 2004 through November 30, 2005) and increase funding by $1,893,889.17

6.Clarify the wording for fixed fee on temporary assignments

7.Increase funding by $83,520.00

8.Increase funding by $84,448.33

9.Increase funding by $72,424.02

10.Increase funding by $8,413.00

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EX-10.7

Exhibit 10.7

Waste Management Contract

AGREEMENT

BETWEEN

THE REGENTS OF THE UNIVERSITY OF CALIFORNIA

(LOS ALAMOS NATIONAL LABORATORY)

AND

EBERLINE SERVICES, INC.

University Address:	University of California
	Los Alamos National Laboratory
	P.O. Box 1663
	Los Alamos, NM 87545
Subcontractor Address:	7021 Pan American Freeway NE
	Albuquerque, NM 87109
Agreement Number.	26725-001-01-CQ
Contract Type:	TASK ORDERING AGREEMENT (TOA)
Terms of Payment:	NET 30 DAYS AFTER RECEIPT OF INVOICE
Agreement for:	WASTE MANAGEMENT TECHNICAL SUPPORT

		FOR THE REGENTS OF THE
FOR THE SUBCONTRACTOR		UNIVERSITY OF CALIFORNIA
By:	/s/ Michael K. Kennicot	By:	/s/ Vernon J. Brown
Name: Michael K. Kennicot		Name: Vernon J. Brown
Date: July 26, 2002		Date: July 26, 2002

Agreement No. 26725-000-02-CQ

TABLE OF CONTENTS

ITEM

Cover Page

Table of Contents

Schedule consisting of:

Los Alamos National Laboratory Form 7500
Report Preparation Instructions	Appendix A
Statement of Work	Appendix B
Northern New Mexico Economic Development Plan	Appendix C
Data Deliverable Reporting Description	Appendix C-1
Health and Safety Requirements	Appendix D
Billing Rates — Fixed Price	Appendix E
Fixed Unit Prices	Appendix F
Fixed Hourly Rates — Time and Materials	Appendix G
Fixed-Price Task Order Format	Appendix H
Time and Materials Task Order Format	Appendix I
Key Personnel	Appendix J
Performance Evaluation Format	Appendix K
Small Business Subcontracting Plan	Appendix L
Quality Assurance Plan	Appendix M

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SCHEDULE

SECTION A  -  INTRODUCTION

This Task Ordering Agreement, effective July 26, 2002, is hereby made and entered into by and between the Regents of the University of California, a constitutional corporation and instrumentality of the State of California, hereinafter called the “University” and Eberline Services, Inc., hereinafter called the “Subcontractor”, whose principal offices are located at 7201 Pan American Freeway NE, Albuquerque, NM.

The University has entered into Contract No. W-7405-Eng-36 as modified (hereinafter called the Prime Contract) with the U.S. Government (hereinafter called the ^“Government”) represented by the Department of Energy (hereinafter called the “DOE”) for the performance of certain research and development work at the Los Alamos National Laboratory. This Agreement is entered into in furtherance of the performance of the work provided for in the Prime Contract.

By accepting this Agreement, the Subcontractor agrees to perform any tasks ordered by the University pursuant to this Agreement in accordance with the following terms and conditions. No other terms or conditions shall be binding upon the parties unless accepted by them in writing.

Some of the requirements herein for University approval are imposed by the Prime Contract, statute, or governmental regulation. The Subcontractor recognizes that failure to obtain approvals may jeopardize its reimbursement for costs accrued hereunder. All requests for University approval hereunder shall be directed to the person designated in Section E of this Agreement as the University Contract Administrator.

SECTION B  -  SUPPLIES AND SERVICES TO BE DELIVERED

The Subcontractor shall furnish qualified personnel, equipment, and facilities to perform the Waste Management Technical Support services in accordance with Appendix B, the Statement of Work for this Task Ordering Agreement (Appendix B) dated June 1, 2001. This Task Ordering Agreement shall be subject to the terms of special provision F-22 entitled “Indefinite Quantity”. Specific work scope will be defined within each task order issued by the University pursuant to this agreement. The University is guaranteeing that the aggregate value of task orders awarded during the initial five (5) year term of this Master Task Ordering Agreement will, at a minimum, total $1,000,000.00. This Agreement does not state or imply any obligation of the University to place any task orders with the Subcontractor in excess of $1,000,000.00, which is therefore, the minimum guaranteed amount established for this Subcontract that will be awarded against a maximum amount of $20,000,000.00, within the specified period through July 15, 2007. The University reserves the right to place no further Task Orders with the Subcontractor after issuance of a Task Order or Task Orders that are cumulatively valued at $1,000,000.00. The University also reserves the right to place orders or create subcontracts with other Subcontractors or subcontractors for the same types of services as are described within the Statement of Work for this Subcontract.

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SECTION C  -  PERIOD OF PERFORMANCE

1.The overall term of this Agreement during which the University may order and the Subcontractor will perform work specified on task orders issued hereunder is sixty months beginning on the effective date specified in_. SECTION A. The period of performance may be increased by exercise of the University’s option as described in paragraph F-8 of this Agreement. The period of performance of tasks ordered and delivery dates for any deliverable items shall be specified in each task order.

2.Reports called for under the task orders issued hereunder shall be delivered only to addressees identified in each task order in the quantities specified. Delivery to any individual or agency other than those addressees is not permitted unless specifically authorized in writing by the University Contract Administrator. A copy of each letter of transmittal for all deliverables made to the addressees identified in task orders shall be delivered to:

University of California

Los Alamos National Laboratory

Attention: Michael L. Pierotti, MS K492 Reference: 26725-00-01-CQ

P.O. Box 1663

Los Alamos, NM 87545

SECTION D  -  INSPECTION AND ACCEPTANCE

Inspection and acceptance of all items delivered under task orders issued pursuant to this Agreement shall be at Los Alamos National Laboratory, Los Alamos, New Mexico, 87545. Acceptances shall be in writing by the University Contract Administrator.

SECTION E  -  ADMINISTRATION OF AGREEMENT

1.The University Contract Administrator is: Michael L Pierotti

University of California

Los Alamos National Laboratory

P.O. Box 1663, Mail Stop K492

Los Alamos, NM 87545

Phone: (505) 665-7754

Fax: (505) 667-3953

2.The University Technical Representative is: Ray Hahn University of California

Agreement No. 26725-000-02-CQ

Los Alamos National Laboratory

P.O. Box 1663, Mail Stop J595

Los Alamos, NM 87545

Phone: (505) 665-6158

Fax: (505) 665-8347

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3.The University Technical Representative’s Designee for each task order shall be identified in the task order.

4.If Government Furnished Property or Subcontractor Acquired Property is authorized for performance of a task order, the University Property Administrator shall be identified in the task order.

5.The Patent Counsel is:

U.S. Department of Energy Albuquerque Operations Office

Office of Patent Counsel

P.O. Box 5440

Albuquerque, NM 87115

6.Address Invoices to:

University of California

Los Alamos National Laboratory

Accounting Department, Mail Stop P240

P.O. Box 1663

Los Alamos, NM 87545

7.Payments shall be mailed to:

Eberline Services, Inc

7021 Pan American Freeway NE

Albuquerque, NM 87544

SECTION F  -  SPECIAL PROVISIONS

1.Pricing

A.Task orders issued pursuant to this agreement may be priced as fixed-price, fixed unit price, and time and materials, as determined to be appropriate by the University. Schedule and/or performance incentives may be included in individual task orders when determined to be appropriate by the University.

B.The University has no legal liability for payments to the Subcontractor pursuant to this Agreement until work is authorized in writing by issuance of a task order by the University.

C.Pricing of Task Orders

(1)The Subcontractor shall submit proposals in response to requests for proposal issued by the University Contract Administrator. Fixed-price proposals shall be priced using the labor Billing Rates listed in Appendix E and/or Fixed Unit Prices listed in Appendix F for the first twelve-month period of the agreement term. Labor effort under task orders priced on a

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time and materials basis shall be priced and reimbursed using the Fixed Hourly Rates listed in Appendix F for the first six- month period of the agreement term. Billing Rates and Fixed Hourly Rates for each subsequent twelve month period shall be established by multiplying the unburdened hourly rates for the preceding period by the percent change (+ or -) ending in the 6th, 18th, 30th, and 42nd month of the agreement term as published in the Employment Cost Index, wages and salaries, by occupation and industry group Professional specialty and technical occupations of Private Industry Workers in the Monthly Labor Review. Fixed Unit Prices for each subsequent twelve month period shall be established by multiplying the then current unit prices by the percent change (+ or -) ending in the 6^th, 18^th, 30^th, and 42ⁿd month of the agreement term as published in the Employment Cost Index (ECI) for wages and salaries, by similar occupation and industrial group. Cost reimbursable proposals shall be priced using the Subcontractor’s current cost and pricing data at the time of proposal submittal. The University will not pay for proposal preparation as a direct cost.

(2)If during the term of this Agreement, the Subcontractor determines that a category of labor not already listed in Appendix E or Appendix G is necessary for fulfillment of the agreement objectives, the Subcontractor shall notify the University Contract Administrator.  Upon submission of necessary documentation by the Subcontractor, the parties may negotiate the Fixed Hourly Rate for the additional category for inclusion in Appendix E or Appendix G by a modification to this agreement.

D.Fixed Price Task Orders

The University shall be obligated only to pay the Fixed Price for labor stated in task orders priced on a fixed-price basis.  The Subcontractor shall be obligated to complete all work called for in such task orders.  The subcontractor shall be reimbursed for direct labor expended in performance of fixed-price task orders issued pursuant to this Agreement at the billing rates used in pricing each respective task order.  Reimbursable costs shall be reimbursed at actual cost.

E.Fixed-Unit Priced Task Orders

The University shall reimburse the Subcontractor for work performed or services rendered under Fixed Unit Price Task Orders based on negotiated firm Fixed Unit prices for the services or materials provided under the terms of the Task Order.

F.Time and Materials Task Orders

(1)The Subcontractor will be reimbursed for direct labor effort actually expended in performing task orders that are priced on a Time and Materials basis at the Fixed Hourly Rates stated in the task orders. Reimbursements to the Subcontractor for

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direct labor effort shall not exceed the amount stated in each task order as the maximum amount of the University’s liability for Direct Labor Charges.

(2)If Other Direct Charges (materials) are needed for performance of work called for in time and materials task orders and if the Fixed Hourly Rates listed in Appendix E do not include an allocation for such costs, funds may be allotted in task orders for reimbursement of such charges. The Subcontractor shall only be reimbursed for Other Direct Charges when funds are allotted in task orders.  Reimbursement to the Subcontractor for Other Direct Charges shall be for actual cost and shall not exceed the amount stated in each task order as the maximum amount of the University’s liability for Other Direct Charges.

(3)Direct labor charges or other direct charges that exceed the stated maximum amounts for each category shall not be reimbursed by the University to the Subcontractor even if the task order ceiling price has not been breached.

(4)The Cost Principles and Procedures of Subpart 31.2 of the Federal Acquisition Regulation in effect on the date of this Agreement shall be the basis for establishing allowability and allocability for costs. Profit shall not be paid on reimbursements for other direct charges.

(5)The total cost to the University for the performance of work called for under time and materials task orders issued under this Agreement shall not exceed the ceiling price set forth in each task order. If at any time prior to the completion date of a task order the Subcontractor has reason to believe that the work cannot be completed within the maximum amounts stated for direct labor charges or other direct charges of the stated ceiling price, he shall promptly notify the University Contract Administrator in writing providing either a request to reallocate the maximum amounts for direct labor charges and other direct charges or a revised estimate of the total cost to complete the work, including supporting reasons and documentation.

(6)The University will not pay the Subcontractor any amount in excess of the ceiling price set forth in each task order. The Subcontractor is not obligated to continue performance or otherwise incur costs in excess of the ceiling price or the maximum amounts for direct labor charges or other direct charges unless and until the University Contract Administrator has notified the Subcontractor in writing that the ceiling price and/or the appropriate maximum amount has been increased and specifies the revised maximum amounts and, if appropriate, the revised ceiling price.

G.No acceleration of effort will be undertaken or reimbursed under time and materials unless advance written approval is given to the Subcontractor by the University Contract Administrator.

H.Task orders shall be substantially in the formats of Appendices H and I.

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I.Payment

(1)Fixed-Price Task Orders

(a)The University shall pay the Subcontract, upon submission of proper invoices or vouchers, the price stipulated in each fixed-price task order for work delivered or rendered, less any deductions provided in this Agreement. Unless otherwise specified, payments shall be made upon acceptance by the University of any portion of the work delivered or rendered for which a price is separately stated in a task order.

(b)The University will withhold from payment 20% of the amount – of each invoice or voucher up to a maximum of amount of $50,000 for each task order.

(c)Except as stated in (4) below, upon completion of the requirements, including all deliverables, of each task order and submission of all documentation, certifications, and approvals required of the Subcontractor by the provisions of this Agreement, and acceptance of the work by the University, the University will pay the amount withheld on a task order.

(2)Fixed Unit Price Task Orders

The University shall pay the Subcontractor, upon submission of proper invoices or vouchers, the price stipulated in the task order price schedule for services rendered or products delivered, less any deductions provided in this agreement.

(3)Time and Materials Task Orders

(a)The Subcontractor may submit monthly billings for the direct labor performed and/or other direct charges incurred. A breakdown of the labor categories and hours charged to each and full details of any other direct charges must be included on or with each invoice.

(b)The University will withhold from payment 5% of the amount of the direct labor charges on each invoice up to a maximum amount of $50,000 for each task order.

(c)Except as stated in (5) below, upon completion of the requirements, including all deliverables, of each task order and submission of all documentation, certifications, and approvals required of the Subcontractor by the provisions of this subcontract, and acceptance of the work by the University, the University will pay the amount withheld on a task order.

(4)The amount withheld by the University on the last active task order under this Agreement will not be paid by the University until the following actions have occurred:

(a)All requirements of all task orders are completed.

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(b)Work performed by the Subcontractor on all task orders has been accepted by the University.

(c)Completion of the disposition of any Government Furnished Property or Subcontractor Acquired Property authorized pursuant to this Agreement or a task order issued hereunder in accordance with directions issued by the University.

(d)Submission by the Subcontractor or all documentation, certifications, releases, and assignments required by the provisions of this Agreement.

(5)Each invoice or voucher submitted for payment shall bear the following certification signed by an official of the Subcontractor having authority to make such certification:

“The undersigned certifies that the information set forth herein is true and correct and may be used as a basis for payment by the University for effort performed.”

2.Order of Precedence

Any inconsistency in this agreement shall be resolved by giving precedence in the following order:

a.The Agreement Schedule.

b.The Task Order

c.Task Order statement of work.

d.The Agreement statement of work.

e.The General Provisions, including the Additional General Provisions in Appendix A to this Agreement.

3.Modifications

The University Contract Administrator is the only person authorized to approve changes in any of the requirements under this Agreement and notwithstanding any provision contained elsewhere in this Agreement, the said authority remains solely with the University Contract Administrator. No statement of any person whomsoever shall in any manner or degree modify or otherwise affect the terms of this agreement, except for written statements of the University Contract Administrator. In the event the Subcontractor effects any such change at the direction of any person other than the University Contract Administrator, the change will be considered to have been made without authority and no adjustment shall be made in the Agreement price or a task order price to cover any increase in costs incurred as a result thereof.

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4.University Technical Representative

The individual identified as the University Technical Representative (UTR) is the person designated to monitor the work performed pursuant to this agreement. The UTR does not possess authority to change any of the requirements, including time of delivery or place of delivery, under task orders issued pursuant to this subcontract. Any direction accepted by the Subcontractor from the UTR or any individual other than the University Contract Administrator shall be at the sole risk of the Subcontractor.

5.Key Personnel

It having been determined that the employees whose names appear in Appendix J, or persons approved by the Contract Administrator as persons of substantially equal abilities and qualifications, are necessary for the successful performance of this Agreement, the Subcontractor agrees to assign such employees or persons to the performance of the work under task orders issued pursuant to this Agreement and shall not reassign or remove any of them without the consent of the Contract Administrator. Whenever, for any reason, one or more of the aforementioned employees is unavailable for assignment for work under this Agreement, the Subcontractor shall, with the approval of the Contract Administrator, replace such. employee with an employee of substantially equal abilities and qualifications.

6.Release of Information

Publication or other presentation of material, data, record charts, graphs, or other records developed or maintained under this agreement is prohibited except as approved in writing in advance by the University Classification Office. Your request for review and approval should be addressed to the University Contract Administrator.

7.Maintenance of Records

The Subcontractor will maintain a system of recording effort expended in direct performance of task orders issued pursuant to this agreement. Such record system will be designed to facilitate audits and reporting and will contain as a minimum, (1) the starting date and through date of each task order; (2) a current record of hours expended in performance of task orders issued pursuant to this Agreement by name and category of direct charging personnel; and (3) a full detail and documentation of other direct charges, if any, chargeable to task orders issued pursuant to this Agreement.

8.Option to Extend the Term of the Agreement

(a)The University may extend the term of this Agreement by a Modification to the agreement at least thirty days prior to the expiration date established in Section C provided that the University shall give the Subcontract preliminary written notice of its intent to extend at least 30 days before the Agreement expires. The preliminary notice does not commit the University to an extension.

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(b)If the University exercises this option, the extended agreement shall be considered to include this option provision.

(c)The total duration of this Agreement, including the exercise of any options under this clause shall not exceed 84 months.

9.Northern New Mexico Economic Development Plan

(a)Definitions.

“Northern New Mexico (NNM)” means the counties of Taos, Rio Arriba, Santa Fe, Sandoval, Mora, San Miguel and Los Alamos, including the Pueblos.

“Northern New Mexico business concern” means a business entity with a place of business located in Northern New Mexico and that makes a significant contribution to the economy of NNM through the payment of taxes and/or the use of NNM products, material, and/or labor.

(b)Upon request by the University, the Subcontractor shall submit and negotiate a Northern New Mexico Economic Development Plan that demonstrates the Subcontractor’s commitment to support economic development, corporate citizenship, and economic diversification programs in Northern New Mexico.

(c)The Subcontractor’s NNM Economic Development Plan shall describe each of the following in specific terms:

1.Each activity to be undertaken for the benefit of Northern New Mexico;

2.The methodology for achieving each of the planned activities;

3.The tangible, quantifiable, and measurable intended benefits of each activity to Northern New Mexico; and

4.The specific measurable economic benefit in dollar terms to Northern New Mexico (expressed as a performance goal tied to financial incentives).

(d)The Plan shall be designed to promote job creation, civic outreach, local workforce development and education, and/or support for Northern New Mexico business concerns. Examples of such activities in order of preference include, but are not limited to, the following:

1.NNM Businesses - The-Subcontractor-commitment to enter into long-term business alliances and lower-tier subcontracts with Northern New Mexico business concerns for goods and services, including training and mentoring programs. If lower-tier

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subcontracting opportunities exist, the Subcontractor must comply with the Laboratory’s NNM preference program.

2.Job Creation - The Subcontractor’s commitment to create new job opportunities above and beyond the normal benefits that accrue simply by virtue of entering into a contractual relationship with the University. For example, establish an office in NNM, move part of its business operation to NNM, or hire employees who reside in NNM.

3.Local Workforce Development/Education — Establishment or participation in such programs as academic awards and scholarships, educational enrichment, cooperative agreements with area schools and colleges, training, and mentoring and apprenticeships.

4.Civic Outreach — Tangible support of civic and charitable organizations in NNM, such as the United Way, Chambers of Commerce, economic development offices, etc.

(e)Should the Subcontractor fail to achieve all of the objectives contained herein, the University may deduct a portion or all of the financial incentives stipulated in the Agreement for the NNM Economic Development Plan.

(f)The Subcontractor’s Economic Development Plan is incorporated into this Agreement by reference and shall apply with the same force and effect as if it was incorporated in full text.

(g)During performance of under this Agreement, the Subcontractor’s shall

1.Maintain records, including receipts, payroll information, and other associated documents demonstrating the Subcontractor’s efforts in accordance with its Plan; and

2.Submit a report annually documenting its efforts under the Plan to the University Contract Administrator.

10.Travel Costs

Costs for transportation, lodging, meals, and incidental expenses incurred by Subcontractor personnel for travel relating to the performance of, and chargeable to task orders issued pursuant to this Agreement shall be reimbursed in accordance with the Subcontractor’s travel policy to the extent that it conforms to the provisions and limitations of FAR 31.205-46. Any reimbursement for mileage shall be at the rate at the time the costs are incurred at which employees of Los Alamos National Laboratory are reimbursed. On the effective date of this Agreement that rate is $.345 per mile.

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Subcontractor employees who reside within a 100 mile radius of Los Alamos will not be entitled to reimbursement for travel to Los Alamos National Laboratory.

11.Travel Expense Reimbursement

Lodging and Meal and Incidental Expense (M&IE) (Per Diem) reimbursement for employees of Subcontractors, at any tier, who have not established their principal residence (as defined by the Internal Revenue Service) in Los Alamos or the surrounding commuting area shall not exceed the Federal Travel Regulation (FTR) Maximum Per Diem Rates for Los Alamos County, New Mexico that are in effect at the time the travel expenditures are incurred by the employees, subject to the constraints listed below. Lodging and Meal and Incidental Expense (M&IE) (Per Diem) reimbursement for employees of Subcontractors, at any tier performing work pursuant to a task order at a work location other than Los Alamos National Laboratory shall not exceed the FTR Maximum Per Diem Rates for the locality of the work location.

(a)If an employee has rented or leased an apartment or other similar long-term accommodations, lodging reimbursement shall not exceed actual lodging cost and shall in no case exceed the FTR Maximum lodging amount per day. If more than one employee is sharing the lodging, the reimbursement per employee shall not exceed their proportionate share of the lodging expenses up to the same share ratio of the maximum daily lodging rate.

(b)Employees renting or leasing an apartment shall be entitled to Meal and Incidental Expenses reimbursement not exceeding 55% of the FTR M&IE rate per day.

(c)Employees utilizing commercial lodging facilities (motel, hotel, bed and breakfast, etc.) shall be entitled to reimbursement of actual lodging expenses up to the FTR Maximum loading amount and M&IE rate per day in effect at the time such expenses are incurred.

(d)Per diem will not be payable to employees who obtain lodging from friends or relatives (including members of the immediate family) with or without charge unless the host actually incurs additional costs in accommodating the employee and the additional costs are substantiated by the employee and are determined to be reasonable by the Laboratory. Neither costs based on room rates for conventional lodging in the area nor flat “token” amounts will be considered as reasonable.

(e)Per diem shall not be payable for workdays in which less than half of the prescribed daily working hours have been worked.

(f)Legal Federal Government holidays and weekends or other scheduled non-workdays are considered non-workdays. Employees will be considered to be in a per_. diem status on non-workdays except:

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1.when they return to their principal residence or;

2.when they are in a leave status at the end of the workday before the non workday and at the beginning of the workday following the non-workday and the period of leave on either of those workdays is more than one-half of the prescribed working hours for that day.

(g)Per diem shall not be payable for more than two non-workdays in cases where leave of absence is taken for all of the prescribed working hours between the non-workdays.

(h)Employees who must travel to Los Alamos or other locations from their principal residence shall be entitled to reimbursement for the cost of the trip from their principal residence to the work location at the beginning of their assignment under a task order and for the cost of the trip from the work location to their principal residence at the completion of their assignment under a task order.

(i)Travel between two work locations required to perform a task order will be reimbursable in accordance with the same provision as described in paragraph h.

(j)Receipts supporting all reimbursements, other than M&IE, claimed shall be submitted to support invoices than include such reimbursements.

12.Priority Rating

This Agreement is assigned a priority rating of DO-E-2 and is certified for national defense under the provisions of the Defense Priorities and Allocation System (DPAS) regulation (15 CFR 350). You are required to follow the provisions of the DPAS regulation in obtaining controlled materials and other products and materials needed to fill the requirements of task orders issued pursuant to this Agreement.

13.Safety and Health Requirements

See Appendix D for additional requirements.

A.Definition. For the purposes of this Agreement, the University’s safety-and health requirements are:

(1)The U.S. Department of Labor’s Occupational Safety and Health Standards, 29 CFR 1910 and Safety and Health Regulations for Construction, 29 CFR 1926 and

(2)Such other safety and health requirements as are specified in this subcontract.

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B.Subcontractor’s Responsibilities for Safety and Health

(1)The Subcontractor shall be responsible for the safety and health performance of its lower-tier Subcontractors and for ensuring that all of its workers and its lower-tier Subcontractors’ workers on-site at the Laboratory comply with the Subcontractor’s Safety Program.

(2)The Subcontractor shall be responsible for all claims, demands, causes of action, and suits, of whatever nature, and for all fines, penalties, and monetary damages assessed by any regulatory authority, resulting from noncompliance at the site with the University’s safety and health requirements or the Subcontractor’s Safety Program, and the Subcontractor shall indemnify and hold harmless the University from all such claims, demands, causes of action, suits, fines, penalties, and monetary damages.

C.Stop Activity

The Subcontractor shall ensure that all workers are informed that they should stop work activity if:

(1)An imminent danger exists;

(2)A change in work conditions may impact worker health and safety or the environment;

(3)An existing environment, safety or health hazard cannot be controlled; or

(4)A new environment, safety or health hazard is identified.

D.Subcontractor’s Safety Program

The Subcontractor shall establish and maintain a Safety and Health Program approved by the University. The Program shall protect personnel from inherent hazards, damage to property, and prevent unnecessary work interruptions due to accidents or deficiencies of the regulations. The Subcontractor shall submit it’s Program for review and approval no later than ten days after this agreement is awarded. The approval is granted upon the findings that the Program is in strict compliance with the local, state, and federal safety and health requirements. On-site work shall not be initiated until the approval process has been completed. The approved Program shall be read and made readily available to all on site employees.

The Subcontractor’s Safety Program documentation includes the following:

(1)Health And Safety Plan (HASP).

(2)Site Specific Health And Safety Plan (SSHASP). The Subcontractor shall submit a SSHASP that identifies the hazards associated with the work tasks and the control measures for all activities. The Subcontractor or their

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authorized representative must sign the SSHASP. The signature is an acknowledgement that the Subcontractor concurs with safe work practices and will require employee compliance with local, state, and federal safety and health requirements. Lower-tier Subcontractors will also be required to sign the SSHASP.

The SSHASP shall include:

(a)University identified site specific hazards and controls;

(b)The Subcontractors task specific hazards associated with specific job functions and their controls;

(c)University or Occupational Safety and Health Administration (OSHA) specific permit requirements;

(d)University and OSHA specific training requirements; and

(e)Site drawings, as-built drawings, or other documentation to establish protective measures required by this agreement or regulatory agency.

(3)SSHASP Changes or Modifications. The Subcontractor shall revise the SSHASP when a work activity has changed or when new or unexpected hazards are introduced. Modifications are also required when the original scope of work changes. The Subcontractor shall not conduct any work activities until the SSHASP has been approved.

(4)Confined Space Entry. The Subcontractor must have a confined space entry plan for activities that contain:

(a)A hazardous atmosphere;

(b)a material that presents an engulfment hazard;

(c)an entrapment hazard; or

(d)any other serious health or safety hazard.

(5)Discipline and Discharge. The Subcontractor shall provide a description of the procedures for removal of careless or incompetent employees.

E.Training Requirements.

The Subcontractor shall be responsible for using qualified personnel and for providing appropriate training to its personnel, in accordance: with the following requirements:

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(1)In cases where individuals require specialized training, the Subcontractor shall provide copies of training certificates and shall certify that the individuals are qualified to perform their jobs.

(2)The Subcontractor shall train workers on the contents of the site and task specific AHA, inform workers of site and task hazards and controls during a walkdown of the-work-site, and conduct a pre job safety briefing for all new work, as needed.

(3)The Subcontractor shall be responsible for utilizing trained personnel for the duration of the project. Site-specific training shall be scheduled by the University as required to support work scopes and as requested by the Subcontractor. The University will provide the following training of Subcontractor employees, when required for performance of task order requirements, at no charge to the Subcontractor.

(a)General Employee Training (GET) - 8 hours

(b)Radiation Worker I (Radworker I) - 16 hours

(c)Radiation Worker 11 (Radworker II) - 16 hours

(4)The University will make reasonable efforts to provide additional training to Subcontractor employees on request. The Subcontractor will be responsible for all cost related to this additional training, the Subcontractor shall be responsible for providing trained employees at no additional cost to the University or delay in schedules.

(5)All work classifications requiring certification or training must be maintained at the Subcontractor’s local site to facilitate inspection by the University.

(6)Before a LANL badge will be issued, all Subcontractor employees who perform work on LANL premises for more than 10 workdays during a 12-month period or will require unescorted access to nuclear facilities or radiological controlled areas must successfully complete LANL’s General Employee Training course, by passing the test after taking the class or studying the written materials. Subcontractor employees with current GET badges from other DOE sites may obtain a LANL GET badge by reading LANL-specific material.

(7)Subcontractor employees who will require access to radiological or contamination areas must successfully complete the LANL 16-hour Radiological Worker I or II Courses by passing the practical and written examinations after taking the class or studying the written materials. Retraining every two years is required. Subcontractor employees with current Radworker badges from other DOE sites may obtain LANL

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Radworker badges by presenting the DOE badge and reading LANL specific manual.

F.Deliverables.

The Subcontractor must submit the following to the University Contract Administrator:

(1)A copy of the Employers First Report of Injury or Illness (New Mexico Workers Compensation Administration Form IA-1) within 24 hours of submitting the form to the State of New Mexico.

(2)Notification of the occurrence of any incident that results in either work-related illness or injury to personnel, or loss or damage to Government, University, Subcontractor, or private property loss or damage as a result of work pursuant to this Agreement, and within 24 hours submit an Individual Accident/incident Report (U.S. DOE^-form F5484.X).

(3)Within 5 working days after the end of each month, a Monthly Man-Hours Report (BUS-5-5 Form 2).

G.Injury Reporting.

A Subcontractor employee who is injured or becomes ill on-site during normal working hours should report to the LANL Occupational Medicine Facility for evaluation and possible treatment. The Subcontractor shall immediately report any injury to an employee on-site to the University Contract Administrator by telephone, fax, e-mail, or directly. The Subcontractor shall report to the University Contract Administrator any possible exposure to a chemical or air contaminant as a result of an unanticipated event (e.g., spill) or routing operations (e.g., lead or asbestos) and any sampling that indicates an OSHA or ACGIH action level, permissible exposure limit, ceiling, short-term exposure level or biological testing (e.g., blood lead) has been exceeded.

H.Facility Specific Requirements

If additional controls, permits, or programs are required by the Facility Manager, the must be submitted by the Subcontractor and approved by the University.

14.Applicability of Organizational Conflicts of Interest

The requirements for each task order contemplated to be issued under this agreement are subject to review for Organizational Conflicts of Interest. When determined to be appropriate by the Organizational Conflicts of Interest approving official, Clause B59 of the General Provisions, entitled “Organizational Conflicts of Interest” will be cited in the task order as being applicable to the task order.

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15.Performance Evaluations

The Subcontractor will be evaluated, using the performance evaluation format included as Appendix K to this subcontract, by the University periodically during the performance of task orders issued pursuant to this Agreement in the areas of Schedule Performance, Work Products and Program Implementation, Cost Performance, and Safety Performance. A minimum of one Subcontractor Performance Evaluation Report will be prepared for each task order; the Subcontractor will be allowed an opportunity to review and comment on the contents of each report. Any comments by the Subcontractor must be submitted to the University Contract Administrator within 30 days from the date of transmittal of the report to the Subcontractor. Upon receipt of any comments from the Subcontractor within the 30-day period, the University Contract Administrator will attempt to reconcile the comments with the report contents. A report may or may not be changed as a result of the Subcontractor’s comments, however, comments will be retained with the official file copy of the Performance Evaluation Report. If no comments have been received by the University Contract Administrator after the passage of 30 the report will be considered accepted by the subcontractor. The Subcontractors Small Business Subcontracting Plan, Appendix L, and Northern New Mexico Development goals, Appendix C, will be evaluated annually.

16.Documented Quality Assurance and Inspection System

The Subcontractor maintain a documented quality assurance and inspection system acceptable to the University covering the supplies and services to be furnished under task orders issued pursuant to this Agreement. The Subcontractor shall tender to the University for acceptance only supplies and services that have been produced and inspected in accordance with this system. Records of Quality Assurance inspection by the Subcontractor shall be kept complete and available to the University during the term of this Agreement and for such longer period as specified elsewhere herein. The University may perform reviews and evaluations of Subcontractor records and facilities as reasonably necessary to ascertain compliance with this clause. The right of review, whether exercised or not, does not relieve the, Subcontractor of the obligations under the Agreement. A provision allowing the University to review and evaluate facilities and records of lower-tier Subcontractor’s shall be included in all lower-tier subcontracts under this Agreement. Once Approved, The Subcontractor’s Quality Assurance and Inspection Plan shall be incorporated into the subcontract as Appendix M.

17.Qualification and Certification of Personnel and Staff

The Subcontractor’s personnel and staff shall have the qualifications and certifications as defined in the University’s specifications to perform the processes associated with performance of task orders issued pursuant to this Agreement. Qualification and certification records shall be available for review by the University upon request.

18.Implementation of General Provision Clause A26

Data contained on pages of the Subcontractor’s proposal dated December 6, 2001 is exempt from the provisions of General Provision Clause A26 entitled “Rights in Proposal Data.”

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19.Security

The subcontractor’s personnel and staff shall comply with all applicable Security regulations.

20.Extension After performance

Notwithstanding any other article of this subcontract, the University may require the subcontractor to continue to perform the services required by this subcontract on the same terms and conditions, except as otherwise noted in this article for up to twelve (12) calendar months following the expiration of the subcontract period. The Contract Administrator will furnish written notice to the subcontractor at least fifteen (15) days before this subcontract or any extensions thereof is to expire; provided however, that any extensions of services pursuant to this article shall be for one or more calendar months. An equitable adjustment of this subcontract shall be negotiated in the event that this article is exercised.

21.Phase Out (Transition)

The subcontractor shall be responsible for development of a phase out transition plan. The plan shall include a transition milestone schedule and shall be delivered to the contract administrator following the third full subcontract year after subcontract award. The plan will cover licensing requirements and clarify all necessary issues and coordination efforts with any successor subcontractor, to establish mutually agreeable steps for phase out and phase in of the operations. The Subcontractor shall work diligently with the University, and the incumbent Subcontractor to facilitate a smooth transition and transfer of responsibilities to this Subcontract.

22.Indefinite Quantity

A.This is an indefinite-quantity Subcontract for the supplies or services specified, and effective for the period stated, in the Schedule. The quantities of supplies and services specified in the Schedule are estimates only and are not purchased by this Subcontract.

B.Delivery or performance shall be made only as authorized by orders issued in accordance with the Ordering clause. The Subcontractor shall furnish to the University, when and if ordered, the supplies or services specified in the Schedule up to and including the quantity designated in the Schedule as the “maximum.” The University shall order at least the quantity of supplies or services designated in the Schedule as the “minimum.”

C.Except for any limitations on quantities in the Schedule, there is no limit on the number of orders that may be issued. The University may issue orders requiring delivery to multiple destinations or performance at multiple locations.

D.Any order issued during the effective period of this Subcontract and not completed within that period shall be completed by the Subcontractor within the

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time specified in the order. The Subcontract shall govern the Subcontractor’s and University’s rights and obligations with respect to that order to the same extent as if the order were completed during the Subcontract’s effective period; provided, that the Subcontractor shall not be required to make any deliveries under this Subcontract after July 15, 2009.

SECTION G - - GENERAL PROVISIONS

1.Definition of terms.

The term “subcontract” as used in the General Provisions and Additional General Provisions documents cited below when used in conjunction with a task order issued pursuant to this Agreement means the task order. The use of those terms do not change the nature of this task ordering Agreement or any rights or obligations hereunder.

2.General Provisions consisting of all clauses in Los Alamos National Laboratory Form Number 7500, July 2000 edition, and appendix A to Form 7500, July 2000 addition, are incorporated into this Task Ordering Agreement by Reference, and into any Task Order awarded pursuant to this agreement.

All clauses listed below from Section B of Form 7500 are incorporated into this Task Ordering Agreement and are applicable to all task orders issued pursuant to this agreement.

B1	B13	B32	B46	B64
B2	B14	B35	B47
B3	B17	B36	B48
B5	B18	B38	B53
B6	B22	B43	B54
B8	B25	B44	B55
B10	B29	B45	B59

Additional clauses in Section B of Form 7500, clauses in Sections C, and E of Form 7500 that apply to individual task orders shall be cited in the task orders.

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APPENDIX A — REPORT PREPARATION INSTRUCTIONS

These instructions apply to all formal reports (i.e., other than letter reports or those specifically identified in the subcontract schedule as informal reports)- called for in Section B of the Subcontract schedule.

1.Reports shall fairly and completely describe the efforts applied to and the results obtained toward the achievement of the objectives of the work called for by the Subcontract. If an objective is not accomplished, such failure shall be fully documented and explained in the report.

2.Reports shall be in the following format:

a.A brief abstract describing the overall objective(s) of the work effort and the results attained toward achieving the objective(s).

b.A statement of each objective and description of the effort performed and accomplishments toward achieving the objective.

c.A list of any publication or any other information release made of material developed or maintained through the performance of the subcontract.

d.Any other information pertinent to the progress and/or accomplishment of the subcontract objectives.

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APPENDIX B

June 11,2001

STATEMENT OF WORK

TECHNICAL SERVICES IN SUPPORT OF WASTE MANAGEMENT

ACTIVITIES AT LOS ALAMOS NATIONAL LABORATORY

1.0INTRODUCTION

The Regents of the University of California, operating the Los Alamos National Laboratory (LANL), for the Department of Energy, hereafter referred, as the “University” is a multi-program Research and Development Facility. The principal missions of LANL include research, design, development, and analysis of nuclear weapons components; national interest research programs; energy and environmental research; and environmental management. The LANL facility consists of 49 technical areas (TAs). A number of these TA’s generate radioactive (TRU & LLRW), chemical, hazardous, and mixed (hazardous + radioactive) wastes as a result of research and development activities, processing and recovery operations, and decontamination and decommissioning (D&D) projects.

The Facility and Waste Operations Division (FWO) is responsible for the management of radioactive, hazardous, chemical, and solid (Sanitary) wastes generated by the laboratory in the performance of its mission. The two groups within FWO (Solid Waste Operations and Waste Facility Management) are charged with the responsibility for managing this waste. Nuclear Materials Technology (NMT) Division operates the TA-55 Plutonium Facility and the Chemical & Metallorgical Research Facility. Within this Division, NMT-7 provides waste management support for these facilities. The Environmental Science and Waste Technology (E) Division, in addition to other responsibilities, is responsible for the Transuranic Waste Certification-Pre Division’s Environmental Technology group is specifically responsible for this activity. All of these groups require support services for expert waste management technical support in the areas of regulatory compliance, environmental compliance, safety compliance, quality assurance / quality control, waste management program support, waste management technical support, on-site technical support, simulation modeling, Transuranic Waste Program support, and training support.

2.0BACKGROUND

FWO is responsible for oversight to ensure the safe, compliant, and efficient management of all waste generated as a result of activities at the laboratory. Within FWO, two separate groups provide functional waste management support to the laboratory. These groups are Solid Waste Operations (SWO) and Waste Facility Management (WFM).

Solid Waste Operations (FWO-SWO) is responsible for managing the receipt, characterization, storage, processing, treatment, transportation, and disposal of all solid waste generated by Laboratory-related activities in full compliance with Federal and State laws and regulations and

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DOE orders. Waste is managed in a safe and efficient manner, which reduces risks to the public, workers, and the environment. The types of wastes handled by SWO includes solid (sanitary) waste, New Mexico Special Waste, RCRA hazardous waste, TSCA regulated wastes, chemical waste, low-level radioactive waste, TRU waste, and low-level and TRU mixed wastes.

To accomplish its responsibilities SWO operates a number of waste management facilities. These facilities include:

•A low-level radioactive waste disposal facility, located in TA-54 Area G, with a disposal authorization granted and a performance assessment approved by DOE HQ;

•A low-level, and TRU storage facility in TA-54 Area G;

•A New Mexico permitted TSDF for the storage of hazardous waste, low-level mixed waste and TRU mixed waste located in TA-54 Area L & G;

•An EPA permitted TSCA storage facility in Area L;

•A New Mexico permitted asbestos transfer facility located in TA-54 Area J;

•An exempt Material Recycle Facility for the removal of recyclable and prohibited materials and the processing and baling of the laboratories solid waste; and

•A Radioactive Decontamination and Recycling Facility located in TA-54.

Waste Facility Management (FWO-WFM) is responsible for the management of all radioactive waste management facilities operated by FWO. In addition, WFM is responsible for the collection and treatment of radioactive contaminated and potentially contaminated water-based waste generated by Laboratory related activities in full compliance with Federal and State laws and regulations and DOE orders. To effectively manage this waste, separation processes are used to concentrate the radioactive constituents into solids. The solids are either disposed of as low-level radioactive waste at TA-54 Area G, or stored as TRU waste at TA-54 Area G pending final disposal at WIPP. The treated water is discharged into Mortandad Canyon under an EPA NPDES permit. Most waste is received through a network of buried pipelines, generally referred to as the radioactive liquid waste collection system.  Some radioactive liquid waste is, however, transported to the treatment facility by truck.

As the Facility Manager, WFM is responsible for:

•Determining waste management facilities operating limits through the hazard analysis process including the development of Safety Analysis Reports, Development and maintenance of Area G Performance Assessment under DOE 0 435.1, USQ determinations, and other activities associated with the facilities Authorization Basis;

•Efficient and effective maintenance of the waste management facilities structures, systems, and components capabilities and assets;

•Training and qualification of waste management personnel;

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•Emergency Preparedness at waste management facilities;

•Quality Assurance, Industrial Safety, and Radiological Protection activities in support of waste management activities.

•The authorization of new or expanded work activities within the Waste Management Facilities.

To accomplish its radioactive liquid waste treatment responsibilities, WFM operates a number of waste management facilities. These facilities include:

•The Radioactive Liquid Waste Treatment Facility at TA-50;

•The DP plant located at TA-21 building 257; and

•The Radioactive Liquid Waste system at TA-53.

The LANL organization responsible for implementation of the Transuranic (TRU) Waste Characterization/ Certification Program (TWCP) is the Environmental Science and Waste Technology (E) Division, Environmental Technology Group (ET). The LANL TWCP Site Project Manager in E-ET is responsible for overseeing all TWCP activities at LANL.

The TWCP consists of personnel who sample and analyze waste; validate and report data; waste certification; transportation; and provide project management, quality assurance, audit and assessment, training and records management support, all in accordance with established requirements for disposal of TRU waste at the Waste Isolation Pilot Plant (WIPP) facility.

TWCP personnel characterize TRU waste on a waste stream basis by obtaining chemical, radiological, and physical data. A waste stream is defined as a waste material generated from a single process or activity that is similar in material, physical form, and hazardous constituents. The TWCP characterizes and certifies retrievably stored and newly generated TRU waste using acceptable knowledge, testing, sampling, and analytical techniques to meet specific data quality objectives.

The TWCP operates under the Quality Assurance (QA) Program outlined by the Carlsbad Area Office (CBFO), the WIPP Waste Acceptance Criteria and the WIPP Resource and Recovery Act (RCRA) Permit. (The WIPP Waste Acceptance Criteria and the WIPP Resource Recovery Act Permit can be accessed at WWW.Wipp.carlsbad.nm.usi) The provisions of the program apply to all programs and projects managed by the CBFO which require a QA program including activities-related-to-waste-, regulatory-compliance, and nuclear safety. This program is developed and maintained through an ongoing process that applies the varied QA program criteria. The program delineates the quality contributions expected of all personnel and encourages active participation in implementing the QA program.

NMT-7 is the centralized waste management activity for both the TA-55 Plutonium Facility and the Chemical & Metallurgical Research Facility. These facilities are one of the major operational and research & development facilities within LANL. NMT-7 is the infrastructure support organization for the major waste generator within the Laboratory and generates considerable

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quantities of TRU, LLRW, chemical, hazardous, and mixed wastes. The CMR facility is currently undergoing extensive modifications. As a result, NMT-7 is responsible for the management of D&D waste generated as a result of this activity. The work described herein, may be coordinated by the Contract Administrator through NMT-7, to supply direct support to other NMT Groups operating within TA-55 and CMR.

3.0SCOPE

The Subcontractor shall in accordance with the terms and conditions of this Subcontract and in response to_. Task Orders that will be issued by the University provide regulatory and technical support to FWO-SWO, FWO-WFM, E-ET, and NMT-7 in the following areas:

•Regulatory Compliance

Provide regulatory review, analysis, and evaluation of conceptual designs, operational plans, procedures, and other applicable documents. Preparation and revision of waste management technical, management, and other applicable documents dealing with regulatory issues. Provide reports, studies, and analysis of new or existing regulatory requirements and their effect on waste management operations at the Laboratory.

•Environmental Compliance

Provide environmental review, analysis, and evaluation of conceptual designs, operational plans, procedures, and other applicable documents. Preparation and revision of waste management technical, management, and other applicable documents dealing with environmental issues. Perform environmental audits and appraisals to evaluate conformance to RCRA, TSCA, NMED, DOE and laboratory requirements. Provide analysis of existing and new environmental regulations pertaining to waste management operations. Evaluate and analyze new and current Federal and State Permit requirements and assist in the preparation of modifications to existing permits. Provide technical support for the on-going compilation of waste management facility environmental and operational surveillance data and conduct an analysis of trending of the data using existing databases. Provide a review of potential new waste streams and other issues for their impact on documents such as the Waste Acceptance Criteria and the Performance Assessment. Provide support in the maintenance of Area G’s Performance assessment which may include conducting analysis to reduce uncertainties, review on-going and proposed disposal operations with the scenarios and assumptions used in the Performance Assessment to determine potential effects on disposal site performance.

•Safety Compliance and Oversight

Provide support in the implementation of the Integrated Safety Management System (ISMS) process. Provide safety review, analysis, and evaluation of conceptual designs, operational plans, procedures, and other applicable documents. Preparation and revision of waste management technical, management, and other applicable documents dealing with safety issues. Perform assessments and audits of waste management activities to ensure compliance with ISM principles. Provide reports, studies, and analysis of new or existing safety requirements and their

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effect on waste management operations at the laboratory. Provide technical advice and assistance in the area of safety to waste management activities.

•Quality Assurance / Quality Control

Provide support in the preparation of quality assurance program plans and quality improvement processes in accordance with DOE Order 414.1A. For some of the work covered by the Statement of Work, the subcontractor may be subject to the requirements of 10 CFR 830.120 and enforcement actions under 10 CFR 820. The Specific Task Order that may be issued for this type work, will identify when the Subcontractor is subject to 10 CFR 830.120 and the enforcement action under 10 CFR 820.

Development and implementation of associated document control and records management programs. Perform assessments and audits to measure quality and process effectiveness. Preparation and implementation of associated QAIQC procedures, plans, and studies. Provide quality assurance review, analysis, and evaluation of conceptual designs, operational plans, procedures, and other applicable documents. Preparation and revision of waste management technical, management, and other applicable documents dealing with quality assurance issues. Develop audit plans, conduct, and document vendor audits of waste management facilities, service companies and equipment suppliers. Develop plans, programs, and procedures for the receipt inspection of vendor-supplied equipment, services, and materials.

Prepare and/or review plans and procedures, prepare assessment or surveillance checklists, perform assessments or surveillance’s, assist in closure of deficiencies or findings from internal or external assessments, perform trend analyses, update calibration reports, assist with software quality assurance, perform batch data report reviews, and evaluate revisions to regulatory agency or DOECBFO programmatic documents and assess the impacts of these changes to the TWCP. One draft, one review cycle, and one final will be provided for any documents developed under this task.

Support the TWCP project office with project level reviews, validation of batch data reports, compilation and review of waste stream summaries, waste container reports, and other required reports. Assist the TWCP Site Project Manager with reconciliation of data quality objectives (DOO), UCL 90 calculations, and other similar functions. One draft, one review cycle, and one final will be provided for any documents developed under this task.

Assist the TWCP staff with WIPP Waste Analysis Plan, WIPP Waste Acceptance Criteria, and Quality Assurance Program Document compliance evaluation. Assist with updating of TWCP and facility procedures and plans based on the compliance evaluations.

•Waste Management Program Support

Provide waste management programmatic review, analysis, and evaluation of conceptual designs, operational plans, procedures, and other applicable documents. Preparation and revision of waste management technical, management, operations, and other applicable documents, studies, and reports as it relate to waste management programmatic activities. Develop and implement program management support systems, including but not limited to budget

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estimating, cost tracking, document control and records management, project management, and program planning.

•Waste Management Technical Support

Provide waste management technical review, analysis, and evaluation of conceptual designs, operational plans, procedures, and other applicable documents. Preparation and revision of waste management, technical and management documents, and other applicable documents. Provide evaluation and analysis of new or current waste management technologies that may have applicability to the laboratory. Conduct evaluations of current waste management facilities, systems, processes, and operations to identify improvements in safety, compliance, effectiveness, efficiency, and cost. Provide technical support on generator certification program including the review of generator documentation, waste volume projections, and conducting of implementation verification audits. Provide assistance in the radiological, chemical, and physical characterization of generator waste. Provide technical support in the development of facility operations and maintenance programs for waste management facilities. Provide technical assistance in the development of waste acceptance criteria, sampling and analysis plans, hazard control plans, preparation of standard operating procedures (SOP’s) work instructions (WI), and detailed operating procedures (DOP’s) for waste management operations.

•On-Site Technical Support

As required and for limited duration provide experienced and technically qualified personnel to assist in waste management operational activities at the laboratory. Task orders awarded, will include specific requirements and deliverables against scheduled milestones.

•Training Support.

Provide support in the performance of job task analyses and identification of OSHA, RCRA, DOE, and Laboratory training requirements for waste management personnel. Design and development of associated lesson plans and course materials. Provide classroom training in areas relevant to solid, hazardous and radioactive waste management. Provide support in waste management personnel qualification documentation.

•Simulation Modeling and_. Database Support

Develop simulation models to support waste management reengineering and aqueous recovery processes using EXTEND and SDI industry software. The model shall be designed to query unclassified inventory data. Required model output shall include process consequences in terms of actinides recovered, waste generated, cost, and personnel exposure (dose) for iterative postulated act-concentration-based discard limits. Software quality assurance procedures shall meet DOE G 200.1-1, Software Engineering Methodology. Support the development, population, and update of databases in efforts to streamline the TWCP characterization and certification activities. Support the development, population, and update of databases in an effort to improve or expand the management of TSDF or liquid waste processing activities.

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•Material Removal

Support the material removal project at the CMR building. Identify, categorize, and document all items to be removed. Create an inventory list by the use of barcode and electronic databases. On a priority bases begin removing the identified items. Maintain compliance with Laboratory and DOE facility requirements for safety and health. Assure compliance with state and federal regulations. Coordinate with in-house technical groups to assure minimal impacts to on-going operations. Although this task is specifically designed for the CMR building, other similar facilities may require legacy material removal during the course of this Scope of Work.

•Transuranic Waste Program Support

Support the Site Project Manager with updates and revisions to the TWCP Sampling Plan.  Assist the Site Project Manager with TRU waste stream designations, querying existing databases, assigning matrix parameter categories to waste containers, and reviewing characterization data against Sampling Plan information. One draft, one comment cycle, and one final of the Sampling Plan will be provided.

Support the development of interface documentation (TWID) for LANL TRU-Waste generators. This task will require an active “Q” clearance and will involve direct communication and ma ‘oft of LANL TRU waste generators. One draft, one review cycle, and one final will be provided for any documents developed under this task.

Support the LANL TWCP Waste Certification Officer with WAC compliance verification, Certification Plan maintenance, WWIS data input, etc.

Support the TWCP Project Office with work planning activities, identifying waste containers in storage that require characterization, etc.

Support TWCP in the acceptable knowledge (AK) development process including compilation, review, documentation and submission of AK Summary Reports for specified waste streams. Also included are the resolution of AK discrepancies and compilation of the auditable AK records package.

4.0APPLICABLE DOCUMENTS

The following is a list of regulations and documents applicable to work performed under this procurement. Subcontractor shall be experienced and knowledgeable in each of these documents.

4.1Federal Regulations

•Atomic Energy Act, as amended (AEA)

•LLRW Policy Act, as amended

•National Environmental Policy Act (NEPA)

•Toxic Control Substance Act (TSCA)

•Federal Facilities Compliance Act (FFCA)

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•Resource Conservation and Recovery Act (RCRA)

•Hazardous and Solid Waste Amendments Act (HSWA)

•Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)

•Clean Water Act (CWA)

•Superfund Amendments and Reauthorization Act (SARA)

•10 CFR Part 20 Subpart K & Appendix G Standards for Protection Against Radiation

•10 CFR Part 61 Licensing Requirements for Land Disposal of Radioactive Waste

•10 CFR Part 71 Packaging and Transportation of Radioactive Materials

•10 CFR 830.120 Quality Assurance

•10 CFR 835 Occupational Radiation Protection

•29 CFR 1910 Occupational Safety and Health Standards

•29 CFR 1926 Safety and Health Regulations for Construction

•40 CFR Subchapter F (Parts 190-195) Radiation Protection Programs

•40 CFR Subchapter I (Parts 239-299) Solid Waste

•40 CFR Subchapter R (Parts 700-799) Toxic Substance Control Act

•49 CFR Chapter 1(Parts 100-185) Hazardous Materials and Oil Transportation

4.2DOE Orders

•DOE 0 200.1 Information Management Program

•DOE 0 210.1 Performance Indicators and Analysis of Operations Information

•DOE O 360.1 Training

•DOE 0 414.1A Quality Assurance

•DOE O 420.1 Facility Safety

•DOE O 425.1 Startup and Restart of Nuclear Facilities

•DOE 0 430.1A Life-Cycle Asset Management

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•DOE O 435.1 Radioactive Waste Management

•DOE M 435.1-1 Radioactive Waste Management Manual

•DOE G 435.1-1 Implementation Guide for DOE M 435.1-1

•DOE O 440.1A Worker Protection Management for DOE Federal and Contract Employees

•DOE P 450.4 Safety Management System Policy

•DOE 0 460.1A Packaging and Transportation Safety

•DOE O 460.2 Departmental Materials Transportation and packaging Management

•DOE 0 5400.1 General Environmental Protection Program

•DOE 0 5400.5 Radiation Protection of the Public and^-the Environment

•DOE 0 5480.19 Conduct of Operations Requirements for DOE Facilities

•DOE 0 5480.20A Personnel Selection, Qualification, and Training Requirements for DOE Nuclear Facilities

•DOE 0 5480.21 Unreviewed Safety Questions

•DOE 0 5480.22 Technical Safety Requirements

•DOE 0 5480.23 Nuclear Safety Analysis Reports

•DOE 0 5633.3B Control and Accountability of Nuclear Materials

•DOE 0 6430.1A General Design Criteria

4.3Other Relevant Documents and Regulations

•NMAC Solid and Hazardous Waste Regulations

•Laboratory Work Smart Standards (UC Contract No. W-7405 ENG-36 Appendix G)

•Laboratory Implementation Requirements (LIR’s)

•DOE/LANL RCRA Operating Permit

•Attachment B, Waste Analysis Plan , to the Hazardous Waste Facility Permit (EPA No. NM48901308) issued to the WIPP

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•U.S Department of Energy Carlsbad Area Office, Quality Assurance Program Document (CBFO-94-1012)

•Waste Acceptance Criteria for the Waste Isolation Pilot Plant (DOE-WIPP 069)

•Los Alamos National Laboratory Transuranic Waste Quality Assurance Project Plan (TWCP-PLAN-0.2.3-001)

•Los Alamos National Laboratory Transuranic Waste Quality Assurance Management Plan (TWCP-PLAN-0.2.6-001)

•Los Alamos National Laboratory Transuranic Waste Interface Documents
•Los Alamos National Laboratory Transuranic Waste Characterization Sampling Plan (TWCP-PLAN-0.2.7-001)

•Los Alamos National Laboratory Transuranic Waste Certification Plan (TWCP-PLAN-0.2.4-001)

•Applicable Los Alamos National Laboratory Transuranic Waste Certification/Characterization Project Quality Procedures, Detail Technical Procedures, etc.

5.0TECHNICAL REQUIREMENTS

The specific technical requirements for each task shall be identified in the Task Order document issued for each specific task within the general task areas described in the Scope that the subcontractor is requested to perform. For some of the work covered by this Statement of Work, the subcontractor may be subject to the requirements of 10 CFR 830.120 and enforcement actions under 10 CFR 820. The Specific Task order that may be issued for this type work, will identify when the Subcontractor is subject to 10-CFR 830.120 and the enforcement actions under 1-0 CFR 820.

6.0DELIVERABLES

6.1Complete monthly progress reports as required by the requestor in the Task Order that outline by specific task the activities that have been performed to-date, the activities that need to be performed in the future, a schedule of when these activities will be completed, and the expected cost to complete the task.

6.2Submit monthly accrual information to FWO-SWO budget analyst.

6.3Submit other deliverables as required by the Task Order document on a task by task basis.

6.4Small Business and Northern New Mexico Plans and semiannual reports.

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7.0GOVERNMENT FURNISHED PROPERTY

The University may furnish the subcontractor with government furnished property under the activities performed under a specific task order, Statement Of Work. The types of government furnished property if any will be limited to an area for workspace, computer access and a centrally located telephone for use in completing each task. All government furnished property to be provided will be specifically outline in the Task Order. For the majority of the activities outlined in this Statement of Work it is expected that the subcontractor would complete the requirement off-site (i.e. company offices). The subcontractor is required to provide to the technical staff the equipment necessary to complete the task.

8.0SPECIAL CONSIDERATIONS

Completion of assigned tasks may require travel by contractor personnel to the WIPP, other DOE facilities, vendor facilities and other locations. The Subcontractor shall be reimbursed for allowed travel costs associated with performing assigned tasks when billed to LANL in accordance with the Federal Travel Regulations geographic rates for hotels and meals.

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APPENDIX C - NORTHERN NEW MEXICO ECONOMIC DEVELOPMENT PLAN

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2NORTHERN NEW MEXICO ECONOMIC DEVELOPMENT PLAN

The Eberline Services team understands and is committed to support Los Alamos National Laboratory (LANL) efforts to contribute to the economic development of Northern New Mexico (NNM). We are committed to assisting and partnering with LANL, the Northern New Mexico Regional Development Center (RDC), and local communities in meaningful initiatives that have long-range economic benefits in NNM.

NNM economic development and corporate community stewardship is not only a requirement under this subcontract, but also an Eberline Services corporate value that mirrors our employees’ values. The majority of our Team’s employees that have been proposed to support this subcontract reside in NNM. As residents, we have a vested interest in the economic health and development of NNM. For this reason, compliance with LANL’s NNM economic development efforts is mutually beneficial.

2.1PURPOSE OF THE PLAN

The Eberline Services Team NNM Economic Development Plan (the Plan) identifies the resources, partnerships, and planned activities for contributing to NNM economic development.  The Plan demonstrates our commitment to support NNM economic development and diversification, and corporate stewardship.  This plan will be updated annually during the subcontract.

The Plan presents the following information:

•Corporate history, including information on past economic development efforts and our history of achieving economic development goals

•Plan administration and management, outlining the roles and responsibilities of our Economic Development Implementation Team

•Economic development commitments, describing the level of corporate commitment and the total benefit, expressed in dollar-value

•Economic development projects, describing projects that we have selected to support, including resources and methodology, desired outcomes, and criteria for success or performance metrics for our commitments.

2.2CORPORATE HISTORY

Eberline Services and its teaming partners, Los Alamos Technical Associates, Inc. (LATA), Duke Engineering & Services (DE&S), and S.M. Stoller Corporation (Stoller), have a proven track record of supporting NNM initiatives, through our hiring and employment practices, mentoring and educational programs, volunteer and civic outreach efforts, charitable contributions, and regional purchases and subcontracting.

Eberline Services and LATA are active members of the NNM community and have:

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•Hired student interns from NNM Community Colleges

•Recruited and hired college graduates from NNM communities

•Participated in the Rio Grande Minority Purchasing Council

•Contributed to the LANL Foundation

•Contributed to NNM charitable organizations and events, including United Way of NNM, NNM Community College scholarship fund, Mesa Public Library, Habitat for Humanity, American Legion Los Alamos Chapter, Los Alamos Elks Lodge, Local Chapter of the American Red Cross, Espanola Valley Basketball League, KRSN AM radio broadcast station for emergency broadcast capabilities, and various Cerro Grande fire recovery funds and efforts.

Our past and current subcontracts have not included specific economic development goals or requirements, per se.  However, our history of achieving small business and economic development initiatives can be demonstrated by the following examples.

•Eberline Services has directly supported Johnson Controls Northern New Mexico^’s (JCNNM’s) economic development initiatives, working with Mr. Mike Shepherd and Mr. Wayne Worden. As a subcontractor to JCNNM, we are strongly committed to ensure that they meet their economic development performance goals required under their prime contract with LANL and the University of California (UC). In support of their goals, we have provided staff resources, third party technical assistance, and corporate support to the Nambe cardboard recycling efforts, NNM recycling fairs, and other community outreach events. We have supported Mr. Shepherd with implementing projects that meet the economic development goals, as well as tracking and reporting on those projects and goals.

•Eberline Services employees are directly involved in numerous charitable, educational, and environmental volunteer activities in NNM communities. Our employees serve as tutors for disadvantaged students with reading difficulties, provide classroom presentations on environmental issues, serve as judges at science fairs and as sponsors of recycling activities. We also volunteer professional services for activities such as Household Hazardous Material turn-in days, and design of environmental solutions to community problems.

•We estimate that over 90% of Eberline Services’ procurements by our Los Alamos-based office (in White Rock) is to NNM businesses. We have procured from over 15 different companies in Los Alamos, Santa Fe, Espanola, and Pojoaque, and we estimate our past and current NNM procurements at over $7,000 per month, exclusive of office rental expenses.

•Eberline Services, under previous ownership as a large business, built a track record of providing subcontracting opportunities to qualified small, small disadvantaged, and women-owned small businesses. Under our current subcontract with LANL to provide

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waste management support services, (Subcontract No. B4537007-8N) we have subcontracted over $1 million of $11.6 million to small business as in NNM. Much of this subcontracting was accomplished at a time when our company was also a small business.

•As a subcontractor at the U.S. Department of Energy (DOE) Hanford site, Eberline Services has a seven-year history of community support through charitable contributions, civic outreach, and support to local colleges. In 2000, our financial contributions to these communities exceeded $12,000.

•Our Team partner, DE&S, has a 100% compliance record meeting Economic Development goals on their subcontracts at the Hanford site, including contributions to local organizations and community outreach events.

•Our team partner, LATA, routinely contributes more than $2,000 per year to various NNM initiatives in the areas of health and human services, education, economic development, and the environment. LATA has been a corporate sponsor of the LANL Foundation since its inception, contributing over $30,000 to this important organization. LATA gives purchasing preference to the NNM small business community and, together with its Environmental Remediation Project subcontractors, has established a NNM investment pool (approaching $200,000 in funds) for placement with a worthy regional business venture.

2.3PLAN ADMINISTRATION AND MANAGEMENT

The Team has appointed a NNM Economic Development Implementation Team and a Program Administrator, Ms. Camille Bustamante, responsible for the implementation and management of the Plan. The assignment of designated roles and responsibilities to the Implementation Team will ensure the success of the Plan and provide it the visibility and attention that it requires.

To date, the Implementation Team has already acted to develop this Plan; secure necessary corporate support, commitments, and resources; and identify selected projects that benefit NNM. Upon award of the subcontract, our Implementation Team will initiate efforts to execute the Plan and monitor performance and progress. The Team will:

•Establish policies and procedures for implementing project initiatives, allocating resources, scheduling and prioritizing activities, interfacing with community/project leaders (points of contact), and tracking and reporting

•Establish a quality assurance program for the Plan and projects to assess progress relative to the established performance measures and desired outcomes

•Interface with the Project Manager, Mr. Michael Kennicott, and the team partners to ensure that the required support and resources are made available

•Interface with the RDC, community leaders, and designated points-of-contact for projects to identify and prioritize resource allocation

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•Make resource assignments as necessary to implement projects

•Prepare and submit required reports to LANL to describe the ongoing initiatives, progress, commitments and success measures. Reports will follow the format outlined in Request for Proposal (RFP) No. 26725-RFP-02-CQ, Attachment 5 and will be submitted semi-annually, or under another schedule as determined by the University Contract

Ms. Bustamante has been identified as the Program Administrator for our Economic Development Plan and will be responsible for administering the program, implementing the initiatives, and tracking and reporting our progress. Ms. Bustamante is bilingual and a long-time resident of the NNM community. She has a proven track record with outreach and economic development projects, as evidenced by her current role and accomplishments as the Recycling Coordinator on Eberline Services’ subcontract with JCNNM. She works closely with the JCNNM Economic Development Program Manager, assisting with implementing projects and meeting the program’s NNM economic development goals. Ms. Bustamante has worked with the Nambe Recycling Facility preparing grant and funding proposals and conducting research to identify new markets and recycle opportunities: She has successfully planned and implemented recycling fairs and other community outreach events.  Ms. Bustamante is experienced in preparing work scopes, managing subcontractor performance, and tracking and reporting progress relative to established performance measures.

As part of our Plan, Eberline Services will contribute Ms. Bustamante’s labor to perform her role as Program Administrator. During the first year of the subcontract, Ms. Bustamante will spend a minimum of 240 hours to initiate and implement the program. In subsequent years (2 through 5) a minimum of 96 hours per year will be invested in administrating the program and ensuring its success.

The Implementation Team will include additional resources and representatives from each Team partner:

•Ms. Suzanne Hartnett, Eberline Services

•Mr. Robert Edmunds, DE&S

•Ms. Sharon Potter, LATA

•Ms. Denise Gelston, Stoller.

2.4  ECONOMIC DEVELOPMENT COMMITMENTS AND METHODOLOGY

Under this Plan, our intent is to identify and implement corporate initiatives for NNM economic development projects that are above and beyond our ongoing activities. The NNM economic development commitments proposed under this plan are outlined in Table 1. Details on specific projects and initiatives are provided below.

Under this Plan, our methodology to support economic development programs in NNM includes the following:

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•Developing and expanding business relationships in NNM through the increased regional procurements of goods and services and NNM small business utilization.

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Table 1. Summary of NNM Economic Development Commitments

Initiative(1)	Commitment	Benefit or Value(2) (Express in Dollars)
0.Program Administrator	Staffing by Program Administrator and Economic Development Implementation Team will be contributed at Year 1 Min 300 staff hours Years 2-5 Min 120 hours per year Hours will be adjusted upwards as needed to meet project requirements	Year 1 = $118K Years 2 through 5 = $?      ? Per year Total Value for 5 year subcontract = $40 K
1.Business Relationships in NNM
1ANNM Small Business Subcontracting and Procurements	A minimum of 10% of total task value will be subcontracted to NNM Small Business interests. (Equal to 50% of small business subcontracts, as referenced in the Small Business Subcontracting Plan)(3)	$ 400K per year Total Value = $2M
1BRegional Purchasing/NNM Procurements	Purchases of goods, supplies, and services from NNM businesses will be at $150K per year (based on current and expected practices and values).	$ 150K per year. Total Value = $750K
2.In-Kind Support to NNM Communities, Projects, or Businesses
2ANambe Recycling Facility Glass Pulverizer and Eco Park Project	In-Kind Technical Service (professional service hours) contributed will equal to 0.5% (one half of one percent) of Direct Labor hours billed to tasks. A minimum of 360 hours of professional service per year will be contributed at an estimated value of $18K per year, allocated among projects.(4)	Minimum $18K per year Total Value = $90K
3.Workforce Development, Education, and Job Creation
3ASupport to Sandoval County Jemez Valley communities, including City of Jemez Springs and Jemez Pueblo	In Kind Technical Semite (professional service hours) contributed will be a minimum of 100 hours per year, estimated at per year. Training Assistance will be contributed to sponsor two training courses per year, estimated to cost $2K per year.	$ 7K per year Total Value = $35K

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3BNNM-Focused Recruiting, Hiring, and Student-Intern Program	Financial Resources will be invested in a recruiting program at $8.4Kper year. Under the program we will commit to establish and hire two full time positions per year. A minimum of two student-intern positions (32 hr/week), will be established per year. Financial resources will be committed to these positions, at estimated $41.5K per year.	$ 49.9K per year Total Value = $249.5K; 2 jobs created; 2 intern positions created
3CScholarship and Educational Assistance Program	Financial Resources will be contributed to scholarships and student intern educational assistance.	$ 8K per year Total Value (for 5 year subcontract) = $40K
4.Civic Outreach Donations
4ASupport to Los Alamos or Espanola Household Hazardous Waste Collection Day(s)	In-Kind Technical Service professional service hours contributed will be a minimum of 4 hours per year estimated $200 per year. Volunteer Hours will be contributed at a minimum of 64 hours per year.	$ 200 per year = Volunteer hours Total Value = $?K Volunteer hours
4BDonations to NNM charities and community organizations	Financial Resources or other donations will be contributed equal to $5K per year.	$ 5K per year Total Value = $25K

(1)Specific projects are identified and described in Section 2.5.

(2)Estimated values assume subcontract task order awards of $4M per year, with 5-year subcontract life.

(3)Refer to the Small Business Subcontracting Plan, Section 7

(4)The 0.5% of billable hours represents the total amount of in-kind technical service hours that are committed under this plan. This amount will be split among the projects as determined by the Implementation Team

•Contributing technical/professional expertise (in-kind service) to businesses or community projects that benefit the region’s economic development. Our Team specializes in providing high-quality professional services in the areas of Environmental, Safety, and Health (ES&H) management. In support of economic development projects, we will contribute in-kind professional services in these specialty areas. These services will provide necessary expertise to enhance ongoing business operations, facilitate the start up of new operations and markets, and promote environmental stewardship and protection in NNM.

•Providing training, education, or workforce development opportunities.

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•Providing volunteer services, civic outreach, and charitable donations.

In selecting specific economic development projects for support, we used the criteria outlined below. These criteria will also be used in selecting future projects for the economic development initiatives.

•Work with the NNM RDC. Eberline Services has worked with the RDC through our current subcontract with JCNNM, and we have found it a valuable resource for identifying projects that benefit the NNM communities. For this Plan, we referenced the RDC to identify specific projects that have applied for LANL subcontractor assistance and selected specific projects for support. The projects identified include the Nambe Recycling Facility’s (NRF’s) Glass Purlverizer Project and Eco Park Project. As funding allows, additional or alternate RDC projects will be supported.

•Work with NNM community leaders to identify Other community-based projects. To demonstrate that our commitment goes beyond our current involvement with the RDC, we commit to identify, and support other NNM community-based projects that are not identified bn the RDC, but still benefit NNM. These include special projects in the Jemez Valley (Sandoval County), the Espanola Valley, or Taos County. Selected projects are discussed in the following section.

As the Plan progresses, a similar approach will be used to identify and select future projects for support.

2.5 ECONOMIC DEVELOPMENT PROJECTS

The specific projects, programs, or initiatives that our Economic Development Plan commits to support are described below and summarized in Table 2. The total benefit, expressed in dollar terms, is shown for each project in Table 2. However, the actual number of projects and the level of commitment will depend on the amount of work issued under the subcontract.

2.5.1 Business Relationships in NNM

Project IA NNM Small Business Subcontracting and Procurements

Description. The Eberline Services team is committed to NNM small business utilization for services and goods to enhance business relationships and contribute to the economic growth of these businesses. Through this subcontract, we will have an opportunity to expand our use of NNM small businesses, creating lower-tier subcontracting opportunities and long-term business alliances. Our commitment is further described in our Small Business Subcontracting Plan in the Appendix.

Methodology for Implementing Our Commitment. A minimum of 10% of the work awarded under this subcontract will be performed by NNM small businesses through lower-tier subcontracts and business alliances. This represents 50% of the total small business subcontracting that we commit to under our Small Business Subcontracting Plan. The Economic Development Implementation Team will maintain appropriate records, receipts, and other documents to demonstrate and report progress toward this commitment.

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Intended Benefit/Impact. Enhance business relationships and contribute to the economic growth of NNM small businesses.

Total Commitment. $400K per year; $2M total value over the 5-year life of the subcontract. (Assuming $4M per year in awarded tasks under the subcontract.)

Project IB: Regional Purchasing/NNM Procurement

Description. Similar to our small business commitments, the Eberline Services team is committed to purchasing from NNM suppliers whenever technical and economically feasible. We have an active regional purchasing program currently in place, and under this subcontract, all team members will have the opportunity to expand our purchases of materials, equipment, and services from regional suppliers. Under this Plan, the Team commits to increasing our regional procurements, implementing a program to give preference to purchasing materials, supplies, and services from members of the NNM Supplier’s Alliance (NNMSA) whenever possible. If there is a need that cannot be met through the NNMSA, we will work with the LANL Small Business Office to locate other possible suppliers.

Methodology for Implementing Our Commitment. An estimated $150K per year will be spent with NNM suppliers for purchases of goods and services. This will include rental or lease expenses; purchases of materials and supplies, equipment, and computers; travel and lodging expenses tendered to NNM merchants; janitorial and maintenance services; and other services. Our Implementation Team will develop a system for tracking, reporting, and documenting qualified regional purchases maintain appropriate records and receipts.

Intended Benefit/Impact. Enhance business relationships and contribute to the economic growth of NNM small businesses.

Total Commitment. $150K per year, based on current and expected expenditures; $750K over the 5-year life of the subcontract.

2.5.2 In-Kind Support fo NNM Communities, Projects, or Businesses

Project 2A: Support to Nambe Recycling Facility Glass Pulverizer and Eco Park

Description. The NRF is located on and owned by the Nambe Pueblo. Eberline Services has an established relationship with the NRF through our subcontract with 1CNNM, providing them with professional support to identify recyding markets for their cardboard and baleing operations. Under this plan, we commit to increasing our partnership with the NRF to assist with the purchase, installation, and operation of a glass pulverizer, and with the Eco Park expansion.

The addition of glass pulverizer equipment to the NRF would significantly expand their operation’s capabilities and recycling opportunities. The equipment would process tons of waste glass creating a marketable product that would be used in landscaping and road projects. The glass crushing operations will have a strong, positive impact on glass recycling programs in Santa Fe, Los Alamos, and Rio Arriba Counties, and it will result in 2-A new jobs in NNM.

43

Nambe Pueblo and the NRF currently plan to expand the recycling facility into an Eco Park, which will provide operating space for NNM companies that produce marketable projects from recycled materials.  In addition, the Eco Park will further expand the recycling opportunities for the area, reducing the reliance on sanitary landfill, and creating new manufacturing businesses.

For both of these projects, the NRF has specifically requested financial resources (or assistance) for the purchase of equipment, as well as technical assistance with operational, waste management, and ESH issues; technical assistance developing markets for the recycled or remanufactured materials; and assistance with funding/grant proposal requests.

Methodology for Implementing Our Commitment

•Professional, technical services (in kind services) will be contributed to the NRF in the areas of ES&H technical support, as necessary to meet the needs of the facility. During the first year of the subcontract, the Eberline Services team will contribute professional service hours equal to 0.5% of the Direct Labor hours charged to the subcontract, as described in Tables 1 and 2. An estimated 360 hours for the first year will be contributed. Professional services provided are expected to include assistance with environmental and safety compliance and waste management; recycling operation plans, including material collection and handling and identifying new recycling opportunities; identifying markets for the recycled-glass end products; and preparing cost estimates, return-on-investment calculations and grant or funding proposal requests. All technical services will be coordinated through the NRF project leader so as to meet the facility needs.

Intended Benefit/Impact.  Expand the operations and business opportunities of a NNM business entity; promote environmental stewardship and resource conservation through recycling.

Total Commitment. Estimated at $18K per year (estimated value assumes $4M per year in tasks awarded) for the first year. Similar commitments are expected for Years 2 through 5 on this project or similar projects.

Project 2B:  Support to other RDC Projects

Description:  Through the RDC, we have selected a second (or alternative) project that will be supported (in addition to Project 2A), as funding allows.  The Ganados del Valle/Otra Vuelta Project is based in the Espanola Valley and it works to conserve resources and clean the environment by using discarded tires to weave into floor mats, vehicle mats, and plant pots.  The project has requested technical assistance to support training, marketing assistance, and financial assistance for equipment purchases that directly support the project’s infrastructure or operations.

Methodology for Implementing Out Commitment

As implementation of the Economic Development Plan progresses and as funding allows, we will begin to work with these additional RDC projects. The allocation of resources among the projects and priority of projects will be determined by the Economic Development Implementation Team. Our commitments will include professional, technical services (in kind

44

services) focused on environmental and safety compliance, waste management, and marketing assistance, as necessary to meet the needs of the facility.

Intended Benefit/Impact. Expand the operations and business opportunities of a NNM business entity; promote environmental stewardship and resource conservation through recycling.

Total Commitment. The level of resources committed to these additional RDC projects will be a portion of total financial resources and technical service hours committed to all projects, as described in Table 1 and 2, as determined by the Implementation Team.

2.5.3 Workforce Development, Education, and Job Creation

Project 3A: Support to Sandoval County Jemez Valley communities, including the city of Jemez Springs and Jemez Pueblo

Description.  Under this Plan, the Eberline Services team commits to providing technical assistance and training resources that will benefit special projects in the Jemez Valley, Jemez Springs, and Jemez Pueblo.  These NNM communities are located in northern Sandoval County, home to many LANL employees and subcontractors.  The communities have ongoing special projects and needs related to emergency services and infrastructure and improvement that could benefit from corporate citizenship and economic investment.

The emergency services in the area, including emergency medical and fire department, are entirely dependent on volunteers, and they have limited equipment and financial resources.  Also, the communities are involved in major projects to improve the area’s infrastructure, including a highway by-pass for the Jemez Pueblo; upgrades to the area’s wastewater and sold waste management facilities; and improvements to area roads and recreational facilities that support the area’s tourism business. There is concern that the infrastructure of these communities will be further stressed with the opening of the Valle Caldera National Preserve as it brings more traffic to and through the area.

Methodology for Implementing Our Commitment.

•Specialized Training will be contributed to the area’s emergency service teams by sponsoring the required annual training for volunteer members of the teams. Emergency service volunteers will be invited to participate (at no cost to them) in certified training classes that are offered by Eberline Services, or we will pay registration fees for them to attend classes provided by other certified providers. A minimum of two (2) training classes will be provided each year of the subcontract.

•Professional, technical services (in-kind services) will be contributed to support the area’s ongoing infrastructure improvement projects, including the wastewater, solid waste management, and highway by-pass projects. Professional services contributed are expected to focus on environmental and waste management engineering and environmental compliance, as appropriate to support the ongoing infrastructure projects. Assistance may also be provided to short-term projects, including preparing-plans, grants or proposals; or newsletters; or help with planning and implementing a conference on the Jemez, which has been proposed by local community groups to bring together

45

stakeholders to discuss the area’s Economic Development. The Eberline Services team will contribute a minimum of 100 hours of professional services to this project per year, at an estimated value of $5K.

Initial contact has been made with Jemez Valley representatives (the Mayor of Jemez Springs, the Jemez Pueblo Governor’s office and the Jemez Valley Residents Association) to identify specific projects or needs for the area. Upon subcontract award, our Implementation Team will establish routine communication with these representatives and work with them to identify a schedule and priority for support activities, as needed to meet the community or project needs.

Intended Benefit/Impact. Local workforce development and education/training; improvements in NNM infrastructure.

Total Commitment. $7K per year ($5K in professional services, $2K in training sponsorship).

Project 3B: NNM-Focused Recruiting, Hiring, and Student-Intern Program.

Description. Eberline Services will expand our current recruiting program, which focuses on recruiting New Mexico college graduates that are from NNM communities for entry-level scientist and engineer positions in our company. Our goal is to give opportunities to college graduates to return to their home communities in NNM and work in professional career positions. In addition, we have implemented an intern program for students from local schools and community colleges.

•Financial resources will be invested in travel, labor, and recruiting expenses to conduct recruiting at Colleges and Universities and identify qualified students/graduates from the NNM area.  A minimum of 2 job positions per year will be established and filled by the recruited students/graduates from this activity.  Eberline Services’ expected investment for this activity is $8.4K per year.

•Student-intern position(s) within Eberline Services will be established and filled by qualified student(s) from NNM school districts or community colleges.  A minimum of 2 paid-intern positions per year will be established and filled.  The estimated investment for this activity is $41.5K per year, (assuming 32 hr/week for the position).

Intended Benefit/Impact.  Job creation; work force development and education.

Total Commitment. $49.9K per year; $249.5K for the 5-year life of the subcontract.

Project 3C: Scholarship and Educational Assistance Program

Description. The Eberline Services Team will contribute to scholarship funds that benefit NNM students and will provide educational assistance to student interns and employees (from NNM) to attend NNM-based colleges.

46

Methodology for Implementing Our Commitment.

•Financial resources will be contributed to established scholarship funds that benefit NNM students, such as the LANL Foundation Scholarship Program. The current and expected investment for this activity is $5K per year.

•Educational Assistance funds will be contributed to pay for tuition and fees of Eberline Services’ student-interns who attend NNM-based colleges in degree or advanced degree programs. The expected investment for this activity is $3K per year.

Intended Benefit/Impact. Job creation; work force development and education.

Total Commitment. $8K per year; $40K for the 5-year life of the subcontract.

2.5.4  Civic Outreach and Donations

Project 4A: Support to Los Alamos or Espanola Household Hazardous Waste Collection Day(s)

Description. Eberline Services and its team partners will support the annual Household Hazardous Waste Collection Day sponsored by the Los Alamos County or similar events in Espanola or neighboring communities.

Methodology for Implementing Our Commitment:

•Professional services will be contributed to coordinate with the event’s sponsoring organization to identify volunteer or other needs.  A minimum of 4 hours per year will be contributed.

•Volunteer hours will be donated to support the event. A minimum of 64 hours of volunteer service will be provided per year.

Intended Benefit/Impact. Corporate stewardship and civic outreach, reduced community safety and health risks.

Total Commitment. $200 per year (+ Volunteer hours); estimated at $1,000 over life of subcontract, assuming one event per year.

Project 4B: Donations to NNM Charities and Community Organizations

Description. The Team will continue its history of financial assistance or donations of materials, supplies, or equipment to local charities or community groups in NNM.

Total Commitment. $5K per year, $20K for the 5-year life of the subcontract, based on current values and expected contributions.

3  ACCEPTANCE OF TERMS AND CONDITIONS

Eberline Services accepts the terms and conditions of both the Model Subcontract and the Model Task Order—Number One as stated in the RFP.

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4  REPRESENTATIONS AND CERTIFICATIONS

Eberline Services’ fully executed representations and certifications are provided in this section. These include the following:

•Forms 2002 and 2002a

•Cost Accounting Standards Notices and Certification Form 3001

•Small Business Certification Form 826

•OCI Disclosure Form 903b

•Proposal Pricing Cover sheet Form 156.

Completed representations and certifications for LATA, DE&S, and Stoller follow Eberline Services.  Our offer form is provided in Section 1 above.

48

Agreement No. 26725-000-02-CQ

APPENDIX C-1 NORTHERN NEW MEXICO ECONOMIC DEVELOPMENT PLAN

DATA DELIVERABLES REQUIREMENTS DEFINITION

49

Data Deliverable Requirement Description	1.Subcontract No: 26725—2-00-CQ
Northern New Mexico Economic Development Plan	2.DD No: 001
Remarks:	3.Date/Revision Date: July 2002
	4.Authority/Requirement Cite: Subcontract
	5.Originator: SBO Office
Preparation Information: The Subcontractor shall provide a Northern New Mexico Economic Development Plan that will set forth the initiatives that the Subcontractor is committed to achieving as part of its plan to further the economic development of Northern New Mexico. The Plan will describe the Subcontractors initiatives and or commitments together with the manner that will be used to measure progress. The Plan is expected to be consistent with the initiatives that were proposed by the Subcontractor and accepted by the University.	6.Media: Email Word Attachment and Hard Copy 7.Frequency of Submission:  Once 8.Controlled Document: Yes o No ý
The Plan will be provided in a 3-ring binder. Use of existing proposal information to construct the Plan submittal is permitted. Tab the Plan using the headings set forth below.	9.Approval Required: Yes ý No o
Preparation Instruction:	10.Distribution and Number of Copies:
1.Cover	Contract Administrator – 1
a.The cover will identify the Subcontractor, subcontract number and will be entitled “Subcontractor’s Northern New Mexico Economic Development Plan”	SBO	– 1
b.The binder’s spine will also identify the title of the document and Subcontractor.	11.Deliverable Submission Date(s):
2.Table of Contents	30 Days after subcontract award
a.Provide a table of contents.
b.Limit 1 page
3.Introduction and Summary
a.Provide an executive summary or general introduction of the Plan content.
b.Provide the name, title, telephone no., e-mail and fax of the Subcontractor person responsible for administering the Plan.
c.Provide a matrix (table) that, as a minimum, identifies the following;
•Proposed initiatives
•Impact of initiatives
•Success measurement method
d.Limit 2 pages
4.Plan Content
a.Provide details on each initiative or commitment.
b.Ensure the detail includes a description of your strategy to achieve the commitment. Identify the specific intended recipient of the initiative.
c.If initiative activity is tied to revenue (i.e. tasking type subcontract), show a correlation between revenue and the initiative(s) through completion. Use narrative, tables or other visuals to clearly communicate this point.
d.For each commitment, provide time-lines and/or describe major milestones.
e.Limit 10 pages.
5.Measurement
a.Describe the method that will be used to measure the success of each initiative. Show, by example or illustration, the measurement method.
b.Limit 3 pages.

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Data Deliverable Requirement Description	1.Subcontract No: 26725-000-02-CQ
Northern New Mexico Economic Development Plan	2.DD No: 002
Remarks:	3.Date/Revision Date: July 2002
	4.Authority/Requirement Cite: Subcontract
	5.Originator: SBO Office
Preparation Information: The Subcontractor shall periodically report on the progress of their Northern New Mexico Economic Development Plan initiatives.  Reports are intended to provide sufficient information to describe progress that has been made on proposed economic development initiatives and/or commitments.	6.Media: Email Word Attachment 7.Frequency of Submission:  Semi annual Reporting
	8.Controlled Document:
Reports will be submitted via email as Microsoft Word attachments.
	Yes o No ý
Preparation Instruction:
	9.Approval Required:
1.Cover
a.The cover page (transmittal memo) will identify the Subcontractor, subcontract number and will be entitled “Subcontractor’s Northern New Mexico Economic Development Plan – Report XXX”	Yes ý No o
b.Reports will be numbered sequentially by fiscal year (FY 2000-1)	10.Distribution and Number of Copies:
2.Table of Contents	Contract Administrator – 1
a.Provide a table of contents.	SBO	– 1
b.Limit 1 page
	11.Deliverable Submission Date(s):  3-30 and 10-30 of every year to CA (4-30 and 11-30 of every year to SBO)
3.Introduction and Summary
a.Provide an executive summary or general introduction of the progress that has been achieved for the reporting period.
b.Limit 1 page.
4.Report Content
a.Summarize each initiative in a one-paragraph statement followed by a detailed description of the overall progress of the initiative.
b.Reports should be structured such that any reader will be able to read and understand the sequence of progress from reporting period to reporting period without having to review past reports.
c.If you are significantly ahead or completed an initiative, briefly describe factors that contributed to the completion of the initiative.
d.If you are significantly behind in the executions of an initiative, briefly describe factors that contributed to the scheduled delay.
e.Show the correlation between revenue received and progress made on initiatives.  Be specific, don’t generalize.  Address each initiative separately such that your report corresponds to the methods set forth in your Socioeconomic Plan submittal.
f.Limit 3 pages.
5.Community Reporting
a.Subcontractors will be required to submit (concurrent with this report) summary information to the Regional Development Corporation (RDC) for inclusion into the ECONOMIC DEVELOPMENT PROJECT CLEARINGHOUSE web-site (http://www.rdcnm.org/). The purpose of this reporting information is to provide information to the community on positive progress of your initiatives.
b.Provide the specific narrative information that is being reported to the RDC.
c.The Contract Administrator reserves the right to edit your input to the RDC.
d.Limit 1 page.

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Agreement No. 26725-000-02-CQ

APPENDIX D — HEALTH AND SAFETY REQUIREMENTS

SAFETY AND HEALTH REQUIREMENTS

(a)The Safety and Health Regulations and/or requirements applicable to work performed at Los Alamos National Laboratory under this subcontract are listed below. The Subcontractor shall comply with the latest versions of these regulations and/or requirements as they are amended or superseded from time to time:

1.NIOSH Occupational Safety and Health Guidance Manual for hazardous waste site activities (1985).

2.EPA Order 1440.2, Health and Safety Requirements for employees engaged in field activities.

3.EPA Order 1440.3, Respiratory Protection.

4.EPA Operating Safety Guide (1984).

5.29 CFR 1904, Recording and reporting occupational injury and illnesses

6.29 CFR 1910, Occupational safety and health standards

7.29 CFR 1926, Safety and health regulations for construction

8.DOE Order 1324.2a, Records disposition

9.DOE Order 5480.11, Radiation protection for occupational workers

10.DOE Order 5480.20, Personnel selection, qualification, training, and staffing requirements at DOE reactor and non-reactor nuclear facilities

11.Los Alamos National Laboratory Emergency Response Plan

12.Los Alamos National Laboratory Environment Safety and Health Manual

13.State and local regulations relating to safety and health

14.Other EPA guidance which the University may direct the Subcontractor to comply with.

(b)The Subcontractor shall provide information about training and medical examination dates for workers at hazardous waste sites as required under 29 CFR 1910.120 through the Contract Administrator to the University Technical Representative identified in Section E, Paragraph 2 for entry into the sponsoring technical organization’s data base.

(c)The Subcontractor shall be responsible for providing the training requirements of EPA Order 1440.3 for all employees requiring such training. At least 30 days prior to the

52

scheduled start of work in which respiratory protection of workers will be required, the Subcontractor shall submit documentation through the Contract Administrator to the Industrial Hygiene Group (HS-5) to substantiate that the Subcontractor’s program complies with all standards/DOE orders pertaining to respiratory protection (OSHA 1910.134, ANSIZ 88.2-1980). The Subcontractor’s respiratory protection program records, operating procedures, and on-site use of equipment is subject to audit by the Laboratory’s Industrial Hygiene Group.

53

Agreement No. 26725-000-02-CQ

APPENDIX E — BILLING RATES — FIXED PRICE

Eberline Services, Inc.

January 1, 2002 Through December 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	38.82
2	$	49.40
3	$	58.23
4	$	65.40
5	$	72.93
6	$	77.63
7	$	91.75
8	$	105.86
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	37.78
2	$	48.08
3	$	56.66
4	$	63.65
5	$	70.96
6	$	75.55
7	$	89.29
8	$	103.02

54

APPENDIX E — BILLING RATES — FIXED PRICE

LATA

JANUARY 1, 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	37.17
2	$	58.52
3	$	68.81
4	$	78.00
5	$	89.17
6	$	102.17
7	$	118.94
8	$	145.21
Direct Labor Category	Fully Loaded Rate
	(OnSite Labor)
	$	30.11
2	$	47.40
3	$	55.73
4	$	63.17
5	$	72.22
6	$	82.75
7	$	96.33
8	$	117.61

55

APPENDIX E — BILLING RATES FIXED PRICE

S. M. STOLLER CORPORATION

JANUARY 1, 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	28.79
2	$	44.76
3	$	53.36
4	$	69.22
5	$	84.23
6	$	93.28
7	$	108.77
8	$	132.89
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	20.73
2	$	32.21
3	$	38.40
4	$	49.81
5	$	60.62
6	$	67.13
7	$	78.28
8	$	95.63

56

APPENDIX E — BILLING RATES — FIXED PRICE

FRAMATOME ANP-DE&S

JANUARY 1, 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	44.36
2	$	53.65
3	$	71.96
4	$	85.21
5	$	104.31
6	$	123.37
7	$	137.64
8	$	157.39
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	41.28
2	$	49.94
3	$	66.97
4	$	79.32
5	$	97.08
6	$	114.83
7	$	128.11
8	$	146.49

57

Eberline Services

Labor Category Definitions

LaborCategory	YearsExperience	MinimumDegree	Skill Level
1	0-2	Associate’s degree	Performs assignments involving deliverable preparation and production; database development, population, and implementation; data entry and/or validation; basic literature research; other duties in direct support of project deliverables under direct supervision.
2	1-5	Bachelor’s degree	Performs assignments requiring basic working knowledge to thorough knowledge within discipline with latitude for independent judgment and initiative under general supervision.
3	6-7	Bachelor’s degree	Performs assignments requiring thorough knowledge within discipline with latitude for independent judgment and initiative under general supervision.
4	8-9	Bachelor’s degree	Performs assignments requiring thorough knowledge within discipline with latitude for independent judgment and initiative under limited supervision.
5	10-12	Bachelor’s degree	Performs difficult assignments requiring thorough knowledge within discipline with latitude for independent judgment and initiative under limited supervision. Leads execution of specific tasks within a project.
6	13-14	Bachelor’s degree	Demonstrated thorough knowledge within discipline with ability to plan, organize, and direct significant activities of staff within discipline or multiple disciplines. Uses project controls and management skills to effectively execute projects.
7	15+	Bachelor’s degree	Demonstrated superior knowledge within discipline with ability to plan, organize, and direct large groups of technical staff in the accomplishment of difficult assignments. Manages multiple projects concurrently. Responsible for programmatic budget development and execution.

58

8 15+ Bachelor’s
degree Demonstrated superior knowledge within discipline with ability to plan, organize, and direct large groups of technical staff in the accomplishment of difficult assignments. Manages multiple projects concurrently. Responsible for programmatic budget development and execution.

Notes:  Two years of experience = One year of education

59

Agreement No. 26725-000-02-CQ

APPENDIX F - FIXED UNIT PRICES

60

Agreement No. 26725-000-02-CQ

APPENDIX G — FIXED HOURLY RATES — TIME AND MATERIALS
EBERLINE SERVICES, INC.
JANUARY 1, 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	38.55
2	$	49.06
3	$	57.82
4	$	64.95
5	$	72.42
6	$	77.09
7	$	91.11
8	$	105.13
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	37.51
2	$	47.74
3	$	56.27
4	$	63.20
5	$	70.48
6	$	75.03
7	$	88.67
8	$	102.31

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APPENDIX G — FIXED HOURLY RATES — TIME AND MATERIALS
LATA
JANUARY 1, 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	36.91
2	$	58.12
3	$	68.34
4	$	77.45
5	$	88.55
6	$	101.46
7	$	118.11
8	$	144.20
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	29.90
2	$	47.07
3	$	55.34
4	$	62.73
5	$	71.72
6	$	82.17
7	$	95.66
8	$	116.79

62

APPENDIX G — FIXED HOURLY RATES — TIME AND MATERIALS
S. M. STOLLER CORPORATION
JANUARY 1, 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	28.59
2	$	44.44
3	$	52.99
4	$	68.74
5	$	83.64
6	$	92.63
7	$	108.01
8	131.97
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	20.58
2	$	31.98
3	$	38.14
4	$	49.46
5	$	60.20
6	$	66.67
7	$	77.73
8	$	94.97

63

APPENDIX G — FIXED HOURLY RATES — TIME AND MATERIALS
FRAMATOME ANT^.- DE&S
JANUARY 1,. 2002 THROUGH DECEMBER 31, 2002

Direct Labor Category	Fully Loaded Rate
	(Offsite Labor)
1	$	44.05
2	$	53.28
3	$	71.46
4	$	84.62
5	$	103.58
6	$	122.51
7	$	136.68
8	$	156.30
Direct Labor Category	Fully Loaded Rate
	(Onsite Labor)
1	$	40.99
2	$	49.59
3	$	66.51
4	$	78.76
5	$	96.41
6	$	114.01
7	$	127.22
8	$	145.47

64

Eberline Services

Labor Category Definitions

LaborCategory	YearsExperience	MinimumDegree	Skill Level
1	0-2	Associate’s degree	Performs assignments involving deliverable preparation and production; database development, population, and implementation; data entry and/or validation; basic literature research; other duties in direct support of project deliverables under direct supervision.
2	1-5	Bachelor’s degree	Performs assignments requiring basic working knowledge to thorough knowledge within discipline with latitude for independent judgment and initiative under general supervision.
3	6-7	Bachelor’s degree	Performs assignments requiring thorough knowledge within discipline with latitude for independent judgment and initiative under general supervision.
4	8-9	Bachelor’s degree	Performs assignments requiring thorough knowledge within discipline with latitude for independent judgment and initiative under limited supervision.
5	10-12	Bachelor’s degree	Performs difficult assignments requiring thorough knowledge within discipline with latitude for independent judgment and initiative under limited supervision. Leads execution of specific tasks within a project.
6	13-14	Bachelor’s degree	Demonstrated thorough knowledge within discipline with ability to plan, organize, and direct significant activities of staff within discipline or multiple disciplines. Uses project controls and management skills to effectively execute projects.
7	15+	Bachelor’s degree	Demonstrated superior knowledge within discipline with ability to plan, organize, and direct large groups of technical staff in the accomplishment of difficult assignments. Manages multiple projects concurrently. Responsible for programmatic budget development and execution.

65

8 15+ Bachelor’s
degree Demonstrated superior knowledge within discipline with ability to plan, organize, and direct and provide guidance and resources for mission accomplishment of a large, complex project or program.

Notes:  Two years of experience = One year of education

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Agreement No. 26725-000-02-CQ

APPENDIX H — FIXED-PRICE TASK ORDER FORMAT

Form 5003-1 (8/98) Appendix H

University of California
(Los Alamos National Laboratory)
Firm Fixed-Price Task Order

1.This Task Order is issued pursuant to Agreement No.               between the University and the Subcontractor,                TBD

2.Task Order No:

3.Task Order Effective Date:

4.The Subcontractor shall perform the work described in Attachment #

5.The work called for in Paragraph 4 shall be performed and required deliveries shall be made in accordance with the following schedule:

6.The Firm Fixed-Price of this Task Order is $

7.Payments shall be made in accordance with the terms of Paragraph 1. I. (1) of Section F of the Agreement schedule.

8.The Subcontractor’s Representative for this Task Order is

9.The University Technical Representative’s Designee for this Task Order is

10.The Terms and Conditions of Agreement No.     , and any ..modifications thereto, in effect on the date of this Task Order are incorporated herein by reference.

11.The clauses listed below of Los Alamos National Laboratory Form 7500, July 2000 Edition and Appendix A to the Agreement apply to this task order.

a.All of Section A of Form 7500.

b.The following clauses of Section B of Form 7500:

c.The following clauses of Section-C of Form 7500:

d.The following clauses of Appendix A:

For the Regents of the	ACCEPTED
University of California	For the Subcontractor
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

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Agreement No. 26725-000-02-CQ

APPENDIX I — TIME AND MATERIALS TASK ORDER FORMAT

Form 5003-3 (8/98) Appendix I

University of California
(Los Alamos National Laboratory)
Time and Materials (T&M) Task Order

1.This Task Order is issued pursuant to Agreement No.             between the University and the Subcontractor,

2.Task Order No:

3.Task Order Effective Date:

4.The Subcontractor shall perform the work described below:

5.The work called for in Paragraph 4 shall be performed and required deliveries shall be made in accordance with the following schedule:

6.The Subcontractor’s Labor Categories, level of effort for each category and the Fixed Hourly Rates upon which the Not-to-Exceed amount for reimbursement of Direct Labor charges is based are listed below. The Subcontractor may vary the level of effort identified for the labor categories listed, however, any costs in excess of the Not-to-Exceed amount which are caused by such variations shall not be reimbursable by the University unless the procedures stated in Special Provision 1.F of the Section F - Special Provisions of the Agreement have been followed. Reimbursement for Direct Labor shall be at the Fixed Hourly Rate listed below for the actual effort performed by each category.

Subcontractor’s Labor		Fixed Hourly
Category	Level of Effort	Rate

If during the performance of the work called for hereunder, the Subcontractor identifies other labor categories needed to accomplish the work, such information, including tradeoffs with already identified labor .categories necessary to remain within the Not-to-Exceed amount for Direct Labor on this task order shall be submitted to the Contract Administrator.

7.This Task Order is priced on a Time and Materials basis. The Ceiling Price for all work called for by the Task Order is. This amount is allocated to the following categories:

a.The maximum amount (Not-to-Exceed) that the University shall be liable for reimbursement of Direct Labor charges is $

68

b.The maximum amount (Not-to-Exceed) that the University shall be liable for reimbursement of Other Direct charges is $

c.The Ceiling Price includes the amount of $        for reimbursing the Subcontractor for New Mexico Gross Receipts Tax attributable to this task order.

The Not-to-Exceed amount stipulated above for Other Direct charges is based upon the following estimates:

Travel	$
Materials and Supplies	$
Tooling and Equipment	$
Other Required Services	$

When funds are allocated above for Other Direct Charges, they shall be reimbursed to the Subcontractor at actual cost in accordance with the Cost Principles and Procedures of Subpart 31.2 of the Federal Acquisition Regulation in effect on the date of the Subcontract.

8.Payments shall be made in accordance with the terms of Paragraph 1. I. (3) of Section F of the Agreement schedule.

9.The Subcontractor’s Representative for this Task Order is

10.The University Technical Representative’s Designee for this Task Order is

11.The Terms and Conditions of Agreement No.        and any modifications thereto in effect on the date of this Task Order are incorporated herein by reference.

12.The-clauses listed below of Los Alamos National Laboratory Form 7500, July 2000 Edition, and Appendix A to the Agreement apply to this task order.

a.All of the clauses of Section A of Form 7500.

b.The following clauses of Section B of Form 7500:

c.The following clauses of Section E of Form 7500:

d.The following clauses of Appendix A:

For the Regents of the	ACCEPTED
University of California	For the Subcontractor
By:	By:
Name:	Name:
Title:	Title:
Date:	Date:

69

Agreement No. 26725-000-02-CQ

APPENDIX J — KEY PERSONNEL

Key Personnel

The following listed individuals are designated as key personnel for performing this Subcontract. Diversion of any of the individuals shall be subject to the conditions of Special Provision 5, entitled “Key Personnel”.

Michael Kennicott	Project Manager
Suzanne Hartnett	Deputy Project Manager

70

Agreement No. 26725-000-02-CQ

APPENDIX K – PERFORMANCE EVALUATION FORMAT

See form 420b on the next page.

71

Agreement No. 26725-000-02-CQ

APPENDIX L - SMALL BUSINESS SUBCONTRACTING PLAN

72

Agreement No. 26725-000-02-CQ

APPENDIX M - QUALITY PLAN

73

EX-10.8

Exhibit 10.8

Hanford Contract

BECHTEL HANFORD, INC.

TECHNICAL SERVICES SUBCONTRACT

SUBCONTRACTOR:	TMA Hanford	SUBCONTRACT NO.:	22192-TMAH-001-CPFF
ADDRESS	450 Hills Street Richland, WA 99352	EFFECTIVE DATE:	July 01, 1994
		COMPLETION DATE:	September 30, 1994
		REGISTER NO.:	001
CONTRACT:	John D. Moroney, III	WORK LOCATION:	Richland, WA
TELEPHONE:	(509) 375-4675	ISSUING OFFICE:	Hanford
FAX:	(509) 372-9448

THIS SUBCONTRACT, entered into the first day of July 1994, by Bechtel Hanford, Inc., a corporation organized and existing under the Laws of the State of Delaware (CONTRACTOR) and TMA Hanford, a partnership duly organized and existing under the Laws of the State of                                    (SUBCONTRACTOR);

All work specified below, which is a portion of the work and services to be performed by Bechtel Hanford, Inc. for the United States Department of Energy under Contract Number DE-AC06-93RL12367, shall be performed by the Subcontractor in accordance with all provision of this Subcontract, consisting of the following:

SUBCONTRACT AGREEMENT

PART ISchedule

PART IIGeneral Provisions

PART IIIList of Documents, Exhibits, and Other Attachments

1.WORK TO BE PERFORMED: Bechtel desires Subcontractor to perform the work described in Part I, attached hereto and made a part hereof and Subcontractor agrees to do for the compensation and in accordance with the terms and conditions set forth in Part I, Schedule; and Part II, General Provisions.  Such services shall be performed during the period set forth in said Schedule.  For satisfactory performance of the work described herein, Bechtel will pay to Subcontractor the compensation provided for herein.

2.COMPENSATION:  As full consideration for the satisfactory performance by the SUBCONTRACTOR of this Agreement, Contractor shall pay to the SUBCONTRACTOR compensation in accordance with the provisions set forth in Part I, Section B and in accordance with the payment provisions of this SUBCONTRACT.

CONTRACTOR:			SUBCONTRACTOR:
BECHTEL HANFORD, INC.			TMA HANFORD
BY:	D.D. von der Linden		BY:
			(print or type)
SIGNATURE:			SIGNATURE
TITLE:		Manager, Procurement and Property	TITLE:

2

TABLE OF CONTENTS

Section	Description
	PART I – SCHEDULE
A	Subcontract Agreement Form
B	Supplies or Services and Prices/Costs
C	Description/Specifications/Work Statement
D	(Reserved)
E	Inspection and Acceptance
F	Deliveries or Performance
G	Subcontract Administration Data
H	Special Subcontract Requirements
	PART II – GENERAL PROVISIONS
I	Subcontract Clauses
	PART III – LIST OF DOCUMENTS, EXHIBITS, AND OTHER ATTACHMENTS
J	List of Attachments

3

SUBCONTRACT AGREEMENT
ERMC-CPFF-003

This Subcontract, entered into this eighth day of August, 1994, by Bechtel Hanford, Inc., a corporation organized and existing under the Laws of the State of Delaware (herein sometimes called “Bechtel” or “BHI”) and Thermo Analytical, Inc., a Corporation duly organized and existing under the Laws of the State of New Mexico (herein sometimes called “Subcontractor”).

All work specified below, which is a portion of the work and services to be performed by Bechtel for the United States of America Department of Energy (DOE), under Contract Number DE-AC06-93RL12367, shall be performed by the Subcontractor in accordance with all provisions of this Subcontract, consisting of the following:

Part ISchedule

Part IIGeneral Provisions

Part IIIList of Documents, Exhibits, and Other Attachments

Bechtel desires Subcontractor to perform the work described in Part I, attached hereto and made a part hereof and Subcontractor agrees so to do for the-compensation and in accordance with the terms and conditions set forth in Part I, Schedule; and Part II, General Provisions.  Such services shall be performed during the period set forth in said Schedule.  For satisfactory performance of the work described herein, Bechtel will pay to Subcontractor the compensation provided for herein.

Subcontractor understands and agrees that this Subcontract is issued subject to DOE’s approval of this Subcontract.

CONTRACTOR:			SUBCONTRACTOR:
Bechtel Hanford, Inc.			Thermo Analytical, Inc.
450 Hills Street			5635 Jefferson Street, NE
Richland, WA 99352			Albuquerque, NM 87109
BY:	D.D. von der Linden		BY:
TITLE:		Manager, Procurement and Property	TITLE:
Date:			Date:

4

PART I - SECTION B

SUPPLIES OR SERVICES AND PRICES/COSTS

CONTENTS

Para.	Title
B-1	SERVICES BEING ACQUIRED
B-2	ESTIMATED COSTS
B-3	OBLIGATION OF FUNDS
B-4	OPTION TO EXTEND THE TERM OF THE SUBCONTRACT
B-5	FEE
B-6	PAYMENT OF FIXED FEE
B-7	LEVEL OF EFFORT
B-8	ORDERING PROCEDURE

5

PART I - SECTION B

SUPPLIES OR SERVICES AND PRICES/COSTS

B-1SERVICES BEING ACQUIRED

The Subcontractor when directed by Bechtel shall be responsible for assisting Bechtel in its performance of the Environmental Restoration Contractor at the Hanford Site. The primary services to be provided by the Subcontractor are those related to health and safety including: preparation of plans, development and implementation of training programs, providing health and safety professionals to monitor field work and participate in Area team planning, and maintain and calibrate required health and safety equipment. The Subcontractor shall furnish all necessary personnel, materials, supplies, services (unless otherwise directed by Bechtel), reports in accordance with the Reporting Requirements Checklist located in Section F, or as directed by Bechtel, and otherwise do all things necessary for, or incidental to, the performance of the items of work specified in Section C.

B-2ESTIMATED COST (exclusive of fixed fee)

a.	Estimated cost for the Conversion period (July 01, 1994 - September 30, 1994):	$	1,875,952.00
b.	Estimated cost for the subcontract Base Period (October 01, 1994 - June 30, 1999):	(TBD		)
c.	Estimated cost for the three-year Option Period (July 1, 1999 - June 30, 2002)	(TBD		)
d.	Cumulative (Conversion Period, Base Period, and Option Period estimate cost:	(TBD		)

B-3OBLIGATION OF FUNDS

a.Pursuant to the clause FAR 52.232-22 (see Section I) entitled “Limitation of Funds,” total funds in the amount of $800,000.00 are obligated herewith and made available for payment of allowable costs and fee to be incurred from the effective date of this subcontract through the period estimated to end September 30, 1994.

b.Financial plans; cost and commitment limitations.  In addition to the limitations provided for elsewhere in this subcontract, Bechtel may, through financial plans or other directives issued to the Subcontractor, establish controls on the costs to be incurred and commitments to be made in the performance of the subcontract work.  Such plans and instruction may be amended or supplemented from time to time by Bechtel.  The Subcontractor hereby agrees to comply with the specific limitations (ceilings) on costs and commitments set forth in such plans and directives to use its best efforts to comply

6

with other requirements of such plans and directives, and to promptly notify Bechtel in writing, whenever it has reason to believe the authorized financial levels of costs and commitments will be exceeded or substantially underrun.

B-4OPTION TO EXTEND THE TERM OF THE SUBCONTRACT

This subcontract shall be renewable, at the unilateral option of Bechtel, in accordance with FAR 52.217-9 as set forth in Section I.  All terms and conditions stated herein shall remain in effect during the renewed Subcontract period.  Further, the Subcontractor agrees that the performance under said extension shall be accomplished within the estimated cost as set forth in B-2c above.

B-5FEE

It is Bechtel’s intention to manage this subcontract under a cost-plus-fixed-fee arrangement (CPFF).

a.	The fixed fee for the Conversion period is	$	122,335
b.	The fixed fee for the Base Period is	(TBD		)
c.	The fixed fee for the Option Period is	(TBD		)

The fixed fees constitutes the total fee available for payment subject to the provisions of clause DEAR 952.216-7 (see section I).

B-6PAYMENT OF FIXED FEE

The fixed fee is available for payment beginning July 01, 1994 through subcontract completion.  Such fee shall be paid as it accrues in monthly installments.

B-7LEVEL OF EFFORT

a.In the performance of Task Orders issued pursuant to the ordering procedure of the subcontract, the Subcontractor shall provide that estimated total of DPLH which is specified below during the period of the subcontract.  DPLH are defined as actual work hours exclusive of vacation, holiday, sick leave, and other absences.

Period	Estimated DPLH Level of Effort
Conversion Period (July 01, 1994 – September 30, 1994)	43,632
Base Period (October 01, 1994, 1993 – June 30, 1999)	(TBD	)
3-year Option Period (July 1, 1999 – June 30, 2002)	(TBD	)

7

b.In any event, during the period of the subcontract, the Subcontractor is obligated to provide not less than 95 percent, nor more than 105 percent of the above specified total DPLH.

c.The fixed fee, if any, of this subcontract is based upon the furnishing of the above specified level of effort.  In the event that during the period of the subcontract Bechtel shall issue Task Orders and Subtask Orders requiring a total effort of no less than 95 percent or nor more than 105 percent of the above specified level of effort, the fixed fee of this subcontract shall not be adjusted under this clause.

1.In the event that the Subcontractor shall be required to provide less than 95 percent of the above specified level of effort, the fixed fee of the subcontract shall be negotiated to reflect the difference between 95 percent of the state DPLH and the DPLH actually provided.

2.The Subcontractor is not authorized to exceed 105 percent of the above specified level of effort unless a subcontract modification is issued by Bechtel.

B-8ORDERING PROCEDURE

Performance under this subcontract shall be subject to the following ordering procedure:

a.The Subcontractor shall incur costs under this subcontract only in the performance of Task Orders and revisions to Task Orders issued in accordance with this ordering procedure.  No other costs are authorized without the express written consent of Bechtel.

b.From time to time during the period of performance of this subcontract, Task Orders will be issued in writing from Bechtel to the Subcontractor designating (1) the task to be performed; (2) the schedule of performance; (3) estimated DPLH for the task; and (4) estimated total cost for the task.  Such Task Orders will specify deliverables and required delivery dates.

c.Task Orders will be issued on forms specified and provided by Bechtel.  Task Orders will be numbered.  A revision to a Task Order will be identified by a numeric designation following the existing Task Order number indicating the revision sequence.

d.After a Task Order is issued, if any revision becomes necessary to the estimated cost (more than + or – 10 percent variance), or the level of effort (more than + or - - 10 percent variance), the Subcontractor shall promptly submit to Bechtel a written notice with explanatory notes.

8

PART I – SECTION C

DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

CONTENTS

Para.	Title
C-1	DESCRIPTION OF WORK
ATTACHMENT 1
DELIVERABLE DATA AND REPORTING

9

PART 1 – SECTION C

DESCRIPTION/SPECIFICATIONS/WORK STATEMENT

C-1DESCRIPTION OF WORK

The Subcontractor shall plan and supervise the execution of work to accomplish the following safety and health support tasks for the Environmental Restoration Contractor (ERC) related to environmental restoration of Hanford Sites as may be assigned to Bechtel Hanford, Inc.

a.Assist in the preparation of safety and health and related plans and procedures as directed by Bechtel.

b.Provide qualified health physics and industrial hygiene technicians.

c.As required by Bechtel, provide a safety and health technician cross-training program to ensure individual qualification in all safety and health disciplines (i.e., health physics, industrial hygiene, and construction safety).  DOE Order 5480.11 contains specific requirements for the health physicist technicians (HPT, also referred to as radiation protection technicians) training program.  The applicable portion of the Order is included in Section J, Attachment 3.  Also included in this Attachment is the HPT Training Program and Health Physics Administrative Guide prepared by WHC and currently in use.  The Subcontractor is responsible for implementation of a comparable training program to comply with the requirements of the Order.

d.Provide qualified safety and health professionals to participate in BHI Hanford Area Teams.  Subcontractor’s management staff shall participate in planning efforts, and ensure allocation of safety and health resources required for planned team activities.

e.Provide pre-mobilization radiological, hazardous chemical and safety surveys of ERC field sites, and establish base conditions for inclusion on the appropriate work permits.  This shall include survey documentation in accordance with applicable plans and procedures, as well as preparation and/or coordination of the issuance of applicable work permits.

f.Provide health physics, industrial hygiene and safety monitoring and surveillance of ERC field activities as required by Bechtel.  This shall include but not necessarily be limited to monitoring and sampling activities necessary to document personnel exposures, surveillance of the conduct of operations (e.g., proper use of personal and environmental protective equipment and procedures) so as to ensure that personnel and environmental exposures are maintained as low as reasonably achievable, and documentation of these activities in a legally defensible manner.

g.Provide radiological, hazardous chemical and safety surveys of designated surplus facilities and areas prior to entry by BHI Team personnel, and establish base conditions for inclusion on the appropriate work permits.  This shall include survey documentation

10

in accordance with applicable plans and procedures, as well as preparation and/or coordination of the issuance of applicable work permits.

h.As necessary, provide health physics, industrial hygiene and safety monitoring and surveillance of personnel entries into designated surplus facilities and areas.  This shall include but not necessarily be limited to monitoring and sampling activities necessary to document personnel exposures, surveillance of the conduct of operations (e.g., proper use of personal and environmental protective equipment and procedures) so as to ensure that personnel and environmental exposures are maintained as low as reasonably achievable, and documentation of these activities in a legally defensible manner.

i.Provide safety and health and related training as may be required by Bechtel.  This may include, and not necessarily be limited to, developing training plans and procedures, developing session-specific instructor’s guides, development of proficiency testing methods and applications, conducting the training, maintenance of training records, and coordination of training services provided by others.

j.Maintain and calibrate all government furnished field radiological and hazardous chemical monitoring and/or measurement equipment required to support ERMC field activities.  Coordinate issuance and control of such government furnished field radiological and hazardous chemical monitoring and/or measurement equipment as may be used by Subcontractor but managed by others.

k.Submit monthly written reports to Bechtel recording all significant safety and health activities, including problems encountered and actions taken.  The basis for this report shall be daily records of activities maintained for each ERMC field activity.  At Bechtel’s discretion, these records may take the form of legally defensible log book entries, or such records as required by applicable plans and procedures.  Such records shall be provided for government retention at the direction of Bechtel.

l.At Bechtel’s discretion, coordinate required personnel monitoring with the appropriate Hanford Site service organization.  Personnel monitoring may include, but not necessarily be limited to, medical examinations, bioassays, whole body counting, and radiation dosimetry.

m.At Bechtel’s discretion, design, construct, qualify and operate mobile and/or close support laboratories for the purpose of sample screening and analysis.  Sample screening may be accomplished for the purposes of laboratory and transportation hazard classification.  Sample analyses may be required to provide qualitative and quantitative assessments of contaminant presence and concentration, and to evaluate safety and health samples (e.g., smears, air samples, etc.).

n.Provide a Quality Assurance Manual for all ERMC related Subcontractor operations and implement approved quality assurance requirements, including procedure audits of field operations in support of the ERMC.

11

o.Subcontractor shall maintain staff necessary for the proper execution of project planning, detail of field work and quality control of Subcontractor operations.  Subcontractor staffing shall only occur with Bechtel’s prior written approval.

12

PART I - SECTION C
ATTACHMENT 1
DELIVERABLE DATA AND REPORTING

ITEM NO.	TITLE	FREQUENCY	AS OF DATE	WHEN TO SUBMIT
1	FISCAL YEAR SPEND PLAN (BY TASK)	YEARLY OR WITH PROJECT CHANGE	AWARD DATE	30 DAYS AFTER AWARD
2	COST MANAGEMENT/SCHEDULE CONTROL (BY TASK)	MONTHLY	END OF PRIOR MONTH	2ND CALENDAR DAY OF MONTH
3	SPEND SCHEDULE PLAN	YEARLY OR WITH PROJECT CHANGE	AWARD DATE	30 DAYS AFTER AWARD
4	STAFFING PLAN	YEARLY OR WITH PROJECT CHANGE	AWARD DATE	30 DAYS AFTER AWARD
5	QUALITY ASSURANCE MANUAL	ONE TIME	AWARD DATE	30 DAYS AFTER AWARD
6	TOPICAL REPORTS	AS REQUIRED
7	FIELD WORK PROGRESS REPORT	MONTHLY	END OF PRIOR MONTH	TBD
8	GOVERNMENT FURNISHED EQUIPMENT INVENTORY	MONTHLY UPDATE	AWARD DATE	EACH FY QUARTER
9

13

PART I – SECTION D

PACKAGING AND MARKING

RESERVED

14

PART I – SECTION E

INSPECTION AND ACCEPTANCE

CONTENTS

Para.	Title
E-1	INSPECTION AND ACCEPTANCE

15

PART I - SECTION E

INSPECTION AND ACCEPTANCE

E-1INSPECTION AND ACCEPTANCE

Inspection and acceptance will be made by Bechtel and/or the Government for all work performed under this subcontract.

16

PART I - SECTION F

DELIVERIES OR PERFORMANCE

CONTENTS

Para.	Title
F-1	PERIOD OF PERFORMANCE
F-2	PRINCIPAL PLACE OF PERFORMANCE AND DELIVERY
F-3	UNIFORM REPORTING SYSTEM

17

PART I - SECTION F

DELIVERIES OR PERFORMANCE

F-1PERIOD OF PERFORMANCE

The period of performance for the basic subcontract shall commence on July 01, 1994 and continue for five years.  To the extent the Government exercises the option to extend the term of Bechtel’s prime contract, Bechtel shall exercise its option in accordance with Clause B-4, and extend the term of the Subcontractor’s subcontract accordingly, subject to the Government’s consent.  All terms and conditions will remain in effect throughout the option periods as exercised.

F-2PRINCIPAL PLACE OF PERFORMANCE AND DELIVERY

The principal place of performance of this subcontract shall be at the Hanford Site, Richland, Washington.  All deliverable items shall be delivered to Bechtel unless otherwise specified.

F-3UNIFORM REPORTING SYSTEM

Subcontractor shall, as required by scope, prepare or assist in the preparation and submittal of the plans and reports indicated on the Reporting Requirements Checklist (Attachment 11, or amendments to this checklist, which Bechtel determines are necessary.  The Subcontractor shall prepare or assist in the preparation and submittals of the specified plans and reports in accordance with the formats and structure set forth in DOE 1332.1A.  The level of detail the Subcontractor must provide in any required plans and reports shall be commensurate with the scope and complexity of the task and the reporting categories specified in the checklist.  The Subcontractor shall be responsible for levying appropriate reporting requirements on any lower-tier subcontractors in such a manner to ensure that data submitted by the lower-tier subcontractor to the Subcontractor is compatible with the data elements that the Subcontractor is responsible for submitting to Bechtel.  Plans and reports submitted in compliance with this clause are in addition to any other reporting requirements of this subcontract.

18

INSERT REPORTING REQUIREMENTS CHECKLIST FORM

U.S. Department of Energy

DOE F1332.1	REPORTING REQUIREMENTS CHECKLIST					Form Approved OMB No. 1900-1401
1.  Program/Project Title Environmental Restoration Management Contract				2.  Identification Number DE-RP06-92RL12367
3. Participant Name and Address
4. Planning and Reporting Requirements
			Frequency				Frequency
A.  General Management				E.  Financial Incentives
ý   Management Plan ¨   Status Report ¨   Summary Report ý   SMS Status Report B.  Schedule/Labor/Cost ý  Milestone Generoute Plan ý  Labor Plan – Staffing Profile ¨  Facilities Capital Cost of Money Factors Computation ¨  Contract Facilities capital and Cost of Money ý  Cost Plan ý  Milestone Schedule Status ý  Labor Management Report ý  Cost Management Report C.  Exception Reports ¨  Conference Record ¨  Hot Line Report D.  Performance Measurement ý  Management Control System Description ý  W65 Dictionary ý  Index ý  Element Definition ý  Cost Performance Reports ý  Format 1 – WBS ¨  Format 2 – Function ý  Format 3 – Baseline			X, Y M Y M, X M, A M M M Y Y Y Y M M M M	¨  Statement of Income and Expense ¨  Balance Sheet ¨  Cash Flow Statement ¨  Statement of Changes in Financial Position ¨  Loan Drawdown Report ý  Operating Budget – Change and Trend Log ¨  Supplementary Information – Contingency/Mgmt Reserve Status F.  Technical ¨  Notice of Energy RD&D Project (Required with any of the following) ¨  Technical Progress Report ¨  Drafts for Review ¨  Final for Approval ¨  Topical Report ¨  Final Technical Report ¨  Drafts for Review ¨  Final for Approval ¨  Software ¨  Other (Specify)			M M
5.  Frequency Codes
A -  As Required C – Change to Contractual Agreement F – Final (end of effort)		M – Monthly O – Once After Award Q – Quarterly			S – Semi-Annually X – With Proposal/Bid/Application or with Significant Changes Y – Yearly or Upon Removal of Contractual Agreement
6.  Special Instructions ¨  Report Distribution List/Addresses ¨  Reporting Elements ý  Due Dates				¨  Analysis Thresholds ¨  Work Breakdown Structure ý  Other (See Attached List)
7.  Prepared By (Signature and Date)				8.  Reviewed by (Signature and Date)

19

REPORTING REQUIREMENTS CHECKLIST

PURPOSE

The checklist certifies and communicates additional recurring requirements which are not otherwise set forth in DOE contractual agreement, it will be included as part of the contractual agreements.  The checklist will be completed for each contract or financial incentives agreement, if necessary, special instructions may be appended to modify the checklist to adapt it to specific situations.

INSTRUCTIONS

Item 1.	Enter the title of the project as indicated in the procurement request, contract, interagency agreement, initiating memorandum, or official award, as appropriate.		Note:Frequency codes represent specific reporting frequencies for each selected report.  The frequencies are recommended in the solicitation and negotiated prior to award.  The number of codes required and the addresses are similarly finalized prior to award.
Item 2.	Enter the identification number of the procurement request, contract award or financial incentives agreement, as appropriate.	Item 5.	This item lists the possible frequency codes to be applied in the selection of reporting requirements.
Item 3.	Enter the name and address of the participant.	Item 6.	Attach special instructions as necessary.  Check the appropriate box(es).
Item 4.	Check spaces to indicate plans and reports selected, indicate the frequency of delivery using one of the frequency codes from Item 5.  The addresses to whom reports will be sent and the total number of codes required will be referenced in an attached coded distribution list.	Item 7.	Signature of person preparing checklist and the date prepared.
		Item 8.	Signature of person reviewing the checklist and date reviewed.

20

OTHER REQUIRED REPORTS

The following are the reports which may be required of the Subcontractor.  Bechtel will direct in writing those specific reports to be submitted which are consistent with Subcontractor’s description of work as defined in Section C.  This list is not complete and is subject to change at the discretion of Bechtel.  The distribution list will be determined by Bechtel.  Also, the subcontract and format requirements will be determined by Bechtel.

Report Name	Frequency
Site Management System (SMS) Program/Project Status Report TPA Milestone Status Report Project Managers Progress Report Cost Performance Report-DOE Order 1332.1A (Formats 1 & 3)	Monthly Monthly Monthly Monthly
ERWM Progress Tracking System (PTS) Report Annual SARA 120 Report Input Monthly Herbicide Report Well Start Cards Well Completion Reports Remediation Start Cards	Monthly Yearly Monthly As required As required As required
Annual Land Disposal Restrictions (LDR) Status Report (M-26/01/M-26-02)	Annually
Annual LDR Alternative Report (M-25-00)	Annually
Annual Polychlorinated Biphenyl (PCB) Document Log (40 CFR 761.180) PCB Annual Report (40 CFR 761.180) Biannual RCRA 3016 Report Emergency Planning and Community Right-to-Know Act (EPCRA) 311 - Material Safety Data Sheet E-PC—RA 312 - Tier Two Emergency and Hazardous Chemical Inventory Report EPCRA 313 - Toxic Chemical Release Inventory Forms	Annually Annually Biannually As required Annually Annually
Financial Statements - not yet defined CFO Report	Yearly Biweekly
Electronic Invoice (See Section H-19)	Monthly

21

Report of Employment and Labor Turnover Report of Contractor Expenditures for Group Insurance and Other Health Benefits Programs (If appropriate)	Annually Annually
Public Voucher (SF 1034)	Monthly
5500 Report (IRS)	Annually
Five Year Plan Fiscal Year Work Plans Multi-Year Program Plans Disclosure Statement Report of Contractor Hours and Earnings Report of Compensation Use of Private Aircraft Report of Contractors Expenditures for Supplementary Compensation	Annually Annually Annually Semi-Annually Semi-Annually Annually Annually
Spills and Releases of Hazardous Substances (DOE 5484.1, RCRA, CERCLA, CAA, CWA, WAC 173-303, TCA, APCA 80-7, WAC 173-360	Immediately for releases in excess of CERCLA reportable quantities
Planned, Continuous and Stable Releases in Excess of Standards (CERCLA)	Annually
Data on Waste Activities (description, quantity and method) (WAC 173-303)	Annually
Hazardous Constituent Level Change in Groundwater (WAC 173-303)	7 Days after Determination
Written notification on operation of any portable source of regulated air emissions (WAC 246-247)	90 Days prior to startup
Written notification on shutdown or permanent elimination of a source of radioactive air emission (WAC 246-247)	30 Days prior to shutdown or closure
Permit reporting/notification requirements (Part A, Part B, PSD.NPDES)	Specified in Permit
Underground injection well data on Waste Constituents and Volumes (SDWA WAC 173-218)	TBD
Radioactive effluent and onsite discharge data, EG&G, Idaho (DOE   484.1)	Annually
Data on PCBs and PCB-containing items of equipment such as removal dates, quantities and types of equipment, shall be submitted to RL (40 CFR 761)	Annually
Generator Annual Dangerous Work Report (WAC 173-303)	Annually

22

TSD-Fality Annual Dangerous Waste Report (WAC 173-303)	Annually
Information on the waste minimization efforts to reduce the volume and toxicity of generated waste (RCRA and DOE Order 5400.1)	Annually
Annual Effluent and Solid Waste Report (DOE Order 5484.1 and DOE Order 5400.1)	Annually
Annual Environmental Monitoring Report (DOE Order 5400.1)	Annually
Annual Air Emissions Report (40 CFR 61, Subpart H)	Annually
Physical Inventory Report: Capital Equipment	BiAnnually
Sensitive Property	Annually
Stores’ Inventories	Annually
Loss, Damage and Destruction of Government Property	Upon occurrence
Property Management Walkthrough Inspection Reports (1)	30 days after inspection
Helium Report (if appropriate)	Annually
Lead Usage Report (if appropriate)	Annually

(1) Walkthroughs are required in all operating/storage facilities.

23

PART I - SECTION G

SUBCONTRACT ADMINISTRATION DATA

CONTENTS

Para.	Title
G-1	REPRESENTATIONS AND CERTIFICATIONS
G-2	MODIFICATION AUTHORITY
G-3	SUBCONTRACT TECHNICAL REPRESENTATIVE (STR) TECHNICAL DIRECTION
G-4	PAYMENT TERMS
G-5	REMITTANCE ADDRESS

24

PART I - SECTION G

SUBCONTRACT ADMINISTRATION DATA

G-1REPRESENTATIONS AND CERTIFICATIONS

The Representations and Certifications dated June 24, 1994, and the Offeror Qualification Criteria certifications dated May 28, 1992, for RFP DE-RP06-92RL12367 are hereby incorporated into this subcontract.

G-2MODIFICATION AUTHORITY

Notwithstanding any of the other provisions of this Subcontract, Bechtel’s designated Subcontracting Officer shall be the only individual on behalf of Bechtel authorized to:

a.Accept nonconforming work;

b.Waive any requirement of this subcontract; or

c.Modify any term or condition of this subcontract.

Bechtel’s designated Subcontracting Officer shall be: Darell D. von der Linden, Program Procurement and Property Manager, (509) 375-4670.

G-3SUBCONTRACT TECHNICAL REPRESENTATIVE (STR) TECHNICAL DIRECTION

a.Performance of the work under this subcontract shall be subject to the technical direction of the Subcontract Technical Representative (STR).  The STR will be designated in writing by the Subcontracting Officer.  The designation letters will include the STR’s authority, responsibility, and limitations.

The term “technical direction” is defined to include, without limitation:

1.Directions which redirect the subcontract effort, shift work emphasis between work areas or tasks, require pursuit of certain lines of inquiry, fill in details or otherwise serve to accomplish the contractual Statement of Work.

2.Provision of written information which assists in the interpretation of drawings, specifications or technical portions of the work description.

3.Review and, where required by Bechtel’s Prime Contract, approval of technical reports, drawings, specifications and technical information to be delivered by the Subcontractor to Bechtel under the subcontract.

b.Technical direction must be within the Statement of Work stated in the subcontract.  The STR does not have the authority to issue any technical direction which:

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1.Constitutes an assignment of additional work outside the Statement of Work;

2.Constitutes a change as defined in the subcontract clause entitled “Changes”;

3.In any manner causes an increase or decrease in the total estimated subcontract cost, base fee and award fee, or the time required for subcontract performance;

4.Changes any of the express terms, conditions or specifications of the subcontract; or

5.Interferes with the Subcontractor’s right to perform in accordance with the subcontract.

c.All technical directions shall be issued in writing.

d.The Subcontractor shall proceed promptly with the performance of technical directions duly issued by the STR in the manner prescribed by this Article and within his authority under the provision of this Article.

If, in the opinion of the Subcontractor, any instruction or direction falls within one of the categories defined in paragraphs b.1. through b.5. above, the Subcontractor shall not proceed but shall notify the Subcontracting Officer in writing within fifteen (15) working days after receipt of any such instruction or direction and shall request a modification to the subcontract accordingly.  Upon receiving the notification from the Subcontractor, the Subcontracting Officer shall:

1.Advise the Subcontractor in writing within forty-five (45) calendar days after receipt of the Subcontractor’s letter that the technical direction is within the scope of the subcontract effort and does not constitute a change under the “Changes” clause of the subcontract;

2.Inform the Subcontractor in writing within forty-five (45) calendar days after receipt of the Subcontractor’s letter not to perform under the direction and cancel the direction; or

3.Advise the Subcontractor within a reasonable time that a written change order will be issued.

e.A failure of the Subcontractor and the Subcontracting Officer to agree that the technical direction is within the statement of the subcontract, or a failure to agree upon the subcontract action to be taken with respect hereto shall be subject to the provisions of Clause H-25, entitled “Disputes” of this subcontract.

G-4PAYMENT TERMS

In consideration of satisfactory performance hereunder, payments to the Subcontractor under this subcontract will be made by Bechtel by electronic funds transfer within Net 30

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calendar days after the date of proper and correct invoice in accordance with Clause H-19.

G-5REMITTANCE ADDRESS

Indicated below is the address to which payment is to be made:

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PART I - SECTION H

SPECIAL SUBCONTRACT REQUIREMENTS

CONTENTS

Para.	Title
H-1	USE OF EXISTING WHC SUBCONTRACTORS
H-2	BECHTEL/GOVERNMENT-FURNISHED PROPERTY/SERVICES
H-3	PUBLIC RELEASE OF INFORMATION
H-4	DEPARTMENT OF ENERGY ORDERS
H-5	OWNERSHIP AND DISPOSITION OF RECORDS
H-6	IMPLEMENTATION OF THE HANFORD SITE STABILIZATION AGREEMENT
H-7	PAYMENT AND PERFORMANCE BONDS
H-8	ADVANCE AGREEMENTS
H-9	REQUISITION OF SITE SERVICES
H-10	DETERMINATION OF APPROPRIATE LABOR STANDARDS
H-11	CRAFT SERVICE PERSONNEL
H-12	ORGANIZATIONAL CONFLICT OF INTEREST – SUBCONTRACTORS
H-13	ADVANCE UNDERSTANDING ON PERSONNEL POLICIES AND PROCEDURES
H-14	PRE-EXISTING CONDITIONS
H-15	SPECIAL PROVISION ON FINANCIAL ACCOUNTABILITY
H-16	DELETED
H-17	DELETED
H-18	INTERNAL AUDIT
H-19	INVOICE AMOUNTS

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H-20	KEY PERSONNEL
H-21	DEPARTMENT OF LABOR WAGE DETERMINATION
H-22	BUSINESS UNIT

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PART I - SECTION H

SPECIAL SUBCONTRACT REQUIREMENTS

CONTENTS

Para.	Title
H-1	USE OF EXISTING WHC SUBCONTRACTORS
H-2	BECHTEL/GOVERNMENT-FURNISHED PROPERTY/SERVICES
H-3	PUBLIC RELEASE OF INFORMATION
H-4	DEPARTMENT OF ENERGY ORDERS
H-5	OWNERSHIP AND DISPOSITION OF RECORDS
H-6	IMPLEMENTATION OF THE HANFORD SITE STABILIZATION AGREEMENT
H-7	PAYMENT AND PERFORMANCE BONDS
H-8	ADVANCE AGREEMENTS
H-9	REQUISITION OF SITE SERVICES
H-10	DETERMINATION OF APPROPRIATE LABOR STANDARDS
H-11	HEALTH PHYSICIST TECHNICIANS (HPTs) AND CRAFT SERVICE PERSONNEL
H-12	ORGANIZATIONAL CONFLICT OF INTEREST — SUBCONTRACTORS
H-13	ADVANCE UNDERSTANDING ON PERSONNEL POLICIES AND PROCEDURES
H-14	PREEXISTING CONDITIONS
H-15	SPECIAL PROVISION ON FINANCIAL ACCOUNTABILITY
H-16	DELETED
H-17	DELETED
H-18	INTERNAL AUDIT
H-19	INVOICED AMOUNTS
H-20	KEY PERSONNEL
H-21	DEPARTMENT OF LABOR WAGE DETERMINATION
H 22	BUSINESSUNIT
H-23	LIMITATION ON ASSIGNED SUBCONTRACTS TO BECHTEL
H-24	USE OF ANALYTICAL LABORATORIES
H-25	DISPUTES
H-26	STORES, WORK ORDERS, AND PURCHASE REQUISITIONS
H-27	OTHER DELEGATION OF AUTHORITY
H-28	INDEPENDENT CONTRACTORS
H-29	SUBCONTRACTS
H-30	EMPLOYEES OF THE SUBCONTRACTOR

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H-31	DIVISION OF ADMINISTRATIVE FUNCTIONS
H-32	SUPPORT OF BECHTEL PURCHASING GOALS
H-33	NON-LIABILITY WITH RESPECT TO COST ACCOUNTING STANDARDS
H-34	VIOLATION OF LAWS

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PART I - SECTION H

SPECIAL SUBCONTRACT REQUIREMENTS

H-1USE OF EXISTING WHC SUBCONTRACTORS

The Operations and Engineering (O&E) contractor has obtained contract assistance in performing certain activities which will be assigned to Bechtel.  This assistance is provided under contracts, MLW-SVV-037106 (Ebasco), MLW-SVV-073750 (SAIC), and MLW-SVV-073751 (IT).  To the extent the Management and Operating Contractor indicates the services of the contractor in this activity are available, Subcontractor, through Bechtel, may work order the services of those contractors from the Management and Operating Contractor.  The engineering services provided by these contractors are non-mandatory.  (See paragraph H-9).

H-2BECHTEL/GOVERNMENT-FURNISHED PROPERTY/SERVICES

a.Site services as indicated in the Hanford Site Services Handbook found on the Hanford Local Area Network, are available for use by the Subcontractor through the Contractor.  Those services that the Contractor and Subcontractor agree to utilize under this subcontract, or those services that the DOE directs the use of shall be considered Government furnished.  Government-furnished equipment will be identified.  These Government-furnished property/services shall be utilized, costed, and reimbursed under the terms of this subcontract, as directed by Bechtel.

b.Bechtel shall deliver to the Subcontractor, at the time and locations stated in this Subcontract, Bechtel-furnished property or services described in the specific task order or work assignment.  If that property or services, suitable for its intended use, is not delivered to the Subcontractor, Bechtel shall equitably adjust affected clauses of this Subcontract in accordance with the Changes Article when;

(1)The Subcontractor submits a timely written request for an equitable adjustment; and an equitable adjustment.

c.Title to Contractor-furnished property shall remain in the Government.  The Subcontractor shall use Bechtel-furnished property only in connection with this Subcontract.   The Subcontractor shall assist Bechtel in implementation of the Project Property Management Plan and shall furnish any necessary documentation required by the plan.

d.Upon delivery of Bechtel-furnished property to the Subcontractor, the Subcontractor assumes the risk and responsibility for its loss or damage, except

(1)For reasonable wear and tear;

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(2)To the extent property is consumed in performing this Subcontract; or

(3)As otherwise provided for by the clauses of this Subcontract.

e.Upon completing this Subcontract, the Subcontractor shall follow the instructions of Bechtel regarding the disposition of all Bechtel-furnished property not consumed in performing this Subcontract or previously delivered to Bechtel.  The Subcontractor shall prepare for shipment, deliver f.o.b. origin, or dispose of Bechtel-furnished property, as may be directed or authorized by Bechtel.  The net proceeds of any such disposal shall be credited to the Subcontract price or shall be paid to Bechtel as directed by Bechtel.

H-3PUBLIC RELEASE OF INFORMATION

It is policy of DOE that Contractors share in the responsibility for timely and appropriate public reporting of unclassified DOE-related activities in order to enhance the public understanding of environmental restoration activities.

Subcontractor is expected to submit through Bechtel to the DOE Contracting Officer for advance review and approval all such oral, written and audio-visual information material proposed for public issuance.

H-4DEPARTMENT OF ENERGY ORDERS

The Subcontractor shall comply with all applicable DOE Orders as directed by Bechtel.

H-5OWNERSHIP AND DISPOSITION OF RECORDS

a.Government Records.  Except as otherwise directed by DOE or as otherwise specified in the subcontract or in its data rights clause or as agreed upon by DOE, Bechtel and the Subcontractor, all data or information generated under this subcontract paid for by the Government shall be the property of the Government, and shall be delivered to the Government or otherwise disposed of by the Subcontractor either as Bechtel may from time-to-time be directed by DOE during the progress of the work, or in any event as Bechtel shall be directed by DOE upon completion or termination of this subcontract and final audit of all accounts hereunder.  The Government shall have the right to use all or any part of said data or information which is the property of the Government for any purpose whatsoever consistent with the requirements of the Privacy Act of 1974.

b.Disposition of Government Records.  The Subcontractor shall deliver to the Government or dispose of all Government-owned records as Bechtel is directed by DOE.  Upon expiration or termination of this subcontract, the Subcontractor may request the right to make copies of Government owned financial or other business records.  The parties may agree on an alternative method to assure continued access by the Subcontractor to such records.  Bechtel approval to copy such records is subject to Government consent and shall not be unreasonably withheld.

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c.Prohibition Against Dissemination of Certain Unclassified Information or Technical Data.  Notwithstanding any other authority or provision in this subcontract regarding protection or withholding of information, the Subcontractor shall comply with Section 148 of the Atomic Energy Act of 1954, 42 U.S.C. 2167 “Prohibition Against Dissemination of Certain Unclassified Information” in accordance with such regulations or orders as the Secretary of Energy has prescribed or may prescribe.

No data as defined in the subcontract’s data rights clause (48 CFR 52.227-14 with alternates) first produced under the subcontract or any subcontract or information made available to the Subcontractor by the DOE may be disseminated to the public by the Subcontractor or its lower-tier subcontractors unless the written approval of the Contracting Officer is obtained.

d.Subcontractor-Owned Records.  The following records are considered the property of the Subcontractor and not within the scope of paragraph a.

1.Personnel and medical records and files (excluding personnel radiation exposure records) maintained on current Subcontractor individual employees and applicants;

2.Internal health and safety files;

3.Employee relations records and files, such as records and files pertaining to:

i.Qualifications or suitability for employment of any employee, applicant, or former employee;

ii.Employee and union grievances;

iii.Arbitration proceedings pursuant to the provisions of any labor contract.

iv.Allegations, investigations, and resolution of employee misconduct;

v.Employee discipline;

vi.Employee charges of discrimination; and

vii.Negotiations with any labor organization in connection with any labor contract.

4.Records and files pertaining to wages, salaries and benefits and wage, salary and benefit administration; and

5.Internal legal files.

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Upon expiration or termination of this subcontract, however, if requested by DOE, copies of any such records pertaining to employees that continue in the employ of a successor Subcontractor at the Hanford Site shall be, unless otherwise prohibited by law, delivered to the successor Subcontractor or to DOE. Any other of such records shall be preserved by the Subcontractor for a period of three years after settlement of the subcontract or otherwise disposed of in such manner as may be agreed upon by the Government and the Subcontractor.

e.DOE shall be afforded access to and use of all records, owned by the Subcontractor; in addition the Subcontractor shall obtain agreement with such other owners so that DOE are also afforded access to and use of records of the type described above relating to Subcontractor employees, but owned by others, which have been acquired or generated for the Subcontractor under this subcontract.  Such right shall be for the purpose of fulfilling obligations of DOE as described in paragraphs (1) through (7) below and shall be reasonably consistent with employee privacy interests and claims of privilege.

1.Equal employment opportunity, compliance with federal labor statutes and security;

2.Occupational illness and injury; safety and health;

3.Subcontract approvals where Subcontractor-owned records are relevant to an approval right of DOE under the subcontract and the information is not readily available to DOE from another source;

4.State and/or federal law;

5.Responding to claims or actions against the Government;

6.Complying with the clause of this subcontract entitled “Special Provisions on Financial Accountability”; and

7.Performing DOE appraisals of Subcontractor performance relating to personnel administration.

f.The Subcontractor shall include appropriate provisions in lower-tier subcontracts to implement this requirement.

H-6IMPLEMENTATION OF THE HANFORD SITE STABILIZATION AGREEMENT

This Article H-6 is applicable only in the event the Subcontractor is obligated to perform, or acquire by subcontract with the prior approval of Bechtel, construction services.

a.The Site Stabilization Agreement for all construction work for the DOE at the Hanford Site (hereinafter referred to as “Site Stabilization Agreement”), which is referenced in this paragraph H-6, consists of a Basic Agreement dated September

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10, 1984, plus an Appendix A.  The Site Stabilization Agreement can be found in Section J, Attachment 1.

b.This paragraph H-6 applies to employees performing work, under contracts (or subcontracts thereunder) administered by the Richland Operations Office of the U.S. Department of Energy (DOE-RL) which are subject to the Davis-Bacon Act, in the classifications set forth in the Site Stabilization Agreement for work performed at the Hanford Site.

c.Contractors and subcontractors at all tiers who are parties to an agreement(s) for construction work with a Local Union having jurisdiction over DOE-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.

d.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 Agreement, shall pay not less and no more than the wages, fringe benefits, and other employee compensation set forth in Appendix A thereto, and shall adhere, except as otherwise directed by Bechtel, to the following provisions of the Agreement:

1.	Article VII	Employment, Section 2 only
2.	Article XII	Non-Signatory Contractor Requirements
3.	Article XIII	Hours of Work, Shifts, and Overtime
4.	Article XIV	Holidays
5.	Article XV	Wage Scales and Fringe Benefits, Sections 1 and 2 only
6.	Article XVII	Payment of Wages-Checking In & Out, Section 3 only
7.	Article XX	General Working Conditions
8.	Article XXI	Safety and Health

e.The Subcontractor agrees to make no contributions in connection with this subcontract to Industry Promotion Funds, or similar funds, except with the prior approval of Bechtel.

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f.The obligation of the Subcontractor and its lower-tier subcontractors to pay fringe benefits shall be discharged by making payments required by this subcontract 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, 5).

g.Bechtel may, from time to time, direct the Subcontractor to pay amounts for wages, fringe benefits, and other employee compensation as the Site Stabilization Agreement, including its Appendix A, may be modified by the parties thereto from time to time.

h.1.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 Subcontractor and its lower-tier subcontractors hereunder, Bechtel may withhold any payments due to the Subcontractor and may terminate the subcontract for default.

2.The rights and remedies of Bechtel and the Government provided in this paragraph H-6 shall not be exclusive and are in addition to any other rights and remedies of Bechtel and the Government provided by law or under this subcontract.

i.The requirements of this paragraph H-6 are in addition to, and shall not relieve the Subcontractor of, any obligation imposed by other clauses of this subcontract, 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.”

j.The Subcontractor 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 H-6, and to preserve such records for a period of three years thereafter, for all employees performing such work.  Such records will contain the name and address of each such employee, his 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. hereof.  The Subcontractor agrees to make these records available for inspection by Bechtel and will permit it to interview employees during working hours on the job.

k.The Subcontractor agrees to insert the provisions of this paragraph H-6, including this paragraph k., in all lower-tier subcontracts for the performance of work subject to the Davis-Bacon Act.

H-7PAYMENT AND PERFORMANCE BONDS

The Subcontractor will not be required to furnish payment and performance bonds.

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H-8ADVANCE AGREEMENTS

The following advance agreements apply to this subcontract:

The Advance Agreement of Personnel Policies and Procedures, found in Section J as Attachment 7, is incorporated into and made a part of this subcontract.

The Advance Agreement of Personnel Policies and Procedures (Supplement), found in Section J as Attachment 7a, is incorporated into and made a part of this subcontract.  This document is subject to D.O.E. approval and Subcontractor agrees that the requirements contained therein that are approved by D.O.E. shall apply to this subcontract.

H-9REQUISITION OF SITE SERVICES

Hanford site services are available for use by the Subcontractor from the assigned provider.  The Subcontractor shall be treated just like any other on-site contractor when it comes to obtaining site service.  After transition, a 90-day written notice must be provided prior to terminating site services.  Requests for site services are subject to the providing contractor’s determination of availability.  The Subcontractor shall assist Bechtel in the accounting/billing process for payment of Hanford site services.

H-10DETERMINATION OF APPROPRIATE LABOR STANDARDS

Bechtel, in coordination with DOE, shall determine the appropriate Labor Standards which shall apply to all work performed under the subcontract.  With Bechtel approval, the Subcontractor shall provide such information in the form and timeframe required by Bechtel, as may be necessary for Bechtel to make such labor standards determinations.  The Subcontractor will then be responsible for ensuring that the appropriate labor standards provisions are included in lower-tier subcontracts.

H-11HEALTH PHYSICIST TECHNICIANS HPTSI AND CRAFT SERVICE PERSONNEL

The Subcontractor will not be allowed to furnish its own HPTs.  Bechtel will provide, through a separate subcontract, HPTs that meet the site training and certification requirements.  DOE Order 5480.11 contains specific requirements for the HPT (also referred to as radiation protection technicians) training program.  The applicable portion of the Order is included in Section J, Attachment 3.  Also included in this Attachment is the HPT Training Program and Health Physics Administrative Guide prepared by WHC and currently in use.  The WHC documents have been included for informational purposes.  Bechtel is responsible for implementation of a comparable training program to comply with the requirements in the Order.

In addition, the Subcontractor will be allowed to employ those craft and service personnel required for surveillance and maintenance of Hanford Surplus Facilities funded from the ER Program budget and managed by the Subcontractor.

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H-12ORGANIZATIONAL CONFLICT OF INTEREST - SUBCONTRACTORS_.

The Subcontractor will not be permitted to subcontract or transfer any portion of the work to its subsidiaries affiliates or otherwise related companies through common ownership or control, without Bechtel’s approval.

The Subcontractor and its lower-tier subcontractors shall exert best efforts to acquire for the Government on the best terms available but shall be allowed (but shall not be obligated) to furnish items of such materials, supplies, equipment, and facilities of its own manufacture (or of the manufacture of its subsidiary corporations), provided it obtains Bechtel’s concurrence in advance.

The Subcontractor, including its subsidiaries, affiliates or otherwise related companies, shall not propose upon DOE contracts or subcontracts for facilities or activities related to environmental restoration on the Hanford Site where the Subcontractor has been involved in development of plans or requirements for such facilities or activities or would be involved in management or oversight of such facilities or activities or would be involved in management or oversight of such facilities or activities under this subcontract, unless otherwise approved by Bechtel.

H-13ADVANCE UNDERSTANDING ON PERSONNEL POLICIES AND PROCEDURES

The DOE intends to reach advance understandings with the successful offeror on certain personnel costs and related expenses.  These costs are those associated with personnel policies and procedures which the offeror intends to apply to work under the subcontract.  Advance review by DOE and written approval by Bechtel of such personnel policies and procedures will be required.  Any exceptions noted in Bechtel’s written approval will govern the Subcontractor’s application of the personnel policies and procedures under the subcontract.  In addition, DOE approval will be required in each instance where the Subcontractor proposes to pay an employee $80,000 or more, in total annual compensation exclusive of bonus or incentive compensation pay which will not be an allowable cost under the subcontract.

H-14PREEXISTING CONDITIONS

To the extent that Bechtel is indemnified by DOE, Bechtel shall indemnify, protect, and hold the Subcontractor harmless from and against any and all civil liabilities, obligations, losses, damages, penalties, claims (including, without limitation claims involving strict or absolute liability), actions, suits, costs, expenses, and disbursements (including, without limitation, legal fees and expenses) of any kind and nature whatsoever which may be incurred by, imposed on, or asserted against Subcontractor in any way relating to or arising out of any act or failure to act on the part of any person, and relating to any part of the facility at the sites managed under this subcontract or any areas adjacent thereto which act or failure to act occurred before the Subcontractor assumed responsibility for work performed under this subcontract on July 1, 1994.  New conditions created or caused in whole or in part by the Subcontractor and coming into being after June 30, 1994, are not considered “Pre-existing conditions”.  To the extent the acts or omissions of the Subcontractor acting after July 1, 1994, cause any fine or add to the amount of any fine or penalty that resulted from pre-existing condition(s) (i.e., one in existence prior to

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July 1, 1994), the Subcontractor will be responsible in accordance with the terms and conditions of this subcontract.  The provisions of this clause are subject to the availability of funds appropriated by Congress.  Bechtel and the Government shall use its best efforts to obtain such funds should such funds not be otherwise available.

H-15SPECIAL PROVISION ON FINANCIAL ACCOUNTABILITY

a.This provision governs the Subcontractor’s financial accountability for fines and penalties, losses (e.g., third party claims), government property and certain legal defense costs and unallowable environmental costs (Section I, clause entitled “Allowable Cost and Payment”).  This provision defines categories of unallowable cost, avoidable costs and sets a ceiling on certain liabilities.  The term “lower-tier subcontractor” as used in this clause refers to Subcontractor’s subcontractor(s) and/or supplier(s) at any tier or level.

b.This provision shall not apply to (1) Small Business or Small Disadvantaged Business concerns, and (2) any nonprofit contractor or subcontractor which receives no fee and is considered nonprofit under the laws of the jurisdiction in which it is incorporated.  A subsidiary may be considered a nonprofit contractor or subcontractor under this provision if all entities above it in the corporate structure are considered nonprofit under the laws of the incorporating jurisdiction.  A Contracting Officer may also treat as nonprofit a contractor whose particular corporate organization or circumstances warrants such considerations.  If such costs are otherwise allowable under this subcontract, then the costs resulting from the actions or inactions of the above contractors or subcontractors which would otherwise be determined to be Avoidable Costs are allowable costs to the Subcontractor.

c.Except as specifically provided below, the costs incurred in legal and other proceedings, including finds and penalties (and associated interest) resulting from such proceedings, are governed by FAR 31.205-47 and FAR 31.205-15, respectively.

d.Items of unallowable costs.  The following items of costs are unallowable under this subcontract to the extent provided below.

1.Losses (including litigation expenses, Counsel fees, and settlements) on, or arising from the sale, exchange,, or abandonment of capital assets, including investments; losses on other contracts, including the Subcontractor’s contributed portion under cost-sharing contracts; losses in connection with price reductions to and discount purchases by employees and other from any source; and losses where such losses or expenses:

i.Are compensated for by insurance or otherwise or which would have been compensated by insurance required by law or by written direction of Bechtel or the Government but which the

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Subcontractor failed to procure or maintain through its own fault or negligence;

ii.Result from willful misconduct or lack of good faith on the part of any of the Subcontractor’s directors, corporate officers, or a supervising representative of the Subcontractor;

iii.Represent liabilities to third persons for which the Subcontractor has expressly accepted responsibility under other terms of this subcontract; or

iv.Are direct costs which are avoidable that are incurred by the Subcontractor and/or a lower-tier subcontractor, without any fault of DOE, exclusively as a result of the negligence or willful misconduct on the part of any of the Subcontractor’s and/or lower-tier Subcontractor’s personnel in performing work under the subcontract.

A.Such direct costs may include, for example, additional programmatic expenses for research and development or production activities, and third party claims against the Subcontractor, but shall not include scrap, waste and other routine damages or losses which occur as part of the cost of doing business and are reasonably anticipated and shall not include consequential damages.

B.Costs of litigation incurred by the Subcontractor or a lower-tier subcontractor in bringing or defending claims relating to these costs are also unallowable.

2.Notwithstanding any other provisions of this subcontract, the costs of bonds and insurance are unallowable to the extent they are incurred to protect and indemnify the Subcontractor and/or lower-tier subcontractor against otherwise unallowable Avoidable Costs, fines and penalties, third party claims, negligently or willfully caused damage to, destruction of or loss of Government property, theft or unauthorized use of Government property, and unallowable environmental costs except and only to the extent that such insurance or bond is required by the specific written direction of Bechtel.

e.Additional responsibility for risk of loss of Government property.  Notwithstanding the limitation of liability described in DEAR 952.245-5, the Subcontractor and/or lower-tier subcontractor shall be liable for direct costs and expenses resulting from damage to, destruction of, or loss of Government property as a direct result of Subcontractor or lower-tier subcontractor negligence or willful misconduct where the costs which are to be borne by the Subcontractor and/or lower-tier subcontractor are those incurred in effecting the repairs to, or

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replacement of, Government property.  These Avoidable Costs do not include scrap, waste and other routine damages or losses which occur as part of the cost of doing business and are reasonably anticipated.  Costs which shall not be reimbursable are the result of circumstances: (1) clearly within the Subcontractor’s and/or lower-tier subcontractor’s sole and exclusive control and (2) resulting from acts of omissions of the Subcontractor and/or lower-tier subcontractor, concerning which the exercise of reasonable care would have avoided the loss or destruction or damage.  In the event that such direct costs and expenses resulting from loss or destruction of or damage to Government property are also in part caused by third parties, other than Bechtel or DOE, such costs and expenses will not be reimbursed by Bechtel.

The allocation of financial responsibility between the Subcontractor and such third party should be determined by the parties involved.

In addition, the Subcontractor shall be liable for direct damage to, destruction of, or loss, Government property stemming from theft, embezzlement, unauthorized use, or any other ultra vires activity by any Subcontractor or lower-tier subcontractor personnel at any level.  Under these circumstances the Subcontractor shall be required to bear the cost of repairing or replacing the damaged, destroyed, or lost Government property.

For purposes of this clause, negligence is the failure to exercise that standard of care which a reasonable and prudent person would exercise under the same or similar circumstances in an identical or similar environment.

f.Costs related to legal defense and settlement of claims.

1.Litigation and Claims.  The Subcontractor may, with the prior written authorization of Bechtel (as directed by the Government), and shall upon the request of Bechtel initiate litigation against third parties, including proceedings before administrative agencies, in connection with this subcontract.  The Subcontractor shall proceed with such litigation in good faith and as directed from time to time by Bechtel.

2.The Subcontractor shall give Bechtel immediate notice in writing of any action, including any proceeding before an administrative agency, filed against the Subcontractor arising out of the performance of this subcontract, and of any claim against the Subcontractor the cost and expense of which the Subcontractor would propose to submit as a claim for allowable costs under the terms of the clause entitled “Allowable Cost and Payment.”

3.Except to the extent prohibited by the Major Fraud Act of 1988, 41 U.S.C. 256 and applicable regulations, when directed by the Government, Bechtel may instruct the Subcontractor to proceed in good faith with the defense of the claim subject to the direction of Bechtel.  Except as otherwise directed by Bechtel in writing, the Subcontractor shall furnish immediately to

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Bechtel copies of all pertinent papers received by the Subcontractor with respect to such action or claim.  The Subcontractor may, with Bechtel’s expressed written approval, settle any such action or claim.  The Subcontractor shall effect, at Bechtel’s request, an assignment and subrogation in favor of Bechtel and/or the Government of all of the Subcontractor’s rights and claims (except those against Bechtel and the Government) arising out of or related to such action or claim against the Subcontractor, and, if required by Bechtel, shall authorize representatives of Bechtel and/or the Government to settle or defend any such action or claim and to represent the Subcontractor in, or to take charge of, any action.  If the Settlement or defense of an action or claim against the Subcontractor is undertaken by Bechtel and/or the Government, the Subcontractor shall furnish all reasonable assistance in effecting a settlement or asserting a defense.  If an adverse judgment is entered against the Subcontractor in a case where Bechtel and the Government have approved and/or directed the defense as provided in this paragraph, the costs of litigation and liability for any resulting claim or damages shall be allowable; provided, however, that such expenses shall not be allowable to the extent that they would have been compensated for by insurance which was required by law or by the written direction of Bechtel or the Government, but which the Subcontractor failed to secure or maintain through its own fault or negligence.

4.Should Bechtel not approve or direct the defense of the litigation as provided in paragraph (3), Bechtel has no liability for the costs of litigation except as provided in subparagraphs (5) and (6) below.  The Subcontractor may request that Bechtel ask the Government to assume direction of the litigation at any point when new facts on the matter would so warrant; provided, however, that the Government may assume direction of the litigation or direct settlement without a request from the Subcontractor, at any time during the litigation process when the Government determines that it is in the best interest to do so, in which case the liability for any resulting claims or damages shall be at the expense of the Government.

5.The Subcontractor must inform Bechtel of any proposed settlement agreement.  The notification shall be supported by all information available to the Subcontractor which is pertinent to the settlement.

i.Except to the extent prohibited by the Major Fraud Act of 1988, 41 U.S.C. 256, the Government has the option of accepting the settlement reached by the Subcontractor.  If the settlement is accepted, Bechtel, the Government and the Subcontractor shall negotiate each party’s share, if any, of the settlement and litigation expenses.  Any agreement reached at this point shall be subject to the approval of DOE’s Contracting Officer and to the restrictions of FAR 33.210.

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ii.If the Subcontractor proceeds without, or otherwise does not obtain, Bechtel’s approval of the settlement agreement, the cost of the agreement and all related costs of litigation shall be at the Subcontractor’s own risk and expense.

6.i.If the Subcontractor has suffered a final judgment, a claim for reimbursement of the costs of litigation or any resulting damages or both may be made to Bechtel.  Except to the extent prohibited by the Major Fraud Act of 1988, 41 U.S.C. 256, Bechtel may negotiate a settlement with the Subcontractor which shall be subject to the approval of DOE’s Contracting Officer.

ii.Reimbursement of costs of litigation and judgments under subparagraph (6)(i) above may be paid by Bechtel notwithstanding the limitations or prohibitions contained in paragraph (c) above and subparagraph (d)(1 )(iv) above, the loss of Government property provision in subparagraph (e) above.

7.Certification of costs.  Bechtel may not accept any settlement or otherwise authorize reimbursement of costs and/or damages where the Subcontractor has not certified, in the form required by the clause of this subcontract entitled “Disputes”, the facts known by the Subcontractor, at any time the matter is submitted for review, which form the basis upon which the Subcontractor seeks reimbursement of these costs.

8.Costs of Litigation.  “Costs of Litigation” as used herein, includes, but are not limited to, administrative and clerical expenses; the cost of legal services, whether performed by in-house or private counsel; the costs of the services of accountants, consultants, or others retained by the Subcontractor to assist it; all elements of compensation, related costs, and expenses of employees, officers, and directors; and any similar costs incurred before, during, and after commencement of a judicial or administrative proceeding which bear direct and substantial relationship to the proceedings.

g.Determining Avoidable Costs.

1.i.Avoidable Costs are those costs specified in subparagraph (d)(1)(iv) above, the loss of Government property provision set forth in subparagraph (e) above, costs under subparagraph (f) above and unallowable environmental costs specified in the Section I clause entitled “Allowable Cost and Payment” which are incurred by the Subcontractor and/or its lower-tier subcontractors, in carrying out the terms and conditions of the subcontract when:

A.The work is clearly within the sole and exclusive control of the Subcontractor and/or lower-tier subcontractor personnel, and

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B.The increased costs of expenses result from the negligence or willful misconduct of the Subcontractor and/or lower-tier subcontractor personnel, and

C.DOE is not responsible in any way for the act or omission which resulted in the additional costs.

ii.The costs and expenses of litigation, settlements, and related litigation costs (including attorneys fees), fines penalties, judgments and liabilities resulting from administrative findings, and damage to, or loss of, Government property when carrying out well understood non-experimental work and damage to, or loss of, Government property as the result of theft, embezzlement or other unauthorized use and unallowable environmental costs specified in the Section I clause entitled “Allowable Cost and Payment” are unallowable to the extent that the acts or omissions resulting in these costs are Avoidable Costs as defined in subparagraph (1)(i) above.  Such costs are unallowable except as specifically authorized by Bechtel and within the scope of work in the subcontract.

2.For purposes of this section, negligence is the failure to exercise that standard of care which a reasonable and prudent person would exercise under the same or similar circumstances in an identical or similar environment.

Ceiling on Certain Liabilities.

1.The Subcontractor’s potential financial obligations under the unallowable environmental costs provision in the Allowable Cost and Payment clause (see Section I) and under the unallowable Avoidable Cost provisions contained in subparagraph (g) above shall be limited to the cumulative amount of the fee or profit actually earned under the subcontract, whether cost-plus or fixed price, during the month when contractor (BHI evaluation period when the event or events which were caused by the Subcontractor led to the incurrence of costs or liabilities or the imposition of fines and penalties occurred.  The limitation or ceiling does not apply to any other categories of unallowable costs, nor shall any other unallowable costs be utilized in the calculation of that ceiling for any evaluation period.  In the case of continuing activities of the Subcontractor which occur over a number of Contractor evaluation periods and results in costs or liabilities described above, the potential financial obligations of the Subcontractor shall be limited to the amount of the actual award fee earned and the actual basic fee earned in the single evaluation period when the incident(s) or event(s) giving rise to the Subcontractor’s disallowed cost or expense took place.  If it is not possible to relate to reasonably allocate particular activities to individual evaluation periods, the financial obligation of the

45

Subcontractor shall be limited to the amount of the actual fee earned in the evaluation period when the amount of such nonreimbursable costs or liabilities were finally determined.  If the determination as to which award fee period(s) the incident or activity occurred resulting in the unallowable Avoidable Costs is made following the expiration of the subcontract, or the Subcontractor is otherwise replaced, the actual fee earned for the last evaluation period that the subcontract was in effect shall be utilized after deducting disallowed Avoidable Costs that were previously charged to the Subcontractor during that period.

2.i.The financial obligations of a lower-tier subcontractor, under the unallowable Avoidable Cost provisions contained in subparagraph (g) above shall be limited in the same manner as described in subparagraph (h) 1. above to the cumulative amount of the fee or profit actually earned by the lower-tier subcontractor under its subcontract, whether cost-plus or fixed-price, during the six-month subcontractor evaluation period when the event or events which were caused by the lower-tier subcontractor led to the incurrence of costs or liabilities or the imposition of fines and penalties occurred.  This limitation or ceiling does not apply to any other categories of unallowable costs.

ii.The Subcontractor shall cause all lower-tier subcontractors to be responsible for all costs and liabilities described in this subparagraph (h), up to the amount of the actual fee or profit earned in the pertinent Contractor evaluation period.  The Subcontractor shall cause all lower-tier subcontractors to agree to provide a reasonable financial guarantee to assure that the lower-tier subcontractor will have sufficient resources to satisfy all costs and liabilities up to the amount of the actual fee or profit earned based upon the highest amount of profit or fee received by the lower-tier subcontractor during the last two Contractor evaluation periods.  Alternatively, at the election of the lower-tier subcontractor, at the end of each annual period the Subcontractor may retain a percentage of the fee or profit earned as reasonably determined to be sufficient by the Subcontractor to protect the interests of Bechtel and the Government.  With respect to new subcontracts or subcontracts that have been in effect for less than one year (or two six-month evaluation periods), the guarantee shall be in an amount that the Subcontractor reasonably determines with the approval of Bechtel to be in the best interest of the Government, but not to exceed the amount of fee or profit available for the upcoming evaluation period.  The financial responsibility of the lower-tier subcontractor and the guarantee of retainage of the lower-tier subcontractor shall remain in effect for up to one year after the termination or expiration of the lower-tier subcontract at which time any financial guarantee, including retainage, shall be returned to the lower-tier subcontractor.

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iii.Where the amount of fee or profit earned by a lower-tier subcontractor during the Contractor’s evaluation period is not sufficient to pay in full all Avoidable Costs incurred during that period, the excess amount of these costs will be reimbursed or otherwise treated as allowable costs provided, however, that the Subcontractor shall be responsible for the payment of such Avoidable Costs in excess of the lower-tier subcontractor’s ceiling if such costs and/or damages were caused in whole or in part by the negligence of the Subcontractor; provided, further, that in case the Subcontractor’s obligation to pay Avoidable Costs incurred by the negligence of the lower-tier subcontractor is limited to the extent that (i) the lower-tier subcontractor’s profit for that evaluation period was insufficient to pay the Avoidable Costs in full, and (ii) the Subcontractor’s ceiling on Avoidable Costs liabilities specified in this subsection in subparagraph (1) of this section has not been reached for that evaluation period.  The Subcontractor shall not require a lower-tier subcontractor to provide financial guarantees for the payment of Avoidable Costs beyond the profit or fee earned by the lower-tier subcontractor in the relevant contractor’s six-month evaluation period.

iv.The Subcontractor shall cause appropriate provisions to implement the lower-tier subcontractor liability ceiling and financial guarantee obligation contained in this subparagraph (h(2)) to be inserted into every lower-tier subcontract entered into with a Contractor or subcontractor provided, however, that such lower-tier subcontract shall provide that to the extent that Avoidable Costs incurred by the negligence of the lower-tier subcontractor are reimbursed by Bechtel to the Subcontractor for all such costs to the extent that such lower-tier subcontractor has already paid, or incurred without reimbursement, such costs; provided, further, that all such lower-tier subcontractors shall provide that the financial guarantee provided by lower-tier subcontractors to the Subcontractor should remain in effect for not more than one year after termination or expiration of such subcontract.

3.The Subcontractor shall be responsible for all costs and liabilities described in subparagraphs (h(1)) and (h(2)) of this section, up to the amount of the actual fee earned in the pertinent evaluation period.  The Subcontractor agrees to provide, in such form and amount as shall be satisfactory to Bechtel, a financial guarantee to assure that the Subcontractor will have sufficient resources to satisfy all costs and liabilities up to the amount of the actual fee earned for a period based upon the highest amount of fee received over the last four evaluation periods.  Alternatively, at the election of the Subcontractor, at the end of each evaluation period Bechtel may retain a percentage of the fee as determined to be sufficient by Bechtel to protect the interests of Bechtel and the

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Government.  With respect to new contracts or contracts that have been in effect for less than two years (or four six-month evaluation periods), the guarantee shall be in an amount that Bechtel determines to be in the best interest of Bechtel and the Government, but not to exceed the amount of fee available for the upcoming evaluation period.  The financial responsibility of the Subcontractor and the guarantee or retainage shall remain in effect for up to one year after the termination of or expiration of the subcontract at which time any financial guarantee, including retainage, shall be returned to the Subcontractor.  Any costs or liabilities to third parties beyond the limitations described above would be reimbursed subject to the other provisions of the subcontract governing cost reimbursement.  The Subcontractor’s potential financial risk for proceedings costs under the Major Fraud Act of 1988, 41 U.S.C. 256, or the civil or criminal penalties provisions of the Price-Anderson Amendments Act of 1988, 42 U.S.C. 2273, 2282, will not be limited except as provided in regulations implementing those provisions.

4.Bechtel and the Government’s liability under this clause is subject to the availability to DOE of appropriated funds at a time a contingency occurs.  Nothing in this subcontract shall be construed as implying that the Congress will, at a later date, appropriate funds to meet deficiencies.

H-16DELETED

H-17DELETED

H-18INTERNAL AUDIT

The Subcontractor agrees to conduct an internal audit and examination satisfactory to the Government of the records, operations, expenses, and the transactions with respect to costs claimed to be allowable under this subcontract annually and at such other times as may be mutually agreed upon.  The results of such audit including the working papers, shall be submitted or made available to Bechtel and the Government.  This clause does not supersede the Government’s right to audit.

H-19INVOICED AMOUNTS

In addition to the information required by other sections of this subcontract, the Subcontractor shall provide incurred cost data coded in a Bechtel defined format via computer or some other form of magnetic media such as a computer tape or floppy disk.

H-20KEY PERSONNEL

The personnel specified below are considered to be essential to the work being performed under this subcontract.  Prior to diverting to other positions or substituting any of the specified individuals, the Subcontractor shall notify Bechtel at least forty-five (45) days in advance and shall submit justification (including proposed substitutions) in sufficient

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detail to permit evaluation of the impact on the program.  No diversion or substitution shall be made by the Subcontractor without the written consent of Bechtel provided that Bechtel may ratify in writing such diversion or substitution and such ratification shall constitute the consent of Bechtel required by this clause.  This clause may be amended from time to time during the course of the subcontract to either add or delete personnel, as appropriate.

NAME	TITLE
John Moroney	General Manager, TMA Hanford

H-21DEPARTMENT OF LABOR WAGE DETERMINATION

In the performance of this subcontract, the Subcontractor and/or lower-tier subcontractors shall comply with the requirements of U.S. Department of Labor Wage Determination Number ( TBD ), dated ( TBD ), if the subcontract or lower-tier subcontracts are covered by the Service Contract Act.  Prior to the beginning of each subcontract year, a revised wage determination shall be requested from Bechtel and incorporated into this subcontract by modification.  The Subcontractor and/or lower-tier subcontractors shall comply with revised wage determination for Service Contract Act covered employees.

H-22BUSINESS UNIT

The work performed by the Subcontractor under this subcontract shall be conducted by a separate business unit (division, segment, joint venture, etc.) separate from any parent unit.  The business unit may report or interface directly with a home office.

H-23LIMITATION ON ASSIGNED SUBCONTRACTS TO BECHTEL.

Under no circumstances shall the Subcontractor be allowed to mange, direct, supervise, or otherwise have influence over any subcontract or purchase order assigned by WHC to Bechtel that may involve a company affiliated with the Subcontractor.

H-24USE OF ANALYTICAL LABORATORIES

Bechtel shall review all work plans or other documents that may be prepared by the Subcontractor and which may propose sampling plan that would generate analytical samples to be sent to analytical laboratories.  These plans will subsequently be submitted to DOE for review and generally will be parts of work plans or other documents submitted to the relevant regulatory agencies for regulatory approval under the Hanford Federal Facility Agreement and Consent Order.  Further, there shall be no performance of laboratory testing during the transition period.  It is further understood that Bechtel and the Subcontractor shall establish controls which require the prior approval of Bechtel before the Subcontractor can perform laboratory testing of any nature.

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H-25DISPUTES

a.Initial resolution of disputes, conflicts, or claims under this subcontract shall reside with Bechtel’s Procurement Manager.  In the event that an equitable resolution of the dispute cannot be reached, the Subcontractor may request that Bechtel authorize an appeal to the Government Contracting Officer in the Contractor’s name or, solely at Bechtel’s option, Bechtel may bring the appeal directly to the Government Contracting Officer in Bechtel’s name. Any dispute or appeal brought before the Government Contracting Officer shall be submitted pursuant to the Disputes clause found in the prime contract (FAR 52.233-1 )ALT 1)(DEC 911)).  The Contracting Officer’s Final Decision and, if appealed, the final Appeal Board or court ruling, after all appeals have been exhausted, shall be binding.

b.Except to the extent Bechtel has specifically directed Subcontractor in writing to incur an expense, Bechtel will not be liable to the Subcontractor for any amounts being claimed for such expense unless and until Bechtel receives the amount claimed by the Subcontractor from the Government.  If the Government fails to pay on any claim, Bechtel has no further liability to the Subcontractor.

c.Should Bechtel authorize an appeal in its name, the Subcontractor shall bear all costs associated with such appeal.

d.Any appeal submitted shall include Bechtel’s direct and indirect costs and fee allocation, as applicable to the costs being appealed.

e.The Subcontractor shall indemnify and hold Bechtel harmless from any and all liability stemming from Bechtel’s certification of the Subcontractor’s claim in any appeal.

f.Pending resolution of any dispute under the subcontract, The Subcontractor shall proceed as directed by Bechtel in writing.

g.Any dispute arising from the subcontract that is not processed under FAR 52.233-1 Alt 1 (Dec 91) shall be brought before a court of competent jurisdiction in the State of Washington.  The interpretation of statutes, regulations and clauses in this subcontract which are adaptions of Federal Government acquisition clauses shall be according to the Federal common law of contracts as enunciated by Federal judicial bodies and Boards of Contract Appeals.

H-26STORES, WORK ORDERS, AND PURCHASE REQUISITIONS

The Subcontractor is authorized to write stores orders, work orders, and purchase requisitions, which will be charged to an appropriate Bechtel account.

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H-27OTHER DELEGATION OF AUTHORITY

The Subcontractor will be delegated signature authority for other charges to the appropriate Bechtel account subject to Bechtel approval.

H-28INDEPENDENT CONTRACTORS

This subcontract is not intended and does not constitute, create, or otherwise recognize a joint venture, partnership, or formal business organization of any kind and the rights and obligations of the parties shall be only those expressly set forth herein.

H-29SUBCONTRACTS

a.All subcontracting activity under this Subcontract will be performed by Bechtel upon receipt of a Purchase Requisition from the Subcontractor.

b.The Subcontractor will provide all technical support to the Bechtel Purchasing activity necessary for Bechtel to comply with its approved procedures and with the Prime Contract requirements.

H-30EMPLOYEES OF THE SUBCONTRACTOR

Bechtel will from time to time, request the Subcontractor to provide certain services to Bechtel.  Upon receiving such requests, the Subcontractor shall provide one or more of its employees having expertise in the areas designated by Bechtel.  The Subcontractor shall, at all times and for all purposes, retain sole authority to hire, discipline, discharge, train, appraise, promote, schedule or otherwise supervise such employees.  The Subcontractor shall also be solely responsible for all compensation, benefits, taxes and other state or federal obligations arising out of its employment of such individuals.

H-31DIVISION OF ADMINISTRATIVE FUNCTIONS

The Subcontractor shall utilize certain of Bechtel’s established support organizations, information systems, policies and procedures for Administrative functions. Included in this category are:

•Employee benefits, including the attached Personnel Appendix “A”

•Accounting and financial support

•Travel

•Payroll

•Personnel reporting

•Procurement

•Property Management-However, the Subcontractor is responsible for complying with the provisions of Clause H-2, entitled “Bechtel/Government Furnished Property/Services”

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•Public affairs

•Classification of documents Quality Assurance

•Safety Administration

•Security-However, the Subcontractor is responsible for complying with the requirements of the provisions of Clause 1-3, “Security”, as well as any other provision of this subcontract with respect to data, information, and material of a classified nature which the Subcontractor may come in contact with in the performance of this subcontract.

•Training-However, Bechtel will provide generalized training and-the Subcontractor will provide specialized training related to the Subcontractor workscope.

•In addition to normal finance functions which would be distributed to a line organization independent of the subcontract arrangement (e.g., timekeeping, budgeting, reporting, etc.) certain areas of the Subcontractor administrative support will be retained within the Subcontractor. The exceptions to the general rule of utilizing Bechtel support are in areas where it is advantageous and cost effective to provide the support through the Subcontractor, where there are legal requirements derived from the separate corporate status, or where required for administration of the subcontract. The Subcontractor shall supplement Bechtel administrative support with its own dedicated administrative support in the following areas:

•Compensation EEO/Affirmative Action

•Professional/technical employment

•Employment processing

•Non-exempt recruiting

H-32SUPPORT OF BECHTEL PURCHASING GOALS

The Subcontractor shall support, to the extent possible, the Bechtel Purchasing goals for Labor Surplus, Small, Small Disadvantaged and Women-owned business placements.

H-33NON-LIABILITY WITH RESPECT TO COST ACCOUNTING STANDARDS

Reference is made to the Clause 1-22 entitled, “Disclosure and Consistency of Cost Accounting Practices”.  Notwithstanding the provisions of that clause, the Subcontractor shall not be liable to Bechtel and Bechtel shall indemnify and hold Subcontractor harmless for any increased costs or interest thereon, resulting from any failure of the Subcontractor, with respect to activities carried on at the site of work, to comply with said clause; provided, the Subcontractor is directed by Bechtel to comply with DOE

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accounting practices and procedures which may be in conflict with the Cost Accounting Standards.  The Subcontractor also shall not be liable to Bechtel for any increased costs or interest of a Lower-tier subcontractor who fails to comply with applicable cost accounting standards or to follow any practice disclosed pursuant to the requirements of such clause; provided, that the Subcontractor shall include in each covered Lower-tier subcontract a clause making the Lower-tier subcontractor liable for any increased costs or interest thereon resulting from any failure of the Lower-tier subcontractor to comply with prescribed standard or disclosed practices.

H-34VIOLATIONS OF LAWS OR REGULATIONS

In the event Bechtel is liable for fines, penalties or judgments arising out of a violation of such laws or regulations which is caused in part of Bechtel and in part by Subcontractor, Subcontractor shall indemnify Bechtel for such costs based on the proportionate share of Subcontractor’s responsibility for the violation.  In the event a third party (or parties) bears responsibility for the violation and the third party’s share of the costs is borne by Bechtel and/or Subcontractor, Bechtel and Subcontractor shall bear such share in proportion to their respective shares of responsibility for the violation.  A party’s subcontractors, agents and employees shall not be considered third parties for this purpose.

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PART II – SECTION 1

SUBCONTRACT CLAUSES

Government Contract Clauses.  The clauses contained in the respective Government agency regulations referenced below are incorporated herein.  The obligations of the Contractor to the Government as provided in said clauses shall be deemed to be the obligations of the Subcontractor to Bechtel.  Wherever necessary to make the context of the clauses set forth below applicable to this Subcontract, the term “Contractor” shall mean Subcontractor, the term “Contract” shall mean this Subcontract, and where noted or where necessary to derive proper meaning in a subcontract situation the term ‘DOE’ ‘Government’ ‘Contracting Officer’ and equivalent phrases shall mean Bechtel, except the terms “Government” and “Contracting Officer” do not change:  (1)  In the phrases “Government Property”, “Government-Furnished Property, “Government-Owned Property”, “Government Equipment” and “Government-Owned Equipment”, or where otherwise intended that title ownership or rights to remain with the Government for Government Furnished Property.  (2) When a right, act, authorization or obligation can be granted or performed only by the Government or his duly authorized representative.  (3) When access to proprietary financial information or other proprietary data is required.  (4) When the property is to be transferred directly to the Government.  and (5) Where specifically modified as noted below.

Clauses 1-1 through 1-52 and 1 through 87 below are hereby incorporated into and made a part of this Subcontract.  Clauses 1-1 through 1-52 are provided in full text as Attachment 1 to Section 1.  Clauses 1 through 87 are incorporated by reference.  The “Notes or Modification” column states the manner in which the clause should be interpreted or modified.

NUMBER	CLAUSE TITLE	REFERENCE	NOTES OR MODIFICATION
1-1	Preprinted Contract Clauses for Cost Reimbursement Service Contracts (DOE Set 304) (DEC 1991)		DOE Set 304 are not physically enclosed herein but the clauses are incorporated by reference
1-2	Price for Fee Adjustment or Illegal or Improper Activity (Deviation) (SEP 1990)	FAR 52-203-10
1-3	Security (OCT 1987)	DEAR 952-204-2	DOE shall not mean Bechtel in the 1st and 2nd sentence of ¶ a. and in ¶ b. and h. Applies only to agreements involving access to classified information
1-4	Classification (APR 1984)	DEAR 952-204-70
1-5	Foreign Ownership, Control, or influence over Contractor (APR 1984)	DEAR 952-204-74	Contracting Officer shall not mean Bechtel
1-6	Required Sources for Jewel Bearings and Related Items (APR 1984)	FAR 52-208-1	Applies if items furnished under this agreement contain jewel bearings
1-7	Organizational Conflicts of Interest-Special Clauses (NOV 1987)	DEAR 952-209-72	Government shall not mean Bechtel in ¶ 1. iii. Department shall not mean Bechtel Delete last sentence in ¶ d. 1.
1-8	Cost and Schedule Control Systems (SEP 1991)	DEAR 952-212.73	Change the 2nd sentence of ¶ c. to state 90 days
1-9	Order of Precedence
1-10	Reversion of Adjustment of Plans for Post-Retirement Benefits Other Than Pensions (PRB) (JUL 1991)	FAR 52.215.39
1-11	Allowable Cost and Payment Deviation) (APR 1984) and Alternates I and II	DEAR 952-216-7	DOE shall not mean Bechtel in ¶ b. iv. C. Cognizant Contracting Officer shall mean “audit agency” in ¶ d.2. Government shall not mean Bechtel in ¶ d.2. and d.3. Government shall mean “Bechtel and the Government” in ¶ h.2.ii. and ¶ h.2.ii.C.
1-12	Option to Extend the Term of the Contract (MAR 1989)	FAR 52-217-9
1-13	Acquisition of Real Property (APR 1984)	DEAR 952-217-70
1-14	Labor Surplus Area Subcontracting Program (APR 1984)	FAR 52-220-4	Applies only if this agreement may exceed $500,000
1-15	Environment, Safety and Health (Government-Owned or Leased)		DOE shall not mean Bechtel in the 1st sentence of Acquisition of ¶ a. and Acquisition of Acquisition of ¶ b. and d.
1-16	Environmental Protection		DOE shall not mean Bechtel
1-17	Permits and Licenses		DOE shall not mean Bechtel
1-18	Preservation of Individual Occupational Radiation Exposure Records (APR 1984)	DEAR 952-223-75	DOE shall mean “Bechtel and DOE” when first stated in the 1st sentence
1-19	Privacy Act (Deviation) (APR 1984)	FAR 52-224-2
1-20	Buy American Act-Supplies (JAN 1989)	FAR 52-225-3	Government shall not mean Bechtel
1-21	Restrictions on Certain Foreign Purchases (APR 1991)	FAR 52-225-11
1-22	Disclosure and Consistency of Accounting Practices (AUG 1992)	FAR 52-230-3	Government shall not mean Bechtel
1-23	Consistency in Cost Accounting Practices (AUG 1992)	FAR 52-230-4
1-24	Limitation on Withholding of Payments (Deviation	FAR 52-232-9

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	(APR 1984)
1-25	Protection of Government Buildings, Equipment, and Vegetation (APR 1984)	FAR 52-237-2	Government shall not mean Bechtel
1-26	Continuity of Services (JAN 1991)	FAR 52-237-3	Government shall not mean Bechtel when first stated in the 1st sentence of ¶ a.
1-27	Bankruptcy (APR 1991)	FAR 52-242-13	Government shall not mean Bechtel
1-28	Nuclear Hazards Indemnity Agreement (NOV 1991)	DEAR 952-250-70	DOE and Government shall not mean Bechtel
1-29	Government Supply Sources (APR 1984)	FAR 52-251-1	Government shall not mean Bechtel
1-30	Interagency Fleet Management System Vehicles and Related Services (JAN 1991)	FAR 52-251-2
1-32	Insurance		Government shall not mean Bechtel
1-33	Procurement of Construction (JUN 1991)
1-34	Procurement of Architect-Engineer Services		Deleted in its entirety
1-35	Workers Compensation		DOE shall not mean Bechtel in ¶ a.1.
1-36	Changes (Deviation) (APR 1984)	DEAR 970-5204-11
1-37	Contractor’s Organization (Deviation) (APR 1984)	DEAR 970-5204-12
1-38	Contractor Purchasing System (OCT 1990)	DEAR 970-5204-22	Deleted in its entirety
1-39	Taxes (APR 1984)	DEAR 970-5204-23	Government shall not mean Bechtel
1-40	Nuclear Safety (APR 1984)	DEAR 970-5204-26	DOE shall not mean Bechtel in b. and c.1.
1-41	Assignment (APR 1984)	DEAR 970-5204-28
1-42	Other Government Contractors (APR 1984)	DEAR 970-5204-43	Government shall not mean Bechtel in the last sentence
1-43	Termination (Deviation) (APR 1991)	DEAR 970-5204-45
1-44	Technology Transfer
1-45	Rights in Data – Technology Transfer Activities
1-46	Prompt Payment (SEP 1992)	FAR 52-232-25
1-47	Intellectual Property Indemnity (JUN 1979)	DOE PR 9-9.103-3	Government shall mean “Bechtel and the Government” when first stated in ¶ a. and ¶ b. Government shall not mean Bechtel when last stated in ¶ a.
1-48	Classified Inventions (JUN 1979)	DOE PR 9-9.106
1-49	Facilities License* (Deviation) (APR 1984)	DOE PR 9-9.107-5(H)	Government shall not mean Bechtel
1-50	Limitation on Assigned Subcontracts to Bechtel
1-51	Use of Analytical Laboratories
1-52	Disputes
1	Definitions (SEP 1985)	DEAR 952-202-1
2	Officials Not to Benefit (APR 1984)	FAR 52-203-1
3	Gratuities (APR 1984)	FAR 52-203-3
4	Covenant Against Contingent Fees (APR 1984)	FAR 52-203-5	Government shall not mean Bechtel in ¶ (b)
5	Restrictions on Subcontractor Sales to the Government (JUL 1985)	FAR 52-203-6	Government shall not mean Bechtel in ¶ (a)
6	Anti-Kickback Procedures (OCT 1988)	FAR 52-203-7	Delete ¶ (c)(1)
7	Limitations on Payments to Influence Certain Federal Transactions (JAN 1990)	FAR 52-203-12	Government and Contracting Officer shall not mean Bechtel
8	Requirement for Certificate of Procurement Integrity-Modification (NOV 1990)	FAR 52-203-9
9	Price or Fee Adjustment fro Illegal or Improper Activity (SEP 1990)	FAR 52-203-10
10	Printing (APR 1984)	DEAR 952-206-70
11	Protecting The Government’s Interest when Subcontracting with Contractors Debarred, Suspended, or Proposed for Debarment (NOV 1992)	FAR 52-209-6	Government shall not mean Bechtel
12	Stop-Work Order-Alternate I (APR 1984)	FAR 52-212-13
13	Uniform Reporting System (MAY 1987)	DEAR 952-212-72	Deleted in its entirety
14	Examination of Records by Comptroller (APR 1984)	FAR 52-215-1
15	Audit-Negotiation (DEC 1989)	FAR 52-215-2	Delete the statement “who are employees of the Government” in ¶ (b) and (c) Government shall not mean Bechtel in ¶ (a)
16	Price Reduction for Defective Cost or Pricing Data (JAN 1991)	FAR 52-215-22	Applies if this Agreement is in excess of $100,000 and Cost or Pricing Data was initially required
17	Price Reduction for Defective Cost or Pricing Date-Modification (DEC 1991)	FAR 52-215-23	Applies if Cost or Pricing Data were not initially required
18	Subcontractor Cost or Pricing Data (DEC 1991)	FAR 52-215-24	Applies if FAR 52-215-22 applies
19	Subcontractor Cost or Pricing Data-Modifications (DEC 1991)	FAR 52-215-25	Applies if FAR 52-215-23 applies
20	Integrity of Unit Prices Basic and Alternate I (APR 1991)	FAR 52-215-26 And 26 Alternate I
21	Termination of Defined Benefit Pension Plans (SEP 1989)	FAR 52-215-27

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22	Facilities Capital Cost of Money (SEP 1987)	FAR 52-215-30
23	Waiver of Facilities Capital Cost of Money (SEP 1987)	FAR 52-215-31
24	Order of Precedence (JAN 1986)	FAR 52-215-33	Deleted in its entirety
25	Allowable Cost and Payment (APR 1984)	DEAR 952-216-7 Alternate I and II	Deleted in its entirety
26	Fixed Fee (APR 1984)	FAR 52-216-8	Deleted in its entirety
27	Cost Contract-No Fee (APR 1984)	FAR 52-216-11	Deleted in its entirety
28	Acquisition of Real Property (APR 1984)	DEAR 952-217-70	Government shall not mean Bechtel
29	Utilization of Small Business Concerns and Small Disadvantaged Business Concerns (FEB 1990)	FAR 52-219-8	Applicable to Agreements over $10,000
30	Small Business and Small Disadvantaged Business Subcontracting Plan (JAN 1991)	FAR 52-219-9	Applies only if this Agreement exceeds $500,000. Subcontractor shall adopt a Subcontracting Plan in consonance with this clause\
31	Utilization of Women-Owned Small Businesses (AUG 1986)	FAR 52-216-13
32	Liquidated Damages-Small Business Subcontracting Plan (Aug 1989)	FAR 52-219-16
33	Utilization of Labor Surplus Area Concerns (APR 1984)	FAR 52-220-3
34	Notice to The Government of Labor Disputes (APR 1984)	FAR 52-222-1
35	Payment for Overtime Premiums (JUL 1990)	FAR 52-222-2	Government shall not mean Bechtel
36	Convict Labor (APR 1984)	FAR 52-222-3
37	Contract Work Hours and Safety Standards Act-Overtime Compensation (MAR 1986)	FAR 52-222-4
38	Notification of Employee Rights Concerning Payment of Union Dues or Fees (MAY 1992)	FAR 52-222-18
39	Equal Opportunity (APR 1984)	FAR 52-222-26	Delete ¶ (a) and (c)
40	Equal Opportunity Preaward Clearance of Subcontracts (APR 1984)	FAR 52-222-28	Applies only if this Agreement is $1 million or more
41	Affirmative Action for Special Disabled and Vietnam Era Veterans (APR 1984)	FAR 52-222-35
42	Affirmative Action for Handicapped Workers (APR 1984)	FAR 52-222-36	Applies only if this Agreement is in excess of $2,500
43	Employment Reports on Special Disabled Veterans and Veterans of the Vietnam Era (JAN 1988)	FAR 52-222-37	Applies only if this Agreement is $10,000 or more
44	Service Contract Act of 1965 As Amended (MAY 1989)	FAR 52-222-41
45	Statement of Equivalent Rates for Federal Hires (MAY 1989)	FAR 52-222-42
46	Clean Air and Water (APR 1984)	FAR 52-223-2	Applies if this Agreement is for $100,000 or more or if a facility to be used has been the subject of a conviction under the Clean Air Act or Federal Water Pollution Control Act
47	Drug-Free Workplace (JUL 1990)	FAR 52-223-6	Government shall mean “Bechtel and the Government” in ¶ (d)
48	Paperwork Reduction Act (APR 1984)	DEAR 952-224-70
49	Restrictions on Certain Foreign Purchases (MAY 1992)	FAR 52-225-11
50	Insurance Liability to Third Persons (APR 1981)	FAR 52-228-7	Deleted in its entirety
51	Interest (JAN 1991)	FAR 52-232-17
52	Limitation of Cost (APR 1984)	FAR 52-232-20
53	Limitation of Funds (APR 1984)	FAR 52-232-23
54	Assignment of Claims (JAN 1986)	FAR 52-232-33	Deleted in its entirety
55	Prompt Payment (APR 1989)	FAR 52-232-25	Deleted in its entirety
56	Electronic Funds Transfer Payment Methods (APR 1989)	FAR 52-232-28
57	Disputes Alternate I (APR 1984)	FAR 52-233-1	Deleted. See Clause I-52
58	Protest After Award (AUG 1989) Alternate I (JUN 1985)	FAR 52-233-3 and Alternate I
59	Key Personnel (APR 1984)	DEAR 952-235-70
60	Notice of Intent to Disallow Costs (APR 1984)	FAR 52-242-1
61	Changes (Cost Reimbursement) Alternates I & V (AUG 1987)	FAR 52-243-2 and Alternate I & V	Deleted in its entirety
62	Subcontracts (Cost-Reimbursement and Letter Contracts)	FAR 52-244-2	Government shall mean “Bechtel and the Government” in ¶ (k)
63	Competition in Subcontracting (APR 1984)	FAR 52-244-5
64	Government Property-Cost-Reimbursement. Time-	DEAR 952-245-5

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	and-Material or Labor-Hour Contracts (JAN 1986)
65	Government Property (Cost Reimbursement Time & Material or Labor Hour Contracts) Alternate I (JUL1985)	DEAR 952-245-5	Deleted in its entirety
66	Inspection of Services-Cost-Reimbursement (APR 1984)	FAR 52-246-5
67	Inspection of Research and Development (Cost Reimbursement) Basic and Alternate I (APR 1984)	FAR 52-246-8 and Alternate I	Deleted in its entirety
68	Limitation of Liability Services (APR 1984)	FAR 52-246-25	Deleted in its entirety
69	Preference for U.S. Flag Air Carriers (APR 1984)	FAR 52-247-63
70	Preference for Privately Owned U.S. Flag Commercial Vessels (APR 1984)	FAR 52-247-64
71	Foreign Travel (APR 1984)	DEAR 952-247-70
72	Termination for Convenience of the Government (Educational and other Non-Profit Institutions) (APR 1984)	FAR 52-249-5	Deleted in its entirety
73	Termination (Cost Reimbursement) (MAY 1986)	FAR 52-249-6	Deleted in its entirety
74	Excusable Delays (APR 1984)	FAR 52-249-14
75	Contractor Employee Travel Discounts (APR 1989)	DEAR 952-251-70
76	Clauses Incorporated by Reference (JUN 1988)	FAR 52-252-2
77	Authorization and Consent (JUN 1979)	DOE PR 9-9-102-1	Deleted in its entirety
78	Authorization and Consent (JUN 1979)	DOE PR 9-9-102-2	Government shall not mean Bechtel
79	Notice and Assistance Regarding Patent and Copyright Infringement (JUN 1979)	DOE PR 9-9-104	Government shall not mean Bechtel
80	Reporting of Royalties (JUN 1979)	DOE PR 9-9-110(c)
81	Rights in Data-General with Alternates I & V (JUN 1967)	FAR 52-227-14	Deleted in its entirety
82	Additional Data Requirements (JUN 1987)	FAR 52-227-16
83	Rights in Data Special Works (JUN 1987)	FAR 52-227-17	Deleted in its entirety
84	Rights to Proposal Data (Technical) (JUN 1987)	FAR 52-227-23
85	Patients Rights-Small Business Firms or Nonprofit Organizations (Other than M & Os) (APR 1987)	DEAR 952-227-71	Deleted in its entirety
86	Patient Rights-Long Form (APR 1984)	DEAR 927-300(a)	DOE, Government, and Contracting Officer shall not mean Bechtel 41 CFR 9-9-107-5(a) or 41 CFR 9-9-107-6, as appropriate, is incorporated by reference as requested by ¶ (j)(2)
87	Patient Rights-Short Form (APR 1984)	DEAR 927-300(a)	Deleted in its entirety

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PART II – SECTION 1

CONTRACT CLAUSES

I-1REPRINTED CONTRACT CLAUSES FOR COST-REIMBURSEMENT SERVICE CONTRACTS (DOE SET 304) (DEC 1991)

The contract clauses contained in DOE Set 304, Cost-Reimbursement Service contracts, dated Dec 1991 are located in this Section I and except for those indicated as deleted, are hereby incorporated into and made a part of this contract.

I-2FAR 52.203-10 PRICE OR FEE ADJUSTMENT FOR ILLEGAL OR IMPROPER ACTIVITY (DEVIATION)(SEP 1990)

a.The Government, at its election, may reduce the price of a fixed-price type contract or contract modification and the total cost and fee under a cost-type contract or contract modification by the amount of profit or fee determined as set forth in paragraph (b) of this clause if the head of the contracting activity or his or her designee determines that there was a violation of subsection 27(a) of the Office of Federal Procurement Policy Act, as amended (41 U.S.C. 423), as implemented in the FAR.  In the case of a contract modification, the fee subject to reduction is the fee specified in the particular contract modification at the time of execution, except as provided in subparagraph (b)(5) of this clause.

b.The price or fee reduction referred to in paragraph (a) of this clause shall be —

1.For cost-plus-fixed-fee contracts, the amount of the fee specified in the contract at the time of award;

2.For cost-plus-incentive-fee contracts, the target fee specified in the contract at the time of award, notwithstanding any minimum fee or “fee floor” specified in the contract;

3.For cost-plus-award-fee contracts —

i.(Deviation) The basic fee established in the contract at the time of contract award; Section .I, Page 2

ii.(Deviation) If no basic fee is specified in the contract, 30 percent of the amount of each award fee otherwise payable to the Contractor for each award fee evaluation period or at each award fee determination point.

4.For fixed-price-incentive contracts, the Government may —

i.Reduce the contract target price and contract target profit both by an amount equal to the initial target profit specified in the contract at the time of contract award; or

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ii.If an immediate adjustment to the contract target price and contract target profit would have a significant adverse impact on the incentive price revision relationship under the contract, or adversely affect the contract financing provisions, the Contracting Officer may defer such adjustment until establishment of the total final price of the contract.  The total final price established in accordance with the incentive price revision provisions of the contract shall be reduced by an amount equal to the initial target profit specified in the contract at the time of contract award and such reduced price shall be the total final contract price.

5.For firm-fixed-price contracts or contract modifications, by 10 percent of the initial contract price; 10 percent of the contract modification price; or a profit amount determined by the Contracting Officer from records or documents in existence prior to the date of the contract award or modification.

c.The Government may, at its election, reduce a prime Contractor’s price or fee in accordance with the procedures of paragraph (b) of this clause for violations by its subcontractors by an amount not to exceed the amount of profit or fee reflected in the subcontract at the time the subcontract was first definitively priced.

d.In addition to the remedies in paragraphs (a) and (c) of this clause, the Government may terminate this contract for default.  The rights and remedies of the Government specified herein are not exclusive, and are in addition to any other rights and remedies provided by law or under this contract.

I-3DEAR 952.204-2 SECURITY (OCT 1987)

a.Responsibility.   It is the contractor’s duty to safeguard all classified information, special nuclear material, and other DOE property.  The contractor shall, in accordance with DOE security regulations and requirements, be responsible for safeguarding all classified information, and protecting against sabotage, espionage, loss and theft, the ‘classified documents and material in the contractor’s possession in connection with the performance of work under this contract.  Except as otherwise expressly provided in this contract, the contractor shall, upon completion or termination of this contract, transmit to DOE any classified matter in the possession of the contractor or any person under the Contractor’s control in connection with performance of this contract.  If retention by the Contractor of any classified matter is required after the completion or termination of the contract and such retention is approved by the Contracting Officer, the Contractor will complete a certificate of possession to be furnished to DOE specifying the classified matter to be retained.  The certification shall identify the items and types or categories of matter retained, the conditions governing the retention of the matter, and the period of retention, if known.  If the retention is approved by the Contracting Officer, the security provisions of the

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contract will continue to be applicable to the matter retained.  Special nuclear material will not be retained after the completion or termination of the contract.

b.Regulations.  The Contractor agrees to conform to all security regulations and requirements of DOE.

c.Definition of classified information.  The term “classified information” means Restricted Data, Formerly Restricted Data, or National Security Information.

d.Definition of restricted data.  The term “Restricted Data” means all data concerning (1) design, manufacture, or utilization of atomic weapons; (2) the production of special nuclear material; or (3) the use of special nuclear material in the production of energy, but shall not include data declassified or removed from the Restricted Data category pursuant to Section 142 of the Atomic Energy Act of 1954, as amended.

e.Definition of formerly restricted data.  The term “Formerly Restricted Data” means all data removed from the Restricted Data category under section 142 d. of the Atomic Energy Act of 1954, as amended.

f.Definition of National Security Information.  The term “National Security Information” means any information or material, regardless of its physical form or characteristics, that is owned by, produced for or by, or is under the control of the United States Government, that has been determined pursuant to Executive Order 12356 or prior Orders to require protection against unauthorized disclosure, and which is so designated.

g.Definition of Special Nuclear Material (SNM).  SNM means: (1) Plutonium, uranium enriched in the isotope 233 or in the isotope 235, and any other material which pursuant to the provisions of Section 51 of the Atomic Energy Act of 1954, as amended, has been determined to be special nuclear material, but does not include source material; or (2) any material artificially enriched by any of the foregoing, but does not include source material.

h.Security clearance of personnel.  The Contractor shall not permit any individual to have access to any classified information, except in accordance with the Atomic Energy Act of 1954, as amended, Executive Order 12356, and the DOE’s regulations or requirements applicable to the particular level and category of classified information to which access is required.

i.Criminal liability.  It is understood that disclosure of any classified information relating to the work or services ordered hereunder to any person not entitled to receive it, or failure to safeguard any classified information that may come to the contractor or any person under the Contractor’s control in connection with work under this contract, may subject the contractor, its agents, employees, or subcontractors to criminal liability under the laws of the United States.  (See the Atomic Energy Act of 1954, as amended, 42 U.S.C. 2011 et seq.; 18 U.S.C. 793 and 794; and Executive Order 12356).

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j.Subcontracts and purchase orders.  Except as otherwise authorized in writing by the Contracting Officer, the Contractor shall insert provisions similar to the foregoing in all subcontracts and purchase orders under this contract.

I-4DEAR 952.204-70 CLASSIFICATION (APR 19841

In the performance of the work under this contract, the contractor shall ensure that an Authorized Original Classifier or Derivative Classifier shall assign classifications to all documents, material, and equipment originated or generated under the contract in accordance with classification regulations and guidance furnished to the contractor by the DOE.  Every subcontract and purchase order issued hereunder involving the origination or generation o classified documents, material, or equipment shall include a provision to the effect that in the performance of such subcontract or purchase order, the subcontractor or supplier shall ensure that an Authorized Original Classifier or Derivative Classifier shall assign classifications to all such documents, materials, and equipment in accordance with classification regulations and guidance furnished to such subcontractor or supplier by the contractor.

I-5DEAR 952.204-74 FOREIGN OWNERSHIP, CONTROL, OR INFLUENCE OVER CONTRACTOR (APR 1984)

a.For purposes of this clause, a foreign interest is defined as any of the following:

1.A foreign government or foreign government agency;

2.Any form of business enterprise organized under the laws of any country other than the United States or its possessions;

3.Any form of business enterprise organized or incorporated under the laws of the U.S., or a State or other jurisdiction within the U.S., which is owned, controlled, or influenced by a foreign government, agency, firm, corporation or person; or

4.Any person who is not a U.S. citizen.

b.Foreign ownership, control, or influence (FOCI) means the situation where the degree of ownership, control, or influence over a contractor by a foreign interest is such that a reasonable basis exists for concluding that compromise of classified information, special nuclear material as defined in 10 CFR Part 710, may result.

c.For purposes of this clause, subcontractor means any subcontractor at any tier and the term “Contracting Officer” shall mean DOE Contracting Officer.  When this clause is included in a subcontract, the term “Contractor” shall mean subcontractor and the term “contract” shall mean subcontract.

d.The Contractor shall immediately provide the Contracting Officer written notice of any changes in the extent and nature of FOCI over the contractor which would affect the answers to the questions presented in DEAR 952.204-73.  Further,

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notice of changes in ownership or control which are required to be reported to the Securities and Exchange Commission, the Federal Trade Commission, or the Department of Justice shall also be furnished concurrently to the Contracting Officer.

e.In those cases where a Contractor has changes involving FOCI, the DOE must determine whether the changes will pose an undue risk to the common defense and security.  In making this determination, the Contracting Officer shall consider proposals made by the Contractor to avoid or mitigate foreign influences.

f.If the Contracting Officer at any time determines that the Contractor is, or is potentially, subject to FOCI, the Contractor shall comply with such instructions as the Contracting Officer shall provide in writing to safeguard any classified information or significant quantity of special nuclear material.

g.The Contractor agrees to insert terms that conform substantially to the language of this clause including this paragraph (g) in all subcontracts under this contract that will require access to classified information or a significant quantity of special nuclear material.  Additionally, the Contractor shall require such subcontractors to submit a completed certification required in DEAR 952.204—73 prior to award of a subcontract.  Information to be provided by a subcontractor pursuant to this clause may be submitted directly to the Contracting Officer.

h.Information submitted by the Contractor or any affected subcontractor as required pursuant to this clause shall be treated by DOE to the extent permitted by law, as business or financial information submitted in confidence to be used solely for purposes of evaluating FOCI.

i.The requirements of this clause are in addition to the requirement that a Contractor obtain and retain the security clearances required by the contract.  This clause shall not operate as a limitation on DOE’s rights, including its rights to terminate this contract.

j.The Contracting Officer may terminate this contract for default either if the Contractor fails to meet obligations imposed by this clause, e.g., provide the information required by this clause, comply with the Contracting Officer’s instructions about safeguarding classified information or make this clause applicable to subcontractors, or, if in the Contracting Officer’s judgment, the Contractor creates an FOCI situation in order to avoid performance or a termination for default.  The Contracting Officer may terminate this contract for convenience if the Contractor becomes subject to FOCI and for reasons other than avoidance of performance of the contract, cannot, or chooses not to, avoid or mitigate the FOCI problem.

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I-6FAR 52.208—1 REQUIRED SOURCES FOR JEWEL BEARINGS AND RELATED ITEMS (APR 1984)

a.This clause applies only if supplies furnished under this contract contain jewel bearings or related items.

b.“Jewel bearing,” as used in this clause, means a piece of synthetic corundum (sapphire or ruby) of any shape, except a phonograph needle, that has one or more polished surfaces to provide supporting surfaces or low-friction contact areas for revolving, oscillating, or sliding parts in an instrument, mechanism, subassembly, or part.  A jewel bearing may be unmounted or may be mounted into a ring or bushing.  Examples are watch holes-olive, watch hole-straight, pallet stones, roller jewels (jewel pins), endstones (caps), vee (cone) jewels, instrument rings, cups, and double cups.

“Plant,” as used in this clause, means the Government- owned, Contractor-operated William Langer Plant, Rolla, North Dakota 58367 (Phone: 701-477-3193).

“Price list,” as used in this clause, means the U.S. Government Jewel Bearing Price List, published periodically by the General Services Administration for jewel bearings produced by the Plant.

“Related item,” as used in this clause, means a piece of synthetic corundum (sapphire or ruby), other than a jewel bearing, that (1) is made from material produced by the Verneuil flame fusion process, (2) has a geometric shape up to a maximum of 1 inch in any dimension, (3) requires extremely close tolerances and highly polished surfaces identical to those involved in manufacturing jewel bearings, and (4) is either mounted in a retaining or supporting structure or unmounted.  Examples are window, nozzle, guide, knife edge, knife edge plate, insulator domed pin, slotted insulator, sphere, ring gauge, spacer, disc, valve seat, rod, vee groove, D-shaped insulator, and notched plate.

c.All jewel bearings and related items required for the supplies to be furnished under this contract (or an equal quantity of the same type, site, and tolerances) shall be acquired from the following sources: jewel bearings from the Plant, unless the Plant declines or rejects the order; and related items from domestic manufacturers, including the Plant, if the items can be obtained from those sources.  Sources other than the foregoing may be used if the foregoing sources decline or reject the order.

1.Orders may be placed with the Plant for individual contracts, for a combination of contracts, or for stock.  If the order is for an individual contract, the prime contract number shall be placed on it.

2.Orders, and any supplements to orders, for items listed in the price list shall refer to the most recent price list and its date.

3.Requests for quotations for items not listed in the price list should be accompanied by drawings and forwarded to the Plant as soon as possible to ensure prompt quotation or rejection of the order.

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d.At its option, the Plant may decline or reject all or part of a Contractor’s or subcontractor’s order.  If the order is declined or rejected, the Contractor shall notify the contract administration office cognizant of this contract promptly in writing, enclosing a copy of the rejection notice.  Unless the declination or rejection has been caused by current excessive and overdue Contractor indebtedness to the Plant as determined by the Plant, the contracting officer shall evaluate the impact and make an equitable adjustment in the contract price, in the delivery schedule, or in both, if one is warranted.  This procedure shall also apply to orders for related items rejected by any other domestic manufacturer.

e.The Contractor agrees to insert this clause, including this paragraph (e), and the prime contract number in every subcontract unless the Contractor has positive knowledge that the subassembly, component, or part being purchased does not contain jewel bearings or related items.

I-7DEAR 952.209—72 ORGANIZATIONAL CONFLICTS OF INTEREST—SPECIAL CLAUSE (NOV 1987)

a.Purpose.  The primary purpose of this clause is to aid in ensuring that the Contractor (1) is not biased because of its past, present, or currently planned interests (financial, contractual, organizational, or otherwise) which relate to the work under this contract, and (2) does not obtain any unfair competitive advantage over other parties by virtue of its performance of this contract.

b.Scope.  The restrictions described herein shall apply to performance or participation by the Contractor and any of its affiliates or their successors in interest (hereinafter collectively referred to as “Contractor”) in the activities covered by this clause as a prime Contractor, subcontractor, cosponsor, joint venturer, consultant, or in any similar capacity.

1.Technical consulting and management support services.

i.The Contractor shall be ineligible to participate in any capacity in Department contracts, subcontracts, or proposals therefor (solicited or unsolicited) which stem directly from the Contractor’s performance of work under this contract.  Furthermore, unless so directed in writing by the Contracting Officer, the Contractor shall not perform any technical consulting or management support services work under this contract on any of its products or services or the products or services of another firm if the Contractor is or has been substantially involved in their development or marketing.  Nothing in this subparagraph shall preclude the Contractor from competing for follow-on contracts for technical consulting and management support services.

ii.If the Contractor under this contract prepares a complete or essentially complete statement of work or specifications to be used

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in competitive procurements, the Contractor shall be ineligible to perform or participate in any capacity in any contractual effort which is based on such statement of work or specifications.  The Contractor shall not incorporate its products or services in such statement of work or specifications unless so directed in writing by the Contracting Officer, in which case the restriction in this subparagraph shall not apply.

iii.Nothing in this paragraph shall preclude the Contractor from offering or selling its standard commercial items to the Government.

2.Access to and use of information.

i.If the Contractor, in the performance of this contract, obtains access to information, such as Department plans, policies, reports, studies, financial plans, internal data protected by the Privacy Act of 1974 (Pub. L. 93-579), or data which has not been released or otherwise made available to the public, the Contractor agrees that without prior written approval of the contracting officer it shall not: (a) use such information for any private purpose unless the information has been released or otherwise made available to the public; (b) compete for work for the Department based on such information for a period of six (6) months after either the completion of this contract or until such information is released or otherwise made available to the public, whichever is first; (c) submit an unsolicited proposal to the Government which is based on such information until one year after such information is released or otherwise made available to the public; and (d) release such information unless such information has previously been released or otherwise made available to the public by the Department.

ii.In addition, the Contractor agrees that to the extent it receives or is given access to proprietary data, data protected by the Privacy Act of 1974 (Pub. L. 93-579), or other confidential or privileged technical, business, or financial information under this contract, it shall treat such information in accordance with any restrictions imposed on such information.

iii.The Contractor shall have, subject to patent, data, and security clauses of this contract, the right to use technical data it first produces under this contract for its private purpose consistent with the Rights in Data provisions of this contract.

c.Disclosure after award.

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1.The Contractor agrees that if after award it discovers an organizational conflict of interest with respect to this contract, an immediate and full disclosure shall be made in writing to the contracting officer which shall include a description of the action which the Contractor has taken or proposes to take to avoid or mitigate such conflicts.  The Department may, however, terminate the contract for convenience if it deems such termination to be in the best interests of the Government.

2.In the event that the Contractor was aware of an organizational conflict of interest prior to the award of this contract and did not disclose the conflict to the Contracting Officer, the Department may terminate the contract for default.

d.Subcontracts.

1.The Contractor shall include this Clause, including this paragraph, in subcontracts of any tier which involve performance or work of the type specified in (b)(1)above or access to information of the type covered in (b)(2) above.  The terms “contract”, “Contractor” and “Contracting Officer” shall be appropriately modified to preserve the Government’s rights.

2.If a subcontract is to be issued for evaluation services or activities, technical consulting or management support services work as defined at DEAR 909.570, the Contractor shall obtain for the Department a disclosure statement or representation, in accordance with DOE regulations in effect at the time, from each intended subcontractor or consultant.  The Contractor shall not enter into any subcontract nor engage any consultant unless the Contracting Officer shall have first notified the Contractor that there is little or no likelihood that an organizational conflict of interest exists or that despite the existence of a conflict of interest the award is in the best interest of the Government.

e.Remedies.  For breach of any of the above restrictions or for nondisclosure or misrepresentation of any relevant facts required to be disclosed concerning this contract, the Government may terminate the contract for default, disqualify the Contractor for subsequent related contractual efforts and pursue such other remedies as may be permitted by law or this contract.

f.Waiver.  Requests for waiver under this clause shall be directed in writing to the Contracting Officer and shall include a full description of the requested waiver and the reasons in support thereof.  If it is determined to be in the best interests of the Government, the Contracting Officer shall grant such a waiver in writing.

g.Modifications. Prior to a contract modification when the statement of work is modified to add new work, the period of performance is significantly increased, or the parties to the contract are changed, the Department will request and the

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Contractor is required to submit either an organizational conflict of interest disclosure or representation or an update of the previously submitted disclosure or representation.

I-8DEAR 952-212.73 COST AND SCHEDULE CONTROL SYSTEMS (SEP 1991)

a.In the performance of this contract, the Contractor shall establish, maintain, and use cost and schedule control systems (management control systems) meeting the criteria set forth in the contract and as described in detail in “Cost and Schedule Control Systems Criteria for Contract Performance Measurement-Implementation Guide,” annexed hereto and hereinafter referred to as the “Guide.” Prior to acceptance by the contracting officer and within TBD calendar days after contract award, the Contractor shall be prepared to demonstrate systems operation to the Government to verify that the proposed systems meet the designated criteria. As a part of the review procedures, the Contractor shall furnish the Government a description of the cost and schedule control systems applicable to this contract in such form and detail as indicated by the Guide, or as required by the contracting officer. The Contractor agrees to provide access to all pertinent records, data, and plans as requested by representatives of the Government for the conduct of systems review.

b.The description of the management control systems accepted by the contracting officer, identified by title and date, shall be referenced in the contract. Such systems shall be maintained and used by the Contractor in the performance of this contract.

c.Contractor changes to the reviewed systems shall be submitted for review and approval as required by the Contracting Officer. When contracting officer approval is required, the contracting officer shall advise the Contractor of the acceptability of such changes within sixty (60) days after receipt from the Contractor. When systems existing at the time of contract award do not comply with the designated criteria, adjustments necessary to assure compliance will be made at no change in contract price or fee.

d.The Contractor agrees to provide access to all pertinent records and data requested by the contracting officer, or duly authorized representative, for the purpose of permitting Government surveillance to insure continuing application of the accepted systems to this contract. Deviations from the systems description identified during contract performance shall be corrected as directed by the contracting officer.

e.The Contractor shall require that each selected subcontractor, as mutually agreed to between the Government and the Contractor and as set forth in the schedule of this contract, meet the criteria for cost and schedule control systems as set forth in subcontract and shall incorporate in all such subcontracts adequate provisions for review and surveillance of subcontractor’s systems to be carried out by the prime

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Contractor, or by the Government when requested by either the prime or subcontractor.

I-9ORDER OF PRECEDENCE

Any inconsistency in this solicitation or contract shall be resolved by giving precedence in the following order: (a) the Statement of Work; (b) the schedule; (c) contract clauses and; (d) other documents, exhibits, and attachments. In the event of an inconsistency between or among contract clauses directly dealing with cost allowability issues specific provisions of this contract will take precedence over 31 applicable to the Contract.

I-10FAR 52.215-39 REVERSION OR ADJUSTMENT OF PLANS FOR POST-RETIREMENT BENEFITS OTHER THAN PENSIONS (PRB) (JUL 1991)

The Contractor shall promptly notify the Contracting Officer in writing when it determines that it will terminate or reduce a PRB plan. If the PRB fund assets revert, or inure, to the Contractor or are constructively received by it under a plan termination or otherwise, the Contractor shall make a refund or give a credit to the Government for its equitable share as required by FAR 31.205-6(o)(5). The Contractor shall include the substance of this clause in all subcontracts under this contract which meet the applicability requirements of FAR 15.804-8(f). The resulting adjustment to prior years’ PRB costs will be determined and applied in accordance with FAR 31.205-6(c).

I-11DEAR 952.216-7 ALLOWABLE COST AND PAYMENT (DEVIATION)(APR 1984) AND ALTERNATES I AND II

a.Invoicing. (Deviation) The Government shall make payments to the Contractor within thirty days of receipt of the invoice/voucher, in amounts determined to be allowable by the Contracting Officer in accordance with the clause entitled “Insurance” and Subpart 31 of the Federal Acquisition Regulation (FAR) as supplemented by Subpart 931 of the Department of Energy Acquisition Regulation (DEAR), in effect on the date of this contract and the terms of this contract. The Contractor may submit to an authorized representative of the Contracting Officer, in such form and reasonable detail as the representative may require, an invoice or voucher supported by a statement of the claimed allowable cost for performing this contract.

b.Reimbursing costs.   (Deviation)

1.For the purpose of reimbursing allowable costs (except as provided in subparagraph (2) below, with respect to pension, deferred profit sharing, and employee stock ownership plan contributions), the term “costs” includes only —

i.Those recorded costs that, at the time of the request for reimbursement, the Contractor has paid by cash, check, or other form of actual payment for items or services purchased directly for the contract;

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ii.When the Contractor is not delinquent in paying costs of contract performance in the ordinary course of business, costs incurred, but not necessarily paid, for—

A.Materials issued from the Contractor’s inventory and placed in the production process for use on the contract;

B.Direct labor;

C.Direct travel;

D.Other direct in-house costs; and

E.Properly allocable and allowable indirect costs, as shown in the records maintained by the Contractor for purposes of obtaining reimbursement under Government contracts; and

iii. The amount of progress payments that have been paid to the Contractor’s subcontractors under similar cost standards.

iv.(Deviation) Environmental Costs.

A.Environmental costs are those costs incurred by the Contractor for the primary purpose of preventing pollution; properly handling, transporting, treating, storing, or disposing of wastes or other materials generated by operations or activities under the Contract; complying with federal, state, or local environmental laws and regulations; and correcting past environmental damage caused by the activity or inactivity of this Contractor under this contract.

B.Environmental costs that are determined reasonable and allocable under Subpart 31.2 of the FAR and that are generated by current operations or activities under this contract, except those resulting from violation of law or regulation, are allowable.

C.Environmental costs incurred under this contract by the Contractor to remedy damage caused by the Contractor’s past activities or inactivity, or for which it has been administratively or judicially determined to be liable (including where a settlement or consent decree has been issued) are presumed to be unallowable if DOE was not responsible for such damage. For such costs to be considered allowable, they must be determined reasonable and allocable in accordance with FAR 31 and the Contractor must demonstrate to the Contracting Officer that it:

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1.Was performing the contract at the time the conditions requiring clean-up were created and performance of this contract contributed to the creation of the conditions requiring clean-up;

2.Was conducting its activities or operations prudently at the time the conditions requiring clean-up were created, in accordance with then-accepted standard industry practices for environmental hazard prevention, and in compliance with all then-existing environmental laws, permits, compliance agreements and regulations;

3.Acted promptly and reasonably to prevent and minimize the damage and costs associated with remedying the damage; and

4.Demonstrates that it has exhausted or is diligently pursuing all available legal and contributory (e.g., insurance or indemnification) sources to defray the clean-up costs. If the Contractor subsequently obtains funds as a result of legal action or other contributory source, it shall refund or credit the Government in accordance with FAR 31.201-5.

2.Contractor contributions to any pension, profit-sharing, or employee stock ownership plan funds that are paid quarterly or more often may be included in indirect costs for payment purposes; provided, that the Contractor pays the contribution to the fund within 30 days after the close of the period covered. Payments made 30 days or more after the close of a period shall not be included until the Contractor actually makes the payment. Accrued costs for such contributions that are paid less often than quarterly shall be excluded from indirect costs for payment purposes until the Contractor actually makes the payment.

3.Notwithstanding the audit and adjustment of invoices or vouchers under paragraph (g) below; allowable indirect costs under this contract shall be obtained by applying indirect cost rates established in accordance with paragraph (d) below.

4.Any statements in specifications or other documents incorporated in this contract by reference designating performance of services or furnishing of materials at the Contractor’s expense or at no cost to the Government shall be disregarded for purposes of cost-reimbursement under this clause.

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c.Small business concerns. A small business concern may be paid more often than every 2 weeks and may invoice and be paid for recorded costs for items or services purchased directly for the contract, even though the concern has not yet paid for those items or services.

d.Final indirect cost rates.

1.Final annual indirect cost rates and the appropriate bases shall be established in accordance with Subpart 42.7 of the Federal Acquisition Regulation (FAR) in effect for the period covered by the indirect cost rate proposal.

2.The Contractor shall, within 90 days after the expiration of each of its fiscal years, or by a later date approved by the Contracting Officer, submit to the cognizant Contracting Officer responsible for negotiating its final indirect cost rates and, if required by agency procedures, to the cognizant audit activity proposed final indirect cost rates for that period and supporting cost data specifying the contract and/or subcontract to which the rates apply. The proposed rates shall be based on the contractor’s actual cost experience for that period. The appropriate Government representative and Contractor shall establish the final indirect cost rates as promptly as practical after receipt of the Contractor’s proposal.

3.The Contractor and the appropriate Government representative shall execute a written understanding setting forth the final indirect cost rates. The understanding shall specify (1) the agree-upon final annual indirect cost rates, (ii) the basis to which the rates apply, (iii) the periods for which the rates apply, (iv) any specific indirect cost items treated as direct costs in the settlement, and (v) the affected contract and/or subcontract, identifying any with advance agreements or special terms and the applicable rates. The understanding shall not change any monetary ceiling, contract obligation, or specific cost allowance or disallowance provided for in this contract. The understanding is incorporated into this contract upon execution.

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

e.Billing rates. Until final annual indirect cost rates are established for any period, the Government shall reimburse the Contractor at billing rates established by the Contracting Officer or by an authorized representative (the cognizant auditor), subject to adjustment when the final rates are established. These billing rates—

1.Shall be the anticipated final rates; and

2.May be prospectively or retroactively revised by mutual agreement, at either party’s request, to prevent substantial overpayment or underpayment.

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f.Quick-closeout procedures. When the Contractor and Contracting Officer agree, the quick-closeout procedures of Subpart 42.7 of the FAR may be used.

g.Audit. At any time or times before final payment, the Contracting Officer may have the Contractor’s invoices or vouchers and statements of cost audited. Any payment may be (1) reduced by amounts found by the Contracting Officer not to constitute allowable costs or (2) adjusted for prior overpayment or underpayments.

h.Final payment.

1.The Contractor shall submit a completion invoice or voucher, designated as such, promptly upon completion of the work, but no later than one year (or longer, as the Contracting Officer may approve in writing) from the completion date. Upon approval of that invoice or voucher, and upon the Contractor’s compliance with all terms of this contract, the Government shall promptly pay any balance of allowable costs and that part of the fee (if any) not previously paid.

2.The Contractor shall pay to the Government any refunds, rebates, credits, or other amounts (including interest, if any) accruing to or received by the Contractor or any assignee under this contract, to the extent that those amounts are properly allocable to costs for which the contractor has been reimbursed by the Government. Reasonable expenses incurred by the Contractor for securing refunds, rebates, credits, or other amounts shall be allowable costs if approved by the Contracting Officer. Before final payment under this contract, the Contractor and each assignee whose assignment is in effect at the time of final payment shall execute and deliver —

i.An assignment to the Government, in form and substance satisfactory to the Contracting Officer, of refunds, rebates, credits, or other amounts (including interest, if any) properly allocable to costs for which the Contractor has been reimbursed by the Government under this contract; and

ii.A release discharging the Government, its officers, agents, and employees from all liabilities, obligations, and claims arising out of or under this contract, except—

A.Specified claims stated in exact amounts, or in estimated amounts when the exact amounts are not known;

B.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

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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; and provided that the costs associated with such claims are not unallowable under the clause entitled “Special Provision Financial Accountability.” 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 “Special Provision on Financial Accountability.”

C.Claims for reimbursement of costs, including reasonable incidental expenses, incurred by the Contractor under the patent clauses of this contract, excluding, however, any expenses arising from the Contractor’s indemnification of the Government against patent liability.

I-12FAR 52.217—9 OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 1989)

a.The Government may extend the term of this contract by written notice to the Contractor within the period of performance stated within this contract; provided, that the Government shall give the Contractor a. preliminary written notice of its intent to extend at least 60 days before the contract expires. The preliminary notice does not commit the Government to an extension.

b.If the Government exercises this option, the extended contract shall be considered to include this option provision.

c.The total duration of this contract, including the exercise of any options under this clause, shall not exceed eight years.

I-13DEAR 952.217—70 ACQUISITION OF REAL PROPERTY (APR 1984)

a.Notwithstanding any other provision of the contract, the prior approval of the contracting officer shall be obtained when, in performance of this contract, the contractor acquires or proposes to acquire use of real property by:

1.Purchase, on the Government’s behalf or in the contractor’s own name, with title eventually vesting in the Government.

2.Lease, and the Government assumes liability for, or will otherwise pay for the obligation under the lease as a reimbursable contract cost.

3.Acquisition of temporary interest through easement, license or permit, and the Government funds the entire cost of the temporary interest.

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b.Justification of and execution of any real property acquisitions shall be in accordance and compliance with directions provided by the Contracting Officer.

c.The substance of this clause, including this paragraph (c), shall be included in any subcontract occasioned by this contract under which property described in paragraph (a) of this clause shall be acquired.

I-14FAR 52.220-4 LABOR SURPLUS AREA SUBCONTRACTING PROGRAM (APR 19841

a.See the Utilization of Labor Surplus Area Concerns clause of this contract for applicable definitions.

b.The Contractor agrees to establish and conduct a program to encourage labor surplus area (LSA) concerns to compete for subcontracts within their capabilities when the subcontracts are consistent with the efficient performance of the contract at prices no higher than obtainable elsewhere. The Contractor shall-

1.Designate a liaison officer who will (i) maintain liaison with authorized representatives of the Government on LSA matters, (ii) supervise compliance with the Utilization of Labor Surplus Area Concerns clause, and (iii) administer the Contractor’s labor surplus area subcontracting program;

2.Provide adequate and timely consideration of the potentialities of LSA concerns in all make-or-buy decisions;

3.Ensure that LSA concerns have an equitable opportunity to compete for subcontracts, particularly by arranging solicitations, time for the preparation of offers, quantities, specifications, and delivery schedules so as to facilitate the participation of LSA concerns;

4.Include the Utilization of Labor Surplus Area Concerns clause in subcontracts that offer substantial LSA subcontracting opportunities; and

5.Maintain records showing (i) the procedures adopted and (ii) the Contractor’s performance, to comply with this clause. The records will be kept available for review by the Government until the expiration of 1 year after the award of this contract, or for such longer period as may be required by any other clause of this contract or by applicable law or regulations.

c.The Contractor further agrees to insert in any related subcontract that may exceed $500,000 and that contains the Utilization of Labor Surplus Area Concerns clause, terms that conform substantially to the language of this clause, including this paragraph (c), and to notify the contracting officer of the names of subcontractors.

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I-15ENVIRONMENT, SAFETY AND HEALTH (GOVERNMENT-OWNED OR LEASED)

a.The Contractor shall ensure that performance of the work under this contract is conducted: (1) in a manner that is protective of the environment and the health and safety of employees and the public, and (2) in compliance with all applicable environmental, safety and health requirements (including applicable permitting and reporting requirements) including federal, state, and local laws and regulations and DOE requirements. If the Contractor fails to comply with such regulations or requirements, the Contracting Officer may, without prejudice to any other legal or contractual rights of DOE, issue an order stopping all or any part of the work; thereafter, a start order for resumption of the work may be issued at the discretion of the Contracting Officer. The Contractor shall make no claim for an extension of time or for compensation or damages by reason of, or in connection with, such work stoppage, except as may be provided for elsewhere. The Contracting Officer or the COR shall notify the Contractor, in writing, of any noncompliance (found by the Contracting Officer or designated representatives) with the provisions of the clause and the corrective action to be taken. After receipt of such notice, the Contractor shall immediately take corrective action and notify the Contracting Officer or COR as appropriate in writing of the action’s completion.

b.The Contractor shall submit, within 30 days after the date of award of this contract, an environmental, safety and health program management and implementation plan to the Contracting Officer for review and approval. The plan shall describe the management systems to be employed to ensure that environmental, safety and health requirements are appropriately considered in all phases of contract activities. The plan shall also include provisions for an internal environmental, safety and health performance evaluation and corrective action system to provide management with a continuing assessment of the adequacy and implementation of the environmental, safety and health programs and assurance that deficiencies are corrected: The results of such evaluations shall be made available to DOE_.

c.The Contractor shall include in all of its subcontracts, involving performance of work at the site, the provisions requiring subcontractors to comply with the Contractor’s environmental, safety and health requirements. However, such provisions in the subcontracts shall not relieve the Contractor of its obligations to assure compliance with the provisions of this clause for all aspects of the work.

d.The Contractor shall submit for approval to the DOE, through the Contracting Officer, its policies, procedures, and provisions for including appropriate environment, safety and health requirements, including reporting requirements, in subcontracts, with respect to work to be performed on-site at a DOE-owned or - -leased facility.  These safety and health requirements shall be in accordance with applicable DOE regulations, directives, and other DOE requirements. The subcontract provisions shall provide that no claim shall be made for adjustment in the subcontract amount or the performance schedule, or for damages, by reason of

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a stop work order issued for failure to comply with safety and health regulations or requirements of DOE. The approved subcontract provisions shall be included in subcontracts as appropriate.

e.This contract and subcontracts issued hereunder shall be subject to the provisions of the DOE Contractor Employee Protection Program set forth in 10 CFR Part 708.

I-16ENVIRONMENTAL PROTECTION

In addition to complying with the requirements set forth in the “Environment, Safety and Health” and “Clean Air and Water” clauses, in the performance of this contract the Contractor—

a.shall comply, as applicable, with the following:

1.The Atomic Energy Act of 1954, as amended (42 U.S.C. 2011, et seq.);

2.The Department of Energy Organizational Act (42 U.S.C. 7101, et seq.);

3.The Resource Conservation and Recovery Act of 1976, as amended (42 U.S.C. 6901, et seq.);

4.The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. 9601, et seq.);

5.The Safe Drinking Water Act, as amended (42 U.S.C. 300, et seq.);

6.The Toxic Substances Act, as amended (15 U.S.C. 2601, seq.);

7.The Federal Insecticide, Fungicide and Rodenticide Act, as amended (7 U.S.C. 136, et seq.);

8.The Marine Protection, Research, and Sanctuaries Act of 1972, as amended (33 U.S.C. 1401, et seq.);

9.The Coastal Zone Management Act of 1972, as amended (16 U.S.C. 1451, et seq.);

10.The Coastal Barrier Resource Act of 1982 (16 U.S.C. 3501, et seq.);

11.The Nuclear Waste Policy Act of 1982, as amended (42 U.S.C. 10101, et seq.);

12.The Low-Level Radioactive Waste Policy Act, as amended (42 U.S.C. 2021, et seq.);

13.The Uranium Mill Tailings Radiation Control Act of 1979, as amended (42 U.S.C. 7901, et seq.);

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14.Title 40 of the Code of Federal Regulations, part 61, subpart H (National Emission Standard for Radionuclide Emissions from Department of Energy Facilities), chapter I, subchapter F (Radiation Protection Programs), and parts 247 through 253 (Solid Wastes, Guidelines for procurement of certain products that contain recycled/recovered materials);

15.Code of Federal Regulations, title 10 (Energy), parts involving environmental protection and related requirements for contractors;

16.DOE directives (i.e., Orders and Notices) numbered in the series between 5000.2 and 5000.4 (Unusual Occurrence Reporting), in the series between 5400 and 5500 (Environmental Quality and Impact), and between 5820.1 and 5820.3 (Radioactive Waste Management), and involving requirements for contractors; and

17.Other, Federal and non-Federal, environmental protection laws, codes, ordinances, regulations, and requirements in directives, as identified in writing by the contracting officer. Failure to list a law above, or to identify a requirements having the force and effect of law, shall not be construed as waiving a requirement for the contractor to comply with such law or requirement.

b.Shall assist the Department of Energy in complying, as applicable, with the following:

1.The National Environmental Policy Act of 1969, as amended (42 U.S.C. 4321, et seq.);

2.The Endangered Species Act of 1973, as amended (16 U.S.C. 1531, et seq.);

3.The Fish and Wildlife Coordination Act, as amended (16 U.S.C. 661, et seq.);

4.The Noise Control Act of 1972, as amended (42 U.S.C. 4901, et seq.);

5.The National Historic Preservation Act of 1968, as amended (16 U.S.C. 470, et seq.);

6.The Wild and Scenic Rivers Act, as amended (16 U.S.C. 1273, et seq.);

7.Farmland Protection Policy Act of 1981 (7 U.S.C. 4201, et seq.);

8.Executive Order 11988, of May 24, 1977, Protection of Wetlands;

9.Executive Order 11990, of May 24, 1977, Protection of Wetlands;

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10.Executive Order 12088 of October 13, 1978, Federal Compliance with Pollution Control Standards;

11.Executive Order 12580 of January 23, 1987, Superfund Implementation;

12.Office of Management and Budget (OMB) Circular No. A-106 of December 31, 1974, Reporting Requirements in Connection with the Prevention, Control, and Abatement of Environmental Pollution of Existing Federal Facilities; and

13.Other, Federal and non-Federal, environmental protection laws, codes, ordinances, regulations, and directives, as identified in writing by the contracting officer.

c.shall with regard to the environmental protection laws, codes, ordinances, regulations, and directives described in the clauses entitled, “Environment, Safety and Health” and “Clean) Air and Water,” or included in or covered by paragraphs (a) and (b) of this section:

1.Research these laws, codes, ordinances, regulations and directives on an ongoing basis and, for changes therein, adjust contract performance, as necessary, to assure continuing compliance;

2.Identify, and inform the contracting officer in writing, of any inconsistencies among these laws, codes, ordinances, regulations, and directives which would affect or preclude the contractor’s ability to perform; and

3.Include consideration of these laws, codes, ordinances, regulations, and directives in all planning activities performed under this contract; and

4.shall set forth appropriate environmental protection requirements in subcontracts with respect to work to be performed on-site at a DOE-owned or -leased facility.

I-17PERMITS AND LICENSES

a.Except as notified in writing by the contracting officer, the Contractor shall obtain any necessary permits and licenses required by laws, codes, ordinances, and regulations of the United States, a state or territory, and a municipality or other political subdivision, and which are applicable to the performance of work under this contract. This includes, but is not necessarily limited to, identifying if such permits and licenses are required, compiling the information and data required for applications to obtain permits and licenses, filing any application required to obtain permits and licenses, and providing any additional information or data required.

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b.When notified by the contracting officer that the DOE will obtain certain permits or licenses, the Contractor shall provide all reasonable assistance requested, including providing information or data, that is required for obtaining such permits or licenses.

c.The Contractor shall comply with all laws, codes, ordinances, and regulations of the United States, a state or territory, and a municipality or other political subdivision, and that are applicable to the performance of work under this contract.

I-18DEAR 952.223-75 PRESERVATION OF INDIVIDUAL OCCUPATIONAL RADIATION EXPOSURE RECORDS (APR 1984)

Individual occupational radiation exposure records generated in the performance of work under this contract shall be subject to inspection by DOE and shall be preserved by the Contractor until disposal is authorized by DOE or at the option of the Contractor delivered to DOE upon completion or termination of the contract. If the Contractor exercises the foregoing option, title to such records shall vest in DOE upon delivery.

I-19FAR 52.224-2 PRIVACY ACT (DEVIATION)(APR 1984)

a.The Contractor agrees to-

1.Comply with the Privacy Act of 1974 (the Act) and the agency rules and regulations issued under the Act in the design, development, or operation of any system of records on individuals to accomplish an agency function when the contract specifically identifies-

i.The systems of records; and

ii.The design, development, or operation work that the Contractor is to perform;

2.Include the Privacy Act notification contained in this contract in every solicitation and resulting subcontract and in every subcontract awarded without a solicitation, when the work statement in the proposed subcontract requires the design, development, or operation of a system of records on individuals that is subject to the Act; and

3.Include this clause, including this-subparagraph 3, in all-subcontracts awarded under this contract which requires the design, development, or operation of such a system of records.

b.In the event of violations of the Act, a civil action may be brought against the agency involved when the violation concerns the design, development, or operation of a system of records on individuals to accomplish an agency function, and criminal penalties may be imposed upon the officers or employees of the agency when the violation concerns the operation of a system of records on individuals to accomplish an agency function. For purposes of the Act, when the contract is for the operation of a system of records on

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individuals to accomplish an agency function, the Contractor and any employee of the Contractor is considered to be an employee of the agency.

c.1.“Operation of a system of records,” as used in this clause, means performance of any of the activities associated with maintaining the system of records, including the collection, use, and dissemination of records.

2.“Record,” as used in this clause, means any item, collection, or grouping of information about an individual that is maintained by an agency, including, but not limited to, education, financial transactions, medical history, and criminal or employment history and that contains the person’s name, or the identifying number, symbol, or other identifying particular assigned to the individual, such as a fingerprint or voiceprint or a photograph.

3.“System of records on individuals,” as used in this clause means a group of any records under the control of any agency from which information is retrieved by the name of the individual or by some identifying ‘number, symbol, or other identifying particular assigned to the individual.

d.(Deviation) The Contractor shall include appropriate provisions in subcontracts to implement this requirement.

I-20FAR 52.225-3 BUY AMERICAN ACT—SUPPLIES (JAN 1989)

a.The Buy American Act (41 U.S.C. 10) provides that the Government give preference to domestic end products.

“Components,” as used in this clause, means those articles, materials, and supplies incorporated directly into the end products.

“Domestic end product,” as used in this clause, means (1) an unmanufactured end product mined or produced in the United States, or (2) an end product manufactured in the United States, if the cost of its components mined, produced, or manufactured in the United States exceeds 50 percent of the cost of all its components. Components of foreign origin of the same class or kind as the products referred to in subparagraphs (b)(2) or (3) of this clause shall be treated as domestic. Scrap generated, collected, and prepared for processing in the United States is considered domestic. On acquisitions above $25,000 in value, components of Canadian origin are treated as domestic.

“End products.” as used in this clause, means those articles, materials, and supplies to be acquired for public use under this contract.

b.The Contractor shall deliver only domestic end products, except those—

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1.For use outside the United States;

2.That the Government determines are not mined, produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality;

3.For which the agency determines that domestic preference would be inconsistent with the public interest: or;

4.For which the agency determines the cost to be unreasonable (see section 25.105 of the Federal Acquisition Regulation).

(The foregoing requirements are administered in accordance with Executive Order No. 10582, dated December 17, 1954, as amended, and Subpart 25.1 of the Federal Acquisition Regulation.)

I-21FAR 52.225-11 RESTRICTIONS ON CERTAIN FOREIGN PURCHASES (APR 1991)

a.“Parastatal organization,” as used in this clause means a corporation, partnership, or entity owned, controlled, or subsidized by the Government of South Africa: It does not include a corporation, partnership, or entity which previously received start up assistance from the South African Industrial Development Corporation but which is now privately owned and which is not owned, controlled, or subsidized by the Government of South Africa.

b.Unless advance written approval of the Contracting Officer is obtained, the Contractor shall not acquire for use in the performance of this contract—

1.Any supplies or services originating from sources within the communist areas of North Korea, Vietnam, Cambodia, or Cuba;

2.Any supplies that are or were located in or transported from or through North Korea, Vietnam, Cambodia, or Cuba;

3.Arms, ammunition, or military vehicles produced in South Africa, or manufacturing data for such articles; or

4.Supplies or services from the South African Government or parastatal organizations of South Africa.

c.The Contractor shall not acquire for use in the performance of this contract supplies or services originating from sources within Iraq, any supplies that are or were located in or transported from or through Iraq, or any supplies or services from entities controlled by the Government of Iraq.

d.The Contractor agrees to insert the provisions of this clause, including this paragraph (d), in all subcontracts hereunder.

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I-22FAR 52.230-3 DISCLOSURE AND CONSISTENCY OF COST ACCOUNTING PRACTICES (AUG 1992)

a.The Contractor, in connection with this contract, shall—

1.Comply with the requirements of 48 CFR, Subpart 9904.401, Consistency in Estimating, Accumulating, and Reporting Costs, and 48 CFR, Subpart 9904,402, Consistency in Allocating Costs Incurred for the Same Purpose, in effect on the date of award of this contract as indicated in 48 CFR, part 9904.

2.(CAS-covered Contracts Only). If it is a business unit of a company required to submit a Disclosure Statement, disclose in writing its cost accounting practices as required by 48 CFR, subparts 9903.202-1 through 9903.202-5. If the Contractor has notified the Contracting Officer that the Disclosure Statement contains trade secrets and commercial or financial information which is privileged and confidential, the Disclosure Statement shall be protected and shall not be released outside of the Government.

3.i.Follow consistently the Contractor’s cost accounting practices. A change to such practices may be proposed, however, by either the Government or the Contractor, and the Contractor agrees to negotiate with the Contracting Officer the terms and conditions under which a change may be made. After the terms and conditions under which the change is to be made have been agreed to, the change must be applied prospectively to this contract, and the Disclosure Statement, if affected, must be amended accordingly.

ii.The Contractor shall, when the parties agree to a change to a cost accounting practice and the Contracting Officer has made ‘the finding required in 48 CFR, subpart 9903.201-6(b), that the change is desirable and not detrimental to the interests of the Government, negotiate an equitable adjustment as provided in the Changes clause of this contract.  In the absence of the required finding, no agreement may be made under this contract clause that will increase costs paid by the United States.

4.Agree to an adjustment of the contract price or cost allowance, as appropriate, if the Contractor or a subcontractor fails to comply with the applicable CAS or to follow any cost accounting practice, and such failure results in any increased costs paid by the United States. Such adjustment shall provide for recovery of the increased costs to the United States together with interest thereof computed at an annual rate of interest established under the Internal Revenue Code of 1986 (26 U.S.C. 6621), from the time the payment by the United States was made to the time the adjustment is effected.

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b.If the parties fail to agree whether the Contractor has complied with an applicable CAS, rule, or regulation as specified in 48 CFR, parts 9903 and 9904 and as to any cost adjustment demanded by the United States, such failure to agree will constitute a dispute under the Contract Disputes Act (41 U.S.C. 601).

c.The Contractor shall permit any authorized representatives of the Government to examine and make copies of any documents, papers, and records relating to compliance with the requirements of this clause.

d.The Contractor shall include in all negotiated subcontracts, which the Contractor enters into, the substance of this clause, except paragraph (b), and shall require such inclusion in all other subcontracts of any tier, except that—

1.If the subcontract is awarded to a business unit which pursuant to 48 CFR, subpart 9903.201 is required to follow all CAS, the clause entitled “Cost Accounting Standards” set forth in FAR 52.230-2, shall be inserted in lieu of this clause; or

2.This requirement shall apply only to negotiated subcontracts in excess of $500,000 where the price negotiated is not based on—

i.Established catalog or market prices of commercial items sold in substantial quantities to the general public; or

ii.Price set by law or regulation; or

3.The requirement shall not apply to negotiated subcontracts otherwise exempt from the requirement to include a CAS clause as specified in 48 CFR, Subpart 9903.201-1.

I-23FAR 52.230-4 CONSISTENCY IN COST ACCOUNTING PRACTICES (AUG 1992)

The Contractor agrees that it will consistently follow the cost accounting practices disclosed on Form CASB DS-1 in estimating, accumulating and reporting costs under this contract. In the event the Contractor fails to follow such practices, it agrees that the contract price shall be adjusted, together with interest, if such failure results in increased cost paid by the U.S. Government. Interest shall be computed at the annual rate of interest established under section 6621 of the Internal Revenue Code of 1986 ( 26 U.S.C. 6621) from the time payment by the Government was made to the time adjustment is effected.  The Contractor agrees that the disclosure Statement filed with the U.K. Ministry of Defense shall be available for inspection and use by authorized representatives of the United States Government.

I-23FAR 52.232-9 LIMITATION ON WITHHOLDING OF PAYMENTS (DEVIATION)(APR 1984)

If more than one clause or Schedule term of this contract authorizes the temporary withholding of amounts otherwise payable to the Contractor for supplies delivered or

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services performed, the total of the amounts withheld at any one time shall not exceed the greatest amount that may be withheld under any one clause or Schedule term at that time; provided that this limitation shall not apply to-

a.Withholdings pursuant to any clause relating to wages or hours of employees;

b.Withholdings not specifically provided for by this contract;

c.(Deviation) Withholdings pursuant to paragraph (g) of the clause entitled “Special provision on Financial Accountability”;

d.The recovery of overpayments; and

e.Any other withholding for which the Contracting Officer determines that this limitation is inappropriate.

I-25FAR 52.237-2 PROTECTION OF GOVERNMENT BUILDINGS, EQUIPMENT, AND VEGETATION (APR 1984)

The Contractor shall use reasonable care to avoid damaging existing buildings, equipment, and vegetation on the Government installation. If the Contractor’s failure to use reasonable care causes damage to any of this property, the Contractor shall replace or repair the damage at no expense to the Government as the Contracting Officer directs. If the Contractor fails or refuses to make such repair or replacement, the Contractor shall be liable for the cost, which may be deducted from the contract price.

I-26FAR 52.237-3 CONTINUITY OF SERVICES .(JAN 1991)

a.The Contractor recognizes that the services under this contract are vital to the Government and must be continued without interruption and that, upon contract expiration, a successor, either the Government or another Contractor, may continue them. The Contractor agrees to (1) furnish phase-in training and (2) exercise its best efforts and cooperation to effect an orderly and efficient transition to a successor.

b.The Contractor shall, upon the contracting officer’s written notice, (1) furnish phase-in, phase-out services for up to 90 days after this contract expires and (2) negotiate in good faith a plan with a successor to determine the nature and extent of phase-in, phase-out services required. The plan shall specify a training program and a date for transferring responsibilities for each division of work described in the plan, and shall be subject to the contracting officer’s approval. The Contractor shall provide sufficient experienced personnel during the phase-in, phase-out period to ensure that the services called for by this contract are maintained at the required level of .proficiency.

c.The Contractor shall allow as many personnel as practicable to remain on the job to help the successor maintain the continuity and consistency of the services required by this contract. The Contractor also shall disclose necessary personnel

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records and allow the successor to conduct onsite interviews with these employees. If selected employees are agreeable to the change, the Contractor shall release them at a mutually agreeable date and negotiate transfer of their earned fringe benefits to the successor.

d.The Contractor shall be reimbursed for all reasonable phase-in, phase-out costs (i.e., costs incurred within the agreed period after contract expiration that result from phase-in, phase-out operations) and a fee (profit) not to exceed a pro rata portion of the fee (profit) under this contract.

I-27FAR 52.242-13 BANKRUPTCY (APR 1991)

In the event the Contractor enters into proceedings relating to bankruptcy, whether voluntary or involuntary, the Contractor agrees to furnish, by certified mail, written notification of the bankruptcy to the Contracting Officer responsible for administering the contract. This notification shall be furnished within five days of the initiation of the proceedings relating to bankruptcy filing. This notification shall include the date on which the bankruptcy petition was filed, the identity of the court in which the bankruptcy petition was filed, and a listing of Government contract numbers and contracting offices for all Government contracts against which final payment has not been made. This obligation remains in effect until final payment under this contract.

I-28DEAR 952.250-70 NUCLEAR HAZARDS INDEMNITY AGREEMENT (NOV 1991)

a.Authority. This clause is incorporated into this contract pursuant to the authority contained in subsection 170d. of the Atomic Energy Act of 1954, as amended (hereinafter called the Act.)

b.Definitions. The definitions set out in the Act shall apply to this clause.

c.Financial protection. Except as hereafter permitted or required in writing by DOE, the contractor will not be required to provide or maintain, and will not provide or maintain at Government expense, any form of financial protection to cover public liability, as described in paragraph (d)(2) below. DOE may, however, at any time require in writing that the contractor provide and maintain financial protection of such a type and in such amount as DOE shall determine to be appropriate to cover such public liability, provided that the costs of such financial protection are reimbursed to the contractor by DOE.

d.1.Indemnification. To the extent that the contractor and other persons indemnified are not compensated by any financial protection permitted or required by DOE, DOE will indemnify the contractor and other persons indemnified against (i) claims for public liability as described in subparagraph (d)(2) of this clause; and (ii) such legal costs of the contractor and other persons indemnified as are approved by DOE, provided that DOE’s liability, including such legal costs, shall not exceed the amount set forth in section 170e.(1)(B) of the Act in the aggregate for each nuclear incident or precautionary evacuation occurring within the

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United States or $100 million in the aggregate for each nuclear incident occurring outside the United States, irrespective of the number of persons indemnified in connection with this contract.

2.The public liability referred to in subparagraph (d)(1) of this clause is public liability as defined in the Act which (i) arises out of or in connection with the activities under this contract, including transportation; and (ii) arises out of or results from a nuclear incident or precautionary evacuation, as those terms are defined in the Act.

e.1.Waiver of Defenses. In the event of a nuclear incident, as defined in the Act, arising out of nuclear waste activities, as defined in the Act, the contractor, on behalf of itself and other persons indemnified, agrees to waive any issue or defense as to charitable or governmental immunity.

2.In the event of an extraordinary nuclear occurrence which:

i.Arises out of, results from, or occurs in the course of the construction, possession, or operation of a production or utilization facility; or

ii.Arises out of, results from, or occurs in the course of transportation of source material, by-product material, or special nuclear material to or from a production or utilization facility; or

iii.Arises out of or results from the possession, operation, or use by the contractor or a subcontractor of a device utilizing special nuclear material or by-product material, during the course of the contract activity; or

iv.Arises out of, results from, or occurs in the course of nuclear waste activities, the contractor, on behalf of itself and other persons indemnified, agrees to waive:

A.Any issue or defense as to the conduct of the claimant (including the conduct of persons through whom the claimant derives its cause of action) or fault of persons indemnified, including, but not limited to:

1.Negligence;

2.Contributory negligence;

3.Assumption of risk; or

4.Unforeseeable intervening causes, whether involving the conduct of a third person or an act of God;

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B.Any issue or defense as to charitable or governmental immunity; and

C.Any issue or defense based on any statute of limitations, if suit is instituted within 3 years from the date on which the claimant firs: knew, or reasonably could have know, of his injury or change and the cause thereof.  The waiver of any such issue or defense shall be effective regardless of whether such issue or defense may otherwise be deemed jurisdictional or relating to an element in the cause of action. The waiver shall be judicially enforceable in accordance with its terms by the claimant against the person indemnified.

v.The term “extraordinary nuclear occurrence” means an event which DOE has determined to be an extraordinary nuclear occurrence as defined in the Act. A determination of whether or not there has been an extraordinary nuclear occurrence will be made in accordance with the procedures in 10 CFR part 840.

vi.For the purposes of that determination, “offsite” as that term is used in 10 CFR part 840 means away from “the contract location” which phrase means any DOE facility, installation, or site at which contractual activity under this contract is being carried on, and any contractor-owned or controlled facility, installation, or site at which the contractor is engaged in the performance of contractual activity under this contract.

3.The waivers set forth above:

i.Shall be effective regardless of whether such issue or defense may otherwise be deemed jurisdictional or relating to an element in the clause of action;

ii.Shall be judicially enforceable in accordance with its terms by the claimant against the person indemnified;

iii.Shall not preclude a defense based upon a failure to take reasonable steps to mitigate damages;

iv.Shall not apply to injury or damage to a claimant or to a claimant’s property which is intentionally sustained by the claimant or which results from a nuclear incident intentionally and wrongfully caused by the claimant;

v.Shall not apply to injury to a claimant who is employed at the site of and in connection with the activity where the extraordinary nuclear occurrence takes place, if benefits therefor are either

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payable or required to be provided under any workmen’s compensation or occupational disease law;

vi.Shall not apply to any claim resulting from a nuclear incident occurring outside the United States;

vii.Shall be effective only with respect to those obligations set forth in this clause and in insurance policies, contracts or other proof of financial protection; and

viii.Shall not apply to, or prejudice the prosecution or defense of, any claim or portion of claim which is not within the protection afforded under (A) the limit of liability provisions under subsection 170e. of the Act, and (B) the terms of this agreement and the terms of insurance policies, contracts, or other proof of financial protection.

f.Notification and litigation of claims. The contractor shall give immediate written notice to DOE of any known action or claim filed or made against the contractor or other person indemnified for public liability as defined in paragraph (d)(2). Except as otherwise directed by DOE, the contractor shall furnish promptly to DOE, copies of all pertinent papers received by the contractor or filed with respect to such actions or claims. DOE shall have the right to, and may collaborate with, the contractor and any other person indemnified in the settlement or defense of any action or claim and shall have the right to (1) require the prior approval of DOE for the payment of any claim that DOE be required to indemnify hereunder; and (2) appear through the Attorney General on behalf of the contractor or other person indemnified in any-action brought upon any claim that DE may be required to indemnify hereunder; take charge of such action, and settle or defend any such action. If the settlement or defense of any such action or claim is undertaken by DOE, the contractor or other person indemnified shall furnish all reasonable assistance in effecting a settlement or asserting a defense.

g.Continuity of DOE obligations. The obligations of DOE under this clause shall not be affected by any failure on the part of the contractor to fulfill its obligation under this contract and shall be unaffected by the death, disability, or termination of existence of the contractor, or by the completion, termination or expiration of this contract.

h.Effect of other clauses. The provisions of this clause shall not be limited in any way by, and shall be interpreted without reference to any, other clause of this contract, including the clause entitled Contract Disputes provided, however, that this clause shall be subject to the clauses entitled Covenant Against Contingent Fees, Officials Not to Benefit, and Examination of Records by the Comptroller General, and any provisions that are later added to this contract as required by applicable Federal law, including statutes, executive orders and regulations, to be included in Nuclear Hazards Indemnity Agreements.

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i.Civil penalties. The contractor and its subcontractors and suppliers who are indemnified under the provisions of this clause are subject to civil penalties, pursuant to 234A of the Act, for violations of applicable DOE nuclear-safety related rules, regulations, or orders.

j.Criminal penalties. Any individual director, officer, or employee of the contractor or of its subcontractors and suppliers who are indemnified under the provisions of this clause are subject to criminal penalties, pursuant to 223(c) of the Act, for knowing and willful violation of the Atomic Energy Act of 1954, as amended, and applicable DOE nuclear safety-related rules, regulations or orders which violation results in, or, if undetected, would have resulted in a nuclear incident.

k.Inclusion in subcontracts. The contractor shall insert this clause in any subcontract which may involve the risk of public liability, as the term is defined in the Act and further described in paragraph (d)(2) above. However, this clause shall not be included in subcontracts in which the subcontractor is subject to Nuclear Regulatory Commission (NRC) financial protection’ requirements under section 170b. of the Act or NRC agreements of indemnification under section 170c. or k. of the Act for the activities under the subcontract.

l.To the extent that the Contractor is compensated by any financial protection, or is indemnified pursuant to this clause, or is effectively relieved of pubic liability by an order or orders limiting same, pursuant to 170e of the Act, the provisions of the clause providing general authority indemnity shall not apply.

I-29FAR 52.251-1 GOVERNMENT SUPPLY SOURCES (APR 19841

The Contracting Officer may issue the Contractor an authorization to use Government supply sources in the performance of this contract. Title to all property acquired by the Contractor under such an authorization shall vest in the Government unless otherwise specified in the contract. Such property shall not be considered to be “Government-furnished property, as distinguished from “Government property.” The provisions of the clause entitled “Property,” except its paragraphs (a) and (b), shall apply to all property acquired under such authorization.

I-30FAR 52.251-2 INTERAGENCY FLEET MANAGEMENT SYSTEM VEHICLES AND RELATED SERVICES (JAN 1991)

The Contracting Officer may issue the Contractor an authorization to obtain interagency fleet management system vehicles and related services for use in the performance of this contract. The use, service, and maintenance of interagency fleet management system vehicles and the use of related services by the Contractor shall be in accordance with 41 CFR 101-39 and 41 CFR 101-38.301-1.

I-31FAR 52.253-1 COMPUTER GENERATED FORMS (JAN 1991)

a.Any data required to be submitted on a Standard or Optional Form prescribed by the Federal Acquisition Regulation (FAR) may be submitted on a computer

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generated version of the form, provided there is no change to the name, content, or sequence of the data elements on the form, and provided the form carries the Standard or Optional Form number and edition date.

b.Unless prohibited by agency regulations, any data required to be submitted on an agency unique form prescribed by an agency supplement to the FAR may be submitted on a computer generated version of the form provided there is no change to the name, content, or sequence of the data elements on the form and provided the form carries the agency form number and edition date.

c.If the Contractor submits a computer generated version of a form that is different than the required form, then the rights and obligations of the parties will be determined based on the content of the required form.

I-32INSURANCE

a.The terms in this contract shall take precedence over provisions in FAR 31.205-19, “Insurance and Indemnification.” This clause and the clauses entitled “Special Provision on Financial Accountability,” “Nuclear Hazards Indemnity Agreement,” “Allowable Cost and Payment,” and “Preexisting Conditions” provide the controlling insurance and indemnification provisions for this contract.

b.The Contractor shall procure and maintain such bonds and insurance as required or approved in writing by the Contracting Officer.  The terms and conditions of any such bonds and insurance shall conform to the directions of the Contracting Officer. In view of the provisions of subparagraph (e) of the clause entitled Special Provision on Financial Accountability, the Contractor may, at its own expense and not as an allowable cost, procure for its own protection insurance covering loss or destruction of, or damage to, Government property to compensate the Contractor for any unallowable or nonreimbursable costs incurred in connection with such property.

c.Legally required contributions to old-age and survivors’ insurance, unemployment compensation plans, and workmen’s compensation plans (whether or not covered by insurance) are allowable insurance costs under this contract. Other types of personnel-related insurance are covered under FAR 31.205-6.

d.In the event of a third party claim against the contractor, the cost and expense of which the Contractor would propose to submit as a claim for allowable costs, paragraph (f), “Costs related to legal defense and settlement of claims,” of the clause entitled “Special Provisions on Financial Accountability” shall apply.  In the event the Contractor has insurance covering part, but not all, of the amount claimed and proposes to submit part of the claim as an unallowable cost, the Contractor shall:  (1) immediately notify the Contracting Officer and promptly furnish copies of all pertinent papers received; and (2) authorize Government representatives to collaborate with counsel for the insurance carrier in settling or defending the claim.

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I-33PROCUREMENT OF CONSTRUCTION (JUN 1991)

The Contractor shall not perform construction services with its own employees under this contract without the express prior approval of the Contracting Officer.

The Contractor shall procure by subcontract the construction, alteration or repair of public buildings or public works required to be performed under this Contract. The Contractor shall insure that any subcontract for such construction, alteration or repair includes the following clauses and that the subcontractor complies with their provisions:

•Contract Work Hours and Safety Standards Act—Overtime Compensation at 52.222-4

•Davis-Bacon Act at 52.222-6 Withholding of funds at 52.222-7

•Payrolls and Basic Records at 52.222-8

•Apprentices and Trainees at 52.222-9•

•Compliance with Copeland Act Requirements at 52.222-10

•Subcontracts (Labor Standards) at 52.222-11

•Contract Termination—Debarment at 52.222-12

•Compliance with Davis-Bacon and Related Act Regulations at 52.222-13

•Disputes Concerning Labor Standards at 52.222-14.

•Certification of Eligibility at 52.222-15

•Buy American Act - Construction Materials at 52.225-5

Upon a determination by the Contracting Officer or the duly authorized representative that the Davis-Bacon Act is applicable to any item of work to be performed hereunder, the Contractor shall request a determination of the prevailing wage rates from the Contracting Officer in sufficient time to include the appropriate wage determination in the subcontract bid package.

I-34PROCUREMENT OF ARCHITECT-ENGINEERING SERVICES

Upon direction of the contracting officer, the Contractor shall procure Architect-Engineering (A-E) Services using FAR Part-36 and DEAR Part 936 as guides. The Brooks Act, Public Law 92-582, establishes the policy and procedures necessary to assure the selection of A-E Contractors by the Federal Government is based solely upon the qualifications of competing A-E firms. The Act does not directly govern the award of A-E subcontracts. However, the Contractor shall assure that its purchasing system and methods reflect the essence of the Federal policy by providing for selection of A-E

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subcontractors based primarily upon proposer’s qualifications, however, this does preclude the consideration of other factors including cost or price, in the selection of A-E subcontractors.

Combinations of subcontractors for architect-engineer and construction services, which may result in self-inspection of construction work, shall not be awarded unless specifically authorized by the Contracting Officer.

I-35WORKER’S COMPENSATION

a.The coverage afforded by the workers’ compensation statutes of the State of Washington (Title 51, Revised Code of Washington) shall, for performance of work under this contract at the Hanford Site, including work subcontracted, except work performed under certain lump-sum subcontracts as determined by the Contracting Officer, be subject to the following:

1.Except as provided above and in paragraph (6) below, the Contractor shall be relieved of all obligation to pay premiums for such coverage, DOE having agreed, under the terms of a contract with the Department of Labor and Industries of the State of Washington (hereinafter called the “Department”) to bear the actual cost of such coverage.

2.The Contractor shall submit to DOE, for transmittal to the Department, such payroll records as are required by the said statutes, except as provided above and in paragraph (6) below.

3.The Contractor shall, for coverage of each individual employer or any member or officer of any corporate employer provided for by Section 51.32.030 of the Revised Code of Washington, submit to DOE for transmittal to the Department the written notice required by that section.

4.The Contractor shall submit to DOE, for transmittal to the Department, the accident reports provided for by Section 51.28.010 of the Revised Code of Washington.

5.The Contractor shall take such action, and only such action, as DOE requests in connection with any. accident reports, including assistance in the investigation and disposition of any claim thereunder and, subject to the direction and control of DOE, the conduct of litigation in the Contractor’s own name in connection therewith.

6.The Contractor shall be responsible for making all payments and submitting all reports required by Title 51, Section 51.32.073, Revised Code of Washington.

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I-36DEAR 970.5204-11 CHANGES (DEVIATION)(APR 1984)

a.1.If, as a result of any instruction or direction given by DOE pursuant to the provisions of this contract, the level of the Contractor’s effort under this contract is materially increased or decreased, the fee provided for in the clause entitled “Payment of Basic Fee and Award Fee” may or may not be adjusted. In the event either party deems that an adjustment in fee is appropriate, it will, within thirty (30) days after issuance of the instruction or direction, so notify the other party in writing and the parties will attempt to agree upon the amount by which the fee should be increased or decreased. Failure of the parties so to agree shall constitute a dispute within the meaning of the article entitled “Disputes.”

2.Services pursuant to mutual agreement (Related Services) under the provisions of this contract shall be performed without additional fee unless DOE and the Contractor shall mutually agree in writing that they will constitute a material increase in the level of the Contractor’s effort under this contract, in which event the parties hereto will negotiate in good faith to agree upon an equitable fee for such additional services. Failure of the parties so to agree shall constitute a dispute within the meaning of the clause entitled “Disputes.”

b.Work to continue. Nothing contained in this clause shall excuse the Contractor from proceeding with the prosecution of the work in accordance with the requirements of any direction hereunder.

I-37DEAR 970.5204-12 CONTRACTOR’S ORGANIZATION (DEVIATION)(APR 1984)

a.Organization chart. As promptly as possible after the execution of this contract, the Contractor shall furnish to the Contracting Officer a chart showing the names, duties, and organization of key personnel to be employed in connection with the work, and shall furnish from time to time supplementary information reflecting changes therein.

b.Supervisory representative of Contractor. Unless otherwise directed by the Contracting Officer, a competent full-time resident supervisory representative of the Contractor satisfactory to the Contracting Officer shall be in charge of the work at the site at all times. This also applies to off-site work.

c.The Contractor shall be responsible for maintaining satisfactory standards of employee competency, conduct, and integrity and shall be responsible for taking such disciplinary action with respect to its employees as may be necessary. The Contractor shall establish such standards and procedures as are necessary to implement effectively the provisions set forth in 970.2272, and such standards and procedures shall be subject to the approval of the Contracting Officer. If the Contractor fails to remove any employee from the contract work whom DOE deems incompetent, careless, or insubordinate, or whose continued employment on the work is deemed by DOE to be contrary to the public interest, the Government reserves the right to require the Contractor to remove the employee.

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I-38DEAR 970.5204-22 CONTRACTOR PURCHASING SYSTEM (OCT 1990)

a.[(Name of contractor)] shall develop and implement formal policies, practices, and procedures to be used in the award of subcontracts, which purchasing system and methods shall be fully documented and acceptable to DOE, in accordance with the policies set forth in DEAR 970.71. DOE reserves the right at any time to require that the contractor submit for approval any or all purchases under this contract. The contractor shall not purchase any item or service the purchase of which is expressly prohibited by the written direction of DOE and shall use such special and directed sources as may be expressly required by the DOE Contracting Officer.

b.The obligations of [(name of contractor)] under paragraph (a) above, including the development of the purchasing system and methods, and purchases made pursuant thereto, shall not relieve the contractor of any obligation under this contract (including, among other things, the obligation to properly supervise, administer, and coordinate the work of subcontractors). Subcontracts shall be in the name of the contractor, and shall not bind or purport to bind the Government.

c.In addition to, and without derogation of any rights under paragraph (a) of this clause and any other provision in this contract, [(name of contractor)] shall require all subcontractors to furnish cost or pricing data under those conditions and in accordance with the requirements set forth in FAR 15.804, and shall include in such subcontracts the appropriate clause set forth in 970.5204-24 except as otherwise directed or approved by DOE.

d.Purchase or transfer of equipment, materials, supplies, or services from a contractor-affiliated source shall be treated in accordance with DEAR 970.7105.

e.Proposed awards to firms or individuals on either the GSA Consolidated List of Debarred, Suspended, and Ineligible Contractors or the DOE Consolidated list of Debarred, Suspended, Ineligible, and Voluntarily Excluded Awardees shall be forwarded to DOE for approval notwithstanding any prior purchasing system acceptance.

f.[(Name of Contractor)] shall provide advance notice of proposed subcontract awards in accordance with DEAR 970.7109; shall document purchases in writing; and shall establish and maintain subcontract files which present an accurate and adequate record of all purchasing transactions.

g.[(Name of Contractor)] shall not enter into any lease for property, plant or equipment when the lease must be classified and accounted for as capital lease under generally accepted accounting principles, unless the decision to enter into a capital leasing arrangement is specifically authorized and approved in advance by DOE.

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I-39DEAR 970.5204-23 TAXES (APR 1984)

a.The contractor agrees to notify the contracting officer of any State or local tax, fee, or charge levied or purported to be levied on or collected from the contractor with respect to the contract work, any transaction thereunder, or property in the custody or control of the contractor and constituting an allowable item of cost if due and payable, but which the contractor has reason to believe, or the contracting officer has advised the contractor, is or may be inapplicable or invalid;* and the contractor further agrees to refrain from paying any such tax, fee, or charge unless authorized in writing by the Contracting Officer. Any State or local tax, fee, or charge paid with the approval of the contracting officer or on the basis of advice from the contracting officer that such tax, fee, or charge is applicable and valid, and which would otherwise be an allowable item of cost, shall not be disallowed as an item of cost by reason of any subsequent ruling or determination that such tax, fee, or charge was in fact inapplicable or invalid.

* Requirement for notice may be broadened to include all State and local taxes which may be claimed as allowable costs when considered to be appropriate.

b.The contractor agrees to take such action as may be required or approved by the contracting officer to cause any State or local tax, fee, or charge which would be an allowable cost to be paid under protest; and to take such action as may be required or approved by the contracting officer to seek recovery of any payments made, including assignment to the Government or its designee of all rights to an abatement or refund thereof, and granting permission for the Government to join with the contractor in any proceedings for the recovery thereof or to sue for recovery in the name of the contractor. If the contracting officer directs the contractor to institute litigation to enjoin the collection of or to recover payment of any such tax, fee, or charge referred to above, or if a claim or suit is filed against the contractor for a tax, fee, or charge it has refrained from paying in accordance with this article, the procedures and requirements of the article entitled “Litigation and Claims” shall apply and-the costs and expenses incurred by the contractor shall be allowable items of costs, as provided in this contract, together with the amount of any judgment rendered against the contractor.

c.The Government shall hold the contractor harmless from penalties and interest incurred through compliance with this clause. All recoveries or credits in respect of the foregoing taxes, fees, and charges (including interest) shall inure to and be for the sole benefit of the Government.

I-40DEAR 970.5204—26 NUCLEAR SAFETY (APR 1984)

a.The activities under this contract include the operation of nuclear facilities. The Contractor recognizes that such operations involves the risk of a nuclear incident which, while the chances are remote, could adversely affect the public health and safety as well as the environment. Therefore, the Contractor will exercise a degree of care commensurate with the risk involved.

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b.The Contractor shall comply with all applicable regulations of DOE concerning nuclear safety and with those requirements (including reporting requirements and instructions) of DOE concerning nuclear safety of which it is notified in writing by the contracting officer.

c.Prior to the initial startup of any nuclear facility under this contract and prior to any subsequent startup following a change which represents a significant deviation from the procedures, equipment, or analyses described in the safety analysis reports or other hazards summary reports for that facility, the Contractor shall:

1.Prepare a safety analysis report and detailed plans and procedures designed to assure the safe operations and maintenance of the facility in accordance with applicable DOE regulations and directives. For nuclear reactors and critical facilities, technical specifications shall also be provided.

2.Establish nuclear safety control procedures to be used within the Contractor’s organization to insure competent independent review and internal approval of the safety analysis report and the detailed plans and procedures specified in (1) above.

3.Submit to the contracting officer for his approval such procedures relating to nuclear safety as may be designated by him.

4.Carry out a program of initial training and periodic requalification designed to assure that all personnel who will be engaged in nuclear operations or maintenance understand the approved plans and procedures for nuclear safety and are qualified to perform their assigned functions; and

5.Obtain the approval of the contracting officer prior to start-up of the facility.

d.In the operation and maintenance of any nuclear facility under this contract, the Contractor shall:

1.Use all reasonable efforts to assure that all operational and maintenance activities are performed by qualified and adequately trained personnel, and except as otherwise agreed in writing, are conducted under the supervision of personnel who are qualified and authorized to evaluate any emergency condition and take prompt effective action with respect thereto.

2.Operate the facility within the technical specifications or operational safety requirements which are approved by the contracting officer.

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3.Follow strictly the procedures relating to nuclear safety approved by the contracting officer in (c)(3) above, and submit to the contracting officer for his approval, any proposed changes in such procedures.

4.Establish an auditable, well—defined, internal safety review and inspection system approved by the contracting officer (including review and inspection reports by competent technical personnel) that will: (1) Provide frequent and periodic checks of facility performance and of the qualifications and training of operating and maintenance personnel, and (ii) provide for investigation of any unusual or unpredicted conditions that might affect safe operations.

5.Report promptly to the contracting officer any change in the physical condition of the facility or its operating characteristics that might, in the judgment of the Contractor, affect the safe operation of the facility.

6.Terminate operations at the facility immediately whenever so instructed by the contracting officer, or whenever, in the judgment of the Contractor, the risk of a nuclear incident endangering persons or property warrants such action.

7.Prepare, in cooperation with other services and facilities available at the site and with the approval of the Contracting Officer, a plan for minimizing the effects of a nuclear incident upon the health and safety of all persons on the site; participate as directed in the integration of the Contractor’s and contracting officer’s emergency plans with the responsible state and local government’s emergency plans for protection of the public offsite; instruct its personnel as to their participation in such plans and any personal risk to such personnel that may be involved; and participate in such practice exercises as may be desirable to assure the effectiveness of such plans.

8.At an appropriate time as determined by the Contracting Officer, prepare and submit to the Contracting Officer for his approval, shutdown, decommissioning, decontamination and property management plans leading to orderly and safe program disposition of the nuclear facility and any associated nuclear wastes or other hazardous material.

9.In the event that the Contractor fails to comply with said standards and requirements of DOE, the contracting officer may, without prejudice to any other legal or contractual rights of DOE, issue an order stopping all or any part of the work; thereafter a start order for resumption of the work may be issued at the discretion of the contracting officer. The Contractor shall make no claim for an extension of time or for compensation or damages by reason of or in connection with such work stoppage.

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I-41DEAR 970.5204-28 ASSIGNMENT (APR 1984)

Neither this contract nor any interest therein nor claim thereunder shall be assigned or transferred by the Contractor except as expressly authorized in writing by the Contracting Officer.

I-42DEAR 970.5204-43 OTHER GOVERNMENT CONTRACTORS (APR 1984)

The Government may undertake or award contracts for work or services. The Contractor agrees to fully cooperate with such other Contractors and Government employees and carefully fit its own work to such other work as may be directed by the Contracting Officer. The Contractor shall not commit or permit any act which will interfere with the performance of work by any other Contractor or by Government employees.

I-49DEAR 970.5204-45 TERMINATION (DEVIATION) (APR 1991)

a.This contract shall continue until the date shown in the clause of this contract entitled “Term of Contract(s)” unless sooner terminated in accordance with the provisions which follow:

1.The performance of work under this contract may be terminated by the Government in whole, or from time to time in part, (i) whenever the Contractor shall default in performance, and shall fail to cure the fault or failure within such period as the Contracting Officer may allow after receipt from the Contracting Officer of a notice specifying the fault or failure, or (ii) whenever, for any reason, the Contracting Officer shall determine any such termination is for the best interest of the Government. Termination of the work hereunder shall be effected by delivery of a notice of termination specifying whether termination is for default of the Contractor or for the convenience of the Government, the extent to which performance of work under the contract shall be terminated, and the date upon which such termination shall become effective. Any such termination shall be without prejudice to any claim which either party may have against the other. If, after notice of termination under the provisions of (a)(1)(i) above, it is determined for any reason that the Contractor was not in default, such notice of default shall be deemed to have been issued pursuant to (a)(1)(ii) above, and the rights and obligations of the parties hereto shall in such event be governed accordingly.

2.Upon receipt of notice of termination, in accordance with (1) above, the Contractor shall, to the extent directed in writing by the Contracting Officer, discontinue the terminated work and the placing of orders for materials, facilities, supplies, and services in connection therewith, and shall proceed, if, and to the extent required by the Contracting Officer, to cancel promptly and settle with the approval of the Contracting Officer, existing orders, subcontracts, and commitments insofar as such orders, subcontracts, and commitments pertain to this contract.

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b.Upon the termination of this contract, full and complete settlement of all claims of the Contractor and of DOE arising out of this contract shall be made as follows:

1.The Government shall have the right in its discretion to assume sole responsibility for any or all obligations, commitments, and claims that the Contractor may have undertaken or incurred, the cost of which is allowable in accordance with the provisions of this contract; and the Contractor shall, as a condition of receiving the payments mentioned in this article, execute and deliver all such papers and; take all such steps as the Contracting Officer may require for the purpose of fully vesting in the Government any rights and benefits the Contractor may have under or in connection with such obligations, commitments, or claims.

2.The Government shall treat as allowable costs all expenditures made in accordance with and allowable under the clause entitled “Allowable Cost and Payment,” not previously so allowed or otherwise credited for work performed prior to the effective date of termination, together with expenditures as may be incurred for a reasonable time thereafter with the approval of, or as directed by, the Contracting Officer.

3.The Government shall treat as allowable costs, to the extent not included in (b)(2) above, the costs of settling and paying claims arising out of the termination of work under orders, subcontracts, and commitments as provided in (a)(2) above.

4.The Government shall treat as allowable costs the reasonable costs of settlement, including accounting, legal, clerical, and other expenses reasonably necessary for the preparation of settlement claims and supporting data with respect to the termination of the contract and for the termination and settlement of orders and subcontracts thereunder, together with such further expenditures made by the Contractor after the date of termination for the protection or disposition of Government property as are approved or required by the Contracting Officer, provided, however, that if the termination is for default of the Contractor, there shall not be included any amount for preparation of the Contractor’s settlement proposal.

5.If the performance of work under this contract is terminated in whole by the Government, the basic and award fee of the Contractor shall be prorated to and including the effective date of such termination.  In addition, if the termination is for the convenience of the Government, the Contractor shall be paid a fixed fee in an amount to be agreed upon as compensation for its services in closing out the work under this contract after the effective date of such termination. The additional fixed fee is to be negotiated as soon as practicable after service of notice of termination, shall take into account the estimate of the cost of the services and managerial effort to be rendered under this clause after the effective date

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of termination, and shall be provided for in a supplement or amendment to this contract prior to final settlement hereunder. Pending agreement as to the amount of such fee, the Contractor shall diligently proceed with the performance of the services required under this clause. No additional fee will be paid if the contract is terminated due to the default of the Contractor. In the event of a partial termination by the Government, an equitable adjustment shall be made in the fee if such termination results in a material decrease in the level of the Contractor’s management effort. Any failure to agree on the right to or the amount of any adjustment shall be deemed a dispute within the purview of the clause hereof entitled “Disputes.”

6.The obligation of the Government to make any of the payments required by this clause or any other provisions of this contract shall be subject to any unsettled claims in connection with this contract which the Government may have against the Contractor.

c.Prior to final settlement, the Contractor shall furnish a release as required in the clause entitled “Allowable Cost and Payment” and account for Government-owned property as may be required by the Contracting Officer: provided, however, that unless the Contracting Officer requires an inventory, the maintenance and disposition of the records of Government-owned property in accordance with the clause entitled “Government Property-Cost Reimbursement, Time-and-Material, or Labor Hour Contract” shall be accepted by the Contracting Officer as full compliance with all requirements of this contract pertaining to an accounting for such property.

I-44TECHNOLOGY TRANSFER

This clause has as its purpose, implementation of the National Competitiveness Technology Transfer Act of 1989 (Sections 3131, 3132, 3133, and 3159 of P.L. 101-189) and takes precedence over any other provisions of this Contract to the contrary.

a.Technology transfer.

1.Definitions.

i.Contractor’s Laboratory Director means the individual who has supervision over all or substantially all of the Contractor’s operations at the Laboratory.

ii.Intellectual Property means patents, trademarks, copyrights, mask works, and other forms of comparable property rights protected by Federal Law

iiiCooperative Research and Development Agreements (CRADAs) mean any agreement entered into between one or more Federal laboratories and one or more non-Federal parties under which the

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Government, through its laboratories, provides personnel, services, facilities, equipment, and other resources with or without reimbursement (but not funds to non-Federal parties) and the non-Federal parties provide funds, personnel, services, facilities, equipment, or other resources toward the conduct of specified research or development efforts which are consistent with the missions of the Laboratory; except that such term does not include a procurement contract, grant, or cooperative agreement as those terms are used in Sections 6303, 6304, and 6305 of Title 31 of the United States Code.

iv.Joint Work Statement (JWS) means a proposal for a CRADA prepared by the Contractor, signed by the Contractor’s Laboratory Director or designee which describes the following:

A.Purpose;

B.Scope of Work which delineates the rights and responsibilities of the Government, the Contractor and Third Parties, one of which must be a non-Federal party;

C.Schedule for the work; and

D.Cost and resource contributions of the parties associated with the work and the schedule.

2.Authority.

i.In order to ensure the full use of the results of research and development efforts of, and the capabilities of, the Laboratory, technology transfer, including CRADAs, is established as a mission of the Laboratory consistent with the policy, principles, and purposes of Sections 11(a)(1) and 12(g) of the Stevenson-Wydler Technology Innovation Act of 1980 as amended (15 U.S.C. 3710a); Section 3132(b) of P.L. 101-189 and of Chapter 38 of the Patent Laws (35 U.S.C. 200 et seq.); Section 152 of the Atomic Energy Act of 1954 as amended (42 U.S.C. 2182); Section 9 of the Federal Non-Nuclear Act of 1974 (42 U.S.C. 5908); and Executive Order 12591 of April 10, 1987.

ii.The Contractor shall conduct technology transfer activities with the clear intent of providing benefit from Federal research to U.S. industrial-competitiveness.

iii.In pursuing the technology transfer mission, the Contractor is empowered to conduct the following activities:  identify and protect Intellectual Property, negotiate licensing agreements for Intellectual Property that the Contractor controls or owns, enter

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into CRADAs, provide technical consulting and personnel exchanges, conduct science education activities and reimbursed Work For Others (WFO), provide information exchanges and make available Laboratory user facilities. It is fully expected that the Contractor shall use all of the mechanisms available to them to accomplish this technology transfer mission, including, but not limited to, user facilities, WFO, science education activities, consulting, personnel exchanges, and licensing in accordance with this clause.

3Allowable costs (Applies to Contractors performing technology transfer activities under this clause and from which all income is returned to the Laboratory for use under the Contract).

i.The Contractor shall establish and carry out its technology transfer efforts through appropriate organizational elements consistent with the requirements for an Office of Research and Technology Applications (ORTA) pursuant to Paragraphs (b) and (c) of Section 11 of the Stevenson-Wydler Technology Innovation Act of 1980 as amended (15 U.S.C. 3710). The costs associated with the conduct of technology transfer through the ORTA, including activities associated with obtaining, maintaining, and licensing Intellectual Property rights, increasing the potential for the transfer of technology, and the widespread notice of technology transfer opportunities, shall be deemed allowable provided that such costs meet the other requirements of the allowable costs provisions of this Contract. These costs in any fiscal year shall not exceed an amount equal to 0.5 percent of the Federal research and development budget (operating including Work For Others) of the Laboratory for that fiscal year, without written approval of the Contracting Officer, in addition to any separately designated funds.

ii.The Contractor’s participation in litigation to enforce or defend Intellectual Property claims associated with its technology transfer efforts shall be as provided in the clause entitled “Litigation and Claims” of this Contract.

4.Conflicts of interest - technology transfer.

The Contractor shall develop implementing procedures that seek to avoid employee and organizational conflicts of interest, or the appearance of conflicts of interest, in the conduct of its technology transfer activities. Such implementing procedures shall be provided to the Contracting Officer for review and approval within sixty (60) days after execution of this clause. The Contracting Officer shall have thirty (30) days thereafter to approve or require specific changes to such procedures. Such implementing procedures shall include procedures to:

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i.Ensure employee competency, conduct, and integrity, in connection with the CRADA activity in accordance with the provisions of Paragraph (b)(5) of this clause.

ii.Review and approve employee activities so as to avoid conflicts of interest arising from commercial utilization activities relating to Contractor-developed Intellectual Property.

iii.Conduct work performed using royalties so as to avoid interference with or adverse effects on ongoing DOE projects and programs.

iv.Conduct activities relating to commercial utilization of Contractor-developed Intellectual Property so as to avoid interference with or adverse effects on user facility or WFO activities of the Contractor.

v.Conduct DOE funded projects and-programs so as to avoid the appearance of conflicts of interest or actual conflicts of interest with non-Government funded work.

vi.Notify the Contracting Officer with respect to any new work to be performed or proposed to be performed under the Contract for the Department or other Federal agencies where the new work or proposal involves Intellectual Property in which the Contractor has obtained or intends to request or elect title.

vii.Except as provided elsewhere in this Contract, obtain the approval of the Contracting Officer for any licensing of or assignment of title to Intellectual Property rights by the Contractor to any business or corporate affiliate of the Contractor.

viii.Obtain the approval of the Contracting Officer prior to any assignment, exclusive licensing, or option for exclusive licensing, of Intellectual Property to any current or former Laboratory employee or consultant.

ix.Notify non-Federal sponsors of WFO activities, or non-Federal users of user facilities, of any relevant Intellectual Property interest of the Contractor prior to execution of WFOs or user agreements.

5.Fairness of opportunity.

In conducting its technology transfer activities, the Contractor shall prepare procedures and take all reasonable measures to ensure widespread notice of availability of technologies suited for transfer and opportunities for exclusive licensing and joint research arrangements. The requirement to widely disseminate the availability of technology transfer opportunities does not apply to a specific application originated outside of the Laboratory.

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6.U.S. Industrial Competitiveness.

i.In the interest of enhancing U.S. Industrial Competitiveness, the Contractor shall, in its licensing and assignments of Intellectual Property, give preference in such a manner as to enhance the accrual of economic and technological benefits to the U.S. domestic economy. The Contractor shall consider the following factors in all of its licensing and assignment decisions:

A.Whether any resulting design and development will be performed in the United States and whether resulting products, embodying parts, including components thereof, will be substantially manufactured in the United States; or

B.1Whether the proposed licensee or assignee has a business unit located in the United States and whether significant economic and technical benefits will flow to the United States as a result of the license or assignment agreement; and further,

2Whether in licensing any entity subject to the control of a foreign company or government, such foreign government permits United States agencies, organizations, or other persons to enter into cooperative research and development agreements and licensing agreements, and have policies to protect United States intellectual property rights.

If the Contractor determines that neither of the above two sets of conditions is likely to be fulfilled, the Contractor, prior to entering into such an agreement, must obtain the approval of the Contracting Officer.  The Contracting Officer shall act on any such requests for approval within thirty (30) days.

ii.The Contractor agrees to be bound by the provision of 35 U.S.C. 204

7.Indemnity - - product liability.

In conducting technology transfer activities, including, but not limited to, licensing activities or CRADAs, the Contractor agrees to include in such agreements a requirement that the Contractor and the U.S. Government be indemnified for all damages, costs, and expenses, including attorneys’ fees, arising from the commercialization and utilization of such technologies, including, but not limited to, the making, using, selling, or exporting of products, processes, or services derived from the transferred technology.

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8.Disposition of income (Applies to Contractors conducting technology transfer activities under this clause and from which all income is returned to the Laboratory for use under the Contract).

i.Royalties or other income earned or retained by the Contractor as a result of performance of authorized technology transfer activities herein shall be used by the Contractor for scientific research, development and education at the Laboratory, consistent with the research and development mission and objectives of the Laboratory and subject to Section 12(b)(5) of The Stevenson-Wydler Technology Innovation Act of 1980, as amended [15 U.S.C. 3710a(b)(5)] and Chapter 38 of the Patent Laws (35 U.S.C. 200 et seq.) as amended through the effective date of this modification. If the amounts of such royalties and income received during any fiscal year exceed 5 percent of the Laboratory’s budget for the fiscal year, 75 percent of such excess amounts shall be paid to the Treasury of the United States, and the remaining amount of such excess shall be used by the Contractor for the purposes as described above in this paragraph. Any inventions arising out of such scientific research and development activities shall be deemed to be “Subject Inventions” under the Contract.

ii.The Contractor shall include as part of its annual Laboratory Institutional Plan or other such annual document a plan setting out those uses to which royalties and other income received as a result of performance of authorized technology transfer activities herein, will be applied at the Laboratory, and at the end of the year, provide a separate accounting for how the funds were actually used. Under no circumstances shall these royalties and income be used for an illegal augmentation of funds furnished by the U.S. Government.

iii.The Contractor shall establish a policy for making awards or sharing of royalties with Contractor employees, other coinventors and coauthors including, when deemed appropriate by the Contracting Officer, Federal employee coinventors.

9.Transfer to successor Contractor.

In the event of termination or expiration of this Contract, any unexpended balance of income received for use at the Laboratory shall be transferred, at the Contracting Officer’s request, to a successor Contractor, or in the absence of a successor Contractor, to such other entity as designated by the Contracting Officer. The Contractor shall transfer title, as one package, in all patents and patent applications, licenses, accounts containing royalty revenues from such license agreements, including equity positions in third party entities, and other Intellectual Property rights which arose at the

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Laboratory, to the successor Contractor or to the Government as directed by the Contracting Officer.

10.Technology transfer affecting the national security.

i.The Contractor shall notify and obtain the written approval of the Contracting Officer, prior to entering into any technology transfer arrangement, when such technology or any part of such technology is classified or sensitive under Section 148 of the Atomic Energy Act (42 U.S.C. 2168). Such notification shall include sufficient information to enable DOE to determine the extent that commercialization of such technology would enhance or diminish security interests of the United States, or diminish communications within DOE’s nuclear weapons production complex. DOE shall use its best efforts to complete its determination within sixty (60) days of the Contractor’s notification, and provision of any supporting information, and DOE shall promptly notify the Contractor as to whether the technology is transferable.

ii.The Contractor shall include in all of its technology transfer agreements with third parties, including, but not limited to, CRADAs, licensing agreements and assignments, notice to such third parties that the export of goods and/or Technical Data from the United States may require some form of export control license from the U.S. Government and that, failure to obtain such export control license, may result in criminal liability under U.S. laws.

iii.For other than fundamental research as defined in National Security Directive 189, the Contractor is responsible to conduct internal export control reviews and assure that technology is transferred, in accordance with applicable law.

11.Records.

The Contractor shall maintain records of its technology transfer activities, in a manner and to the extent satisfactory to DOE, and specifically including, but not limited to, the licensing agreements, assignments and the records required to implement the requirements of Paragraphs (5), (6), and (8) herein and shall provide reports to the Contracting Officer to enable DOE to maintain the recording requirements of Section 12(c)(6) of the Stevenson-Wydler Technology Innovation Act of 1980 as amended (15 U.S.C. 3710a(c)(6)). Such reports shall be made annually in a format to be agreed upon between the Contractor and DOE and in such a format which will serve to adequately inform DOE of the Contractor’s technology transfer activities while protecting any data not subject to disclosure under the Rights in Technical Data clause and Paragraph (b) herein. Such

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records shall be made available in accordance with the clauses of this Contract pertaining to inspection, audit, and examination of records.

12.Reports to Congress.

To facilitate DOE’s reporting to Congress, the Contractor is required to annually submit to DOE a technology transfer plan for conducting its technology transfer function for the upcoming year, including plans for securing Intellectual Property rights in Laboratory innovations with commercial promise and plans for managing such innovations so as to benefit the competitiveness of United States industry.  This plan shall be provided to the Contracting Officer on or before October 1 of each year.

13.Oversight and appraisal.

The Contractor is responsible for developing and implementing effective internal controls for all technology transfer activities consistent with the audit and record requirements of this Contract. Laboratory Contractor performance in implementing the technology transfer mission and the effectiveness of Contractor procedures will be evaluated by the Contracting Officer as part of the annual appraisal process, with input from the cognizant Secretarial Officer or program office.

b.Technology transfer through cooperative research and development agreements.

Upon approval of the Contracting Officer and as provided in a DOE-approved Joint Work Statement (JWS), the Laboratory Director or his designee may enter into CRADAs on behalf of the DOE subject to the requirements set forth herein.

1.Review and approval of CRADAs.

i.Each JWS shall be submitted to the Contracting Officer for approval. The Contractor’s Laboratory Director shall provide a program mission impact statement and shall include an impact statement regarding related Intellectual Property rights owned by the Government to assist the Contracting Officer in his approval determination.

ii.The Contractor shall also include (specific to the proposed CRADA) a statement of compliance with the Fairness of Opportunity requirements of Paragraph (a)(5) above.

iii.Within ninety (90) days after submission of a JWS, the Contracting Officer shall approve, disapprove, or request modification to the JWS. If a modification is required, the Contracting Officer shall approve or disapprove any resubmission of the JWS within thirty (30) days of its resubmission, or ninety (90) days from the date of the original submission, whichever is later. The Contracting

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Officer shall provide an explanation to the Contractor’s Laboratory Director of any disapproval or requirement for modification of a JWS.

iv.Upon approval of a JWS, the Contractor’s Laboratory Director may submit a CRADA, based upon the approved JWS, to the Contracting Officer. The Contracting Officer, within thirty (30) days of receipt of the CRADA, shall approve or request modification of the CRADA. If the Contracting Officer requests a modification of the CRADA, an explanation of such request shall be provided to the Laboratory Director.

v.The Contractor shall not enter into, or begin work on, a CRADA until approval of the CRADA has been granted by the Contracting Officer. The Contractor may submit its proposed CRADA to the Contracting Officer at the time of submitting its proposed JWS or any time thereafter. However, the Contracting Officer is not obligated to respond under Subparagraph (iv) above until within thirty (30) days after approval of the JWS or thirty (30) days after submittal of the CRADA. whichever is later.

2.Selection of participants.

The Contractor’s Laboratory Director, in deciding what CRADA to enter into shall:

i.Give special consideration to small business firms, and consortia involving small business firms;

ii.Grant U.S. preference in accordance with the licensing and assignment requirements of Paragraph (a)(6) above;

iii.Provide Fairness of Opportunity in accordance with the requirements of Paragraph (a)(5) above; and

iv.Give consideration to the Conflict of Interest requirements of Paragraph (a)(4) above.

3.Withholding of data.

i.The Contractor may provide for appropriate protection against dissemination of data produced as a result of research and development activities conducted under the CRADA, for a period of up to five (5) years from the time the data is first produced. Such data must be data that would be a trade secret or commercial or financial data that would be privileged or confidential, if such data had been obtained from a non-Federal Third Party. Since such data is exempt from disclosure under the Freedom of Information

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Act, the DOE shall cooperate with the Contractor in withholding such data.

ii.Unless otherwise expressly approved by the Contracting Officer in advance for a specific CRADA, the Contractor agrees, at the request of the Contracting Officer, to transmit such data to other DOE facilities for use by DOE or its Contractors by or on behalf of the Government. Upon transmitting such data, the Contractor shall clearly mark the data with a legend setting out the restrictions against private use and further dissemination, along with the expiration data of such restrictions.

iii.In addition to its authority to license Intellectual Property, the Contractor may enter into licensing agreements with third parties for data developed by the Contractor under a CRADA subject to other provisions of this Contract. However, the Contractor shall neither use the protection against dissemination nor the licensing of data as an alternative to obtaining patent protection of any invention contained in such data.

4.Work for others and user facility programs.

i.WFO and User Facility Agreements (UFAs) are not considered CRADAs and will be available for use by the Contractor in addition to CRADAs for achieving utilization of employee expertise and unique facilities for maximizing technology transfer. The Contractor agrees to inform prospective CRADA participants, which are intending to substantially pay full cost recovery for the effort under the CRADA, of WFO and UFA opportunities, including Class Waiver provisions associated therewith.

ii.Where the Contractor believes that the transfer of technology to the U.S. domestic economy will benefit from, or other equity considerations dictate, an arrangement other than the Class Waiver of patent rights to the sponsor in WFO and UFAs, a request may be made to the Contracting Officer for an exception to the Class Waivers.

5.Conflicts of interest.

i.Except as provided in Subparagraph (iii) below, the Contractor shall assure that no employee of the Contractor shall have a substantial role (including an advisory role) in the preparation, negotiation, or approval of a CRADA, if, to such employee’s knowledge:

A.Such employee, or the spouse, child, parent, sibling, or partner of such employee, or an organization (other than the

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Contractor) in which such employee serves as an officer, director, trustee, partner, or employee;

1Holds financial interest in any entity, other than the Contractor, that has a substantial interest in the preparation, negotiation, or approval of the CRADA;

2Receives a gift of gratuity from any entity, other than the Contractor, that has a substantial interest in the preparation, negotiation, or approval of the CRADA; or

B.A financial interest in any entity, other than the Contractor, that has a substantial interest in the preparation, negotiation, or approval of the CRADA, is held by any person or organization with whom such employee is negotiating or has any arrangement concerning prospective employment.

ii.The Contractor shall require that each employee of the Contractor who has a substantial role (including an advisory role) in the preparation, negotiation, or approval of a CRADA certify to the Contracting Officer that the circumstances described in Subparagraph (i) above do not apply to that employee.

iii.The requirements of Subparagraphs (1) and (ii) above shall not apply in a case where an employee, described therein, advises through the Contractor the Contracting Officer in advance of his or her participation in the preparation, negotiation, or approval of a CRADA of the nature of and extent of any financial interest described in Subparagraph (i), and the Contracting Officer determines that such financial interest is not so substantial as to be considered likely to affect the integrity of the Contractor employee’s participation in the process of preparing, negotiating, or approving the cooperative agreement.

c.Technology transfer in other cost sharing agreements.

In conducting research and development activities in cost shared agreements not covered by Paragraph (b) above, the Contractor, with written permission of the Contracting Officer, may provide for the withholding of data produced thereunder in accordance with the applicable provisions of Paragraph (b)(3) herein.

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I-45RIGHTS IN DATA - TECHNOLOGY TRANSFER ACTIVITIES

a.Definitions.

1.“Computer software,” as used in this clause, means computer programs, computer data bases, and documentation thereof.

2.“Data,” as used in this clause, means recorded information, regardless of form or the media on which it may be recorded.  The term includes technical data and computer software. The term does not include information incidental to contract administration, such as financial, administrative, cost or pricing, or management information.

3.“Limited rights data,” as used in this clause, means data (other than computer software) developed at private expense that embody trade secrets or are commercial or financial and confidential or privileged.

4.“Technical data,” as used in this clause, means data (other than computer software) which are of a scientific or technical nature.

5.“Restricted computer software,” as used in this clause, means computer software developed at private expense and that is a trade secret; is commercial or financial and is confidential or privileged; or is published copyrighted computer software; including minor modifications of such computer software.

6.“Unlimited rights,” as used in this clause, means the right of the Government to use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, in any manner and for any purpose, and to have or permit others to do so.

7.“Limited rights,” as used in this clause, means the rights of the Government in limited rights data as set forth in the Limited Rights Notice of paragraph (g) in this clause.

8.“Restricted rights,” as used in this clause, means the rights of the Government in restricted computer software, including minor modifications of such computer software, as set forth in a Restricted Rights Notice of paragraph (h) in this clause.

b.Allocation of rights.

1.The Government shall have:

i.Ownership of all technical data and computer software first produced in the performance of this Contract;

ii.The right to inspect technical data and computer software first produced or specifically used in the performance of this Contract at all reasonable times (for which inspection the proper facilities shall be afforded DOE by the Contractor and its subcontractors);

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iii.The right to have all technical data and computer software first produced or specifically used in the performance of this Contract delivered to the Government or otherwise disposed of by the Contractor, either as the Contracting Officer may from time to time direct during the progress of the work or in any event as the Contracting Officer shall direct upon completion or termination of this Contract, provided that nothing contained in this paragraph shall require the Contractor to actually deliver any technical data or computer software, the delivery of which is excused by this Rights in Data clause;

iv.Unlimited rights in technical data and computer software specifically used in the performance of this Contract, except as provided herein regarding copyright, and except for technical data and computer software pertaining to items of standard commercial design, and further, subject to the withholding provisions for protected CRADA information in accordance with Technology Transfer actions under this Contract; the Contractor agrees to leave a copy of such data at the facility or plant to which such data relate, and to make available for access or to deliver to the Government such data upon request by the Contracting Officer; provided, that if such data are limited rights data or restricted computer software the rights of the Government in such data shall be governed solely by the provisions of paragraph (g) hereof (“Rights in Limited Rights Data”) or paragraph (h) hereof (“Rights in Restricted Computer Software”); and

v.The right to remove, cancel, correct, or ignore any markings not authorized by the terms of this Contract on any data furnished hereunder if, in response to a written inquiry by DOE concerning the propriety of the markings, the Contractor fails to respond thereto within 60 days or fails to substantiate the propriety of the markings. In either case DOE will notify the Contractor of the action taken.

2.The contractor shall have:

i.The right to withhold its limited rights data and restricted computer software in accordance with the provisions of this clause;

ii.The right to use for its private purposes, subject to patent, security or other provisions of this Contract, data it first produces in the performance of this Contract, except for data in DOE’s Uranium Enrichment Technology, including diffusion, centrifuge, and atomic vapor laser isotope separation, provided the data requirement of this Contract have been met as of the date of the private use of such data; and

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iii.The right to assert copyright subsisting in scientific and technical articles as provided in paragraph (d) of this clause and the right to request permission to assert copyright in works subsisting in works other than scientific and technical articles as provided in paragraph (e) of this clause.

The contractor agrees that for limited rights data or restricted computer software or other technical, business or financial data in the form of recorded information which it receives from, or is given access to by, DOE or a third party, including a DOE Contractor or subcontractor, and for technical data or computer software it first produces under this Contract which is authorized to be marked by DOE, the contractor shall treat such data in accordance with any restrictive legend contained thereon.

Nothing contained in this clause shall imply a license to the Government under any patent or be construed as affecting the scope of any licenses or other rights otherwise granted to the Government under any patent.

c.Copyright (General).

1.The Contractor agrees not to mark, register or otherwise assert a copyright in any data in a published or unpublished work, other than as set forth in paragraphs (d) and (e) below.

2.Except for material to which the Contractor has obtained the right to assert copyright in accordance with either paragraph (d) or (e) hereof, the Contractor agrees not to include in the data delivered under this Contract any material copyrighted by the Contractor and not to knowingly include any material copyrighted by others without first granting or obtaining at no cost a license therein for the benefit of the Government of the same scope as set forth in paragraph (d) below. If the Contractor believes that such copyrighted material for which the license cannot be obtained must be included in the data to be delivered, rather than merely incorporated therein by reference, the Contractor shall obtain the written authorization of the Contracting Officer to include such material in the data prior to its delivery.

d.Copyrighted works (scientific and technical articles).

1.The Contractor shall have the right to assert, without prior approval of the Contracting Officer, copyright subsisting in scientific and technical articles based on or containing data first produced in the performance of this Contract, and published in academic, technical or professional journals, synopsis proceedings or similar works. When assertion of copyright is made, the Contractor shall affix the applicable copyright notice of 17 U.S.C. 401 or 402 and acknowledgement of Government sponsorship (including contract number) on the data when such data are

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delivered to the Government as well as when the data are published or deposited for registration as a published work in the U.S. Copyright Office. The contractor grants to the Government, and others acting on its behalf, a paid-up, nonexclusive, irrevocable worldwide license in such copyrighted data to reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, by or on behalf of the Government.

e.Copyrighted works (other than scientific and technical articles).

1.The Contractor may obtain permission to assert copyright subsisting in technical data and computer software first produced by the Contractor in performance of this Contract, where the Contractor can show that commercialization would be enhanced by such copyright protection, subject to the following:

i.Contractor Request to Assert Copyright.

A.For data other than scientific and technical articles, the Contractor shall submit in writing to Patent Counsel its request to assert copyright in data first produced in the performance of this Contract pursuant to this clause. Each request by the Contractor to be complete must include: (1) the identity of the data (including any computer program) for which the Contractor requests permission to assert copyright, as well as an abstract which is descriptive of the data and is suitable for dissemination purposes, (2) the program under which it was funded, (3) whether the data is subject to an international treaty or agreement, (4) whether the data is subject to export control, (5) a statement that the Contractor plans to commercialize the data within five (5) years of obtaining permission to assert copyright, and (6) for data other than computer software, a statement explaining why the assertion of copyright is necessary to enhance commercialization. For data that is developed using other funding sources in addition to DOE funding, the permission to assert copyright in accordance with this clause must also be obtained by the Contractor from all other funding sources prior to the Contractor’s request to Patent Counsel. The request shall include the contractor’s certification or other documentation acceptable to the Patent Counsel demonstrating such permission has been obtained.

B.Permission for the Contractor to assert copyright in excepted categories of data as determined by DOE is expressly withheld. Such excepted categories include data

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whose release (1) would be detrimental to national security, i.e., involves classified information or data or sensitive information under Section 148 of the Atomic Energy Act of 1954, as amended, or are subject to export control for nonproliferation and other nuclear-related national security purposes, (2) would not enhance the appropriate transfer or dissemination and commercialization of such data, (3) would have a negative impact on U.S. industrial competitiveness, (4) would prevent DOE from meeting its obligations under treaties and international agreements, or (5) would be detrimental to one or more of DOE’s programs.  Additional excepted categories may be added by the Assistant General Counsel for Intellectual Property. Where data are determined to be under an export control restriction, the Contractor may still obtain permission to assert copyright in such restricted data for purposes of limited commercialization within the constraints provided by the export control statutes and regulations subject to the provisions of this clause. However, notwithstanding any other provision of this Contract, all data developed with Naval Reactors’ funding and those that are classified fall within the above excepted categories and permission to assert copyright will not be granted by DOE for those data. Additionally, the rights of the Contractor in data are subject to the disposition of data rights in the treaties and international agreements identified under this Contract as well as those additional treaties and international agreements which DOE may from time to time identify by unilateral amendment to the Contract; such amendment listing added treaties and international agreements is effective only for data which is developed after the date such treaty is added to this contract. Also, the Contractor will not be permitted to assert copyright in data in the form of various technical reports generated by the Contractor under the Contract without first obtaining the advanced written permission of the Contracting Officer.

ii.DOE Review and Response to Contractor’s Request.

A.The Patent Counsel shall use its best efforts to respond in writing within 90 days of receipt of a complete request by the Contractor to assert copyright in technical data and computer software pursuant to this clause. Such response shall either give or withhold DOE’s permission for the Contractor to assert copyright or advise the Contractor that DOE needs additional time to respond and the reasons therefor.

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iii.Permission for Contractor to Assert Copyright.

A.For computer software, the Contractor shall furnish to the contractor designated by DOE to serve as the DOE centralized software distribution and control point, at the time permission to assert copyright is given under (ii) above: (1) an abstract describing the software suitable for publication, (2) the source code for each software program, and (3) the object code and at least the minimum support documentation needed by a technically competent user to understand and use the software. The Patent Counsel, for good cause shown by the Contractor, may allow the minimum support documentation to be delivered within 60 days after permission to assert copyright is given or at such time the minimum support documentation becomes available. The Contractor acknowledges that the above-identified DOE-designated contractor may provide a technical description of the software in an announcement identifying its availability from the copyright holder.

B.Unless otherwise directed by the Contracting Officer, for data other than computer software to which the Contractor has received permission to assert copyright under paragraph (ii) above, the Contractor shall within (60) days of obtaining such permission furnish to DOE’s Office of Scientific and Technical Information (OSTI) a copy of such data as well as an abstract of the data suitable for dissemination purposes. The Contractor acknowledges that OSTI may provide an abstract of the data in an announcement to DOE, its contractors and to the public identifying its availability from the copyright holder.

C.For a period of five (5) years beginning on the date the Contractor is given permission to assert copyright in data, the Contractor grants to the Government, and others acting on its behalf, a paid-up, nonexclusive, irrevocable worldwide license in such copyrighted data to reproduce, prepare derivative works, and perform publicly and display publicly, by or on behalf of the Government.

D.After the five (5) year period set forth in (C) above, or if, prior to the end of such period, the Contractor abandons commercialization activities pertaining to the data to which the Contractor has been given permission to assert copyright, the Contractor grants to the Government, and others acting on its behalf, a paid-up, nonexclusive, irrevocable worldwide license in such copyrighted data to

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reproduce, distribute copies to the public, prepare derivative works, perform publicly and display publicly, and to permit others to do so.

E.Whenever the Contractor obtains permission to assert copyright in data, the Contractor shall affix the applicable copyright notice of 17 U.S.C. 401 or 402 on the copyrighted data and also an acknowledgement of the Government sponsorship and license rights of paragraphs (C) and (D) above such action shall be taken when the data are delivered to the Government, published, licensed, or deposited for registration as a published work in the U.S. Copyright Office. The acknowledgement of Government sponsorship and license rights shall be as follows:

NOTICE: The Government is granted for itself and others acting on its behalf a paid-up, nonexclusive, irrevocable worldwide license in this data to reproduce, prepare derivative works, and perform publicly and display publicly. Beginning five (5) years after (date permission to assert copyright was obtained) the Government is granted for itself and others acting on its behalf a paid-up, nonexclusive, irrevocable worldwide license in this data to reproduce, prepare derivative works, distribute copies to the public, perform publicly and display publicly, and to permit others to do so. NEITHER THE UNITED STATES NOR THE UNITED STATES DEPARTMENT OF ENERGY, NOR ANY OF THEIR EMPLOYEES, MAKES ANY WARRANTY, EXPRESS OR IMPLIED, OR ASSUMES ANY LEGAL LIABILITY OR RESPONSIBILITY FOR THE ACCURACY, COMPLETENESS, OR USEFULNESS OF ANY INFORMATION, APPARATUS, PRODUCT, OR PROCESS DISCLOSED, OR REPRESENTS THAT ITS USE WOULD NOT INFRINGE-PRIVATELY OWNED RIGHTS.

F.With respect to any data to which the Contractor has received permission to assert copyright, the DOE has the right, during the 5-year period set forth in subparagraph (e)(1)(i)(A) above, to request the Contractor to grant a nonexclusive, partially exclusive or exclusive license in any field of use to a responsible applicant(s) upon terms that are reasonable under the circumstances, and if the Contractor refuses such request, to grant such license itself, if the DOE determines that the Contractor has not made a satisfactory demonstration that either it or its licensee(s) is actively

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pursuing commercialization of the data as set forth in subparagraph (e)(1)(i)(A) above. Before licensing under this paragraph (F), DOE shall furnish the Contractor a written request for the Contractor to grant the stated license, and the Contractor shall be allowed thirty (30) days (or such longer period as may be authorized by the Contracting Officer for good cause shown in writing by the Contractor) after such notice to show cause why the license should not be granted. The Contractor shall have the right to appeal the decision of the DOE to grant the stated license to the Invention Licensing Appeal Board as set forth in 10 CFR 781.65 - “Appeals”.

G.No costs shall be allowable for maintenance of copyrighted data, primarily for the benefit of the Contractor and/or a licensee and which exceeds DOE Program needs, except as expressly provided in writing by the Contracting Officer. The Contractor may use its net royalty income to effect such maintenance costs.

H.At any time the Contractor abandons commercialization activities for data for which the Contractor has received permission to assert copyright in accordance with this clause; it shall advise OSTI and Patent Counsel and upon request assign the copyright to the Government so that the Government can distribute the data to the public.

f.Subcontracting.

1.The Contractor agrees to use a Rights in Data clause as directed by the Contracting Officer in subcontracts having as a purpose the conduct of research, development, and demonstration work and in subcontracts for supplies.

2.It is the responsibility of the Contractor to obtain from its subcontractors data and rights therein, on behalf of the Government, necessary to fulfill the Contractor’s obligations to the Government with respect to such data.  In the event of refusal by a subcontractor to accept a clause affording the Government such rights, the Contractor shall:

i.Promptly submit written notice to the Contracting Officer setting forth reasons for the subcontractor’s refusal and other pertinent information which may expedite disposition of the matter; and

ii.Not proceed with the subcontract without the written authorization of the Contracting Officer.

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g.Rights in Limited Rights Data.

Except as may be otherwise specified in this Contract as data which are not subject to this paragraph, the Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive paid-up license and right to use by or for the Government, any limited rights data of the Contractor specifically used in the performance of this Contract, provided, however, that to the extent that any limited rights data when furnished or delivered is specifically identified by the Contractor at the time of initial delivery to the Government or a representative of the Government, such data shall not be used within or outside the Government except as provided in the “Limited Rights Notice” set forth below. All such limited rights data shall be marked with the following “Limited Rights Notice”:

LIMITED RIGHTS NOTICE

These data contain “limited rights data”, furnished under Contract No.                  with the United States Department of Energy (and Purchase Order/Subcontract No.                         if applicable) which may be duplicated and used by the Government with the express limitations that the “limited rights data” may not be disclosed outside the Government or be used for purposes of manufacture without prior permission of the Contractor, except that further disclosure or use may be made solely for the following purposes:

a.This “limited rights data” may be disclosed for evaluation purposes under the restriction that the “limited rights data” be retained in confidence and not be further disclosed;

b.This “limited rights data” may be disclosed to other Contractors participating in the Government’s program of which this Contract is a part for information or use in connection with the work performed under their contracts and under the restriction that the “limited rights data” be retained in confidence and not be further disclosed; and

c.This “limited rights data” may be used by the Government or others on its behalf for emergency repair or overhaul work under the restriction that the “limited rights data” be retained in confidence and not be further disclosed.

This Notice shall be marked on any reproduction of this data in whole or in part.

(END OF NOTICE)

h.Rights in Restricted Computer Software.

1.Except as may be otherwise specified in this Contract as data which are not subject to this paragraph, the Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive paid-up license and right to use by or for the Government, any restricted computer software of the Contractor specifically used in the performance of this Contract, provided, however, that to the extent that any restricted computer software when furnished or delivered is specifically identified by the Contractor at the time of initial delivery to the Government or a representative of the Government, such data shall not be used within or outside the Government except as provided in the “Restricted Rights Notice” set forth below. All

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such restricted computer software shall be marked with the following “Restricted Rights Notice”:

RESTRICTED RIGHTS NOTICE—LONG FORM

a.This computer software is submitted with restricted rights under Government Contract No.                                 (and subcontract                             if appropriate).  It may not be used, reproduced, or disclosed by the Government except as provided in paragraph (b) of this notice.

b.This computer software may be:

1.Used, or copied for use, in or with the computer or computers for which it was acquired, including use at any Government installation to which such computer or computers may be transferred;

2.Used, copies for use, in a backup or replacement computer if any computer for which it was acquired is inoperative or is replaced;

3.Reproduced for safekeeping (archives) or backup purposes;

4.Modified, adapted, or combined with other computer software, provided that only the portions of the derivative software are to be made subject to the same restricted rights; and

5.Disclosed to and reproduced for use by contractors under a service contract (of the type defined in FAR 37.101) in accordance with subparagraphs (b)(1) through (4) of this Notice, provided the Government makes such disclosure or reproduction subject to these restricted rights.

c.Notwithstanding the foregoing, if this computer software has been published under copyright, it is licensed to the Government, without disclosure prohibitions, with the rights set forth in the restricted rights notice above.

d.This notice shall be marked on any reproduction of this computer ‘software, in whole or in part.

(END OF NOTICE)

2.Where it is impractical to include the Restricted Rights Notice on restricted computer software, the following short-form Notice may be used in lieu thereof:

RESTRICTED RIGHTS NOTICE — SHORT FORM

Use, reproduction, or disclosure is subject to restrictions set forth in the Long Form Notice of Contract No.                         (subcontract No.                                 if appropriate) with                                       (name of Contractor or subcontractor).

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(END OF NOTICE)

3.If the software is embedded, or if it is commercially impractical to mark it with human readable text, then the symbol R and the clause date (mo/yr) in brackets or a box, a [R-mo/yr], may be used. This will be read to mean restricted computer software, subject to the rights of the Government as described in the Long Form Notice, in effect as of the date indicated next to the symbol. The symbol shall not be used to mark human readable material. In the event this Contract contains any variation to the rights in the Long Form Notice, then the contract number must also be cited.

4.If restricted rights computer software is delivered with the copyright notice of 17 U.S.C. 401, the software will be presumed to be published copyrighted computer software licensed to the Government without disclosure prohibitions, with unlimited rights, unless the Contractor includes the following statement with such copyrighted notice:  “Unpublished — rights reserved under the Copyright Laws of the United States.”

I-46FAR 52.232-25 PROMPT PAYMENT (SEP 1992)

Notwithstanding any other payment clause in this contract, the Government will make invoice payments and contract financing payments under the terms and conditions specified in this clause. Payment shall be considered as being made on the day a check is dated or an electronic funds transfer is made. Definitions of pertinent terms are set forth in 32.902. All days referred to in this clause are calendar days, unless otherwise specified. The term foreign vendor means an incorporated concern not incorporated in the United States, or an unincorporated concern having its principal place of business outside the United States.

a.Invoice Payments

1.For purposes of this clause, “invoice payment” means a Government disbursement of monies to a Contractor under a contract or other authorization for supplies or services accepted by the Government. This includes payments for partial deliveries that have been accepted by the Government and final cost or fee payments where amounts owed have been settled between the Government and the Contractor.

2.Except as indicated in subparagraph (a)(3) and paragraph (c) of this clause, the due date for making invoice payments by the designated payment office shall be the later of the following two events:

i.The 30th day after the designated billing office has received a proper invoice from the Contractor.

ii.The 30th day after Government’ acceptance of supplies delivered or services performed by the Contractor. On a final invoice where the payment amount is subject to contract settlement actions, acceptance shall

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be deemed to have occurred on the effective date of the contract settlement. However, if the designated billing office fails to annotate the invoice with the actual date of receipt, the invoice payment due date shall be deemed to be the 30th day after the date the Contractor’s invoice is dated, provided a proper invoice is received and there is no disagreement over quantity, quality, or Contractor compliance with contract requirements.

3.The due date on contracts for meat, meat food products, or fish; contracts for perishable agricultural commodities, contracts for dairy products, edible fats or oils, and food products prepared from edible fats or oils, and contracts not requiring submission of an invoice shall be as follows:

i.The due date for meat and meat food products, as defined in section 2(a) (3) of the Packers and Stockyard Act of 1921 (7 U.S.C. 182 (3)) and further defined in Pub. L. 98—181 to include any edible fresh or frozen poultry meat, any perishable poultry meat food product, fresh eggs, and any perishable egg product, will be as close as possible to, but not later than, the 7th day after product delivery.

ii.The due date for fresh or frozen fish, as defined in section 204(3) of the Fish and Seafood Act of 1986 (16 U.S.C. 4003(3)), will be as close as possible to, but not later than, the-seventh day after product delivery.

iii.The due date for perishable agricultural commodities, as defined in Section 1(4) of the Perishable Agricultural Commodities Act of 1930 (7 U.S.C. 499a(44)), will be as close as possible to, but not later than, the 10th day after product delivery, unless another date is specified in the contract.

iv.The due date for dairy products, as defined in section 111(e) of the Dairy Production Stabilization Act of 1983 (7 U.S.C. 4502(e)), edible fats or oils, and food products prepared from edible fats or oils, will be as close as possible to, but not later than, the 10th day after the date on which a proper invoice has been received.

v.If the contract does not require submission of an invoice for payment (e.g., periodic lease payments), the due date will be as specified in the contract.

4.An invoice is the Contractor’s bill or written request for payment under the contract for supplies delivered or services performed. An invoice shall be prepared and submitted to the designated billing officer specified in the contract. A proper invoice must include the items listed in subdivisions (a)(4)(i) through (a)(4)(viii) of this clause.  If the invoice does not comply with these requirements, then the contractor will be notified of the defect within 7 days after receipt of the invoice at the designated billing office (3 days for meat, meat food products, or fish, and 5 days for perishable agricultural commodities, edible fats or oils, and

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food products prepared from edible fats or oils. Untimely notification will be taken into account in the computation of any interest penalty owed the Contractor in the manner described in subparagraph (a)(6) of this clause.

i.Name and address of the Contractor.

ii.Invoice date.

iii.Contract number or other authorization for supplies delivered or services performed (including order number and contract line item number).

iv.Description, quantity, unit of measure, unit price, and extended price of supplies delivered or services performed.

v.Shipping and payment terms (e.g., shipment number and date of shipment, prompt payment discount terms).  Bill of lading number and weight of shipment will be shown for shipments on Government bills of lading:

vi.Name and address of Contractor official to whom payment is to be sent (must be the same as that in the contract or in a proper notice of assignment).

vii.Name (where practicable), title, phone number and mailing address of person to be notified in event of a defective invoice.

viii.Any other information or documentation required by other requirements of the contract (such as evidence of shipment).

5.An interest penalty shall be paid automatically by the Government, without request from the contractor, if payment is not made by the due date and the conditions listed in subdivisions (a) (5) (i) through (a) (5) (iii) of this clause are met, if applicable. An interest penalty shall not be paid on contracts awarded to foreign vendors outside the United States for work performed outside the United States.

i.A proper invoice was received by the designated billing office.

ii.A receiving report or other Government documentation authorizing payment was processed and there was no disagreement over quantity, quality, or contractor compliance with any contract term or condition.

iii.In the case of a final invoice for any balance of funds due the Contractor for supplies delivered or services performed, the amount was not subject to further contract settlement actions between the Government and the Contractor.

6.The interest penalty shall be 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)

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that is in effect on the day after the due date, except where the interest penalty is prescribed by other government authority. This rate is referred to as the “Renegotiation Board Interest Rate,” and it is published in the Federal Register semiannually on or about January 1 and July 1. The interest penalty shall accrue daily on the invoice payment amount approved by the Government. and be compounded in 30-day increments inclusive from the first day after the due date through the payment date. That is, interest accrued at the end of any 30-day period will be added to the approved invoice payment amount and be subject to interest penalties if not paid in the succeeding 30-day period. If the designated billing office failed to notify the Contractor of a defective invoice within the periods prescribed in subparagraph (a)(4) of this clause, then the due date on the corrected invoice will be adjusted by subtracting the number of days taken beyond the prescribed notification of defects period. Any interest penalty owed the Contractor will be based on this adjusted due date. Adjustments will be made by the designated payment office for errors in calculating interest penalties, if requested by the Contractor.

i.For the sole purpose of computing an interest penalty that might be due the contractor, Government acceptance shall be deemed to have occurred constructively on the 7th day (unless otherwise specified in this contract) after the contractor delivered the supplies or performed the services in accordance with the terms and conditions of the contract, unless there is a disagreement over quantity, quality, or contractor compliance with a contract provision. In the event that actual acceptance occurs within the constructive acceptance period, the determination of an interest penalty shall be based on the actual date of acceptance.  The constructive acceptance requirement does not, however, compel Government officials to accept supplies or services, perform contract administration functions, or make payment prior to fulfilling their responsibilities.

ii.The following periods of time will not be included in the determination of an interest penalty:

A.The period taken to notify the Contractor of defects in invoices submitted to the Government, but this may not exceed 7 days (3 days for meat, meat food products, or fish, and 5 days for perishable agricultural commodities, dairy products, edible fat or oils, and food products prepared from edible fats or oils).

B.The period between the defects notice and resubmission of the corrected invoice by the Contractor.

iii.Interest penalties will not continue to accrue after the filing of a claim for such penalties under the clause at 52.233-1, Disputes, or for more than 1 year. Interest penalties of less than 51.00 need not be paid.

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iv.Interest penalties are not required on payment delays due to disagreement between the Government and Contractor over the payment amount or other issues involving contract compliance or on amounts temporarily withheld or retained in accordance with the terms of the contract. Claims involving disputes, and any interest that may be payable, will be resolved in accordance with the clause at 52.233-1, Disputes.

7.An interest penalty shall also be paid automatically by the designated payment office, without request from the contractor, if a discount for prompt payment is taken improperly. The interest penalty will be calculated as described in subparagraph (a) (6) of this clause on the .amount of discount taken for the period beginning with the first day after the end of the discount period through the date when the contractor is paid.

8.If this contract was awarded on or after October 1, 1989, a penalty amount, calculated in accordance with regulations issued by the Office of Management and Budget, shall be paid in addition- to the interest penalty amount if the contractor

i.Is owed an interest penalty;

ii.Is not paid the interest penalty within 10 days after the date the invoice amount is paid; and

iii.Makes a written demand, not later than 40 days after the date the invoice amount is paid, that the agency pay such a penalty.

b.Contract Financing Payments

1.For purposes of this clause, contract financing payment means a Government disbursement of monies to a Contractor under a contract clause or other authorization prior to acceptance of supplies or services by the Government. Contract financing payments include advance payments, progress payments based on cost under the clause at 52.232-16, Progress Payments, progress payments based on a percentage or stage of completion (32.102(e)(1)) other than those made under the clause at 52.232-5, Payments Under Fixed-Price Construction Contracts, or the clause at 52.232-10, Payments Under Fixed-Price Architect-Engineer Contracts, and interim payments on cost type contracts.

2.For contracts that provide for contract financing, requests for payment shall be submitted to the designated billing office as specified in this contract or as directed by the Contracting Officer. Contract financing payments shall be made on the [insert day as prescribed by Agency head; if not prescribed, insert 30th day] day after receipt of a proper contract financing request by the designated billing office. In the event that an audit or other review of a specific financing request is required to ensure compliance with the terms and conditions of the contract, the designated payment office is not compelled to make payment by the due date specified.

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3.For advance payments, loans, or other arrangements that do not involve recurrent submissions of contract financing requests, payment shall be made in accordance with the corresponding contract terms or as directed by the Contracting Officer.

4.Contract financing payments shall not be assessed an interest penalty for payment delays.

If this contract contains the clause at 5.213-1, Fast Payment Procedure, payments will be made within 15 days after the date of receipt of the invoice.

Intellectual Property Clauses

Additional Intellectual Property clauses (general clauses 78, 79, 80, and 84) are included in DOE Set 304, Contract Clauses Cost Reimbursement Service Contracts dated May 1992.

I-47DOE PR 9-9.103-3 INTELLECTUAL PROPERTY INDEMNITY (JUN 1979)

a.The Contractor shall indemnify the Government and its officers, agents, and employees against liability, including costs, for infringement of U.S. Letters Patent (except U.S. Letters Patent issued upon an application which is now or may hereafter be kept secret or otherwise withheld from issue by order of the Government) resulting from the Contractor’s:

1.furnishing or supplying standard parts or components which have been sold or offered for sale to public on the commercial open market; or

2.utilizing its normal practices or methods which normally are or have been used in providing goods and services in the commercial open market, in the performance of the contract; or

3.utilizing any parts, components, practices, or methods to the extent to which the Contractor has secured indemnification from liability. The foregoing. indemnity shall not apply unless the Contractor shall have been informed as soon as practicable by the Government of the suit or action alleging such infringement, and shall have been given such opportunity as is afforded by applicable laws, rules, or regulations to participate in the defense thereof; and further, such indemnity shall not apply to a claimed infringement which is settled without the consent of the Contractor, unless required by final decree of a court of competent jurisdiction or to an infringement resulting from addition to or change in such supplies or components furnished or construction work performed for which addition or change was made subsequent to delivery or performance by the Contractor.

b.The Contractor shall indemnify and save and hold harmless the Government, its officers, agents, and employees acting within the . scope of their official duties against any liability, including costs and expenses for violation by the Contractor

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of proprietary rights or copyrights arising out of delivery or use of any data furnished or utilized by the Contractor in the course of or under this contract.

I-48DOE PR 9-9.106 CLASSIFIED INVENTIONS (JUN 1979)

a.The Contractor shall not file or cause to be filed on any invention or discovery conceived or first actually reduced to practice in the course of or under this contract, in any country other than the United States, an application or registration for a patent without first obtaining written approval of the contracting officer.

b.When filing a patent application in the United States on any invention or discovery conceived or first actually reduced to practice in the course of or under this contract, the subject matter of which is classified for reasons of security, the Contractor shall observe all applicable security regulations covering the transmission of classified subject matter. When transmitting the patent application to the United States Patent and Trademark Office, the Contractor shall by separate letter identify by agency and number, the contract or contracts which require security classification markings to be placed on the application.

c.The substance of this clause shall be included in subcontracts which cover or are likely to cover classified subject matter.

I-49DOE PR 9-9.107-5(H) FACILITIES LICENSE* (DEVIATION) (APR 1984)

Facilities license.

As used in this (n) paragraph “facility” means any facility of the Government at which the remediation, decontamination or decommissioning technology practiced under this contract or any subcontract thereunder may be utilized by or for the Government.

a.In addition to the rights of the parties with respect to inventions actually reduced to practice in the course of or under this contract, the Contractor agrees to and does hereby grant to the Government an irrevocable, nonexclusive paid-up license in and to any inventions or discoveries regardless of when conceived or actually reduced to practice or acquired by the Contractor, which are owned or controlled by the Contractor at any time through completion of this contract and which are incorporated or embodied in the construction of the facility or which are utilized in the operation of the facility or which cover articles, materials, or products manufactured by the facility (1) to practice or to have practices by or for the Government at the facility, and (2) to transfer such license with the transfer of that facility. The acceptance or exercise by the Government of the aforesaid rights and license shall not prevent the Government at any time from contesting the enforceability, validity or scope of, or title to, any rights or patents herein licensed.

b.To the extent that the Contractor or any of its subcontractors intend to employ or utilize patented technology which it does not own or control and which it knows or should know is patented to others, the Contractor shall be responsible for

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obtaining a license to utilize such patented technology by and for the Government on terms and conditions which have the written approval of the Contracting Officer.

*This clause supplements DEAR 927.300(a) Patent Rights - Long Form (Deviation) (APR 1984)

I-50LIMITATION ON ASSIGNED SUBCONTRACTS TO BECHTEL.

Under no circumstances shall the subcontractor be allowed to mange, direct, supervise, or otherwise have influence over any subcontract or purchase order assigned by WHC to Bechtel that may involve a company affiliated with the subcontractor.

5-51USE OF ANALYTICAL LABORATORIES

BHI shall review all work plans or other documents that may be prepared by the subcontractor and which may propose sampling plan that would generate analytical samples to be sent to analytical laboratories. These plans will subsequently be submitted to DOE for review and generally will be parts of work plans or other documents submitted to the relevant regulatory agencies for regulatory approval under the Hanford Federal Facility Agreement and Consent Order. Further, there shall be no performance of laboratory testing during the transition period.  It is further understood that BHI and the Subcontractor shall establish controls which require the prior approval of BHI before the subcontractor can perform laboratory testing of any nature.

I-52DISPUTES

a.Initial resolution of disputes, conflicts, or claims under this subcontract shall reside with Bechtel’s Procurement Manager. In the event that an equitable resolution of the dispute cannot be reached, the Subcontractor may request that Bechtel authorize an appeal to the Government Contracting Officer in the Contractor’s name or, solely at Bechtel’s option, Bechtel may bring the appeal directly to the Government Contracting Officer in Bechtel’s name. Any dispute or appeal brought before the Government Contracting Officer shall be submitted pursuant to the Disputes clause found in the prime contract (FAR 52.233-1 (ALT 1) (DEC 91)). The Contracting Officer’s Final Decision and, if appealed, the final Appeal Board or court ruling, after all appeals have been exhausted, shall be binding.

b.Bechtel will not be liable to the Subcontractor for any amounts being claimed unless and until Bechtel receives the amount claimed by the Subcontractor from the Government. If the Government fails to pay on any claim, Bechtel has no further liability to the Subcontractor.

c.Should Bechtel authorize an appeal in its name, the Subcontractor shall bear all costs associated with such appeal.

d.Any appeal submitted shall include Bechtel’s direct and indirect costs and fee allocation, as applicable to the costs being appealed.

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e.The Subcontractor shall indemnify and hold Bechtel harmless from any and all liability stemming from Bechtel’s certification of the Subcontractor’s claim in any appeal.

f.Pending resolution of any dispute under the subcontract, The Subcontractor shall proceed as directed by Bechtel in writing.

g.Any dispute arising from the subcontract that is not processed under FAR 52.233-1 Alt 1 (Dec 91) shall be brought before a court of competent jurisdiction in the State of Washington. Such Court shall refer to Government contract law, including Comptroller General decisions and Board of Contract Appeals decisions, on questions of policy and the construction of standard clauses, and will refer to Washington State law on questions of sales and general rules of contract interpretation.

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PART III - SECTION J

LIST OF ATTACHMENTS

The below attachments, with the exception of Attachment 4 (Billing Instructions), are not physically attached to subcontract. The Attachments shall form a part of the subcontract to be established for the ERMC activities. All transition activities shall be based on the inclusion of these attachments in the subcontract to be established following the transition. A copy of the attachments will be made available upon request. Attachment 4 is attached herewith and is a part of this Agreement.

Attachment No.	Title
Attachment 1	Hanford Site Stabilization Agreement
Attachment 2	Appendices
	Appendix 1	Reserved
	Appendix 2	Interface Matrix with Hanford On-Site Contractors
	Appendix 3	Site Support Services Handbook (*indicates mandatory services) and Types of Data Bases
	Appendix 4	Site Management System Description
	Appendix 5	Facilities for Decontamiation and Decommissioning
	Appendix 6	List of Applicable Milestones in the Tri-Party Agreement
	Appendix 7	Environmental Restoration RCRA Treatment, Storage, and Disposal (TSD) Unit Closures
Attachment 3	Excerpt from DOE 5480.11, Radiation Protection for Occupational Workers; Health Physics Position Qualification and Training Requirements
Attachment 4	Billing Instructions
Attachment 5	Reserved
Attachment 6	Subcontracting Plan
Attachment 7	Advance Agreement, Personnel and Related Costs

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EX-11.1

Exhibit 11.1

Statement re computation of per share earnings

EX-14.1

Exhibit 14.1

Code of Ethics

GLENROSE INSTRUMENTS INC.

Code of Business Conduct and Ethics

This Code of Business Conduct and Ethics (the “Code”) sets forth legal and ethical standards of conduct for directors, officers and employees of GlenRose Instruments Inc. (the “Company”). This Code is intended to deter wrongdoing and to promote the conduct of all Company business in accordance with high standards of integrity and in compliance with all applicable laws and regulations. This Code applies to the Company and all of its subsidiaries and other business entities controlled by it worldwide.

If you have any questions regarding this Code or its application to you in any situation, you should contact your supervisor or our corporate Treasurer.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

The Company requires that all employees, officers and directors comply with all laws, rules and regulations applicable to the Company wherever it does business. You are expected to use good judgment and common sense in seeking to comply with all applicable laws, rules and regulations and to ask for advice when you are uncertain about them.

If you become aware of the violation of any law, rule or regulation by the Company, whether by its officers, employees, directors, or any third party doing business on behalf of the Company, it is your responsibility to promptly report the matter to your supervisor or to corporate Treasurer. While it is the Company’s desire to address matters internally, nothing in this Code should discourage you from reporting any illegal activity, including any violation of the securities laws, antitrust laws, environmental laws or any other federal, state or foreign law, rule or regulation, to the appropriate regulatory authority. Employees, officers and directors shall not discharge, demote, suspend, threaten, harass or in any other manner discriminate or retaliate against an employee because he or she reports any such violation, unless it is determined that the report was made with knowledge that it was false. This Code should not be construed to prohibit you from testifying, participating or otherwise assisting in any state or federal administrative, judicial or legislative proceeding or investigation.

CONFLICTS OF INTEREST

Employees, officers and directors must act in the best interests of the Company. You must refrain from engaging in any activity or having a personal interest that presents a “conflict of interest.” A conflict of interest occurs when your personal interest interferes, or appears to interfere, with the interests of the Company. A conflict of interest can arise whenever you, as an officer, director or employee, take action or have an interest that prevents you from performing your Company duties and responsibilities honestly, objectively and effectively.

EMPLOYEES AND OFFICERS

Employees and officers must not:

•Perform services as a consultant, employee, officer, director, advisor or in any other capacity, or, where feasible, permit any close relative to perform services as an officer or director, for a significant customer, significant supplier or direct competitor of the Company, other than at the request of the Company.

•Have, or, where feasible, permit any close relative to have, a financial interest in a significant supplier or significant customer of the Company, other than an investment representing less than one percent of the outstanding shares of a publicly-held company or less than five percent of the outstanding shares of a privately-held company.

•Have, or, where feasible, permit any close relative to have, a financial interest in a direct competitor of the Company, other than an investment representing less than one percent of the outstanding shares of a publicly-held company.

•Supervise, review or influence the job evaluation or compensation of a member of his or her immediate family.

•Engage in any other activity or have any other interest that the Board of Directors of the Company determines to constitute a conflict of interest.

DIRECTORS

Directors must not:

•Perform services as a consultant, employee, officer, director, advisor or in any other capacity, or, where feasible, permit any close relative to perform services as an officer or director, for a direct competitor of the Company.

•Have, or, where feasible, permit any close relative to have, a financial interest in a direct competitor of the Company, other than an investment representing less than one percent of the outstanding shares of a publicly-held company.

•Use his or her position with the Company to influence any decision of the Company relating to a contract or transaction with a supplier or customer of the Company if the director or a close relative of the director.

•Perform services as a consultant, employee, officer, director, advisor or in any other capacity for such supplier or customer.

•Have a financial interest in such supplier or customer, other than an investment representing less than one percent of the outstanding shares of a publicly-held company.

•Supervise, review or influence the job evaluation or compensation of a member of his or her immediate family.

•Engage in any other activity or have any other interest that the Board of Directors of the Company determines to constitute a conflict of interest.

A “close relative” means a spouse, dependent child or any other person living in the same home with the employee, officer or director. “Immediate family” means a close relative and a parent, sibling, child, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law. A “significant customer” is a customer that has made during the Company’s last full fiscal year, or proposes to make during the Company’s current fiscal year, payments to the Company for property or services in excess of five percent of (a) the Company’s consolidated gross revenues for its last full fiscal year or (b) the customer’s consolidated gross revenues for its last full fiscal year. A “significant supplier” is a supplier to which the Company has made during the Company’s last full fiscal year, or proposes to make during the Company’s current fiscal year, payments for property or services in excess of five percent of (a) the Company’s consolidated gross revenues for its last full fiscal year or (b) the customer’s consolidated gross revenues for its last full fiscal year.

It is your responsibility to disclose any transaction or relationship that reasonably could be expected to give rise to a conflict of interest to our Chief Financial Officer or, if you are an executive officer or director, to the Board of Directors, who shall be responsible for determining whether such transaction or relationship constitutes a conflict of interest.

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INSIDER TRADING

Employees, officers and directors who have material non-public information about the Company or other companies, including our suppliers and customers, as a result of their relationship with the Company are prohibited by law and Company policy from trading in securities of the Company or such other companies, as well as from communicating such information to others who might trade on the basis of that information. To help ensure that you do not engage in prohibited insider trading and avoid even the appearance of an improper transaction, the Company has adopted an Insider Trading Policy, which is available on the Company’s intranet.

If you are uncertain about the constraints on your purchase or sale of any Company securities or the securities of any other company that you are familiar with by virtue of your relationship with the Company, you should consult with our Chief Financial Officer before making any such purchase or sale.

CONFIDENTIALITY

Employees, officers and directors must maintain the confidentiality of confidential information entrusted to them by the Company or other companies, including our suppliers and customers, except when disclosure is authorized by a supervisor or legally mandated. Unauthorized disclosure of any confidential information is prohibited. Additionally, employees should take appropriate precautions to ensure that confidential or sensitive business information, whether it is proprietary to the Company or another company, is not communicated within the Company except to employees who have a need to know such information to perform their responsibilities for the Company.

Third parties may ask you for information concerning the Company. Subject to the exceptions noted in the preceding paragraph, employees, officers and directors (other than the Company’s authorized spokespersons) must not discuss internal Company matters with, or disseminate internal Company information to, anyone outside the Company, except as required in the performance of their Company duties and after an appropriate confidentiality agreement is in place. This prohibition applies particularly to inquiries concerning the Company from the media, market professionals (such as securities analysts, institutional investors, investment advisers, brokers and dealers) and security holders. All responses to inquiries on behalf of the Company must be made only by the Company’s authorized spokespersons. If you receive any inquiries of this nature, you must decline to comment and refer the inquirer to your supervisor or one of the Company’s authorized spokespersons. The Company’s policies with respect to public disclosure of internal matters are described more fully in the Company’s Disclosure Policy, which is available on the Company’s intranet.

You also must abide by any lawful obligations that you have to your former employer. These obligations may include restrictions on the use and disclosure of confidential information, restrictions on the solicitation of former colleagues to work at the Company and non-competition obligations.

HONEST AND ETHICAL CONDUCT AND FAIR DEALING

Employees, officers and directors should endeavor to deal honestly, ethically and fairly with the Company’s suppliers, customers, competitors and employees. Statements regarding the Company’s products and services must not be untrue, misleading, deceptive or fraudulent. You must not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts or any other unfair-dealing practice.

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PROTECTION AND PROPER USE OF CORPORATE ASSETS

Employees, officers and directors should seek to protect the Company’s assets. Theft, carelessness and waste have a direct impact on the Company’s financial performance. Employees, officers and directors must use the Company’s assets and services solely for legitimate business purposes of the Company and not for any personal benefit or the personal benefit of anyone else.

Employees, officers and directors must advance the Company’s legitimate interests when the opportunity to do so arises. You must not take for yourself personal opportunities that are discovered through your position with the Company or the use of property or information of the Company.

GIFTS AND GRATUITIES

The use of Company funds or assets for gifts, gratuities or other favors to employees or government officials is prohibited, except to the extent such gifts are in compliance with applicable law, insignificant in amount and not given in consideration or expectation of any action by the recipient.

Employees, officers and directors must not accept, or permit any member of his or her immediate family to accept, any gifts, gratuities or other favors from any customer, supplier or other person doing or seeking to do business with the Company, other than items of insignificant value. Any gifts that are not of insignificant value should be returned immediately and reported to your supervisor. If immediate return is not practical, they should be given to the Company for charitable disposition or such other disposition as the Company, in its sole discretion, believes appropriate.

Common sense and moderation should prevail in business entertainment engaged in on behalf of the Company. Employees, officers and directors should provide, or accept, business entertainment to or from anyone doing business with the Company only if the entertainment is infrequent, modest and intended to serve legitimate business goals.

Bribes and kickbacks are criminal acts, strictly prohibited by law. You must not offer, give, solicit or receive any form of bribe or kickback anywhere in the world.

ACCURACY OF BOOKS AND RECORDS AND PUBLIC REPORTS

Employees, officers and directors must honestly and accurately report all business transactions. You are responsible for the accuracy of your records and reports. Accurate information is essential to the Company’s ability to meet legal and regulatory obligations.

All Company books, records and accounts shall be maintained in accordance with all applicable regulations and standards and accurately reflect the true nature of the transactions they record. The financial statements of the Company shall conform to generally accepted accounting rules and the Company’s accounting policies. No undisclosed or unrecorded account or fund shall be established for any purpose. No false or misleading entries shall be made in the Company’s books or records for any reason, and no disbursement of corporate funds or other corporate property shall be made without adequate supporting documentation.

It is the policy of the Company to provide full, fair, accurate, timely and understandable disclosure in reports and documents filed with, or submitted to, the Securities and Exchange Commission and in other public communications.

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CONCERNS REGARDING ACCOUNTING OR AUDITING MATTERS

Employees with concerns regarding questionable accounting or auditing matters or complaints regarding accounting, internal accounting controls or auditing matters may confidentially, and anonymously if they wish, submit such concerns or complaints in writing to the Company’s Chief Financial Officer at 45 First Avenue, Waltham, Massachusetts 02451. See “Reporting and Compliance Procedures.” All such concerns and complaints will be forwarded to the Audit Committee of the Board of Directors, unless they are determined to be without merit by our Chief Financial Officer and Chief Executive Officer of the Company. In any event, a record of all complaints and concerns received will be provided to the Audit Committee each fiscal quarter.

The Audit Committee will evaluate the merits of any concerns or complaints received by it and authorize such follow-up actions, if any, as it deems necessary or appropriate to address the substance of the concern or complaint.

The Company will not discipline, discriminate against or retaliate against any employee who reports a complaint or concern, unless it is determined that the report was made with knowledge that it was false.

DEALINGS WITH INDEPENDENT AUDITORS

No employee, officer or director shall, directly or indirectly, make or cause to be made a materially false or misleading statement to an accountant in connection with (or omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which such statements were made, not misleading to, an accountant in connection with) any audit, review or examination of the Company’s financial statements or the preparation or filing of any document or report with the SEC. No employee, officer or director shall, directly or indirectly, take any action to coerce, manipulate, mislead or fraudulently influence any independent public or certified public accountant engaged in the performance of an audit or review of the Company’s financial statement.

WAIVERS OF THIS CODE OF BUSINESS CONDUCT AND ETHICS

While some of the policies contained in this Code must be strictly adhered to and no exceptions can be allowed, in other cases exceptions may be appropriate. Any employee or officer who believes that an exception to any of these policies is appropriate in his or her case should first contact his or her immediate supervisor. If the supervisor agrees that an exception is appropriate, the approval of our Chief Financial Officer must be obtained. Our Chief Financial Officer shall be responsible for maintaining a record of all requests for exceptions to any of these policies and the disposition of such requests.

Any executive officer or director who seeks an exception to any of these policies should contact our Chief Financial Officer. Any waiver of this Code for executive officers or directors or any change to this Code that applies to executive officers or directors may be made only by the Board of Directors of the Company and will be disclosed as required by law or stock market regulation.

REPORTING AND COMPLIANCE PROCEDURES

Every employee, officer and director has the responsibility to ask questions, seek guidance, report suspected violations and express concerns regarding compliance with this Code. Any employee, officer or director who knows or believes that any other employee or representative of the Company has engaged or is engaging in Company-related conduct that violates applicable law or this Code should report such information to his or her supervisor or to our Chief Financial Officer, as described below. You may report such conduct openly or anonymously without fear of retaliation. The Company will not discipline,

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discriminate against or retaliate against any employee who reports such conduct, unless it is determined that the report was made with knowledge that it was false, or who cooperates in any investigation or inquiry regarding such conduct. Any supervisor who receives a report of a violation of this Code must immediately inform our Chief Financial Officer.

You may report violations of this Code, on a confidential or anonymous basis, by contacting our Chief Financial Officer, Anthony S. Loumidis, by mail at 45 First Avenue, Waltham, Massachusetts 02451. While we prefer that you identify yourself when reporting violations so that we may follow up with you, as necessary, for additional information, you act anonymously if you wish.

If our Chief Financial Officer receives information regarding an alleged violation of this Code, he or she shall, as appropriate, (a) evaluate such information, (b) if the alleged violation involves an executive officer or a director, inform the Chief Executive Officer and Board of Directors of the alleged violation, (c) determine whether it is necessary to conduct an informal inquiry or a formal investigation and, if so, initiate such inquiry or investigation and (d) report the results of any such inquiry or investigation, together with a recommendation as to disposition of the matter, to the Board of Directors for action, or if the alleged violation involves an executive officer or a director, report the results of any such inquiry or investigation to the Board of Directors or a committee thereof. Employees, officers and directors are expected to cooperate fully with any inquiry or investigation by the Company regarding an alleged violation of this Code. Failure to cooperate with any such inquiry or investigation may result in disciplinary action, up to and including discharge.

The Company shall determine whether violations of this Code have occurred and, if so, shall determine the disciplinary measures to be taken against any employee who has violated this Code. In the event that the alleged violation involves an executive officer or a director, the Chief Executive Officer and the Board of Directors, respectively, shall determine whether a violation of this Code has occurred and, if so, shall determine the disciplinary measures to be taken against such executive officer or director.

Failure to comply with the standards outlined in this Code will result in disciplinary action including, but not limited to, reprimands, warnings, probation or suspension without pay, demotions, reductions in salary, discharge and restitution. Certain violations of this Code may require the Company to refer the matter to the appropriate governmental or regulatory authorities for investigation or prosecution. Moreover, any supervisor who directs or approves of any conduct in violation of this Code, or who has knowledge of such conduct and does not immediately report it, also will be subject to disciplinary action, up to and including discharge.

DISSEMINATION AND AMENDMENT

This Code shall be distributed to each new employee, officer and director of the Company upon commencement of his or her employment or other relationship with the Company and shall also be distributed annually to each employee, officer and director of the Company, and each employee, officer and director shall certify that he or she has received, read and understood the Code and has complied with its terms.

The Company reserves the right to amend, alter or terminate this Code at any time for any reason. The most current version of this Code can be found on the Company’s intranet.

This document is not an employment contract between the Company and any of its employees, officers or directors.

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CERTIFICATION

The undersigned

Print name:

do hereby certify that:

1. I have received and carefully read the Code of Business Conduct and Ethics of GlenRose Instruments Inc.

2. I understand the Code of Business Conduct and Ethics.

3. I have complied and will continue to comply with the terms of the Code of Business Conduct and Ethics.

Date: September 22, 2005
	(Signature)

EACH EMPLOYEE, OFFICER AND DIRECTOR IS REQUIRED TO SIGN, DATE AND RETURN THIS CERTIFICATION TO OUR CHIEF FINANCIAL OFFICER. FAILURE TO DO SO MAY RESULT IN DISCIPLINARY ACTION.

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EX-21.1

Exhibit 21.1

GLENROSE INSTRUMENTS, INC.

SUBSIDIARIES OF THE REGISTRANT

Eberline Services, Inc.	Delaware
Eberline Services Hanford, Inc.	Delaware
Eberline Analytical Corporation	New Mexico
Benchmark Environmental Corp.	New Mexico
TMA Norcal Corporation	California
Lionville Laboratory Inc.	Delaware