A-9.4.0_Exhibit_B_Statement_of_Work_-_11-29-18.docx

EXHIBIT B – STATEMENT OF WORK

MISSION SUPPORT AND TEST SERVICES, LLC

TIME-AND-MATERIAL CONSTRUCTION SUBCONTRACT

STATEMENT OF WORK

EXHIBIT B

Time-and-Material Construction Subcontract - Exhibit B Solicitation Number: 331923-EM-19 11/29/18

RADIOACTIVE WASTE MANAGEMENT COMPLEX (RWMC)

SPECIFICATION FOR DRILLING MONITOR WELL No. 4 (UE5MW-4)

1.0 STATEMENT OF WORK

The planned work consists of drilling one (1) monitoring well for the Nevada Nuclear Security Administration Nevada Field Office (NNSA/NFO) Waste Management Division (WMD). This well is designed to facilitate the collection of groundwater samples from the uppermost aquifer for analyses required under Resource Conservation and Recovery Act (RCRA) regulations. Total depth of this well will be approximately 900 feet below the ground surface (bgs). The work will begin during the third quarter of Fiscal Year 2019 (April – June 2019), which began October 1, 2018. It is currently anticipated that Notice to Proceed for this Subcontract will be issued during May of 2019. It is estimated that the one well will be drilled and completed over a period of approximately one month.

Since this well will be used to collect RCRA related groundwater samples, it is very important to keep risks of contamination from the drilling process to a minimum. Thus, the dual-wall reverse circulation air and water method to construct the borehole will be used with a known water source.

1.1 Location of Work The site for this well is on the Nevada Nuclear Security Site (NNSS). The NNSS is approximately 65 road miles northwest of Las Vegas, Nevada off Highway 95. Mercury Nevada is the NNSS main base camp and is located in the very southern portion of the NNSS, see Figures 1.1. The site for the well is in Area 5, Frenchman Flat, of the NNSS approximately 16.3 miles north of the Mercury base camp as shown in Figures 1.2 – 1.4. The expected depth to water at the well site is estimated to be 772 feet bgs with a ground surface elevation of approximately 3,171 feet above mean sea level (amsl).

1.2 Contractor Reference to the Contractor in this specification is Mission Support and Test Services, LLC (MSTS). The Contractor’s Subcontract Technical Representative (STR) shall have the authority to establish controls for the work, and to inspect the work for quality and compliance with plans and specifications within the scope of work of this specification. The STR has no authority to direct changes, no matter how insignificant, in the scope of the work. Only the MSTS Subcontract Administrator has authority to direct changes to the scope of work.

1.3 Description of Work

1.3.1 The work shall consist of a Subcontractor furnishing all personnel, equipment, facilities, materials, supplies, and services, unless otherwise specified, to drill and complete one monitor well as detailed in this specification. The well is designated as UE5MW-4 with an estimated total depth of 900 feet bgs.

NNSS Area 5 Mercury, NV

Figure 1.1 Location of Nevada Nuclear Security Site (NNSS) and Las Vegas

Figure 1.2 Location of the RWMC in Area 5 of the NNSS

Mercury, NV 5-01 road

RWMC

Mercury Hwy 5-01 road

Figure 1.3 Route from Mercury, NV to the RWMC 5-01 road

Figure 1.4 Location of RWMC Monitor Well UE5MW-4 on the NNSS Area 5

1.3.2 Conductor Casing – Upon selection of the exact location, and prior to mobilizing the Subcontractor’s equipment to the drill site, the Contractor shall install a conductor casing. The conductor casing will be in the 13-3/8-inch to 16inch outside diameter (OD) range. The diagram in Figure 1.6 indicates a 13-3/8 inch OD conductor casing, but it may be as large as 16 inch OD. The conductor casing depth will be approximately 118 feet bgs. The purpose of the conductor casing is to isolate loose or unstable near-surface formations and provide means to continue drilling with dual-wall reverse circulation. The annulus behind the conductor will be cemented from total depth to the surface.

1.3.3 Drilling Sump/Pit – After Subcontract award, but prior to Subcontractor mobilization the Contractor will construct/excavate a drilling sump/pit based on the Subcontractor’s specification for the specific drill rig the Subcontractor will be using.

1.3.4 Main Borehole Drilling - The Subcontractor shall drill a 12-1/4 inch borehole from the bottom of the conductor casing to total depth, approximately 900 feet bgs, using dual-wall reverse circulation with air and water.

1.3.5 Logging and Completion - Upon completion of the drilling of the well, the borehole will be conditioned and gyroscopic and geophysical logging services run at the direction of the Contractor. Well completion will follow with the installation of a 5-9/16 inch OD stainless steel production casing with the bottom of the casing slotted across the completion interval. Exact setting depths will depend on information obtained from drilling and geophysical logging, including the static water level. A stemming line/tubing will be run on the outside of the production casing to provide a means to gravel pack the annulus around the slotted casing. The production casing/open-hole annulus will be gravel packed and cemented, as shown in the completion diagram, Figure 1.6. The Contractor shall supply all the well completion hardware and handling tools, gyroscopic and geophysical logging services. The Contractor shall also provide real-time stemming monitoring using a density tool positioned inside the 5-9/16 production casing. The Subcontractor shall provide the stemming line/tubing, all gravel/sand pack, bentonite chips and cementing materials and equipment necessary to stem the annulus to the surface.

1.3.6 Procedure for In-Hole Tubulars - All threaded drilling tools, bits, drill pipe, collars, other bottom hole assembly components, casing, and tubing shall be torqued to American Petroleum Institute (API), or other approved industry or manufacturer’s specifications, prior to being run into the borehole. Additionally, the rig must be equipped with torque gauge(s), such that make-up torques used for drill pipe, drilling tools and other tubular goods can be measured. The gauge(s) are required to have current calibration stickers or other means to verify that calibrations are current. The rig must have the capability to run Range 3 casing. The Contractor shall provide the make-up torque ranges for the tubular products the Contractor furnishes.

1.3.7 Radionuclide Conditions – There is no radionuclide contamination of the formations to be penetrated or the water to be encountered in this well based on past drilling, sampling and analysis in this area. However, Contractor sampling of the drilling effluent discharged by the Subcontractor may take place while drilling progresses. Contractor sampling events will be conducted without impact to the drilling operations.

Figure 1.6 Completion Diagram of the UE5MW-4 Well

1.3.8 Geology – The geology of this area is well known since there are other monitor wells in the immediate area. The geology can generally be characterized as Quaternary/Tertiary alluvium. Textural units consist predominantly of well graded sand with silt, numerous layers of well graded sand with gravel, and less numerous thinner layers of poorly graded sand and silty sand.

1.3.9 Equipment/Hardware Cleaning and Environmental Requirements - The following requirements shall be adhered to by the Subcontractor:

1.3.9.1 The purpose of drilling this well is to obtain groundwater samples in the area adjacent to the RWMC. Sampling and analysis of the groundwater in the uppermost aquifer is the only purpose of this monitoring well. Because of this, all efforts must be made to eliminate the risks of introducing any contaminants to the wellbore or aquifer. Thus, it is mandatory that all equipment used for drilling or logging, and especially that equipment which will enter the borehole or contact anything that might enter the borehole, be cleaned prior to arrival at the well site or introduction into the borehole to ensure that cross-contamination between the equipment and the wellbore does not occur. All equipment is subject to the following cleanup activities prior to shipment to well site:

1.3.9.1.1 The drilling rig, all downhole equipment and tools, are to be high-pressure hot water or steam-cleaned prior to arrival at the well site. All downhole equipment will be cleaned by washing with a solution of phosphate-free soap and water prior to arrival, and arrive free of dirt, paint and grease/oils. If the equipment is contaminated with separate-phase materials such as hydrocarbons, the equipment will also be washed with an environmentally safe degreasing solution, and rinsed with water. The Subcontractor will verify, by letter to the STR prior to delivery of the equipment to the well site, that the above cleaning procedures have been followed.

1.3.9.1.2 The equipment will be inspected by representatives of the Contractor, to determine the cleanliness of the equipment. Inspection will be done when the equipment arrives at the well site. Two cleanliness standards shall apply: The equipment shall be visually free of gross contamination such as dirt, greases and oils, and shall be free of radiological contamination as determined by the Contractor‘s radiological surveys conducted by Contractor personnel.

1.3.9.1.3 If the representatives of the Contractor determine that the subject equipment has not been adequately cleaned, the Subcontractor, at its own expense, shall promptly clean the equipment at a designated local site to conform to the Contractor requirements specified above.

1.3.9.2 All downhole tools including all threaded connections shall be made-up using approved lubricants from the list provided in Specification Attachment 1, List of Contractor-Approved Lubricants. If the Subcontractor proposes to use a lubricant not on the list samples of substitute lubricant must be submitted, tested, and accepted by the STR prior to use. The submittal shall include a Safety Data Sheet. Petroleum-based lubricants, or lubricants containing metals, shall not be used.

1.3.9.3 The drill rig and other Subcontractor-motorized/hydraulic equipment that contains oils or fuel shall be underlain by the Subcontractor with plastic liner(s) of minimum multi-ply construction, nylon or equal fiber reinforced, minimum 60-mil thickness, to prevent ground contamination from lubricants and drippings from the rig and/or other equipment on the ground surface.

1.3.9.4 Discharged drilling fluids may be subjected to environmental monitoring by the Contractor, to include tritium content measurement at time intervals to be determined by the Contractor. These samples will be obtained without interruption to the drilling operations.

1.3.9.5 While on the drill sites, all Subcontractor and lower-tier Subcontractor personnel shall comply with all Subcontractor and Contractor Environmental, Safety, and Health (ES&H) requirements to include the wearing of hard hats, safety shoes, and safety glasses in those areas so designated. The drill rig pad and immediate working area is one such locale. See Exhibit E, Environmental, Safety, & Health Requirements.

1.3.10 Support - The Subcontractor shall provide rig and equipment support for running Contractor-furnished gyroscopic surveys geophysical logs, and to complete the boreholes, as indicated in Figure 1.6. This is to include running strings of Contractor-furnished casing, providing & running of stemming lines/tubing, for gravel packing, sealing and cementing of the casing from total depth to surface, and providing rig mast sheave support for gyroscopic and geophysical logging activities and for stemming monitoring.

1.3.11 Contractor-Furnished Items - The Contractor will furnish the items listed in Specification Attachment 2 for work under this Subcontract.

1.3.12 Subcontractor Minimum Equipment Requirements - The minimum equipment, materials and services to be furnished and operated by the Subcontractor are as listed in Specification Attachment 3.

1.4 Commencement - The Subcontractor shall begin mobilization within 30 days after the Subcontractor has received the notice to proceed (NTP), and shall complete mobilization to the drill site within seven (7) calendar days.

1.4.1 The NTP is expected to be issued in May 2019, and will include two days of Contractor provided orientation and training for all Subcontractor personnel that will be working on the well sites. This includes all rig crews, Drilling Foremen (Tool Pushers) and Safety personnel. During the two day period the Contractor will provide project specific training including:

1.4.1.1 Health and Safety Orientation and expectations

1.4.1.2 Tortoise Conservation and Hantavirus Awareness

1.4.1.3 Integrated Safety Management System (ISMS) orientation

1.4.1.4 Work Control

1.4.2 The training will be provided the Monday and Tuesday just prior to the Subcontractor’s start of mobilization. The training and NNSS badge processing for all Subcontractor employees will be conducted at the Contractor’s North Las Vegas (NLV) facilities.

1.4.3 The Subcontractor shall begin mobilization of equipment to the drill site the Wednesday following completion of the two days of training.

1.5 Subcontractor's Work Week and Crew Requirements

1.5.1 It is expected that mobilization will be conducted by the Subcontractor on a daylight schedule 5 to 7 days a week. The Subcontractor shall operate on a 24-hour per day seven days per week schedule after the completion of mobilization and until the production casing is installed and stemmed to the surface. The seven-day week will begin at 0001 hours on Monday, and continue through 2400 hours on Sunday. Subcontractor shall provide all crew members required to support all Subcontractor work scope established in this specification.

1.5.2 Subcontractor Drillers must be licensed in Nevada in accordance with Nevada Administrative Code (NAC) Chapter 534, Underground Water and Wells. The Contractor will submit the Request for Waiver and Affidavit of Intent to Plug to the State Division of Water Resources (DWR). The waiver is required since this is a monitor well and the well completion design is greater than four (4) inches. The Subcontractor’s Drillers will be required to sign the Notice of Intent to drill the well and the thirty (30) day Well Driller’s Report. The Contractor’s STR will assist the Subcontract Drillers with the completion and submittal of these documents.

1.6 Water / Electrical Power

1.6.1 Water will be available to the Subcontractor at no cost from a Contractor-furnished fill stand(s). The water haul distance will be less than one-quarter (1/4) mile to the well site.

1.6.2 The Subcontractor will be responsible for loading, transporting, and storing all water required. This includes providing sufficient and dependable transporting equipment and storage facilities for water used in drilling and/or stemming and cementing operations required. Truck(s) and storage facilities shall be labeled "NON-POTABLE WATER."

1.6.3 There will be no electrical power available at the work site. The Subcontractor must provide Subcontractor's own electrical power for all equipment and facilities Subcontractor is required to provide under the specifications of this Subcontract. The Contractor shall provide power for all equipment and facilities it is providing for use in support of the work under this Subcontract.

1.8 Drill Site Surface Location - The characteristics and dimensions of the surface location provided by the Contractor are based on the anticipated requirements that consider drill rig size and equipment space needs, use of existing roads, environmental considerations, and the existence of any antiquities or endangered species. The Contractor shall provide adequate surface area at the site to enable the Subcontractor to move in and out, rig up, service and operate all of its equipment required to perform the work prescribed in this specification. The Contractor will provide a drill site that will be a graded 200 foot square with the well location in the center, see Figure 1.5. The Contractor will excavate a sump/pit, size and location per the Subcontractor’s specification for the rig the Subcontractor will be using to drill the well.

200’X 200’ area cleared around borehole site

Figure 1.5 Survey Coordinates of RWMC Monitor Well UE5MW-4 on the NNSS Area 5

1.9 Subsurface Information - A description of the expected geology is provided in section 1.3.8.

1.10 Consideration Schedule Items Defined - This section defines the items of the Consideration Schedule. The Subcontract unit prices established on the Consideration Schedule are applicable for work performed during fiscal year (FY) 2019 that covers the period from October 01, 2018 through September 30, 2019.

1.10.1 Mobilization - Mobilization shall be considered complete when all Subcontractor equipment is rigged up and operational including drilling of rat and mouse holes if necessary, under laying Subcontractor’s equipment with plastic, washing of any Subcontractor equipment, if necessary, installing circulating system equipment, pick up of the first drilling assembly, and the Subcontractor is ready to drill out of the conductor casing. Mobilization will be paid as a lump sum under Item 1 of the Consideration Schedule and will include two days for badging and training for Subcontractor’s personnel at the Contractor’s North Las Vegas Complex at 2621 Losee Road. The lump sum payment for mobilization will also include all Subcontractor efforts associated with the submittals required prior to the start of work, such as the development of the Subcontractor’s Health & Safety Plan, Work Control documents, and Project Labor Agreements.

1.10.3 Hourly Rate Operations - All operations other than mobilization and demobilization will be paid for on a unit rate basis according to the appropriate item in the Consideration Schedule. Routine servicing of Subcontractor-furnished equipment, and time for such routine servicing, shall be paid for under the appropriate Consideration Schedule for the activity being conducted at the time of servicing. Payment for such servicing shall not exceed one (1) hours for each 24hour period. There will be no payment for time required for maintenance over one (1) hours for any 24-hour period. All maintenance and repair time shall be recorded per Paragraph 1.11.1 on the Daily Drilling Report.

1.10.3.1 Hourly Rate with Drill Pipe - Hourly rate with full crew and with Subcontractor’s drill pipe in the borehole will be paid for under Item 2.A of the Consideration Schedule. This includes trip time and time spent changing out bits and bottom-hole assemblies.

1.10.3.2 Hourly Rate without Drill Pipe - Hourly rate, with full crew and without drill pipe in the borehole, will be paid for under Item 2.B of the Consideration Schedule. This includes, but is not limited to gyroscopic and geophysical logging operations, the installation of production casing and stemming tubing, stemming and cementing of the production casing.

1.10.3.4 Standby Ready - When directed by the Contractor, the Subcontractor shall cease all operations and standby, ready to resume full operations immediately on direction to proceed. Hours for standby ready will be paid for under Item 2.C of the Consideration Schedule. The purpose of this item is to provide, during construction of the well, an established rate of compensation during any such Contractor-directed standby periods in the event that rig operations are impacted by other NNSS activities.

1.10.3.5 Standby Secured - The Contractor may direct that the Subcontractor secure all equipment. Under this direction, Subcontractor personnel need not be in attendance. The Contractor will give the Subcontractor a minimum eight-hour notice before the Subcontractor is directed to go on standby secured. Standby secured rates will continue until normal operations are resumed, but under no circumstances shall exceed 24 hours after receipt of notice from the Contractor to resume operations. Standby secured time will be paid for under Item 2.D of the Consideration Schedule. Again, the purpose of this item is to provide, during construction of the well, an established rate of compensation during any such Contractor-directed standby periods in the event that operations are impacted by other NNSS activities.

1.10.4 Materials – This consideration schedule item is designed to compensate the Subcontractor for expendable materials the Subcontractor is providing to construct the well. This includes drill bits and materials used to stem the production zone, stem, and cement the production casing annulus to the surface. It does not include other non-expendable components of the drilling assemblies, which are intended to be covered by the hourly rates defined in Section 1.10.3 above.

1.10.4.1 12-1/4 inch bits – The estimate for proposal purposes is two (2) bits designed for dual wall reverse circulation. Payment for bits will be made under Consideration Schedule Item 3.A and will be made for the actual number of bits used.

1.10.5 Miscellaneous Items and Services - During the drilling and completion of the well under this Subcontract, it may be necessary to obtain additional items and/or services not planned for or covered under other line items of this Consideration Schedule. These are items/services typically provided by the Subcontractor directly or through lower-tier subcontractors. The purpose of this line item is to provide a means of obtaining these items and/or services from the Subcontractor on a fair and reasonable cost basis and in a timely manner to minimize standby time to the operations while waiting on these items and/or services. Items and/or services covered under this Consideration Schedule item shall include miscellaneous hardware urgently needed due to borehole problems such as hole openers; fishing equipment and services; mud materials; free-point/back-off services; welding services; cleaning services; and miscellaneous labor. The Subcontractor shall provide these items and/or services after receiving written request from the Contractor. The Subcontractor shall be paid at current market or published price list prices for these items and services upon submittal of an invoice with supporting documentation and verification of price reasonableness by the Contractor. The amount shown in the Consideration Schedules is for estimating purposes only, and represents a range of what is expected for such items and/or services, if needed. Payment will be made under Item 4 of the Consideration Schedule.

1.10.6 Safety Representative – The Subcontractor shall provide a full-time Safety Representative for all work under this subcontract. The Safety Representative shall spend a minimum of 40 hours per week on the work site, with some time devoted to each work shift. During off-hours or off-days while Subcontract work is ongoing, the Safety Representative shall be on call in case of emergencies or to respond to health and safety incidents or issues that may arise. The Safety Representative shall be assigned to support subcontract work from the beginning of mobilization until the end of demobilization whenever the Subcontractor is performing work. Typical responsibilities of the Safety Representative are outlined in Exhibit E. Payment for the Safety Representative will be made on a per day basis under Item 5 of the Consideration Schedule.

1.10.7 Demobilization - Upon completion of drilling, logging, and installation and stemming/cementing of the production casing and upon written notice from the Contractor the Subcontractor shall, within seven calendar days, remove from the worksite, Subcontractor-generated rubbish and debris resulting from the drilling and construction work, and shall remove all of its equipment from the well site, and from the NNSS. All equipment, materials, personnel, and services required by the Subcontractor to complete demobilization shall be paid for as a lump sum under Item 6 of the Consideration Schedule.

1.11 Records and Observations - Providing the following records and observations shall be a part of the Subcontractor's general responsibility for which no additional payment will be made:

1.11.1 Daily Drilling Report - A daily drilling report shall be kept on the International Association of Drilling Contractor's (IADC) Official Standard Daily Drilling Report Form or a similar form proposed by the Subcontractor and acceptable to the Contractor. The general remarks section of this report shall contain an accurate record of borehole conditions, work performed, and time required for all work to the nearest quarter hour. The Daily Drilling Report shall be signed by the Subcontractor's authorized representative and the original copy shall be submitted daily to the Contractor. The Consideration Schedule quantities for payment purposes will be taken from the Daily Drilling Report. Accurate descriptions of bottom-hole assemblies shall be included on the Daily Drilling Report form.

1.11.2 Bit Records - Bit records will be maintained daily, and posted on or near the rig. A complete bit record shall be furnished to the Contractor, showing bit types, serial numbers, footage drilled, depths in and out, and condition when pulled.

1.11.3 Accurate Drill Pipe/Tubing/Casing Tallies - It shall be the Subcontractor's responsibility to maintain accurate and complete tubular tallies. This record shall be available for inspection at all times. Copies of steel line measurements of drill pipe, tubing and casing shall be available at the drill site and for inspections by the Contractor. The Subcontractor shall keep an accurate record of the total number of joints of all drill pipe, tubing and casing on-site at all times.

1.11.4 Drilling Fluid Records - The Subcontractor shall record on the Daily Drilling Report the quantities of all drilling fluid materials used each 24-hour period. Pump rates, in gallons per minute while drilling with water, will be recorded. Air pressure and estimated air volume in cubic feet per minute (CFM), shall also be recorded.

1.12 Responsibility for Loss or Damage to Equipment

1.12.1 The Subcontractor shall be liable at all times for damage to or destruction of Subcontractor's surface equipment including all drilling tools, machinery, and appliances for use above the surface, and for any other type of equipment including in-hole equipment when such in-hole equipment is above the surface, regardless of when or how such damage or destruction occurs. The Contractor shall be under no liability to compensate the Subcontractor for any such loss except loss or damage thereto caused by negligence of the Contractor, its agents, or employees.

1.12.2 Loss of Tools in the Hole

1.12.2.1 Tool Fishing – If there are tools lost in the hole, the Subcontractor shall notify the Contractor, or its authorized representative, of the existing conditions immediately, to be confirmed in writing on the Daily Drilling Report.

a. As soon as possible after notification of lost tools the Subcontractor’s on-site drilling Supervisor and Subcontract Point of Contact (POC) will meet with the Contractor’s STR and Subcontract Administrator to discuss the circumstances of the event. Upon establishing the circumstances of the event, the purpose of the meeting will be to reach an agreement of subsequent mitigating actions to recover the tools or options to recovery of the tools, and payment of the Subcontractor for fishing or other mitigating operations and for any Subcontractor tools lost or damaged.

b. Discussion and evaluation of the event circumstances will include if there was any Subcontractor negligence or violation of good drilling practices that caused or contributed to the event. Any such negligence or violation will influence Subcontractor payment of any subsequent mitigating/recovery operations and Subcontractor tools lost or damaged.

c. Any dispute concerning any questions of fact any failure of the Contractor and Subcontractor to reach an agreement under Paragraph 1.12.2.1 shall be subject to Disputes Clause in Exhibit C of the Subcontract.

1.12.2.2 Contractor Equipment - Except as provided for in Paragraph 1.12.2., "Loss of Tools in the Hole," all machinery, tools, materials, and equipment furnished by the Contractor shall, at the completion or abandonment of the work, be returned by the Subcontractor in as good condition as when received by the Subcontractor, ordinary wear and tear excepted. The Subcontractor shall be liable to the Contractor for any loss or damage to such equipment beyond such ordinary wear and tear, and for loss or damage due to the negligence or carelessness of the Subcontractor.

1.13 Abandonment - In the event that, prior to completion, the borehole covered by this Subcontract is abandoned upon direction of the Contractor, the Subcontractor will be paid for work performed under the applicable items of the Consideration Schedules.

The term "abandonment" as used in this paragraph shall mean abandonment to suit the convenience of the Contractor, as directed by the Contractor.

1.14 Inspection of Materials Furnished by Contractor - A visual field inspection of all Contractor-furnished equipment, machinery, tools, or other items shall be conducted jointly by the Subcontractor and the STR, or STR designee, immediately upon delivery of any such materials at the well site. If any defects are found therein sufficient to make the use of any such items unsuitable or unsafe, the Subcontractor shall immediately notify the STR of such defect or defects and confirm such notification in writing within 48 hours.

1.15 Abnormal Conditions - It is not possible to anticipate all of the unusual conditions that may be encountered in drilling and/or completion of this well. If abnormal conditions arise, it is the responsibility of the Subcontractor to bring this information to the immediate attention of the Contractor. The Subcontractor shall document the notification of the Contractor in writing in the Daily Drilling Report. Should downhole difficulty be encountered which makes drilling abnormal, the Subcontractor in all such cases and immediately shall use every reasonable means to overcome such difficulty.

1.16 Radiological Safety - All Subcontractor and privately owned equipment, materials, and vehicles entering the NNSS shall be subject to radiological monitoring. Unless otherwise directed by the Contractor, the Subcontractor shall notify the Contractor in writing at least two working days prior to removing the Subcontractor's materials, equipment, and vehicles (other than commuting vehicles) from the NNSS. If it is determined that any materials, equipment, and/or vehicles must be decontaminated, the Contractor will furnish the necessary decontamination services. The Subcontractor agrees not to remove such contaminated materials, equipment and/or vehicles until approval in writing is given by the Contractor to do so.

1.17 Contamination of Equipment - In the event any of the Subcontractor's equipment becomes contaminated by radiation, the Contractor shall, at Contractor’s expense, decontaminate and return such equipment to the Subcontractor within a reasonable time. Should the Contractor, in its sole discretion, determine that such equipment could not be decontaminated, the Contractor agrees to adjust the Subcontract price to equitably compensate the Subcontractor for loss of any and all such equipment that cannot be decontaminated. Failure of the parties to agree on such adjustment shall be deemed a dispute and subject to the Disputes Clause in Exhibit C of the subcontract.

1.18 Subcontractor's Equipment - The Subcontractor's equipment, tools, and materials shall be inspected and inventoried upon arrival on the NNSS, shall be in good operating condition, and shall be subject to periodic inspection by the Contractor for the purpose of judging its safe and usable condition.

In the event any equipment, tools, and materials are considered by the Contractor to be unsatisfactory for the performance of work, as required herein, such unsatisfactory equipment, tools, and/or materials shall be placed in acceptable condition by repair or removed from the NNSS and replaced with satisfactory equipment, tools, and/or materials. The repair or replacement of any equipment, tools, and/or materials, including time expended by the Subcontractor for such work, will be at the sole expense of the Subcontractor. All such equipment repair or replacements shall be judged satisfactorily completed only with the authorized acceptance of the Contractor.

1.19 Standards for Pressure Vessels - All Subcontractor's fired and/or unfired pressure vessels and accessories shall be designed, fabricated, inspected, and certified in accordance with the American Society of Mechanical Engineers (ASME) Boiler and Pressure Vessel Code.

1.20 Contractor-Directed Delays During Mobilization or Demobilization - Notwithstanding any other provision of the Subcontract, if within the Subcontractor's mobilization or demobilization period, the Subcontractor's operations are delayed as a result of an area of the NNSS being secured for any operational reason, the Subcontractor shall be paid for the period of such delays at the rate provided for Standby Ready in the Consideration Schedule. To be eligible for compensation, delay periods shall be for a minimum of one hour and interruptions for a lesser duration shall not be compensable. Payment shall be made for the number of the Subcontractor's scheduled working hours during which work was actually delayed. Compensation will also include payment to the Subcontractor for commercial trucking and/or other added equipment charges as required for mobilization or demobilization, as incurred during such delays, and as determined by negotiated agreement of the parties.

2.0 TECHNICAL PROVISIONS

2.1 Drilling Method and Circulating Media - The borehole shall be drilled using the dual wall reverse circulation method with air and water.

2.2 Subcontractor Minimum Equipment Requirements and Standards

2.2.1 The Subcontractor minimum equipment requirements are listed in Specification Attachment 3.

2.2.2 The following API standards, latest issue as of the date of subcontract award, and other statutes, are a part of these specifications whenever applicable to standardized equipment, materials, processes or procedures:

a. API Spec 4F Specification for Drilling and Well Servicing Structures

b. API Spec 4G Recommended Practice for Operations, Inspection, Maintenance, and Repair of Drilling and Well Servicing Structures

c. API Spec 5DP Specification for Drill Pipe

d. API Spec 7-1 Specification for Rotary Drill Stem Elements

e. API RP 7G-2 Recommended Practice for Inspection and Classification of Used Drill Stem Elements

f. API Spec. 8A Specification for Drilling and Production Hoisting Equipment

g. API Spec. 9A Specification for Wire Rope

h. API RP 9B Recommended Practice on Application, Care, and Use of Wire Rope for Oilfield Service

i. API RP 54 Recommended Practice for Occupational Safety for Oil and Gas Well Drilling and Servicing Operations

j. Title 29 CFR 1910 Occupational Safety and Health Standards

k. Title 29 CFR 1926 Safety and Health Regulations for Construction

l. For equipment not manufactured/covered by any of the above API Standards, manufacturer's specifications/ratings shall apply.

2.3 Geophysical Logs and Directional Surveys - The geophysical logging services which will be furnished by the Contractor and run at the direction of the Contractor with support services (primarily rig mast availability for logging wireline block support with minimum rig crew presence) supplied by the Subcontractor, may include, but are not limited to, the following:

2.3.1 Upon reaching total depth of 900 feet bgs a north-seeking gyroscopic survey will be run inside the Subcontractor's drill pipe, as directed by the Contractor.

2.3.2 Other logs to be run after Subcontractor's removal of drill pipe from the hole may include, but are not limited to a caliper, density or fluid density.

2.4 Quality Assurance - As part of the general requirements under this Subcontract for which there shall be no additional compensation, the Subcontractor shall provide the Contractor with appropriate documentation or other supporting evidence that the equipment, materials, and services provided under this Subcontract are in accordance with the specifications herein. The paragraphs below list the documentation the Subcontractor is to furnish, along with the time at which it must be furnished to the Contractor. All items listed must be accepted by the STR prior to use under this Subcontract.

2.4.1 Drill Rig General - The Subcontractor shall furnish copies of the manufacturer's specifications for the rig to be used to accomplish the work at time of submission of proposal. If this type of equipment is covered by API Specifications and Recommended Practices, as listed in Paragraph 2.2.2, the Subcontractor shall provide supporting documentation, such as a copy of the API license certificate that the manufacturer was on the API's list of approved vendors. This documentation is to be provided at time of submission of proposal.

2.4.2 Major Hoisting/Load-Bearing Components - Records of latest inspection of all major hoisting or load-bearing components, which includes, but is not limited to the mast, crown, traveling blocks, drawworks, swivel, lifting fixtures and substructure. Visual, or a combination of visual and nondestructive examination (i.e., radiography, magnetic particle, dye penetrant, ultrasonic, etc.,) are acceptable methods of inspection as long as they are performed by qualified groups or individuals. The documentation shall provide information on what type(s) of inspection was performed, who performed the inspection, when it was performed, and the inspection results. In addition, the Subcontractor must provide certifications that each component can be operated at its original rated capacity. This documentation is to be provided prior to Mobilization under this Subcontract and must verify that inspection was performed not more than 90 days prior to mobilization.

2.4.3 Weight Indicators - The Subcontractor shall provide documentation that weight indicators or pressure gauges, load cells or other components used to determine weight, pull, or thrust are in current calibration and were calibrated with instruments traceable back to the National Institute of Standards and Technology (formerly the National Bureau of Standards). This includes any gauges used to determine make-up torque. This documentation is to be provided prior to spudding the hole.

2.4.4 Drill Pipe - The Subcontractor shall provide documentation of inspection within 90 days prior to completion of Mobilization under this Subcontract verifying that all drill pipe to be used has undergone inspection and at a minimum is equivalent the manufacturer’s original specifications or to API Class 2 if manufactured to API specifications. This documentation is to be provided before the tubulars are used.

2.4.5 Wireline - The Subcontractor shall provide documentation of manufacturer's specifications for wireline used for the hoisting equipment. This includes the drilling line, and wireline or cable used for any other auxiliary hoist or cathead. Documentation shall include certification of wireline breaking strength. This documentation is to be provided prior to spudding the hole.

SUBMITTALS

(ADM = Subcontract Administrator; STR = Subcontract Technical Representative; NLT = No Later Than;

NTP = Notice to Proceed; TLO = Transmittal Letter Only)

ADM (TLO)

ADM (TLO)

NLT 10 calendar days from award/Prior to start of work

ADM (TLO)

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