Attachment 02 - Draft GAA Provisions - Clauses - JAN 2020 (003).docx

1. CLAUSES, REPRESENTATIONS AND CERTIFICATIONS (JAN 2020)

1.1. The following clauses are incorporated into the Agreement by reference. The clauses so incorporated shall be the version of the clause that was in effect on the date a specific Assignment Letter is issued. Clauses will be updated prior to issuing an assignment and identified in an attachment to the assignment letter. Wherever a clause refers to “the Contractor,” substitute “the General Agent.” Wherever a clause refers to a “subcontractor,” substitute “contractor of the General Agent.”

1.2. The General Agent shall flow down the below clauses, representations and certifications, in solicitations issued by and contracts entered into by the General Agent as Agent of the Government, when applicable according to the prescription in the regulation. At a minimum, the General Agent shall insert the applicable clauses in 52.244-6 Subcontracts for Commercial Items in contracts for commercial items.

1.3. FAR Clauses. This Agreement incorporates one or more clauses in the Federal Acquisition Regulation (FAR) by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this address: https://www.acquisition.gov/content/part-52-solicitation-provisions-and-contract-clauses Several clauses including 52.225-03, 52.232-12, 52.232-20 and 52.232-22 will vary depending upon circumstances specific to the task assignment. The Assignment letter and Task Order will include the information required for certain clauses as well as identify any applicable Alternates.

1.4. DOT and MARAD Clauses: This Agreement incorporates one or more clauses in the Transportation Acquisition Regulation (TAR) by reference, with the same force and effect as if they were given in full text. Upon request, the Contracting Officer will make their full text available. Also, the full text of a clause may be accessed electronically at this address:

https://www.transportation.gov/administrations/assistant-secretary-administration/transportation-acquisition-regulation-tar

The MARAD Clause beginning MCL incorporated by reference may be view in full text electronically at this address:

https://voa.marad.dot.gov/Solicitation_Awards/docs/mar-380/MARAD%20Clauses%20MCL%20for%20HTML.htm

2. APPOINTMENT OF GENERAL AGENT (JAN 2020)

2.1. The United States appoints the General Agent as its agent, and not as an independent contractor, to manage and conduct the business of one or more Government-owned public vessels (herein referred to singularly or collectively as the "vessel") as may, from time to time, be assigned for urgent or compelling reasons to the General Agent pursuant to this Agreement.

2.2. The United States, after consultation with the General Agent, will assign or delete the vessel by name and location. The assignments and deletions shall be in writing, either by letter or by cable or telegram confirmed by letter, and addressed to the General Agent as prescribed by ARTICLE 14 of this Agreement. The General Agent will execute an acceptance of the letter and return two original counterparts to the United States. Each assignment and deletion shall constitute a formal modification of this Agreement.

3. ACCEPTANCE OF APPOINTMENT (JAN 2020)

The General Agent accepts the appointment and undertakes and promises so to manage and conduct the business for the United States in accordance with such directions, orders, or regulations, not inconsistent with this Agreement as the United States has prescribed, or from time to time may prescribe, and upon the terms and conditions herein provided of the vessels as have been or may be by the United States assigned to and accepted by the General Agent for that purpose.

4. DUTIES OF THE GENERAL AGENT (JAN 2020)

4.1. For the account of the United States, in accordance with such directions, orders, regulations, forms and methods of supervision and inspection as the United States may from time to time prescribe (or in the absence of such directions, orders, regulations, forms and methods of supervision and inspection, in accordance with good and reasonable commercial practices, including the use of customary commercial forms), in an economical and efficient manner, and exercising due diligence to protect and safeguard the interest of the United States in connection with the duties prescribed in this Agreement and without prejudice to its rights under the Article entitled "Insurance and Indemnification," the General Agent (solely as agent for the United States and not in any other capacity), shall:

4.1.1. Procure the Master of the vessel, subject to the approval of the United States. The Master shall be an agent and employee of the United States within the meaning, and only for the purposes of Section 1(a) of Public Law 17, 78th Congress, 1st Session, 57 Stat 45, March 24, 1943, as incorporated into 50 U.S.C. App. 1291. The Master shall have and exercise full control, responsibility and authority with respect to the manning, navigation and management of the vessel and shall be controlled by the United States directly or through the General Agent. The General Agent shall procure and make available to the Master for engagement, the officers and members of the crew required to fill the complement of the vessel. Such officers and members of the crew shall be procured by the General Agent through the usual channels and in accordance with the customary practices of commercial operators and upon the terms and conditions of the General Agent's collective bargaining agreements, if any. The officers and members of the crew shall be subject only to the orders of the Master. All such persons shall be paid in the customary manner with funds provided by the United States hereunder. If the United States shall have any reason to be dissatisfied with the conduct of any person employed by the General Agent or by the Master and assigned to operation, management, or direct support of the vessel, or the General Agent, or the Master, upon receiving particulars of the complaint, shall investigate and, if required, make a change in the assignment.

4.1.2. Equip, victual, supply and repair the vessel, or arrange therefore, including hull, machinery, boilers, tackle, apparel, furniture, equipment and spare parts, and including maintenance and voyage repairs and replacements, as may be necessary to maintain the vessel in an efficient state of repair and condition. In carrying out these functions, the General Agent shall undertake the following activities with respect to the vessel, if and as required by the United States:

4.1.2.1. Assign dedicated personnel to husband the vessel and identify the specific point of contact for program action, reports and accounting.

4.1.2.2. Identify preferred and alternative berthing spaces.

4.1.2.3. Coordinate activation specifications and routine support services with selected shipyards, port authorities and local service organizations.

4.1.2.4. Develop, maintain and revise, as necessary, a communications "alert" list for all organizations involved in retention, servicing and activations.

4.1.2.5. Submit for approval specific accounting and reporting procedures which will reflect cost and vessel status in accordance with formats prescribed by the United States.

4.1.2.6. Identify procedures to be employed to obtain and maintain the vessel's documents and certificates in accordance with regulatory requirements, standard agreements and other special requirements.

4.1.2.7. Survey, inspect, develop specifications, perform operational testing in conjunction with the American Bureau of Shipping, United States Coast Guard, Federal Communications Commission and other regulatory bodies, make recommendations as to repairs, accomplish repairs required to maintain and hold the vessel in its designated status and prepare instructions, if required, for the holding of the vessel in such status.

4.1.2.8. Periodically review the current status of shipboard equipment and systems in accordance with retention standards and reporting procedures prescribed by the United States.

4.1.2.9. Prepare listing of ship and equipment deficiencies and required repair list items for issuance to repair organizations.

4.1.2.10. Prepare and maintain current activation specifications including specific deficiency items noted. Coordinate periodic upgrade of activation specifications with designated ship repair organizations.

4.1.2.11. Develop and maintain a sequenced action plan for specific assignment of responsibilities relating to "no-notice" activation requirements.

4.1.2.12. Maintain current inventory of ship stores, supplies, spare parts and equipment in formats prescribed by the United States and prepare "pre-cut" requisitions for prompt purchase and delivery of required items.

4.1.2.13. Prepare a dock trial and sea trial procedure to be accomplished in advance of vessel being tendered for operation at the completion of activation.

4.1.2.14. Develop and maintain a deactivation plan and specifications in accordance with retention standards prescribed by the United States.

4.1.3. Hire tugboats and pilots and pay canal tolls, either directly or through port agents approved by the United States.

4.1.4. Appoint port agents at all ports for the purpose of husbanding the vessel, as required and subject to prior approval by the United States, except when in the judgment of the General Agent conditions are such that prompt action must be taken and obtaining approval of the United States would be impracticable. In port areas where the General Agent has an office, husbanding may be performed by that office with reimbursement for services at the customary commercial rates subject to the Article entitled "Related Company Services" of this Agreement as applicable.

4.1.5. Assist the United States in the handling, adjustment, settlement, or litigation of all claims of any nature whatsoever for or against the United States relating to the vessel. In the event of any claims being presented after this Agreement terminates, the United States may request the General Agent to assist in the handling, adjustment, settlement, or litigation and will compensate the General Agent for out-of-pocket costs.

4.1.6. Abide by and conform to all government laws, rules and regulations applicable to the vessel and to its personnel, and make all reports and returns required by any government body with respect to the vessel.

4.1.7. Exercise diligence, in accordance with good commercial practices, to maintain the vessel in the highest classification of the American Bureau of Shipping for its type, and to keep the vessel in a thoroughly efficient state in hull, machinery, equipment, personnel and other particulars relating to the seaworthiness of the vessel, and to keep the vessel working to prevent the loss of time. Except in cases of emergency, no alterations in hull, machinery, or equipment shall be made by the General Agent without first securing the authorization of the United States.

4.1.8. Furnish to the United States prompt notice and full information including copies of all pertinent papers, documents and records regarding casualties, accidents or damage to the vessel, suits, libels, actions and claims, and all problems of importance relating to the vessel.

4.1.9. Assist the United States in obtaining and maintaining all appropriate and applicable certification and documentation for the vessel; handle or process all shipping documents necessary to the management and conduct of the business of the vessel; and obtain all port and harbor information necessary for the vessel.

4.1.10. Relay voyage instructions from the United States directly to the master of the vessel.

4.1.11. If required by the United States, furnish and maintain during the duration of the Agreement, a bond with sufficient surety and in such form and amount as shall be approved by the United States, conditioned upon the due and faithful performance of each covenant and agreement of the General Agent contained in this Agreement, including, but not limited to, the obligation to faithfully account for and be responsible to the United States for all funds collected and disbursed and property received by the General Agent or its subagents. No monies of the United States shall be advanced or entrusted by the General Agent to a Master, purser, or any other member of the vessel's personnel, unless such person is under bond indemnifying the United States against loss of such monies or property caused solely or in part by the dishonesty or lack or care of any such person in the performance of the duties of any position covered by the bond. Cost of such indemnification bond or bonds under this Paragraph 4.k shall be for the account of the United States.

4.1.12. Keep books, records and accounts (which shall be the property of the United States) relating to the activities, maintenance and business of the vessel in such form and under such regulation as may be prescribed by the United States.

4.1.13. File, upon notice from the United States, balance sheets, profit and loss statements and such other statements of activities, special reports and memoranda of any facts and transactions, which, in the opinion of the United States, affect the results of the performance of transactions or activities under this Agreement, and whenever the General Agent employs any related, affiliated, or holding company of the General Agent to render any service or to furnish any stores, supplies, equipment, provisions, materials, or facilities which are for the account of the United States under the terms of this Agreement, the General Agent shall also, as a condition of such employment, obtain from such related or affiliated, or holding company its agreement to comply with the requirements aforesaid and to make available to the United States for examination and audit, its books, records and accounts, to the extent that such services affect the results or the performance of transactions or activities under this Agreement.

4.1.14. Exercise due diligence in the selection of contractors, subcontractors or vendors. The fees and expenses of contractors or subcontractors utilized to aid in the performance of services and functions required herein shall be included in the costs to be reimbursed by the United States. The General Agent shall promptly terminate any subcontractor or vendor not satisfactory to the United States upon, or confirmed by, written instructions from the United States.

4.1.15. When directed by the United States or upon termination of this Agreement, turn over to the United States at time and place to be fixed by the United States, the vessel and other property of whatsoever kind then in the custody of the General Agent pursuant to this Agreement, and upon such action the United States may collect directly, or by such agent or agents as it may appoint, all monies or other debts remaining unpaid; provided, that the General Agent shall, if required by the United States, adjust, settle and liquidate the business of the vessel.

4.1.16. Conduct the business of the vessel including but not limited to all matters with respect to voyages, cargoes, mail, passengers, persons to be carried, charter rates of freight and charges, and procure or provide all services incident thereto but not limited to stevedoring and other cargo handling port activities, wharfage and dockage, pilotage, canal transits, and services of subagents, brokers and consulates.

4.1.17. Collect, deposit, remit, disburse, and account for all monies due to the United States arising in connection with activities under or pursuant to this Agreement, and to the extent disbursements made by the General Agent pursuant to this Agreement are recoverable from insurance, the General Agent shall take such steps as may be appropriate to affect such recovery for the account of the United States.

4.1.18. To the maximum extent practicable existing Maritime Administration contracting methods and agreements shall be utilized.

4.1.19. Abide by and conform to Governmental laws, rules and regulations applicable to the vessel and the conduct of all activities under this Agreement.

4.1.20. If in support of the vessel, equipment, materials, or commodities must be transported to the vessel, the General Agent shall use privately owned U.S.-flag commercial vessels to ship at least 50 percent of the gross tonnage required to be transported in accordance with the procedures set forth in FAR 52.247-64.

4.2. The General Agent shall submit one legible copy of a rated onboard ocean bill of lading for each shipment to both (I) the Contracting Officer, and (ii) the Division of Military Cargoes, Office of Cargo Preference, Maritime Administration, U.S. Department of Transportation, Washington, DC 20590. Subcontractor bills of lading shall be submitted through the Prime Contractor. The Contractor shall furnish copies of these bills of lading (I) within 20 working days of the date of loading for shipments originating in the United States, or (ii) within 30 working days for shipments originating outside the United States. Each bill of lading copy shall contain the following information:

4.2.1. Sponsoring U.S. Government agency.

4.2.2. Name of Vessel.

4.2.3. Vessel flag of registry.

4.2.4. Date of loading.

4.2.5. Port of loading.

4.2.6. Port of final discharge.

4.2.7. Description of commodity.

4.2.8. Gross weight in pounds and cubic feet if available.

4.2.9. Total ocean freight revenue in U.S. dollars.

5. COMPENSATION (JAN 2020)

5.1. At any time while this Agreement is in effect, the General Agent may be requested to perform any or all of the functions outlined in the Article entitled "Duties of the General Agent" above. The vessel will, at all times, be in one of the following phases:

5.2. Phase I - ACQUISITION

5.3. Phase II - UPGRADE

5.4. Phase III – DEACTIVATION

5.5. Phase IV – MAINTENANCE

5.6. Phase V – EXERCISE

5.7. Phase VI – SEALIFT ENHANCEMENT

5.8. Phase O – OPERATION

5.9. Phase E – ENVIRONMENTAL COMPLIANCE

5.10. The United States will assign the vessel to the particular Phase. The initial assignment and any subsequent change shall be in writing, either by letter or by email, and addressed to the General Agent as prescribed in the Article entitled "Notices, Communications" of this Agreement.

5.11. During the period when the vessel is in Phase I Acquisition (that is, being acquired by the Government), the United States shall pay to the General Agent, compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay the General Agent's out-of-pocket expenses, including pro-rata compensation plus fringe benefits and taxes for the personnel assigned at the request of the United States to oversee, observe, survey, inspect, develop specifications, perform operational testing, or to perform any other duties or tasks as may be specifically assigned plus a Management Fee of $407.00 per diem, per vessel.

5.12. During the period when the vessel is in Phase II - Upgrade (that is, being upgraded to meet prescribed Government standards), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay the General Agent's out-of-pocket expenses including pro-rata compensation plus fringe benefits and taxes for the personnel assigned at the request of the United States to oversee, observe, survey, inspect, develop specifications, perform operational testing, or to perform any other duties or tasks as may be specifically assigned plus a Management Fee of $407.00 per diem, per vessel.

5.13. During the period when the vessel is in Phase III-Maintenance (that is, undergoing initial Deactivation after completion of Phases I & II), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay the General Agent's out-of-pocket expenses, including pro-rata compensation plus fringe benefits and taxes for the personnel assigned at the request of the United States to oversee, observe, survey, inspect, develop specifications, perform operational testing, or to perform any other duties or tasks as may be specifically assigned plus a Management Fee of $407.00 per diem per vessel.

5.14. During the period when the vessel is in Phase IV - Maintenance (that is, being held in a National Defense Reserve Fleet site or other place, port, dock, or wharf at the direction of the United States for the purpose of preserving and maintaining the assigned readiness level), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay the General Agent out-of-pocket expenses, including pro-rata compensation plus fringe benefits and taxes for the personnel assigned at the request of the United States to oversee, observe, survey, inspect develop specifications, perform operational testing, or to perform any other duties or tasks as may be specifically assigned plus a Management Fee of $407.00 per diem per vessel.

5.15. During the period when the vessel is in Phase V - Exercise (that is breakout and activation for sustained operations under Phase-O and lay up after completion of Phase-O), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay all the costs incurred by the General Agent, including, but not limited to, yard facilities, crew costs, fuel, subsistence, lodging of personnel, outfitting, crew and activation personnel, travel, towage, etc., plus a Management Fee of $871.00 per diem, per vessel.

5.16. During the period when the vessel is in Phase - VI Sealift Enhancement (this is, undergoing the installation of sealift enhancement features in order to meet National Defense Mission Requirements), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the General Agent's out-of-pocket expenses, including pro-rata compensation plus fringe benefits and taxes for the personnel assigned at the request of the United States to oversee, observe, survey, inspect, develop specifications, perform operational testing, or to perform any other duties or tasks as may be specifically assigned plus a Management Fee of $407.00 per diem, per vessel.

5.17. During the period when the vessel is in Phase O - Operation (that is, active operational status commencing with readiness to lift cargo and terminating with reentry into Phase V - Exercise for lay up), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay all costs incurred in the operation of the vessel, as outlined in ARTICLE 4 of the Agreement, plus a Management Fee of $871.00 per diem, per vessel.

5.18. During the period when the vessel is in Phase E – Environmental Compliance (that is, a vessel in the NDRF without an assigned Ship Manager requires urgent action to address a condition that may risk harm to the environment or human health and/or to ensure compliance with applicable Federal, State, and local laws, regulations, and permits), the United States shall pay to the General Agent compensation for the General Agent's services with respect to the vessel once a month. The United States shall pay the General Agent out-of-pocket expenses, including pro-rata compensation plus fringe benefits and taxes for the personnel assigned at the request of the United States to oversee, observe, survey, inspect develop specifications, perform operational testing, or to perform any other duties or tasks as may be specifically assigned plus a Management Fee of $407.00 per diem per vessel.

5.19. Clarifications:

5.19.1. Whenever and wherever the term "Management Fee" is used in this Agreement, the parties agree that it means compensation to cover all of the General Agent's administrative and general expenses as such expenses are recognized under generally accepted accounting principles as defined in 46 CFR Part 232. The United States shall fully and directly reimburse the General Agent for those costs incurred directly related to the performance of work under this Agreement which are listed and described in Exhibit A to this Agreement (See 5.21 Exclusions from Management Fee). The "Management Fees" enumerated by Phase in this Article shall be in effect for the duration of this Agreement.

5.19.2. The General Agent is encouraged to devise means of reducing expenses of the vessel while maintaining the level of scheduled services and readiness. The General Agent shall submit such proposals to the United States which shall have sole discretion to adopt and implement them.

5.19.3. In the execution of the General Agent's responsibilities, a representative of the United States will be designated in writing to the General Agent at its address set forth in the Article entitled "Notices, Communications" of this Agreement to inspect, investigate, observe and report on the General Agent's activities, but without hindering the General Agent in the performance of such activities. The General Agent shall furnish the representative with information on a frequent basis, along with progress and time of completion estimates. During the designation period, the representative will be responsible for passing of information between the General Agent and the United States.

5.20. Economic Price Adjustment for Management Fee Rates for All Phases:

5.20.1. Adjustments to General Agent Management Fee Rates will coincide with the start of each successive fiscal year beginning with FY21 on October 01, 2020. Adjustments to the rates will be based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) published monthly by the Bureau of Labor Statistics, U.S. Department of Labor. CPI-W data tables may be obtained by first following the link, http://data.bls.gov/cgi-bin/surveymost?cw, checking the first checkbox, U.S. All items, 1982-84=100 - CWUR0000SA0, at the top of the selection list, and then using the “Retrieve data” button below the selection list.

5.20.2. Two 12-month averages will be used to calculate the General Agent Management Fee Rate adjustment for all phases. The adjustment is the percent change between the two averages. The first 12-month average is the average of the CPI-W index values for the twelve months ending one full month before the beginning of the Fiscal Year (September of previous year thru August of current year); the second is the average of the CPI-W index values for the twelve months preceding the twelve months included in calculating the first average.

5.20.3. General Agent Management Fee Rates in effect at the time a GA assignment is initially made will apply through the end of that specific GA assignment without adjustment.

5.21. Exhibit A – Exclusions from Management Fee:

The following expenses are not included in the Management Fee, but shall be fully credited by the United States.

6. DISBURSEMENTS (JAN 2020)

6.1. At the sole discretion of the United States, the United States shall advance funds or furnish letters of credit to the General Agent to provide for, and the General Agent shall receive credit for, all expenditures in performing, procuring, or supplying the services, facilities, stores, supplies, or equipment as required under this Agreement, excepting the items of expense deemed to be covered by the Management Fee, provided that the General Agent shall receive credit for sales and similar taxes or foreign taxes of any kind to the extent they would have been classifiable as vessel operating expenses under 46 CFR Part 282 as published on May 9, 1974, at 39 CFR 16445. The United States shall also advance funds to the General Agent to provide for, and the General Agent shall receive credit for, all crew expenditures occurring during the period of this Agreement in connection with the vessel, including, but not limited to, expenditures on account of wages, extra compensation, overtime, bonuses, penalties, subsistence, repatriation, internment, travel, loss of personal effects, maintenance and cure, vacation allowances, damages or compensation for death or personal injury or illness, insurance premiums, social security taxes, state unemployment insurance taxes and contributions made by the General Agent to a pension or welfare plan fund with respect to the officers and members of the crew of the vessel who are or may become entitled to benefits under such plan, or any other payment required by law. If the United States elects to use letters of credit to advance financing, the General Agent agrees to use letters of credit strictly in accordance with procedures to be provided by the United States in advance. In all events, the General Agent commits itself:

6.1.1. To the practice of requesting cash draw downs only when needed for prompt distribution; and

6.1.2. To timely reporting as required by the United States, with the understanding that failure to adhere to these commitments constitutes a material breach of this Agreement which may lead to its termination. Any monies of the United States advanced or entrusted to bonded persons by the General Agent which are lost by reason of a casualty to the vessel on which the money is carried shall, in the event of such loss, be considered an expenditure of the General Agent and credit shall be allowed to the General Agent in accordance with this ARTICLE.

6.2. In accordance with procedures established by the United States, the General Agent shall, on a monthly basis in advance, request an advance of funds or letter of credit authority to cover the General Agent's estimated per diem charges and disbursements. Each monthly request for an advance of funds from the MARAD Joint Bank account shall include a fully completed Invoice Summary Sheet (MA-992) indicating the General Agent Cost Category applicable to the advance fund request. Such request for advance funds shall be submitted not later than the 20th day of the current month to the Region Office to which the ship has been assigned, attention Funds Control Officer (FCO). The United States, upon receipt of the request for an advance of funds or letter or credit authority, shall, within ten (10) working days, arrange either;

6.2.1. Through Government check or wire transfer, the deposit of the requested amount to the General Agent's account or,

6.2.2. The delivery of the letter of credit.

6.3. For reconciliation of these advance fund requests, within 30 days of the end of the fiscal year, the General Agent shall submit to the Region FCO, a MA 992 detailing the prior year's actual cost by cost category and line item for each vessel. If required by the FCO, such reconciliations may be more frequent.

7. CLAIMS AND LIABILITY (JAN 2020)

7.1. THIRD PARTY TORT ACTIONS AND CONTRACT DISPUTES

It is the recognition and assumption of this Agreement, subject to the exceptions contained in paragraphs b, c, and d, below, that by operation of law the United States, either directly or through its ownership of the vessels involved, is intended to bear the financial risk for all actions covered by this Article, for which the vessel, the United States, or the General Agent are liable, provided that the liability arose out of the General Agent’s performance of this Agreement and the General Agent was acting within the scope of this Agreement.

7.1.1. The General Agent is an agent of the United States under the Suits in Admiralty Act (SIAA), the Public Vessels Act, the Federal Tort Claims Act, and the Admiralty Extension Act for all third-party tort actions in admiralty and common law, to the extent the General Agent is acting within the scope of the assignment.

7.1.1.1. The General Agent is an agent of the United States for the purposes of contract law when acting as a disclosed agent for the United States. Therefore, when a third party contracts with the General Agent, acting within the scope of this Agreement, that party is in privity of contract with the United States and disputes under that contract are governed by the Contract Disputes Act (CDA).

7.1.1.1.1. Under the CDA, the third-party contractor may pursue its rights under the contract directly against the United States. By operation of law, the General Agent should not be contractually liable for contracts where it contracts as a disclosed agent for a principal, the United States. For this reason, when contracting, the General Agent should disclose that it is acting as general agent for the United States, acting by and through the Maritime Administration (MARAD).

7.1.1.1.2. The General Agent shall work with the MARAD to ensure that such claims are handled and resolved in accordance with the CDA and other applicable federal laws.

7.1.2. Admiralty actions covered by subparagraphs 1 and 2 above, must be brought exclusively against the United States. See e.g. the Suits in Admiralty Act (SIAA), 46 U.S.C.A. § 30901, et seq., which makes the United States the exclusive defendant for all admiralty cases relating to the activities of its agents.

7.1.3. Subject to paragraphs b, c, and d below, the United States will seek to dismiss the General Agent from all actions covered by subparagraphs 1 and 2, above.

7.1.3.1. Where such dismissal is not possible, the United States will defend such suits at its own expense.

7.1.3.2. Such defense will usually be provided, although not necessarily always, through the United States Department of Justice.

7.1.3.3. By entering into this agreement, the General Agent hereby agrees to accept the representation of the United States Department of Justice in such legal proceedings or such other legal representation as the United States shall provide and agrees to fully cooperate in the defense of such matters. See paragraph d, below. The United States will have the sole discretion to determine whether to settle such suits and the United States will control the conduct of the litigation.

7.1.3.4. The General Agent may, at its own expense, retain legal counsel to work with the counsel provided by the United States in defending any such claim or suit.

7.2. THIRD PARTY ACTIONS NOT COVERED

7.2.1. Unless otherwise approved by the Contracting Officer, all liability not mentioned in paragraph a above shall be the sole responsibility of the General Agent, including, but not limited to, all fines, judgments, penalties and cost of legal representation. Examples of third party actions that are the sole responsibility of the General Agent:

7.2.1.1. All employer/employee claims or suits brought by employees (other than seamen aboard public vessels) of the General Agent, or by their union, either via arbitration or in court, regarding:

7.2.1.1.1. Allegations of discrimination, including sexual harassment. Discrimination claims include, but are not limited to, those claims arising under Title VII of the Civil Rights Act, as amended (42 U.S.C. sections 2000e et seq.), the Age Discrimination in Employment Act, as amended (29 U.S.C. sections 621 et seq.), and the Americans with Disabilities Act, as amended, (42 U.S.C. sections 12117 et seq.); or

7.2.1.1.2. Employment disputes such as disciplinary action undertaken by the General Agent against its employees; or

7.2.1.2. Disputes regarding the terms of the CBAs between the General Agent and its unions and other disputes involving a union.

7.2.2. Actions by Governmental Entities. Unless otherwise approved by the Contracting Officer, all lawsuits brought by federal, state or local authorities alleging the General Agent violated federal, state or local laws or regulations shall be the sole responsibility of the general agent, not the United States, its agents, servants, and employees, nor the vessels owned by the United States. Such liability includes, but is not limited to, all costs of legal representation. Examples include, but are not limited to, actions alleging criminal violations of OSHA or environmental laws and regulations.

7.3. INDEMNIFICATION

7.3.1. Notwithstanding anything in this contract to the contrary, particularly this ARTICLE 7, the General Agent agrees to indemnify and hold the United States, MARAD, and its employees and agents harmless from any damages, loss, or injury resulting either directly or indirectly from:

7.3.1.1. acts of Gross Negligence, Willful Misconduct or Violations of Law or Regulations by the Senior Management of the General Agent; or

7.3.1.2. acts of Gross Negligence, Willful Misconduct or Violations of Law or Regulations performed by employees, servants, contractors, subcontractors, suppliers or agents of the General Agent and which occurred with the Knowledge of Senior Management of the General Agent; or

7.3.1.3. damage caused by a contractor, subcontractor or their agents or employees during the performance of their work which is reimbursable by insurance, an indemnification clause, or other similar provision.

7.3.2. Such indemnification shall be provided upon MARAD's request or, if necessary, the United States may bring a legal action, either directly or in a third-party action, against the General Agent and/or individuals working for the General Agent, for damages, loss, or injury to the United States.

7.3.3. The General Agent shall be under no responsibility or liability to the United States for loss or damage to the vessel arising out of any negligence on the part of any of the General Agent's officers, employees, agents, or otherwise, except as provided in subparagraph 1 of this paragraph.

7.3.4. Definitions (for purposes of this section):

7.3.4.1. Senior Management means those individuals responsible for senior management of the General Agent's organization with respect to major components of any of its operations relating to the NDRF or RRF vessels. Senior Management will include the chief executive officer, president, vice president(s), and head(s) of vessel operations for the General Agent.

7.3.4.2. Knowledge means that the relevant individuals had personal cognizance of the circumstances which either caused or contributed to the claim.

7.3.4.3. Third Party means all persons who are not parties to this contract.

7.3.4.4. Violation of Law or Regulation means instances where civil or criminal liability results from a violation of a law or regulation that falls on the vessel, the United States and/or the General Agent. A Violation of Law or Regulation will not be deemed to occur for purposes of this definition when liability occurs without fault on the part of the General Agent.

7.4. DUTY OF COOPERATION

7.4.1. The General Agent has a duty to fully cooperate in the defense of any claim or action for which the United States bears a financial risk or a responsibility to defend.

7.4.1.1. As soon as practicable after the occurrence of any claim or suit, or any loss or damage for which the General Agent believes the United States is at risk under this contract; the General Agent shall immediately furnish the assigned Administrative Contracting Officer (ACO), with a copy to the assigned Contracting Officer’s Representative (COR), detailed written notice of such claim, suit, loss, and/or damage as well as a copy of every demand, notice, summons, complaint, or other process received by the General Agent or its employees or representatives.

7.4.1.2. The General Agent will cooperate with the Government and, upon request, will assist in effecting settlements, securing and giving evidence and documentation, technical advice, and obtaining the attendance of witnesses for consultation, depositions, and trials. Such information, advice, evidence and documentation will be given by the General Agent to the United States in the manner and form the United States requires.

7.4.2. Any material failure of the General Agent to cooperate can negate the duty of the United States to provide or pay for a defense and to pay for a judgment against the General Agent.

8. GENERAL AVERAGE (JAN 2020)

8.1. In the event of general average involving the vessel, the General Agent shall comply fully with all instructions as to appointing an adjuster, obtaining general average security and asserting liens for that purpose unless otherwise instructed, and supplying the adjuster with all disbursements, accounts, documents and data required in the adjustment, statement and settlement of the general average. Reasonable compensation for any general average allowances to the General Agent in such cases shall be fixed by the adjuster, subject to approval by the United States, and paid to and retained by the General Agent.

9. SALVAGE (JAN 2020)

9.1. Salvage claims for services rendered to vessels other than vessels owned or controlled by the United States shall be handled by, and be under the control of, the United States. Salvage awards for services rendered to other vessels owned or controlled by the United States, including the Vessel, shall be made by the United States. The General Agent shall furnish the United States with full reports and information on all salvage services rendered.

10. RELATED COMPANY SERVICES (JAN 2020)

10.1. Agreement or arrangements with an interested or related company to render service or to furnish any stores, supplies, equipment, materials, repairs, or facilities under this Agreement shall be submitted to the United States for approval. Unless and until such agreements or arrangements have been approved by the United States, compensation paid to any interested or related company shall be subject to review and readjustment by the United States. The United States may deny credit hereunder of any portion of such compensation. The United States may also deny credit, in whole or in part, of compensation related company which it deems to be exorbitant, extortionate, or fraudulent. The term "interested company" means any person, firm, or corporation in which the General Agent or any related company of the General Agent, or any officer or director of the General Agent, or any employee of the General Agent who is charged with executive or supervisory duties, or any member of the immediate family or any such officer, director, or employee, or any officer or director or any related company if the General Agent, owns any substantial pecuniary interest directly or indirectly. The term "related company" means any person or concerns that directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the General Agent. The term "control" (including the terms "controlled by" and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the General Agent (or interested or related company) whether through ownership or control of voting securities by contract or otherwise.

10.2. The United States shall, when it may legally do so, have the advantage of any existing or future contracts of the General Agent for the purchase or rental of materials, fuel, supplies, facilities, services, or equipment, if this may be done without unreasonably interfering with requirements of other vessels owned or operated by the General Agent; provided, that any financial loss or disadvantage to the General Agent shall be compensated for in such amount as may be determined by the United States.

10.3. Notwithstanding any other provisions of this Agreement, the United States, by separate agreement, may contract with the General Agent to perform stevedoring, terminal, ship repair, or similar services to the vessel, in which event the General Agent shall have the rights, benefits, obligations and responsibilities provided in such separate agreement.

11. DELEGATION OF AUTHORITY (JAN 2020)

11.1. Wherever and whenever in this Agreement any right, power, or authority is granted or given to the United States, such right, power, or authority may be exercised in all cases by the National Shipping Authority or such agent or agents as the United States may appoint, and the act or acts of such agent or agents when taken shall constitute the act or acts of the United States hereunder. In performing services under this Agreement, the General Agent may rely upon the instructions and directions of the Director, National Shipping Authority, his officers and responsible employees, or any person or agency authorized by the Director. No directions, orders or regulations shall have retroactive effect without the written consent of the General Agent. Whenever practicable, instructions and directions to the General Agent shall be in writing, and oral instructions or directions shall be confirmed promptly in writing. a.