Combined_SEC_A_-_J.pdf

Contract No. DE-NA0001942

Section B – H, Page i

PART I – THE SCHEDULE

TABLE OF CONTENTS

SECTION B

SUPPLIES OR SERVICES AND PRICES/COSTS

CLIN 0001 MANAGEMENT AND OPERATION (M&O) OF Y12/PX

CLIN 0001A CONTRACT TRANSITION: COST REIMBURSEMENT, NO FEE

CLIN 0001B BASE TERM (YEARS 1-5)

CLIN 0001C OPTION I TERM (YEARS 6-7)

CLIN 0001D OPTION II TERM (YEARS 8-9)

CLIN 0001E OPTION III TERM (YEAR 10)

CLIN 0001F TRANSITION OF SAVANNAH RIVER TRITIUM OPERATIONS (SRTO)

OPTION INTO THE CONTRACT

CLIN 0001G OPTION: SAVANNAH RIVER TRITIUM OPERATIONS (SRTO)

CLIN 0001H WORK FOR OTHERS/OTHER REIMBURSABLE WORK

CLIN 0002 URANIUM PROCESSING FACILITY (UPF) PROJECT MANAGEMENT

B-1 CONTRACT TYPE AND VALUE

B-2 CONTRACT FEE STRUCTURES

B-3 SINGLE FEE

B-4 KEY PERSONNEL REPLACEMENT

B-5 OBLIGATION OF FUNDS

B-6 AVAILABILITY OF APPROPRIATED FUNDS

B-7 PERFORMANCE EVALUATION PLAN (PEP)

SECTION C

DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C-1 STATEMENT OF WORK

SECTION D

PACKAGING AND MARKING (RESERVED)

SECTION E

INSPECTION AND ACCEPTANCE

E-1 FAR 52.246-5 INSPECTION OF SERVICES – COST-REIMBURSEMENT

(APR 1984)

E-2 ACCEPTANCE

SECTION F

DELIVERIES OR PERFORMANCE

F-1 FAR 52.242-15 STOP-WORK ORDER (AUG 1989) ALTERNATE I (APR 1984) ... 15

F-2 PERIOD OF PERFORMANCE

F-3 PRINCIPAL PLACE OF PERFORMANCE

F-4 STOP WORK IN EVENT OF IMMINENT DANGER

Section B – H, Page ii

F-5 EVALUATION OF PERFORMANCE AND EXERCISE OF OPTION(S) (THIS

CLAUSE APPLIES TO CLIN 0001 ONLY)

F-6 DELIVERABLES

F-7 DELIVERABLES DURING TRANSITION

SECTION G

CONTRACT ADMINISTRATION DATA

G-1 GOVERNMENT CONTACTS & CORRESPONDENCE PROCEDURES

G-2 MODIFICATION AUTHORITY

G-3 DOE/NNSA PATENT COUNSEL

G-4 DOE/NNSA ORGANIZATIONAL PROPERTY MANAGEMENT OFFICER

G-5 CONTRACTOR CONTACT

G-6 PERFORMANCE GUARANTEE(S)

G-7 RECOGNITION OF PERFORMING ENTITY

G-8 RESPONSIBLE CORPORATE OFFICIAL

SECTION H

SPECIAL CONTRACT REQUIREMENTS

H-1 CONFIDENTIALITY OF INFORMATION

H-2 NNSA PRIME CONTRACTS

H-3 INSTRUCTIONS FOR UPDATING FOREIGN OWNERSHIP, CONTROL OR

INFLUENCE (FOCI) INFORMATION (JUN 2011)

H-4 CONTINUITY DURING TRANSITION

H-5 SMALL BUSINESS PARTICIPATION

H-6 PARENT OVERSIGHT PLAN

H-7 LOBBYING RESTRICTION (FULL-YEAR CONTINUING APPROPRIATIONS

ACT, 2011)

H-8 CONSTRUCTION PROJECTS

H-9 LIMITATION ON PROTECTIVE FORCE SUBCONTRACTING

Section B – H, Page 1

SECTION B

SUPPLIES OR SERVICES AND PRICES/COSTS

CLIN 0001 MANAGEMENT AND OPERATION (M&O) OF Y12/PX

CLIN 0001A CONTRACT TRANSITION: COST REIMBURSEMENT, NO FEE

Services being Acquired under this Contract Line Item Number (CLIN): The Contractor shall, in accordance with the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely transition from the existing contracts to the new contract to operate the Y-12 National Security Complex (Y-12) and the Pantex Plant (PX), (hereinafter referred to as “the Sites”).

The initial transition period of four months for the Y-12/PX Contract consolidation will be on a cost reimbursement basis and the estimated cost is $ TBD*. There will be no fee earned or paid during transition, however, cost savings initiatives may begin in accordance with B-2(a)(3).

[*The estimated cost will be established with the Contractor after the effective date of the Contract with the commencement of the Transition Term.]

CLIN 0001B BASE TERM (YEARS 1-5)

Services being Acquired under this CLIN: The Contractor shall, in accordance with the terms and conditions of this Contract, provide the personnel, equipment, material, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely complete all work in accordance with Section J, Appendix A, Statement of Work, except for the work covered by CLIN 0001H and CLIN 0002.

The fee available is:

Year Fixed Fee

(FF)

Available Performance

Incentive Fee (PIF)

Total Available

Fee

(FF + PIF)

Total Fee Earned

Estimated Cost Savings Incentive Fee

(CSIF)

CSIF

Earned

1 $29,949,750 $9,983,250 $39,933,000 $21,439,000

2 NA $39,933,000 $39,933,000 $42,104,000

3 NA $39,933,000 $39,933,000 $46,831,000

4 NA $39,933,000 $39,933,000 $42,476,000

5 NA $39,933,000 $39,933,000 $26,962,000

Section B – H, Page 2

CLIN 0001C OPTION I TERM (YEARS 6-7)

Services being Acquired under this CLIN: If this option is exercised, the Contractor shall, in accordance with the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely complete all work in accordance with Section J, Appendix A, Statement of Work, except for the work covered by CLIN 0001H and CLIN 0002. The fee available is:

Year Fixed Fee

(FF)

Available Performance Incentive Fee

(PIF)

Total Available

Fee

(FF + PIF)

Total Fee Earned

Estimated

CSIF

CSIF Earned

6 NA $39,933,000 $39,933,000 $17,864,000

7 NA $39,933,000 $39,933,000 $14,663,000

CLIN 0001D OPTION II TERM (YEARS 8-9)

Services being Acquired under this CLIN: If this option is exercised, the Contractor shall, in accordance with the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely complete all work in

(FF)

Available Performance Incentive Fee

(PIF)

Total Available

Fee

(FF + PIF)

Total Fee Earned

Estimated

CSIF

CSIF Earned

8 NA $39,933,000 $39,933,000 $14,419,000

9 NA $39,933,000 $39,933,000 $14,129,000

CLIN 0001E OPTION III TERM (YEAR 10)

accordance with the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely complete all work in

(FF)

Available Performance Incentive Fee

(PIF)

Total Available

Fee

(FF + PIF)

Total Fee Earned

Estimated

CSIF

CSIF Earned

10 NA $39,933,000 $39,933,000 $21,933,000

Section B – H, Page 3

CLIN 0001F TRANSITION OF SAVANNAH RIVER TRITIUM OPERATIONS (SRTO)

OPTION INTO THE CONTRACT

accordance with the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely transition SRTO from the incumbent contract to this M&O contract.

The transition period for incorporation of the SRTO effort of six months will be on a cost reimbursement basis and the estimated cost is $ TBD**. There will be no fee earned or paid for SRTO transition activities.

[**The estimated cost will be established with the Contractor at the time of option exercise and prior to commencement of the Transition Term.]

CLIN 0001G OPTION: SAVANNAH RIVER TRITIUM OPERATIONS (SRTO)

Services being Acquired under this CLIN: If this option is exercised, the Contractor shall, in accordance with the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely manage and operate the SRTO. If this option is exercised, the contract will be modified to revise the services being acquired and to increase the fee available amounts to add SRTO effort to CLIN 0001B, 0001C, 0001D, and 0001E.

CLIN 0001H WORK FOR OTHERS/OTHER REIMBURSABLE WORK

Services being Acquired under this CLIN: The Contractor shall, in accordance with Section J, Appendix A, Chapter II, 1.3 Work for Others/Other Reimbursable Work, and all other the terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely perform all Work For Others and Other Reimbursable Work efforts as directed by the Contracting Officer.

Year Estimated Cost Available Fixed Fee Estimated Cost + Available Fixed Fee

Actual Fee Earned

OPTION I ************** ****************** ******************* ****************

OPTION II ************** ****************** ******************* ****************

Section B – H, Page 4

OPTION III ************** ****************** ******************* ****************

[Table to be completed by the Government in accordance with Section B, B-2(a)(4).]

CLIN 0002 URANIUM PROCESSING FACILITY (UPF) PROJECT MANAGEMENT

Services being Acquired under this CLIN: The Contractor shall, in accordance with Section J, Appendix A, Chapter IV, and all other applicable terms and conditions of this Contract, provide the personnel, equipment, materials, supplies, and services, (except as may be furnished by the Government) and otherwise do all things necessary for, or incident to effectively, efficiently, and safely ensure the completion of UPF. The cost and fee associated with awarding this CLIN shall be accounted for and reported separately and be completely severable from all other parts of this contract.

The Maximum Available UPF Fee (MAUF) for construction management of UPF is:

Column A Column B Column C Column D Column E

Year

UPF Approved Cost Baseline

Percentage Multiplier of Notional Cost for

MAUF

Calculated Dollar Value ($) for MAUF

Reward Fee Earned or Penalty Fee Reduction

1 TBD 5.0% TBD TBD

2 TBD 5.0% TBD TBD

3 TBD 5.0% TBD TBD

4 TBD 5.0% TBD TBD

5 TBD 5.0% TBD TBD

6 TBD 5.0% TBD TBD

7 TBD 5.0% TBD TBD

8 TBD 5.0% TBD TBD

9 TBD 5.0% TBD TBD

10 TBD 5.0% TBD TBD

[Column B will be completed by the Government when the UPF project baseline is approved and will be updated annually. Accordingly, the percentage proposed by the Contractor (inserted into Column C) will be applied to the UPF approved cost baseline to establish Column D.]

The reward/penalty fee structure in Section J, Appendix G, UPF Project Management Plan, shall be utilized for the purposes of determining fee in Column E.

Section B – H, Page 5

B-1 CONTRACT TYPE AND VALUE

This is a Performance Based Contract for the Management and Operation of DOE/NNSA facilities governed by FAR 17.6, DEAR 917.6 and DEAR Part 970. It is a Management and Operating (M&O) cost-reimbursement Contract with terms for a Fixed Fee, Performance Incentive Fee, and Cost Savings Incentive Fee for CLIN 0001 and a Maximum Available Uranium Processing Facility Fee for CLIN 0002.

The total estimated cost, excluding fee and Work for Others/Other Reimbursable Work related to NNSA work:

Year Total Estimated Cost 1 $1,775,166,000

OPTION I

OPTION II

OPTION III

[Table to be completed by the Government during the term of the Contract.]

B-2 CONTRACT FEE STRUCTURES

(a) Fee Structure for CLIN 0001

(1) Definitions.

Total Available Fee = Fixed Fee + Performance Incentive Fee

(2) The Total Available Fee for the Base Term of the Contract, and the option period(s), if exercised by NNSA, is shown in the tables for CLIN 0001B, 0001C, 0001D, and 0001E, including 0001G, if exercised. The Total Available Fee shall not exceed 3.5% of the FY 2011 budget ($1.33B for both Pantex Plant and Y-12, and $1.50B should SRTO option be exercised).

Section B – H, Page 6

(i) Fixed Fee

The Contractor will be paid a Fixed Fee (except as identified in Section B, B- 2(a)(4), Work for Others/Other Reimbursable Work Fixed Fee) during the first year of the Base Term in the CLIN 0001B table. No Fixed Fee will be paid for the remaining years of the Contract.

(ii) Performance Incentive Fee

The Contractor will be paid a Performance Incentive Fee for accomplishments under the Performance Evaluation Plan (PEP). The Available Performance Incentive Fee is reflected in the above table for CLINs 0001B, 0001C, 0001D, and 0001E, including 0001G, if exercised.

(3) Cost Savings Incentive Fee

The Contractor will be paid a Cost Savings Incentive Fee under the approved Cost Reduction Proposal (CRP) submitted in accordance with the Contract’s Section I Clause entitled “DEAR 970.5215-4, Cost Reduction”. In the event savings are not sustained during the remainder of the Contract’s period of performance the Government is entitled to reimbursement of previously paid CSIF and will obtain it out of future fee.

Payment will be made promptly but not later than 90 days after the cost baseline data and adequate records to support validation are supplied to the Government to make a decision on the share of cost savings.

Transition Term: The Contractor may begin cost savings initiatives before the CRP is approved and may be eligible for cost savings incentive fee if the terms of the Contract’s Section I Clause entitled “DEAR 970.5215-4, Cost Reduction” can be met.

Cost savings initiatives before the CRP is approved could include changes in the full-time equivalent (FTE) baseline during the Transition Term, provided there is a corresponding reduction in costs. Savings will be paid in accordance with the Contract’s Section I Clause entitled “DEAR 970.5215-4, Cost Reduction”.

(4) Work for Others/Other Reimbursable Work Fixed Fee

The estimated cost and the available Fixed Fee for Work for Others/Other Reimbursable Work during the Base Term of the Contract and for each Option Term will be established by the NNSA prior to the commencement of the applicable year of the Contract and will be incorporated into the CLIN 0001H table through a modification to this Contract. The Fixed-Fee for Work for Others/Other Reimbursable Work will be up to 3% of the estimated cost of each project. If the work sponsor or the Government subsequently orders material changes in the amount or character of the Work for Others/Other Reimbursable Work, an equitable adjustment of the fee, if any, shall be made in accordance with the Contract’s Section I Clause entitled “DEAR 970.5243-1, Changes." If the Contractor anticipates the amount of estimated cost to

Section B – H, Page 7 change for Work for Others/Other Reimbursable Work due to new or deleted reimbursable work projects, an adjustment to the estimated cost and Work for Others/Other Reimbursable Work Fixed Fee for reimbursable work shall be submitted for approval by the Contracting Officer. Work for Others Fixed Fee is not a component of Total Available Fee under CLINS 0001B, 0001C, 0001D, 0001E and 0001G, if exercised.

(5) Provisional Payment of Fee

(i) The Fixed Fee for the Base Term of the Contract shall be paid monthly at the rate of one-twelfth (1/12) of the annual Fixed Fee per month. Such payment amounts are to be drawn down by the Contractor from the Contract’s special financial institution account in monthly installments on the last day of each month.

(ii) The Performance Incentive Fee is authorized for draw down by the Contractor from the Contract’s special financial institution account as follows:

(A) In monthly provisional fee payments equivalent to 3% of the Available Performance Incentive Fee, or

(B) Upon completion of milestones or any other methodology as set forth in the Performance Evaluation Plan (PEP) and its supporting documentation; and

(C) The balance, if any, upon issuance of the Contracting Officer’s notification in accordance with Section B, B-7, Performance Evaluation Plan.

(D) If the provisional payments made above exceed the Performance Incentive Fee earned or the Contractor fails to fully accomplish the objective/incentive for which it has received milestone completion or provisional payments, the Contracting Officer will determine if the Contractor is to refund all or part of the provisional fee it has received. Any refund made shall include interest. Interest will be paid at the published prime rate of the financial institution (depository) in which the special account is established or at the interest rate established by the Secretary of the Treasury as provided in Section 12 of the Contract Disputes Act of 1978 (Public Law 95-563) whichever is higher, which is applicable to the period in which any unearned payments were made. Interest paid resulting from this clause is an unallowable cost.

(E) The Contractor shall remit any balance due payable to the Government in accordance with directions to be provided by the Contracting Officer.

(iii) The Contractor may request approval from the Contracting Officer for semi-annual provisional payment of the Cost Savings Incentive Fee. If the provisional payment results in overpayment, the Contracting Officer will determine if the Contractor is to refund all or part of the provisional fee it has received. Any refund made shall

Section B – H, Page 8 include interest. Interest will be paid at the published prime rate of the financial institution (depository) in which the special account is established or at interest rate established by the Secretary of the Treasury as provided in Section 12 of the Contract Disputes Act of 1978 (Public Law 95-563) whichever is higher, which is applicable to the period in which any unearned payments were made. Interest paid resulting from this clause is an unallowable cost.

(6) Unearned Fee

NNSA HQ will determine how unearned fee is reinvested in the Nuclear Security Enterprise. Unearned fee will not be available for future performance periods.

(7) Except for the conditions identified in this clause, there shall be no adjustment in the amount of the Contractor's fee by reason of differences between the FY11 budgeted cost for performance of the work under this Contract and the actual cost of performance of that work.

(b) Fee Structures for CLIN 0002

(1) The fee structure for UPF will be separate and severable from the other fee in this contract and is described in this section. The fee amounts will be incorporated into the Table in CLIN 0002 above. Notwithstanding the Contract’s Section I Clause entitled “DEAR 970.5243-1, Changes,” the Maximum Available Uranium Processing Facility Fee (MAUF) percentage in Column C of the table in CLIN 0002 is not subject to adjustment.

(2) Provisional payment of MAUF under Column D in the CLIN 0002 table above will be approved by the Contracting Officer as part of the UPF Project Management Plan.

(3) Unearned fee is subject to Section B, B-2(a)(6).

B-3 SINGLE FEE

(a) For CLIN 0001. If the Contractor is part of a consortium, joint venture, and/or other

Contractor Team Arrangement as defined in FAR 9.601, the team shall share in the Available Fee defined at Section B, B-2, Contract Fee Structures. Separate additional subcontractor fees for individual team members will not be considered an allowable cost under the Contract. If a subcontractor, supplier, or lower-tier subcontractor is a wholly owned, majority owned, or affiliate of any team member, any fee or profit paid to such entity will not be considered an allowable cost under this Contract unless otherwise approved by the Contracting Officer.

Section B – H, Page 9

(b) For CLIN 0002. If the Contractor is part of a consortium, joint venture, and/or other

Contractor Team Arrangement as defined in FAR 9.601, the team shall share in the MAUF defined at Section B, B-2, Contract Fee Structures. If a subcontractor, supplier, or lower-tier subcontractor is a wholly owned, majority owned, or affiliate of any team member, any fee or profit paid to such entity will not be considered an allowable cost under this Contract unless otherwise approved by the Contracting Officer.

(c) The subcontractor fee restriction in the paragraphs above does not apply to members of the

Contractor team that are not wholly owned, majority owned, or affiliate of any team member, but are small business(es) or protégé firm(s) as part of an approved mentor-protégé relationship as described in DEAR 952.219-70, DOE Mentor-Protégé Program.

B-4 KEY PERSONNEL REPLACEMENT

Unless approved in advance, in writing by the Contracting Officer, should any Key Personnel be removed, replaced, or diverted by the Contractor for reasons under the Contractor’s control (other than to maintain satisfactory standards of employee competency, conduct, and integrity under the Contract’s Section I Clause entitled “DEAR 970.5203-3, Contractor’s Organization”) within the first two years of period of performance; or for a replacement Key Person within two years of being placed in the position, the Contractor shall forfeit two years of the DOE/NNSA reimbursable annual salary, bonuses and relocation costs in fee for that position for each occurrence.

B-5 OBLIGATION OF FUNDS

Pursuant to this Contract’s Section I Clause entitled “DEAR 970.5232-4, Obligation of Funds,” the total amount obligated by the Government with respect to this Contract is $4,000,000. The expenditure of appropriated funds shall be subject to the availability of funds appropriated by the Congress, which the DOE/NNSA may legally spend for such purposes.

B-6 AVAILABILITY OF APPROPRIATED FUNDS

Except as may be specifically provided to the contrary to the Contract’s Section I Clauses entitled “FAR 52.250-1, Indemnification Under Public Law 85-804, Alternate I” and “DEAR 952.250- 70, Nuclear Hazards Indemnity Agreement,” the duties and obligations of the Government hereunder calling for the expenditure of appropriated funds shall be subject to the availability of funds appropriated by the Congress, which DOE/NNSA may legally spend for such purposes.

B-7 PERFORMANCE EVALUATION PLAN (PEP)

(a) Performance Evaluation Plan. A PEP developed by NNSA for this Contract, with Contractor input, shall document the process by which the Contractor’s performance will be evaluated.

The Parties will strive to reach mutual agreement on expected business, operational and technical performance and will work together to establish the performance evaluation plan.

Section B – H, Page 10

In the event the parties cannot come to agreement on the PEP, the NNSA Nuclear Production Site Office Manager reserves the unilateral right to make the final decision, including changes thereto, on all performance objectives, goals, and measures and the methodology used to evaluate Contractor performance. The PEP shall be finalized, whether bilaterally or unilaterally, prior to the start of an appraisal period and incorporated into the Contract at Section J, Appendix B, Performance Evaluation Plan by a formal contract modification executed by the Contracting Officer. The Nuclear Production Site Office Manager may revise the PEP, consistent with Section J, Appendix A, Statement of Work (SOW), during the appraisal period of performance. The Contracting Officer will incorporate any revisions to the PEP through a contract modification. No changes will be made to the PEP with less than 60 days remaining in the appraisal period.

(b) Contractor Appraisal Self-Assessment Report. A periodic self-assessment shall be prepared by the Contractor for consideration by the Government in developing an annual Performance Evaluation Report (PER).

(c) Determination of Performance Incentive Fee

(1) NNSA will evaluate the Contractor's performance against the PEP.

(2) The fee determination will be made in accordance with the PEP and supported by the

PER. The determination as to the amount of fee earned is a unilateral determination made by the Fee Determination Official (FDO).

(3) The NNSA will promptly advise the Contractor in writing of the amount and the basis of the fee determination.

(4) Fee not earned (unearned fee) during the evaluation period will not be made available in future evaluation periods.

(d) Schedule. The Nuclear Production Site Office Manager will issue the FDO’s final total

Performance Incentive Fee amount earned determination in accordance with this Contract. A determination will be made within sixty calendar days after the receipt by the Contracting Officer of the Contractor's self assessment or seventy calendar days after the end of the evaluation period, whichever is later, or a longer period if the Contractor and Contracting Officer agree. Within ten calendar days of the FDO final determination, the Contracting Officer will issue a modification to the contract authorizing the payment of such fee. If the Contracting Officer evaluates the Contractor's performance of specific requirements on their completion, the payment of any earned fee amount will be made within seventy calendar days (or such other time period as mutually agreed to between the Contracting Officer and the Contractor) after such completion. If the determination is delayed beyond that date, the Contractor shall be entitled to interest on the determined total available fee amount earned, less any provisional payments, at the rate established by the Secretary of the Treasury under section 12 of the Contract Disputes Act of 1978 (41 U.S.C. 611) that is in effect on the payment date. This rate is referred to as the "Renegotiation Board Interest Rate," and is

Section B – H, Page 11 published in the Federal Register semiannually on or about January 1 and July 1. The interest on any late total available fee amount earned determination will accrue daily and be compounded in 30-day increments inclusive from the first day after the schedule determination date through the actual date the determination is issued. That is, interest accrued at the end of any 30-day period will be added to the determined amount of fee earned and be subject to interest if not paid in the succeeding 30-day period.

Section B – H, Page 12

SECTION C

DESCRIPTION/SPECIFICATIONS/STATEMENT OF WORK

C-1 STATEMENT OF WORK

The work to be performed is set forth in Section J, Appendix A, Statement of Work.

Section B – H, Page 13

SECTION D

PACKAGING AND MARKING (Reserved)

Section B – H, Page 14

SECTION E

INSPECTION AND ACCEPTANCE

E-1 FAR 52.246-5 INSPECTION OF SERVICES – COST-REIMBURSEMENT

(APR 1984)

(a) Definition. "Services," as used in this clause, includes services performed, workmanship, and material furnished or used in performing services.

(b) The Contractor shall provide and maintain an inspection system acceptable to the

Government covering the services under this contract. Complete records of all inspection work performed by the Contractor shall be maintained and made available to the Government during contract performance and for as long afterwards as the contract requires.

(c) The Government has the right to inspect and test all services called for by the contract, to the extent practicable at all places and times during the term of the contract. The Government shall perform inspections and tests in a manner that will not unduly delay the work.

(d) If any of the services performed do not conform with contract requirements, the Government may require the Contractor to perform the services again in conformity with contract requirements, for no additional fee. When the defects in services cannot be corrected by re-performance, the Government may--

(1) Require the Contractor to take necessary action to ensure that future performance conforms to contract requirements; and

(2) Reduce any fee payable under the contract to reflect the reduced value of the services performed.

(e) If the Contractor fails to promptly perform the services again or take the action necessary to ensure future performance in conformity with contract requirements, the Government may--

(1) By contract or otherwise, perform the services and reduce any fee payable by an amount that is equitable under the circumstances; or

(2) Terminate the contract for default.

E-2 ACCEPTANCE

Acceptance for all work and effort under this Contract shall be accomplished by the Contracting Officer or any other duly authorized representative.

Section B – H, Page 15

SECTION F

DELIVERIES OR PERFORMANCE

F-1 FAR 52.242-15 STOP-WORK ORDER (AUG 1989) ALTERNATE I (APR 1984)

(a) The Contracting Officer may, at any time, by written order to the Contractor, require the

Contractor 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 Contractor, 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 is delivered to the Contractor, or within any extension of that period to which the parties shall have agreed, the Contracting Officer shall either--

(1) Cancel the stop-work order; or

(2) Terminate the work covered by the order as provided in the Termination clause of this contract.

(b) If a stop-work order issued under this clause is canceled or the period of the order or any extension thereof expires, the Contractor shall resume work. The Contracting Officer shall make an equitable adjustment in the delivery schedule, the estimated cost, the fee, or a combination thereof, and in any other terms of the contract that may be affected, 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 Contractor's cost properly allocable to, the performance of any part of this Contract; and

(2) The Contractor asserts its right to the adjustment within 30 days after the end of the period of work stoppage; provided that, if the Contracting Officer decides the facts justify the action, the Contracting Officer may receive and act upon the claim submitted at any time before final payment under this contract.

(c) If a stop-work order is not canceled and the work covered by the order is terminated for the convenience of the Government, the Contracting Officer shall allow reasonable costs resulting from the stop-work order in arriving at the termination settlement.

(d) If a stop-work order is not canceled and the work covered by the order is terminated for default, the Contracting Officer shall allow, by equitable adjustment or otherwise, reasonable costs resulting from the stop-work order.

Section B – H, Page 16

F-2 PERIOD OF PERFORMANCE

The effective date of the Contract is the award date identified in Section A.

(a) The Contract’s period of performance includes:

Transition Term – the effective date of the Contract through April 30, 2013 months;

Base Term – May 1, 2013 through April 30, 2018; and, if exercised;

Option Term 1 – May 1, 2018 through April 30, 2020; and, if exercised;

Option Term 2 – May 1, 2020 through April 30, 2022; and, if exercised;

Option Term 3 – May 1, 2022 through April 30, 2023.

(b) The period of performance of this Contract will expire April 30, 2018, unless sooner reduced, terminated or extended in accordance with the provisions of this Contract. The Contract period of performance may be extended in increments, or portions thereof, for up to an additional period of five years of performance in accordance with Section F, F-5, Evaluation of Performance and Exercise of Option(s). The Contract’s maximum period of performance, including the Transition Term and Options, if exercised, shall not exceed ten (10) years, four months.

(c) The Transition Term shall be for the transition activities identified in Section J, Appendix C, Transition Plan. The Contractor’s responsibility for management and operation of the Sites against the Statement of Work shall commence with the Base Term. The Option Terms 1-3 conditions are set forth in Section F, F-5, Evaluation of Performance and Exercise of Option(s).

F-3 PRINCIPAL PLACE OF PERFORMANCE

The work under this Contract is to be carried out at a variety of locations within and outside the United States, with the principal locations of performance being at the Y-12 National Security Complex in Oak Ridge, Tennessee, the Pantex Plant near Amarillo, Texas, with an option for Savannah River Site Tritium Operations near Aiken, South Carolina.

Section B – H, Page 17

F-4 STOP WORK IN EVENT OF IMMINENT DANGER

In the event that a determination or observation of conditions is immediately dangerous to the life or health of the workers, the public, or the environment, the Contractor shall immediately cease that activity. In the event of imminent danger, any Federal or Contractor employee is authorized to instruct the Contractor to properly stop work. The Contracting Officer must be contacted immediately after the event such that a written Stop-Work order can be issued in accordance with the Contract’s Section F Clause entitled “FAR 52.242-15, Stop-Work Order Alternate I.” The Contractor shall include this clause in all subcontracts to be performed at the sites.

F-5 EVALUATION OF PERFORMANCE AND EXERCISE OF OPTION(S) (THIS

CLAUSE APPLIES TO CLIN 0001 ONLY)

This Contract includes several options: three options (Option Terms 1-3) extend the term of this Contract and an option to include SRTO within the scope of this Contract.

(a) Option Exercise for Additional Term

Gateway Decision: The Gateway Decision is a unilateral decision of the FDO based on the Contractor's performance rating under this Contract in accordance with the Performance Evaluation Plan, and the Contractor’s delivery of cost savings reflected in the cost savings profile in Section J, Appendix D, Merger Transformation Plan. The standard of performance is such that the score in the annual PER must be “very good” or above (or achieve 80% or better) under the Performance Evaluation Plan for the performance years evaluated under the Base Term and Option Terms, if exercised, evaluated below. The Contractor must also meet a minimum of 80% of the total projected cost savings within the cost savings profile in Section J, Appendix D, Merger Transformation Plan for the combined performance years evaluated for each gateway decision point, as reflected in the table below. If the FDO’s decision is to award additional term, the Contract will be modified unilaterally by the Contracting Officer to extend the term of the Contract, after considering NNSA requirements, in accordance with the Contract’s Section I Clause entitled “FAR 52.217-9, Option to Extend the Term of the Contract”.

Option Term 1: Commencing in the fourth year of the Contract, the Contract’s period of performance may be extended for two additional years based on the standard of performance (score) and cost savings noted above.

Option Term 2: Commencing in the sixth year of the Contract, the Contract’s period of performance may be extended for two additional years based on the standard of performance (score) and cost savings noted above.

Option Term 3: Commencing in the eighth year of the Contract, the Contract’s period of performance may be extended for one additional year based on the standard of performance (score) and cost savings noted above.

Section B – H, Page 18

The table below reflects Option Terms 1, 2, & 3.

Gateway Decision Point

Performance Years* Evaluated

Option Years* Available

Option Term 1 Beginning of Year 4*

1-3 6-7

Option Term 2 Beginning of Year 6*

4-5 8-9

Option Term 3 Beginning of Year 8*

6-7 10

*Years are counted from the beginning of the Base Term.

(b) Option Exercise to add SRTO

This option allows for adding the SRTO scope of work to the Contract. If the NNSA determines it is in the best interest of the Government to exercise this option, the Contract will be modified unilaterally by the Contracting Officer to add the SRTO effort. Immediately upon option exercise, the Contractor will be required to provide a Transition Plan including the same elements as noted in Section F, F-7(a) and (b). The Contractor shall also update applicable Contract requirements, as directed by the Contracting Officer, including, but not limited to, the Performance Guarantee(s) and Subcontracting Plan, at the time of option exercise. NNSA may exercise the SRTO option at the end of the first year; however the determination will be based on NNSA mission requirements and other factors.

F-6 DELIVERABLES

The primary deliverables under this Contract are described in the Statement of Work, Section J, Appendix A. To ensure that effective and efficient management systems exist for the management and operation of the sites, this Contract also requires the delivery of documents, plans, and reports for the Contracting Officer’s review and approval. The Contractor shall manage all deliverables required throughout this Contract.

F-7 DELIVERABLES DURING TRANSITION

Alternate due dates for transition deliverables may be suggested after the effective date of the Contract, provided they do not conflict with FAR or DEAR clauses. The Contracting Officer may approve changes in deliverable dates that make transition more effective and efficient for both parties.

In addition to the transition deliverables identified elsewhere in the Contract, the following deliverables shall be submitted during the Transition Term as follows:

(a) Transition Plan. The Contractor shall provide a Transition Plan upon the effective date of the

Contract for the transition activities at the Y-12 National Security Complex and Pantex Plant

Section B – H, Page 19 following the guidance provided at Section J, Appendix C, Transition Plan. The Transition Term is specified in Section F, F-2, Period of Performance. The Transition Plan will become part of Section J, Appendix C, Transition Plan. This Transition Plan is separate from, and in addition to, the Merger Transformation Plan requested in paragraph (e) of this clause.

(b) Transition Cost Estimate. The Contractor shall provide a Transition cost estimate for the transition activities at the Y-12 National Security Complex and the Pantex Plant to the Contracting Officer upon the effective date of the contract. The Transition cost estimate shall include: (1) the costs associated with the Transition Plan; and (2) the costs necessary for the Contractor to meet the transition requirements during the Transition Term. The Transition cost estimate will be subject to approval by the Contracting Officer. For the Contract’s Transition Term, the Contractor shall provide a summary by major cost elements to perform the transition activities and meet transition requirements required during the Transition Term.

(1) The Contractor shall provide a cost summary for the Transition Plan that clearly identifies by cost element, the portion of the cost proposal that pertains to each participant, if a teaming arrangement is proposed, including subcontractors. In addition, each participant and each subcontractor must provide separate exhibits, summary schedules and supporting cost information in the same format and level of detail as required below. A separate transition fee is not allowable.

(i) Labor: Identify proposed transition labor hours and unburdened labor rates by labor category and or/specific individual (including Key Personnel). Explain the basis for the proposed labor hour and labor rate estimates.

(ii) Indirects: Identify the cost elements included in each indirect rate cost pool and allocation base. Explain the basis of estimate for each indirect cost rate proposed and the methods used to derive the proposed rates.

(iii) Materials, Equipment, Subcontracts, and Other Direct Costs: Provide an exhibit that summarizes proposed materials, equipment, services, space/lease costs, travel, and other direct cost items relating to the transition effort. Show the proposed quantity, unit price, and extended amounts, and provide the basis of estimate and supporting documentation used to determine the proposed prices.

(iv) Relocation Costs: A relocation cost estimate shall be provided that separately identifies the proposed travel, services, and other direct costs items related to relocation of Key Personnel and any managers who directly report to them.

(2) The Contractor shall also separately provide a cost summary for accomplishing those tasks required during the Transition Term that are identified in Section J, Appendix A, Statement of Work (Chapter III, 2.0 Workforce Transition). In addition to the requirements of paragraph (b)(1) of this clause, costs proposed must be cross-referenced to the specific tasks in Section J, Appendix A, Statement of Work (Chapter III, 2.0 Workforce Transition) that must be accomplished during the Transition Term. A

Section B – H, Page 20 detailed schedule for accomplishment of these tasks during the Transition Term shall also be provided to support the requested cost estimate.

(c) Community Commitment Plan. The Contractor shall deliver within 120 calendar days after the effective date of the Contract, a community commitment plan that has been discussed between the Contractor and the community. The Community Commitment Plan will consist of commitments between the Contractor and the surrounding communities of the sites under this Contract for purposes of supporting the communities and their economic base. As this plan will not become part of the resulting Contract requirements, reasonable costs associated with the development of the plan will be considered allowable, however costs associated with implementing the plan will be considered unallowable.

(d) Key Personnel Cost Estimate.

(1) The Contractor shall propose initial total Key Personnel compensation costs for each of its Key Personnel for the first year of the Base Term for CLIN 0001 and CLIN 0002 upon the effective date of the Contract. The Key Personnel compensation costs will be subject to approval by the Contracting Officer during the Transition Term. For the first year of the Base Term, for Key Personnel, the Contracting Officer will approve one time salary requests. The Contractor shall provide supporting justification related to internal and external equity for each compensation request. The top contractor official’s reimbursed base salary will serve as the maximum allowable salary reimbursement level. No reimbursement above the limits specified will be allowed under the Contract for the first year of the Base Term.

(2) The Contractor shall separately identify and provide a total summary of the annual compensation costs of the Contractor’s proposed Key Personnel for the first year of the Base Term. Costs shall include annual base salaries, and applicable bonuses, incentive pay, fringe benefits, and other key personnel compensation. For each of the Key Personnel proposed, identify the individual’s position, name, current annual salary, and basis for determining the proposed annual salary. Separately identify and describe the basis of estimate for applicable fringe benefits, incentive pay, bonuses, and any other forms of Key Personnel compensation. Provide narrative support sufficient to explain the development and reasonableness of the proposed compensation costs.

(3) Notwithstanding any other term or condition set forth in the Contract, the compensation reimbursed by the Government for each of the Contractor’s Key Personnel shall not exceed $693,951 or the revised benchmark amount, in any subsequent Government fiscal year, as determined by the applicable Determination of Executive Compensation Benchmark Amount Pursuant to Section 39 of the Office of Federal Procurement Policy Act (41 U.S.C. 435), as Amended, as required in FAR 31.205-6, Compensation for Personal Services; paragraph (p), Limitation on allowability of compensation for certain Contractor personnel. Any amount in excess of the OFPP benchmark must be identified and excluded from the Contractor’s proposed Key Personnel Costs.

Section B – H, Page 21

(e) Merger Transformation Plan (MTP). Section J, Appendix A, Statement of Work, requires that the Contractor provide a “Merger Transformation Plan” for Contracting Officer’s approval within 60 calendar days after the effective date of the Contract. The Contractor may request modifications to the MTP during the Contract term and these changes will be reviewed and approved by the Contracting Officer. The Contractor’s Management Approach and Cost Savings which was submitted by the Contractor in its proposal for purposes of evaluation for award, shall be incorporated as a part of Section J, Appendix D, Merger Transformation Plan. The MTP shall also include Performance Fee Incentives, with associated objectives, measures, and targets to be considered for inclusion in the Contract’s Performance Evaluation Plan (PEP), which may be multi-year, and be used as consideration for additional Contract term. The MTP will contain information that will be utilized for development of the CRP as described in the Contract’s Section I Clause entitled “DEAR 970.5215-4, Cost Reduction”.

(f) Conflict of Interest Compliance Plan. The Contractor shall submit a Conflict of Interest

(COI) Compliance Plan to the Contracting Officer for approval within 60 days after the effective date of this Contract including UPF. The COI Compliance Plan shall address the Contractor's approach for adhering to the Contract’s Section I Clauses entitled “DEAR 952.209-72, Organizational Conflicts of Interest Alternate I” and “DEAR 970.5227-3, Technology Transfer Mission Alternate II” and describe its procedures for aggressively self-identifying and resolving both organizational and employee conflicts of interest. The COI Compliance Plan will also serve as the minimum standards for the conflicts of interest portion of the Contractor’s “written code of business ethics and conduct” which is required by this Contract’s Section I Clause entitled “FAR 52.203-13, Contractor Code of Business Ethics and Conduct.” The overall purpose of the COI Compliance Plan is to demonstrate how the Contractor will assure that its operations meet the highest standards of ethical conduct, and how its assistance and advice are impartial and objective. The COI Compliance Plan shall include the minimum standards at Section J, Appendix Q, Minimum Standards for Contractor’s COI Plans.

(g) UPF Project Management Plan. Section J, Appendix A, Statement of Work, Chapter IV, requires that the Contractor provide an updated “Project Management Plan” for Contracting Officer’s approval within 90 calendar days after start of transition. The Acquisition Executive will maintain baseline control as prescribed in DOE O 413.3B. The UPF Project Management Plan shall be consistent with the Project Management Approach that was submitted with the Contractor’s proposal.

Section B – H, Page 22

SECTION G

CONTRACT ADMINISTRATION DATA

G-1 GOVERNMENT CONTACTS & CORRESPONDENCE PROCEDURES

(a) The NNSA Nuclear Production Site Office Manager for this Contract is the Contractor's primary point of contact for all technical and administrative matters, except as identified in Section G, G-3, DOE/NNSA Patent Counsel, regarding performance of this Contract. The Administrative Contracting Officer is the Contractor's primary point of contact for all contractual matters. The Nuclear Production Site Office Manager and Administrative Contracting Officer can be reached at:

NNSA Production Office, Y-12 Attn: NAME P.O. Box 2050 Oak Ridge, TN 37831-8009

(b) Technical and Administrative Correspondence:

Technical and Administrative Correspondence concerning performance of this Contract shall be addressed to the responsible NNSA Contracting Officer’s Representative (COR), with an information copy to the Contracting Officer. CORs are listed in Section J, Appendix R.

(c) Designation of Contracting Officer’s Representative(s)

The Contracting Officer's Representative’s official delegation of authority will be provided to the Contractor in writing. This delegation will describe the COR's authorities in detail.

However, it is emphasized that only the Contracting Officer has the authority to modify the terms of the Contract, therefore, in no event will any understanding, agreement, modification, change order, or other matter deviating from the terms of the basic Contract between the Contractor and any other person be effective or binding on the Government. When/If, in the opinion of the Contractor, an effort outside the existing scope of the Contract is requested, the Contractor shall promptly notify the Contracting Officer in writing, before proceeding with the COR direction. No action shall be taken by the Contractor unless the Contracting Officer has issued a formal, written contractual change.

If an effort under this Contract requires that an Alternate COR is to perform duties in the absence of the responsible COR, all responsibilities and functions assigned to the COR shall be the responsibility of the Alternate COR acting on behalf of the COR.

Section B – H, Page 23

(d) Contractual Correspondence/Matters

Correspondence involving contractual matters shall be addressed to the Contracting Officer responsible for administration of this Contract. The Contracting Officer for NNSA is Leticia Y. Barela. This individual shall be primarily responsible for all Contractual actions required to be taken by the Government under the terms of this Contract.

Notwithstanding the above, in the event the above named individual is absent for an extended period or an urgent action is required, any other duly appointed Contracting Officer assigned shall be authorized to take the required Contractual action(s) within the limits of his/her authority.

(e) Marking

To promote timely and effective administration, correspondence submitted under this

Contract shall contain a subject line commencing with the Contract Number, as illustrated:

"SUBJECT: CONTRACT NUMBER DE-NA0001942, (insert subject topic after Contract

Number, e.g., "Request for subcontract placement approval").

(f) Distribution

A copy of correspondence addressed to the Contracting Officer shall be provided to the

Nuclear Production Site Office Manager.

G-2 MODIFICATION AUTHORITY

Notwithstanding any of the other clauses of this Contract, a Contracting Officer is the only individual authorized, on behalf of the Government, to:

(a) Accept nonconforming work;

(b) Waive any requirement of this Contract; or

(c) Modify any term or condition of this Contract.

Section B – H, Page 24

G-3 DOE/NNSA PATENT COUNSEL

The Patent Counsel for items concerning patent, intellectual property, technology transfer, copyright, open source, licenses and technical data issues is identified below.