Word copy of MARAD clauses.pdf

U.S. MARITIME ADMINISTRATION

SOLICITATION PROVISIONS AND CLAUSES

Table of Contents

MCL.E-1 DELEGATION OF INSPECTION AND ACCEPTANCE -- AUG 2005

MCL.F-1 STATUS REPORTING -- AUG 2005

MCL.F-2 DELIVERY AND SHIFTING OF VESSELS -- AUG 2005

MCL.F-3 DRY-DOCKING AND BERTHING -- AUG 2005

MCL.G-1 ELECTRONIC TRANSMISSION OF DOCUMENTS -- AUG 2005

MCL.G-2 SCHEDULES AND SCHEDULE UPDATES FOR SHIP REPAIR CONTRACTS -- AUG 2005

MCL.H-1 PETROLEUM -- AUG 2005

MCL.H-2 SUPPLEMENTAL WORK REQUESTS -- AUG 2005

MCL.H-3 INDEMNITY AND INSURANCE -- AUG 2005

MCL.H-4 INDEMNITY AND INSURANCE (ADDITIONAL) -- AUG 2005

MCL.H-5 MARAD RESERVE FORCE SAFETY RULES FOR CONTRACT PERSONNEL -- AUG 2005

MCL.H-6 STANDARDS OF EMPLOYEE CONDUCT -- AUG 2005

MCL.H-7 ENVIRONMENTAL CONCERNS/ASBESTOS RELATED/HAZARDOUS MATERIALS/ PETROLEUM AND

PETROLEUM PRODUCTS: ENVIRONMENTAL COMPLIANCE -- AUG 2005

MCL.H-8 NONDISCLOSURE OF DATA AND INFORMATION -- AUG 2005

MCL.H-9 ENGLISH LANGUAGE REQUIREMENT OF ON-SITE SUPERINTENDENT -- AUG 2005

MCL.H-10 SUPPLEMENTAL GROWTH REQUIREMENTS -- AUG 2005

MCL.H-11 DISPOSITION OF REMOVED EQUIPMENT AND SCRAP -- AUG 2005

MCL.H-12 MARITIME LIENS, NO AUTHORITY TO INCUR -- AUG 2005

MCL.H-13 SUPERVISION -- AUG 2005

MCL.I-1 DISCLOSURE OF CONFLICTS OF INTEREST -- AUG 2005

MCL.I-2 BPA TERMS -- AUG 2005

MCL.L-1 PRE-AWARD SURVEY -- AUG 2005

MCL.L-2 AGENCY PROTESTS -- AUG 2005

MCL.E-1 DELEGATION OF INSPECTION AND ACCEPTANCE -- AUG 2005

The Contracting Officer's Technical Representative shall be delegated the responsibility and authority to conduct inspection and acceptance duties for this contract.

MCL.F-1 STATUS REPORTING -- AUG 2005

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A. A Monthly Status report is required as part of the fixed priced per diem and shall be prepared in 2 copies. As a minimum, the report will cover the following items:

(1) The work performed during the previous month to include at a minimum the monthly or semi-monthly walkover inspection required in Section C and detailed in Technical Exhibits.

(2) Significant findings, problems, delays, inclusions, events trends, etc. of the reporting period which result from or affect the performance of the contract. This would include any event in addition to the monthly or semi-monthly visual inspection. In particular it would include the status of any on-going ship repair or maintenance.

(3) Status report of the work planned for the next reporting period. For example, ABS or Coast Guard inspections; development of specifications for deficiencies.

(4) Specific action required by the Government to assist in the resolution of a problem or to effect the timely progression of the contract.

(5) Reimbursable Work Items: An up-to-date schedule of the work performed and work to be performed on the ship. Two charts shall be presented for the reimbursable work order, one reflecting planned expenditures for the project together with the actual expenditures, and the other reflecting planned project accomplishments versus actual accomplishments in terms of time.

(6) The total amount of reimbursable funds obligated during the reporting period.

B. Semi-annual report

A joint meeting between the Ship manager and the COTR will be held. During this meeting a joint deficiency list will be agreed upon, acknowledgement of the completion of one cycle of Maintenance Procedures will be signed-off by both parties. The Ship Manager will be required to develop specifications within the fixed priced per diem for the correction of deficiencies within a specified time frame.

MCL.F-2 DELIVERY AND SHIFTING OF VESSELS -- AUG 2005

I. Delivery

(a) Unless otherwise specified in the IFB or RFP, the Government shall deliver the vessel to the Contractor at a pre-determined location or point of transfer. The Contractor shall have sole responsibility for preparing the vessel for tow.

(b) Both parties shall mutually agree to any change in the time of transfer due to inclement weather or other unforeseen circumstances.

(c) Prior (no less than 48 hours) to the delivery of the vessel to the Contractor by the Government, it shall be the Contractor's responsibility to:

(1) Obtain United States Coast Guard load-line exemption and "permit to proceed."

(2) Have a recognized salvage association or qualified marine surveyor with expertise in towing requirements to certify the adequacy of the vessel to be towed and the tug(s) to be utilized for the tow.

(3) Provide the tugs, pilots, towing gear, equipment and any necessary riding crews involved in the vessel transfer.

(4) Obtain standard towing liability insurance.

(5) Provide sufficient sanitary facilities on the stern in the event a riding crew is necessary.

(6) Provide documents to the COTR that shall verify that items (1) through (5) above have been completed.

II. Transfer

(a) Upon transfer of the vessel, it shall be the Contractor's responsibility to:

(1) Complete a custody document which shall be countersigned by either the Government's Fleet Captain, Fleet Superintendent or Acting Fleet Superintendent, or Marine Surveyor for outported vessels.

(2) Provide proof to one of the officials referenced in (2.1.1) above that the requirements outlined in Section 1(1.3) of this clause are met.

III. Shifting While the vessel is in the custody of the Contractor, any necessary towage, shifting of the vessel's berth at Contractor's facility, carriage, or other transportation between the vessel and shop or elsewhere, which may be incidental to the work herein specified, shall be furnished by the Contractor without additional charge to the Government.

IV. Final Delivery

(a) After preliminary acceptance of the vessel by the Government's designated representative at the Contractor's facility, the Contractor shall make arrangements with the COTR for re-delivery of the vessel to the Fleet site or other location designated by the Government. The Fleet Captain, Fleet Superintendent or Acting Fleet Superintendent, or Marine Surveyor for outported vessels shall make either conditional acceptance or final acceptance of the vessel at the point of transfer.

(b) Prior (no less than 48 hours) to the re-delivery of the vessel by the Contractor to the Government, it shall be the Contractor's responsibility to:

(1) Obtain United States Coast Guard loadline exemption and "permit to proceed."

(2) Have a recognized salvage association or qualified marine surveyor with expertise in towing requirements certify the adequacy of the vessel to be towed and the tug(s) to be utilized for the tow.

(3) Provide the tugs, pilots, towing gear, equipment and any necessary riding crews involved in the vessel transfer.

(4) Obtain standard towing liability insurance.

(5) Provide sufficient sanitary facilities on the stern, in the event a riding crew is necessary.

(6) Provide documents to the COTR that shall verify that items (1) through (5) above have been completed.

(c) Upon transfer of custody of the vessel back to the Government, the Contractor shall complete a standard custody document and have one of the officials referenced in section IV(a) of this clause countersign this document.

MCL.F-3 DRY-DOCKING AND BERTHING -- AUG 2005

(a) FOR CREWED VESSELS

(1) On entering and leaving Contractor's Facilities, the Contractor shall have charge of and be responsible for the vessel within the limitations of this Contract until the time the Contractor's lines are cast off.

(2) While in dry-dock or on a marine railway, the Contractor shall be responsible for the proper closing of all openings to the vessel's underwater body upon which work is being performed. The Contractor shall keep the COTR or the officer-in-charge of the vessel cognizant of the closure status of all valves and openings upon which the Contractor's workers have been working.

(b) FOR NON-CREWED VESSELS The Contractor shall have responsibility for the vessel from the point of transfer or delivery of the vessel to the Contractor to final redelivery at point of transfer of the vessel to the Government, which shall normally be at the vessel's reserve fleet or layberth moorings.

MCL.G-1 ELECTRONIC TRANSMISSION OF DOCUMENTS -- AUG 2005

During the administration of this contract the Government anticipates the use of the National Business Center's (NBC) electronic commerce infrastructure at http://ideasec.nbc.gov to transmit contractual documents to the contractor. In turn, the NBC site uses the Central Contract Register (CCR) Database at http://www.ccr.gov to obtain contractor email addresses and point of contact information.

Accordingly the contractor must register and maintain their company information at the CCR site in the most up-to-date manner.

MCL.G-2 SCHEDULES AND SCHEDULE UPDATES FOR SHIP REPAIR

CONTRACTS -- AUG 2005

(a) The Contractor shall, within a period of time determined by the Contracting Officer, prepare and submit to the Contracting Officer, with a copy to the COTR, for approval, an electronic copy or other format as directed by the Contracting Officer, a practicable, detailed schedule using appropriate project management software and technology, showing the order in which the Contractor proposes to perform the work, and the dates on which the Contractor contemplates starting and completing the several salient features of the work (including acquiring materials and equipment). Format of the schedule and supporting information shall be in the electronic form and format directed by the Contracting Officer. The schedule shall include a summary in the form of a progress chart of suitable scale to indicate appropriately the percentage of work scheduled for completion by any given date during the period. If the Contractor fails to submit a complete schedule package within the time prescribed, the Contracting Officer may withhold notice to proceed until the Contractor submits the required schedule.

(b) Periodically, with each invoice submitted, or at other intervals as directed by the Contracting Officer, the Contractor shall update the schedule showing the actual progress and estimated times and resources at completion compared with initial project elements. Failure to submit updated schedules with the invoice shall be grounds for the Contracting Officer's rejection of the entire invoice. The revised progress schedule information shall be delivered to the Contracting Officer in the format and at the times directed by the Contracting Officer. If, in the opinion of the Contracting Officer, the Contractor falls behind the initial approved schedule, the Contractor shall take steps necessary to improve its progress, including those that may be required by the Contracting Officer, without additional cost to the Government. In this circumstance, the Contracting Officer may require the Contractor to increase the number of shifts, overtime operations, days of work, and/or the amount of facilities, and to submit for approval any supplementary schedule or schedules as the Contracting Officer deems necessary to demonstrate how the required rate of progress will be regained.

http://ideasec.nbc.gov/ http://www.ccr.gov/

(c) Failure of the Contractor to comply with the requirements of the Contracting Officer under this clause shall be grounds for a determination by the Contracting Officer that the Contractor is not prosecuting the work with sufficient diligence to ensure completion within the time specified in the contract. Upon making this determination, the Contracting Officer may terminate the Contractor's right to proceed with the work, or any separable part of it, in accordance with the default terms of this contract.

(d) The Contractor shall plan and schedule all Open, Inspect, and Report Items as required by the Specifications such that they are accomplished within the first 25% of the availability, unless otherwise agreed by the Contracting Officer.

MCL.H-1 PETROLEUM -- AUG 2005

(a) Sources of fuel: The ship(s) operated under this contract shall obtain fuel (hereinafter in this clause referred to as "fuel") from the following sources listed by priority:

(i) DFSC military stocks

(ii) DFSC contract

(iii) Commercial sources (authorized in the event (i) or (ii) sources are either not available or available only with ship diversion/delay unacceptable to the Government).

(b) The term "reasonable expense" as used in this clause, shall mean all reasonable cost except crew overtime, penalty time, or other additional emoluments, which were necessarily incurred in loading fuel on board the ships, such as expenses incurred at bunkering ports; loading fuel from lighters, barges, or other craft used as lighters-, including lighterage, lighter demurrage, or detention incurred; cost of shifting lighters for the convenience of the ships; handling lighter lines; and such similar expenses which the Contracting officer shall find were necessarily incurred in the loading of fuel on ships during the period of this contract.

(c) Subject to paragraph (f) below, the Government will reimburse the SM for the cost of all fuel procured by the SM and loaded in the ships during the period of this contract. The title to all fuel, for the cost of which the SM is entitled to be reimbursed, shall automatically pass to and vest in the Government upon delivery to the SM or upon the happening of any other event by which title passes from the vendor or supplier thereof to the SM, in the case of any such fuel which is purchased for the performance of this contract. The Government shall be afforded all benefits of the SM's contracts for its fuel requirements.

(d) During the period of the contract, the Government may supply or cause to be supplied any or all of the fuel required by the ships. The Government will supply fuel when the SM is unable to obtain such fuel and the payment of the contract price shall not be reduced for delays caused by the SM'S inability to obtain fuel due to circumstances beyond the SM's control. If the SM loads such fuel the Government shall reimburse the SM for reasonable expenses in connection with such loading.

(e) If any ship or ships under this contract is placed off-hire for any period during the term of this contract, the SM shall present to the Contracting Officer a statement certified by him or his authorized agent showing the amount of fuel on board at the time the off-hire period commenced and the amount of fuel on board when the off-hire period ended. The Government shall be credited for the cost of the fuel consumed during the off-hire period and also reasonable expenses incurred in loading such fuel, such costs to be based upon costs at the previous refueling point.

(f) When commercial sources are authorized in accordance with paragraph (a), the SM shall select fuel suppliers on a competitive basis to the maximum practical extent. Invoices for fuel reimbursement shall contain documentation of competitive quotes obtained. Reimbursement shall be for the cost of fuel plus all reasonable expenses incurred by the SM in loading such fuel on board the ships.

(g) The Government agrees to reimburse the SM for all reasonable expenses incurred by him under paragraphs (c) and (d) of this clause upon certification to and verification by the Government of the original receipted invoices covering such charges of other documents as the Contracting officer may require.

MCL.H-2 SUPPLEMENTAL WORK REQUESTS -- AUG 2005

(a) In the complex world of ship repairs, supplemental work often emerges as a result of test, inspection, or discovery of unknown or otherwise differing conditions. The extent and nature of such supplemental work can neither be identified in bid or proposal specifications, and both parties recognize the possibility that such work may arise. Notwithstanding the possibility of the identification of such work, MARAD does not guarantee the award of any supplemental work during contract performance.

(b) Although MARAD shall be under no obligation to award supplemental work during contract performance, MARAD has provided an estimate for labor (in labor hours) and material (in dollars) for such work in the Schedule (Section B of the solicitation under applicable supplemental work contract line item numbers (CLIN or CLINs)). The offeror shall specify an hourly composite billing rate in its bid or proposal for supplemental work labor. The composite labor-billing rate shall be the rate applicable to labor for all supplemental work that MARAD orders under the applicable supplemental CLIN of the resulting contract. Any supplies or subcontracts required to complete supplemental work will be charged as a direct cost reimbursable under the applicable supplemental work CLIN; additional indirect charges for materials and subcontracts will not be allowed.

(c) During the performance of the contract, when conditions indicate a need for supplemental work, the Contracting Officer's Technical Representative (COTR) is empowered to provide technical direction, negotiate the amount of labor and material, and authorize the contractor to perform supplemental work through the issuance of a written authorization. The COTR will issue authorizations for supplemental work in accordance with the following:

(1) When conditions make supplemental work appropriate, the COTR shall submit to the contractor a supplemental work request that identifies the work to be accomplished.

(2) The Contractor shall promptly review each supplemental work request upon receipt and shall, within seventy-two (72) hours of issuance, or sooner, as specified by the COTR, provide the COTR with a proposed price for the supplemental work. Price proposals for all supplemental work must be broken down by labor hours, materials, and subcontracts and allocated to the applicable supplemental work CLIN as appropriate. The contractor shall price the supplemental work to be performed in accordance with the composite labor rate bid or proposed under the supplemental work CLIN in the contract. If necessary, the Contractor shall submit prices for subcontractors, which will be negotiated and treated as direct materials. Once the COTR and contractor agree on the technical direction and price to accomplish the supplemental work, the contractor and COTR shall sign the authorization for supplemental work, which shall be final and binding on the contractor and MARAD. Subject to paragraphs (c.)(3.) through (c.)(6.), if urgent circumstances do not permit waiting for a written authorization, the parties may orally agree and follow up with written confirmation.

(3) Notwithstanding the preceding, the COTR shall not authorize and the contractor shall not accept individual supplemental work authorizations from the COTR in excess of the price ceiling established by the Contracting Officer pursuant to paragraph (d.)(10.). In addition, the COTR shall not authorize and the contractor shall not accept a supplemental work authorization from the COTR that, when combined with all previously authorized supplemental work under the contract, exceeds the amount of labor hours and materials specified in the applicable supplemental work CLINs.

(4) If the contractor requests an adjustment to the contract completion date in its proposal for the supplemental work, the COTR must refer the issue to the Contracting Officer for resolution, which could include modifying the performance period of the contract. All supplemental work must be accomplished within the contract performance period. The COTR shall not authorize and the contractor shall not accept supplemental work authorizations from the COTR that cannot be completed within the contract performance period.

(5) If the COTR and contractor cannot agree upon the price, the time required, or any other term of a supplemental work request, the matter shall be referred to the Contracting Officer who may resolve the issue in accordance with the procedures contained in the Changes clause incorporated in the contract. Specifically, the Contracting Officer shall have the option of (i) directing that the Contractor perform the work at a price and within a time period determined by the Contracting Officer to be reasonable, or (ii) withdrawing said supplemental work request. The Contractor's refusal to perform the work as directed by the Contracting Officer shall constitute an event of default under the default clauses of the contract. Disputed issues resulting from supplemental work unilaterally directed by the Contracting Officer may be handled under the disputes clause of the contract.

(6) If the Contracting Officer directs the Contractor to perform the work at a price and within a time period determined by the Contracting Officer to be reasonable, the Contractor shall maintain and submit to MARAD on a daily basis, report sheets itemizing materials used, the costs and man hours of all labor (direct, indirect, and impact), production schedule activities affected by and/or related thereto, and charges for equipment, whether furnished by the Contractor, subcontractors or others. Material charges shall be substantiated by valid copies of materials and/or suppliers invoices. Such invoices shall be submitted with the daily report sheets or, if not available, as soon as reasonably practicable thereafter. Said daily reports shall also include an indication as to which specific schedule activity(ies) are affected by the order which are the subject of the daily report sheets. To the extent the contractor fails or refuses to submit the aforementioned daily report sheets on a daily basis, such failure or refusal shall constitute a basis for the Contracting Officer to suspend payment for work completed under the supplemental work until appropriate documentation required by the contract is provided.

(d) The following rules apply to supplemental work authorizations:

(1) The COTR shall authorize supplemental-work only during the period of performance of the contract.

(2) All authorizations for supplemental work are subject to the terms and conditions of the contract and must be within the scope of the contract.

(3) If mailed, an authorization is considered "issued" when MARAD deposits the order in the mail. Authorizations may also be issued orally, or by written communications, that is hand-delivered or sent by facsimile or electronic transmission. Oral orders must be followed up by written confirmation as soon as practicable thereafter.

(4) Unless otherwise explicitly noted in the authorization for supplemental work, all authorizations for supplemental work are firm fixed price. The agreed upon price shall cover all costs including, but not limited to, direct and indirect labor and material, overhead, delay, acceleration, and disruption caused by the supplemental work. Where the parties are unable to agree that an order establishes mutually agreeable terms, the parties shall note the specific differences that are not agreed upon in the text of the proposed work authorization and refer the matter to the Contracting Officer for resolution pursuant to paragraph (c.)(5.).

(5) Unless the contractor otherwise explicitly notes in the supplemental work authorization, in consideration of the price of the order, the Contractor remises, releases, and forever discharges MARAD, its officers, agents, employees, and sureties from any and all civil claims and requests for equitable adjustment whatsoever, relating to, arising out of, or connected with said supplemental work authorization. Such release is full and final settlement of all claims and requests for equitable adjustment relating to, arising out of, or connected with the work authorization, as modified, including, but not limited to, all impact claims such as delay, acceleration, disruption, and cumulative effects of the instant and all previously issued supplemental work authorizations. The executed work authorization constitutes a complete and final adjustment of the price and the delivery schedule.

(6) When MARAD requires supplies or services covered by the contract in an amount less than the total value of the contract, MARAD is not obligated to award supplemental work for the balance of the price bid or proposed for supplemental work. The Contractor is not obligated to honor additional supplemental work in excess of the estimated labor hours identified in the Schedule. This subparagraph does not affect or change the Contracting Officer's authority under the changes clause of the contract.

(7) Except for limitations of labor hours estimated in the Schedule, there is no limit to the number of supplemental work authorizations that may be issued. MARAD may issue supplemental work authorizations requiring delivery or performance in multiple locations, if the contract contemplates multiple locations.

(8) In the event a supplemental work authorization covers a series of related procedures, the Contracting Officer may request the Contractor to furnish separate prices for each item of the work.

(9) If not otherwise provided, the Contracting Officer may request at any time during performance of supplemental work a list of subcontractors performing work covered by the supplemental work, the dollar value of the respective subcontracts, and a description of the subcontracted work and the contractor shall promptly provide the requested information.

(10)The COTR shall not issue and the contractor shall not accept supplemental work authorizations from the COTR that exceeds (Contracting Officer fills in amount up to $5000.)

MCL.H-3 INDEMNITY AND INSURANCE -- AUG 2005

The Contractor shall indemnify and save and keep harmless the Government against any or all loss, cost, damage, claim, expense or liability whatsoever because of accident or injury to persons or property of others occurring in connection with the operations under this contract. The Contractor shall secure, pay the premiums for and keep in force until the expiration of this contract, and any renewal thereof, adequate insurance. Such insurance to specifically include liability assumed by the Contractor under this contract.

Each policy of insurance shall contain an endorsement that any cancellation or material change in the coverage adversely affecting the Government's interest shall not be effective unless the insurer or the Contractor gives written notice of cancellation or change as required to the Contracting Officer. When the coverage is provided by self-insurance, the Contractor shall not change or decrease the coverage without the Administrative Contracting Officer's prior approval.

A certificate of each policy of insurance shall be furnished to the Contracting Officer within ten (10) days after notice of award certifying, among other things, that the policy contains the aforesaid endorsement. The insurance companies providing the above insurance shall be satisfactory to the Government. Notices of policy changes shall be furnished to the Contracting Officer.

The contractor shall provide at the Contractor's expense, within five days of request from the MARAD contracting officer, a copy of all original insurance policies. These may be sent by mail or facsimile machine.

MCL.H-4 INDEMNITY AND INSURANCE (ADDITIONAL) -- AUG 2005

(a) INDEMNITY

(1) The Contractor shall exercise reasonable care and use its best efforts to prevent accidents, injury or damage to all employees, persons and property in and about the work, and to the vessel or portion thereof upon which work is done.

(2) Except as provided elsewhere in this contract, including any guarantee clause, the MARAD assumes the risk of physical loss or damage to any part of the vessel, its machinery, equipment, stores, and other property including cargo if owned by the Government except to the extent that such loss or damage is caused by the negligence, fault, error, act or omission of the Contractor, its subcontractors, agents, or employees. The burden of proving freedom from fault shall be borne by the Contractor. Unless the loss or damage was caused by the willful misconduct of the Contractor, its executive officers, or superintendents the Contractor's liability under this Contract shall not exceed total damage to the ship or ships including total loss up to $5,000,000 per accident or occurrence per vessel, and shall not exceed in the aggregate per accident or occurrence the sum of total damage to the ship or ships including total loss up to $5,000,000 multiplied by the number of MARAD's vessels in the care, custody or control of the Contractor at the location and at the time of the accident or occurrence giving to the loss or damage.

(3) As to third parties, including, but not limited to, agents, employees or servants of the Contractor, or any subcontractor, the Contractor will defend, indemnify and hold harmless the Government, the vessel, its owners and charterers, from all claims, actions, suits, costs, demands and expense of all descriptions arising out of disease, illness, personal injury, death or property damage to any third party in any way related to or arising out of the performance of work under this contract except to the extent caused by the fault, error, act or omission, or negligence of the Government, its agencies or employees. The burden of proving fault of the Government, its agencies or employees shall be borne by the Contractor.

(4) As to loss and damage which are the responsibility of the Government, the Government shall be subrogated to any claim, demand, or course of action against third parties which exists in favor of the Contractor, and the Contractor shall, if required, execute a formal assignment or transfer of such claim, demand, or course of action, and shall aid in securing information, evidence, obtaining of witnesses, and cooperate with MARAD in all matters

MARAD may deem necessary in defense of any claim, or suit or appeal from any judgment or in effecting indemnity, provided, further, that nothing contained in this paragraph shall create or give rise to any right, privilege or power in any person except the Contractor, nor shall any person (except the Contractor) be or become entitled thereby to proceed directly against the Government, its agencies or instrumentalities, or to join the Government, its agencies or instrumentalities, as a codefendant in any action against the Contractor brought to determine the Contractor's liability or for any other purpose.

(b) TYPES OF INSURANCE AND MINIMUM COVERAGE. The Contractor shall at its own expense, provide and maintain the following insurances during the entire performance of this contract.

(1) Workmen's Compensation, including Longshoremen & Harbor Worker's Act coverage -

Covering all agents, servants, borrowed servants, statutory employees of Contractor for all compensation and other benefits required by applicable state and federal law or by governmental authority on account of injury, death, sickness or disease - Statutory - no minimum.

(2) Employers Liability - to cover both injury and death resulting from accident, sickness or disease - $5 million bodily injury by accident, each accident - $5 million bodily injury by disease each accident - $5 million bodily injury by disease in the aggregate.

(3) Maritime Employers Liability (Jones Act) to cover both injury and death resulting from accident, sickness or disease - $5 million for each person per occurrence and $5 million in the aggregate.

(4) Comprehensive General Liability to include coverage for (but not limited to) products and completed operations liability, property damage liability and contractual liability - $5 million combined single per occurrence limit for bodily injury and property damage and $5 million in the aggregate.

(5) Ship Repairers Legal Liability - coverage to be provided under the standard London or American Institute forms or their equivalent $5 million per vessel, per occurrence or such other amount as may be requested.

(6) Pollution - sudden and accidental liability - $5 Million per occurrence.

(c) All such insurance shall be subject to the approval of the Division of Marine Insurance and will contain thirty (30) calendar days advance notice of cancellation or of any non-renewal which is the option of the insurer, said notice to be provided to the U.S. Maritime Administration, Division of Marine Insurance MAR-710, 1200 New Jersey Avenue SE, Washington, DC 20590.

(d) FORM OF CONFIRMATION

(1) The pollution insurance may be a separate policy or part of the Comprehensive General

Liability policy, but the coverage must be specifically shown on the required confirmation of insurance. Excess liability and umbrella liability policies may be used in the excess of primary policies to meet the minimum limit requirements. The United States of America shall be an additional assured in the Ship Repairs Legal Liability policy, Comprehensive General Liability Policy and Pollution Policy. Such policies shall contain a clause statement that there is no recourse against the United States of America for payment of premium. All such insurance shall be subject to the approval of the Division of Marine Insurance and must contain thirty

(30) calendar days advance notice of cancellation (without disclaimer) or of any non-renewal which is the option of the insurer, said notice to be provided to the U.S. Maritime Administration, Division of Marine Insurance MAR-710, 1200 New Jersey Avenue SE, Washington, DC 20590.

(2) The Contractor shall have its insurance broker provide a detailed certificate of insurance, cover note or policy confirming the above required coverage. The confirmation shall name the Contractor and United States of America as assureds and confirm the types of coverage, policy forms, policy periods, deductibles (if any) and underwriters with their percentage of participation. The N.Y. Suable Clause or Service of Suit USA Clause must be confirmed for any Foreign underwriter placements. The policy amounts, terms and conditions, deductibles and underwriters shall at all times be satisfactory to the Maritime Administration.

(e) The contractor shall insert the substance of this clause in subcontracts under this contract that require work on a Government installation.

MCL.H-5 MARAD RESERVE FORCE SAFETY RULES FOR CONTRACT

PERSONNEL -- AUG 2005

1. Personnel shall be protected by personal flotation devices (life vests) while in the act of embarking or disembarking from any fleet vessel where the possibility of falling into the water exists; while working from small boats, skiffs, or floats; while working near unguarded edges of decks of vessels afloat; or while engaged in any over-water work. At Fleet sites, the flotation devices will be provided by the Fleet and must be returned each day upon departing the Fleet.

At outported ships, contractors must furnish their own flotation devices.

2. All passengers riding in personnel boats in MARAD's Reserve Fleet locations shall ride below topside while the boat is in transit, and shall remain below until the boat is properly secured either alongside the accommodation ladder or the pier side, and until the operator notifies the employees to disembark.

3. Personnel aboard all craft shall remain inside of the bulwarks and railings and at no time ever will anyone sit on top of bulwarks or rails.

4. Personnel shall not descend from the deck of any ship onto the accommodation ladder or landing platform to wait for transportation. No more than five (5) descending individuals are permitted on the accommodation ladder at one time and they shall be equally spaced. This directive also applies to ascending ladders. This requirement also pertains to outported ships when personnel descend from the deck of the ship to a pier, or ascend from the pier to the deck of the ship.

5. Ringbuoys with a minimum of 90 feet of nylon line attached are available at the head of each gangway and on the stem of Fleet craft, power barges, tugs, and at the Fleet pier for use by Contractor personnel in emergency situations.

6. When working with mooring lines, all ends of such lines shall be left coiled neatly and areas left clear.

7. Smoking is prohibited aboard vessels except on open decks or in places designated as smoking areas. Smoking is not permitted at all aboard tankers. Also, smoking is prohibited during fueling and cleaning operations of any kind. This includes during the filling or emptying of cans of gasoline, xylene, varsol or any other combustible or flammable liquids or gas.

8. Cigarette butts shall not be thrown over the side of any vessel. While at the dock, no cigarette butts shall be thrown onto the dock or into the water. Sand containers or ashtrays are provided in designated smoking areas. Paper and trash are not to be placed in ashtrays.

9. All debris, oily rags, industrial wipers, etc., will be removed from the ships and working areas.

These areas are to be left in clean condition and all materials stowed neatly at the end of each workday. No rags, cups or other trash, oils, fuels, greases, chemicals, lumber, etc., shall be thrown overboard. Fleet Guide will inform personnel of the disposal container locations.

10. Contractor employees are required to wear safety shoes with impact-resistant toes and slip resistant sole material for protection against falling or rolling objects, sharp objects, molten metal, hot surfaces, and oily or wet slippery surfaces. Shoes with loose soles, heels, and laces, or otherwise in poor condition, will not be permitted. Athletic and Cowboy boot-type safety shoes are prohibited.

11. All personnel working at the Fleet shall wear and/or use OSHA/NIOSH approved safety equipment, as required, including personal protective equipment, safety belts and securing lines, and safety glasses.

12. Protective hard hats shall be worn while aboard ships or in any other areas where head injury hazards exist. At MARAD's Reserve Fleet locations, a lighted miner's lamp, supplied by the Fleet, must be worn at all times while in dimly lit areas. The lamps are to be returned to the lamp room each day prior to departing the Fleet. At outported ship locations, contractors are required to provide their own flashlights, etc.

13. Safety glasses or goggles shall be worn while in the vicinity of any operation generating matter which might strike or lodge in the eyes. Such operations include, but are not limited to, scaling rust, water-blasting, Aqua Dyne water-blasting, sandblasting, operating a skill saw, grinding, handling batteries, boiler cleaning, and anchor windlass operations.

14. Ear protection (plugs or muffs) must be worn whenever exposed to loud noises.

15. Consistent with 29 CFR 1910.134, respirators shall be worn while scraping paint, during sandblasting, spraying, or other operations where dust, fumes, airborne particles, or noxious gases may be present.

16. If waterblasting, protective gear shall be worn consisting of a hard hat, safety glasses, face shields, shin guards (baseball type) and steel rigid guard foot protectors.

17. If sandblasting, protective gear consisting of leather gloves, hood, and leather apron shall be worn.

18. When assisting with welding-burning, metal frame flash goggles/glasses shall be worn. The Welder/Burner shall provide the goggles/glasses and shall instruct personnel in their proper use.

19. Contractors must report all accidents resulting in injury, regardless of how slight it may be, to their supervisor, to the Fleet Superintendent, and to the Safety Assistant, or at outported ship locations to the Ship Manager or MARAD representative so that the injury can be treated, if necessary, and recorded. This must be done before leaving the Fleet site or outported location on the day of injury or at the soonest practical time in the event of severe injury.

20. Asbestos Hazard Considerations - Exposure of unprotected personnel to airborne asbestos fibers shall be prevented. While many studies and air sampling have been conducted under varying conditions within the Reserve Fleet environment, no conditions have been found to require special protective clothing or breathing protection. However, all work requiring direct contact with asbestos, conducted within the environment of asbestos, or work in any other way associated with asbestos will be critically evaluated by the cognizant Contractor's supervisor before proceeding. The following general policies will apply:

(a) The Contractor shall inform his/her personnel to be alert to the hazards associated with asbestos and the personnel shall be instructed in the use of respirators.

(b) When work requires direct contact with asbestos, is conducted within the environment of asbestos, or work is in any way associated with asbestos, Contractor personnel shall be required to wear a half-mask, air- purifying respirator, other than a disposable respirator, equipped with high-efficiency filters.

(c) Air pressure/air hoses shall not be used to blow down engine rooms in the process of cleaning when friable asbestos is known or suspected to be present in the area being cleaned. Also, broom sweeping such debris is prohibited. Only vacuum cleaning equipment with special filter attachment is authorized for this purpose, unless vacuuming and/or wet cleaning are not feasible.

(d) Major rip-outs, repairs or removal of asbestos located at any MARAD facility or aboard any vessel under MARAD jurisdiction shall not be conducted by Contractor personnel unless authorized by MARAD.

(e) Asbestos warning signs shall be posted at the access door of all regulated areas.

21. No work shall be performed in any void, tank, or compartment until such tank, void, or compartment has been declared gas free and possessing sufficient oxygen after being tested by trained personnel.

22. Contractor personnel shall not inspect or perform work in holds or tanks of ships without another contractor personnel observer standing by to get help, if necessary, nor shall an individual work on a ship upon which no other personnel are present.

23. Contractor personnel shall not be allowed to work aloft on staging, masts, etc., without using OSHA prescribed safety belts and securing lines with approved fastenings and without Contractor supervision and instructions during the operation.

24. No openings shall be left unprotected. This includes the removal of hatch boards, bilges, manhole covers, floor plates, and any other opening into which a person may inadvertently step or fall. All areas with an opening which cannot be closed shall be roped off.

25. Gangway doors and sideports on vessels not equipped with gangways shall be closed and secured. In the event the door is missing or it cannot otherwise be closed, the opening shall be chained off or wired with several strands of heavy wire.

26. When using gasoline powered equipment in enclosed spaces, adequate ventilation for the dissipation of exhaust fumes must be provided.

27. Electrical lines, air lines, hoses, etc., used in preservation work shall be triced up on deck clear of walkways and passage areas.

28. Under no circumstances shall any Contractor personnel cross from ship to ship by any means other than gangways properly fitted with hand rails. Prior to installation of a permanent walkway between ships, a portable walkway with rails shall be utilized.

29. When ascending or descending ladders, at least one hand shall be free to grasp hand rail.

30. Gasoline, varsol, xylene, and other flammable or combustible liquids brought onto the ship shall be brought to the attention of the Fleet Representative and, on outported ships, to the attention of the Ship Manager or MARAD representative, and shall be stored in, and dispensed from, OSHA or NIOSH approved safety containers. Such cans shall be inspected and properly marked as follows:

(a) Cans painted red and stenciled: "VARSOL", "XYLENE" or "GASOLINE", as applicable

(b) Cans painted yellow and stenciled: "LUBE OIL" or "PRESERVATION OIL," as applicable

(c) Cans painted red with a white band and stenciled: "KEROSENE"

31. Drip tanks or pans shall be used when parts are being cleaned and when draining oil or fuel from motors, engines, etc. Varsol, xylene or other solvents will be used from approved safety cans.

32. Safety can valves and flexible metal hose spouts must never be painted. They are to be treated with preservation oil.

33. At MARAD's Reserve Fleet locations, outboard motor operators must leave gas can vents open when they store them on the access can rack.

34. Under no circumstances shall Contractor personnel wear gloves, jewelry (especially neck chains), neck ties, long sleeves, loose clothing, or wear his/her shirt tail out when working around exposed moving machinery.

35. Metal shavings shall be cleaned up from around machines by means of brushes and properly disposed of.

36. Oil spilled in decks, ladders, etc., shall immediately be wiped up and the decks, if necessary, sanded. On vessels sprayed with an oil or paint mixture, all gangways, passages, and areas in use shall be sanded. Appropriate signs shall be posted at all entrances to areas where slippery conditions are considered to exist.

37. Flame burning/cutting and welding shall be kept to a minimum at the Fleet, and shall be accomplished by qualified Contractor personnel only when duly authorized by Fleet Representative, and in accordance with existing fire prevention regulations. Before any welding or hot work is performed, a permit must be issued by the Fleet representative, and a fire watch set. On outported ships, the Ship Manager shall ensure that all hot work is cooled off and there is no danger of fire.

38. Never look directly at arc welding because of the potential for serious eye injury.

39. At MARAD Reserve Fleet locations, prior to any personnel working over the side of, or in a precarious location or position inside of a service craft at the access dock (where applicable), the warning light at the end of the dock shall be activated.

40. Whenever lumber is removed from a structure, nails shall be withdrawn or bent over immediately as part of the operation to prevent possible injury.

41. Liquid fuel operated space heaters shall be operated only when properly installed and vented to the outside. Propane gas bottles are not to be placed in the area of the heater. Gas bottles must be left on the open decks and fed into the heated spaces by a hose. Space heaters are not to be left on when unattended and a CO2 extinguisher must be in the area of the space heater. All electrical space heaters must be UL approved.

42. Contractor Personnel shall promptly report all potentially dangerous areas and conditions to a MARAD representative.

43. The flooding alarm system carries 110 volts and if wiring is cut accidentally it could cause a fire.

If when working in the engine room of a ship it becomes necessary to move the ball switches out of the way of an area which is to be preserved, they should be handled very carefully. Do not tilt or disconnect, but merely lift straight up by the ribbon and then lower into place after the job is completed. See that no damage is done to this equipment by wash down hoses, oil spray hoses, etc.

44. Straight ladders, whenever and wherever used, shall be made of metal, except when performing electrical work, then wooden or other non-conductive ladders shall be used, and shall be rigidly inspected prior to use. Use of such ladders shall be kept to a minimum.

Whenever using straight ladders to board ships, metal ladders should be used and secured at top to railing of ship. Also, step ladders of the proper size shall be used where warranted. Boxes, chairs, etc., shall not be used in lieu of step ladders. All ladders shall conform to OSHA standards.

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