ML20024B033
| ML20024B033 | |
| Person / Time | |
|---|---|
| Site: | Crane  |
| Issue date: | 03/24/1967 |
| From: | BABCOCK & WILCOX CO. |
| To: | |
| References | |
| TASK-*, TASK-GB GPU-0192, GPU-192, NUDOCS 8307020068 | |
| Download: ML20024B033 (60) | |
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' DRAFT 3/24/67 i
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_ CONTRACT
_FOR
_ NUCLEAR EQUIPMENT For The Three Mile Island Nuclear Station Between Metropolitan Edison' Company and The Babcock & Wilcox Company C f0 set Exh.Forin iTA N v-
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Charles.Shapiro CSR Doyle Reporting Inc.
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B307020068 670324 PDR ADOCK 05000289 i
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0 0-INDEX
, Article Page No.
I SCOPE OF SUPPL"..................
1 A.
Equipment.
1 B.
Services..................
2 C.
Fuel Supply.
8
'D.
Spare Parts................
8 II CHANGES IN PLANT DESIGN.
.......9 A.
Changes W1' thin B&W's Scope of Supply Other Than Changes Due to AEC Licensing Requirements.
9 B.
Changes Within B&W's Scope of Supply Due to AEC Licensing Requirements.
10 C.'
Changes in the Plant Equipment or
. Structures Not Within B&W's Scope of Supply Due to AEC Licensing Requirements.
13 D.
Choice of Changes in Plant Design....
17 E.
Limitation on Financial Responsi-bility of B&W.
17 F.
Control Rod Drives.
17-G.
Site Suitability..
18 0
e (1)
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INDEX Page No.
DELIVERY, SCHEDULE AND RISK OF LOSS.
. 19 A.
Delivery and Schedule.
. 19 B.
Risk of Loss.
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CONTRACT PRICE AND TERMS OF PAYMENT.
. 21 A.
Contract. Price.
. 21 B.
Terms of Payment.
. 21 PLANT WARRANTIES.
...............22 A. ' System Performance.'.
4 i.
. 22 B.
Design, Workmanship and Materials.
. 27 PRECPsRATIONAL TESTING, PRELIMINARY AND FINAL ACCEPTANCE.
31 A.
Preoperational Testing.
31 B.
Preliminary Acceptance.
31 C.
Final Acceptance.
32 D.
Release by Preliminnry and Fin'al Acceptances.
32 INDEMNITY AND INSURANCE.
33 A.
Meted.
33 B.
B&W.
...............35 PATENT INDEMNITY,...............38' 9
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O-INDEX Article Page No.
IX GOVERNMENT AUTHORIZATIONS.
40 A.
AEC Licensing.
. 40 B.
Regulatory Approvals By Other Governmental A encies..
42 6
X TAXES.
43 XI DELAYS - DAMAGES................44 XII CONSEQUENTIAL DAMAGES.
45 XIII ASSIGNMENT AND SUBCONTRACTING.
46 A.
Assignment..
46 B.
Sabcontracting.
.'. 46 XIV FOUNDATIONS.
. 47 xv STEEtwCRx.....................
48 XVI ARBITRATION.
. 49 XVII NOTIFICATION OF CLAIMS.
50 XVIII CANCELLATION BY Meted.
51 XIX CONTRACT CHANGES AND EXTRA WORK.
52 XX' ADMINISTRATION OF CONTRACT.
53 XXI -
' GOVERNING LAW.
54 XXII WAIVERS..................
55 Xnn INTEGRATION.
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CONTRACT FOR NUCLEAR STEAM SUPPLY SYSTEM This contract, entered into between Metropolitan Edison Company, a Fennsylvania corporation (hereinafter re-ferred to as Meted) and The Babcock & Wilcox Company, a New Jersey corporation, (hereinafter referred to as B&W),
is effective a's'of November 15, 1966.
Article I - Scope of Supply A.
Ecuipment (1)
B&W shall supply to Meted at Philadelphia, Pa. on barges. the reactor vessel and at railhead, Reading, Pa. the balance of equipment of the chemic'al shim pressurized water reactor nuclear steam supply
. system having a base capacity of 2351 MWt and certain auxiliary equipment and systems.
(2)
The nuclear steam supply system and the auxiliary equipment and systems to be provided by B&W are t
described in the Technical Description set forth in Appendix A to this contract (hereinafter re-ferred to as "the Technical Description").
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O B.
_ Services B&W shall furnish the following technical services on a timely basis in support of plant design, construc-tion, licensing, and operation.
All information and documents furnished by B&W shall be complete and ade-quate to meet plant design and test requirements and applicable codes and regulations.
(1)
Equipment and Systems Supplied 'by Babcock & Wilcox (a)
B&W shall cooperate with Meted, Gilbert Asso-ciates, Inc., its architect-engineering con-tractor, and United Engineers and Constructors, Inc., its construction management contractor, in their performance of the design, construc-tion and inspection of' the power plant.
(b)
B&W shall furnish to Meted, on a timely basis, for use in connection with the design, erectibn and operation of the Three Mile Island Nuclear Station, as many copies, as Meted may reason-ably require, of progress reports, production and fabrication schedules, preliminary and final drawings, plans and specifications, diagrams and other engineering data for all the equipment and systems to be supplied by it hereunder.
Within a reasonable time after receipt, Meted shall check, approve and return one set of such reports, schedules, drawings,
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and data to S&W.
Such check and approval shall not relieve B&W of any of its obli-gations under this Contract.
(c)
Prior to preliminary acceptance of the nu-clear steam supply system, B&W shall furnish to Meted for its use for or in connection with the Three Mile Island Nuclear Station, a complete set of permanent, reproducible as-built drawings of all equipment and sys-
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tems supplied by B&W under this Contract.
(d)
B&W shall transmit two copies of the follow-ing documents.to Meted as they are issued by B&W, or as received by.B&W, as the case may be:
(1)
Descriptive material as available for all items procured from subcontractors,
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(ii)
Certificates of inspections and tests as required by state and local regula-tory authorities received by,B&W for the equipment and systems to be de-livered hereunder.
j (2)
Licensing Assistance B&W shall assist Meted in obtaining all government authorizations necessary to permit construction and operation of the Three Mile Island Nuclear Sta-i tion as provided in Article IX of this Contract.
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1 (3)
Public Relations B&W shall provide competent personnel to partic-ipate in public presentations of technical infor-mation at the request of Meted.
(h)
Training B&W.shall assist Meted in preparing, staffing and providing a training program f6r approximately 30 employees of Meted, as described in Appendix B to
.this Contract.
(5)'
operation and Maintenance B&W shall provide Meted with:
(a)
Ten copies each of installation, operating and maintenance instruction books for equip-ment and systems furnished by B&W, and (b)
Ten copies of such other information for in-corporation into the Plant data book and Plant start-up, operating and maintenance manuals, as Meted may reasonably request.
(6)' Design," Installation and Construction (a)
During the design, fabrication and testing of the equipment and systems t'o be supplied here-
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under, B&W shall permit employees of Meted and of its agents to observe design, fabrication and testing work performed under this Contract at BkW facilities, and shall furnish suitable office facilities for such employees.
Any 1
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o proprietary information concerning the products or' manufacturing processe's of B&W, its suppliers and subcontractors which are designated as pro-prietary information by B&W and disclosed to the employees of Meted or its agents incident to the performance of this Contract shall re-main the property of B&W and shall be disclosed in confidence, and no rights are granted to Meted or its agents or other employees to pro-duce or have produced any such products or to i
practice or cause to be practiced any such manu-facturing processes.
The employees of Meted or i
of its agents shall remain employees of Meted or its agents, as the case may be, for all pur-poses during the design, fabrication and testing of the equipment and systems to be supplied here-s under, and their salaries, travel, communication; and living expenses shall be paid by Meted or'its agents, as the case may be.
B&W shall have no obligation to provide Workmen's Compensation or Occupational Disease Act coverage for any type of employee.
B&W will be liable for personal injury or property damage arising out of such employee's activities at B&W facilities only to the extent that such liability is covered by its existing insurance policies or pro rg ams, e
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Any liability for damage in excess of MW's applicable i
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existing insurance coverage or programs and liability to such employees under Workmen's Compensation and Occupational Disease Acts shall be the responsibility of Meted.
(b)
B&W shall furnish the services of experienced, competent individuals to provide on-site tech-nical advice and consultation, including erection procedures and quality standards, with respect to the installation and erection of the nuclear steam supply system and aux 11-iary equipment and sys'tems furnished under this contract.
Such technical adv5.ce and consultation shall accurately reflect the best judgment of B&W.
Meted shall provide suitable office facilities for such ind.ividuals, who shall, however, remain employees of B&W, which shall be respons.ible for their salaries, i
travel and living expenses.
(c)
No warranty with respect to erection workman-ship performed by, or on behalf of, Meted shall be implied from the consultation services i
i furnished by B&W under subparagraph (6)(b) of this section.
Any defective erection workmanship,
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o o-whether discovered in the course of erection or subsequent thereto is to be remedied at the expense of Meted and/or its construction management contractor.
(d)
Except as provided in the Technical Descrip-tion, Meted shall furnish all erection labor, tools, rigging, cranes, trucks and facilities 4
required to unload, handle and erect the equip-ment furnished hereunder.
(7)
Preoperational Testing, Low Power Testing, and System Performance Testing (a)
B&W shall furnish to Meted such technical as-sistance for equip' ment and systems preoper-ational testing, low power testing and nuclear
. steam supply system performanc'e testing cover- -
ing its scope of supply as Meted may reason-ably require.
The technical assistance re-
. quired may include routine testing equipment,
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qualified personnel, detailed written testing procedures, review and approval of testing procedures prepared by others and detailed written analyses and interpretations of test results.
(b)
Representatives of B&W will be authorized only to advise and consult with Meted and will not be authorized to operate the equipment.
All
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preoperational testing, preliminary operations and demonstration of performance guarantees shall be performed by Meted.
C.
Fuel Supply All reactor internals other than fuel assemblies are pro-vided under this contract as part of the nuclear steam supply system.
The supply of fuel assemblies for the plant is the subject of a separate contract between Meted and B&W and is outside the scope of this Contract.
D.
Spare Parts Spare parts may be the subject of a separate agreement between Meted and B&W and are not included in the scope of this Contract.
B&W shall provide Meted with unit prices of recommended spare parts for equipment. fur-nished by B&W, including special tools and items requir-ing periodic replacement, from time to time as procure-ment proceeds.
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i Article II - Changes in Plant Design A.
Changes Within PlcW's Scope of Supply Other Than Changes Due to AEC Licensing Requirements (1)
_ Changes by Meted As B&W's work progresses, it shall furnish to Meted the drawings, diagrams and other data described in Subsection B(1)(b) of Article I hereof.
Meted shall review the drawings, diagrams and data as expedi-tiously as practicable, giving dug consideration to their complexity and to B&W's procurement and fab-rication schedules.
If Meted desires to have B&W make any change in the design, equipment and sys-tems reflected in the drawings, diagrams and other data, it shall immediately furnish to B&W a descrip-tion of the proposed change.
B&W shall make the change.if in its opinion the change will no.t ad-versely affect the safety of the plant or B&W's warranty obligations.
The contract price and the performance schedules shall be equitably adjusted to reflect any change in the cost or time of per-formance due to the design change.
(2)
Changes by B&W.
B&W may make changes from the Technical Description' without additional cost to Meted, if necessary to meet its guarante'ed performance or warranty obli-gations as contained in this Contract.
All other.
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changes by B&W shall be subject to review by Meted which may disapprove any proposed change which b
would have adverse effects on plant operability or availability or upon operating and maintenance costs or upon balance of plant costs or upon.the plant completion schedule.
B.
Changes Within B&W's Scope of Supply Due to AEC Licensing Requirements r
(1)
If, prior to preliminary acceptance, as defhed in Article VI of this Contract, modifications in the equipment furnished by B&W are required as a result of requirements of the U. S. Atomic Energy Commission to secure and ma;intain an AEC construc-i tion permit and an AEC operating license, B&W shall make such modifications at its expense.
If, sub-sequent to preliminary acceptance but prior to final acceptance, as defined in Article VI of this Contract, modifications in the equipment furnished by B&W are required as a result of requirements of the U. S. Atomic Energy Commission directly and primarily related to an increase in the steam out-put of the nuclear steam supply system from its
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initial warranted output to its additional war-ranted output, as respectively defined in Article V A(1) and Article V A(2) of this Contract, B&W shall make such G
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The responsibilities
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provisions of Section E of this Article II.
(2)
B&W recognizes that the AEC operating license may contain conditions requiring that some minimum number,of systems and components of the Auxiliary and Engineered Safeguards Systems furnished by B&W hereunder must be opert.ble in order to operate the reactor at the warranted output level.
If prior i
to preliminary acceptance, as defined in Article VI
' f this contract, the AEC requires, or B&W specifics, o
that any systems or components of such Auxiliary and Engineered Safeguards Systems must be removed
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from service for scheduled routine maintenance work in between scheduled refuelings and if such removal 9
would require a reactor shutdown or a reduction in load below the warranted output level, B&W at its expense, shall' modify the equipment and systems furnishe'd hereunder or shall furnish, within its scope of supply, sufficient redundant systems or components to permit operation at the warranted output level.
B&W also recognizes that the AEC operating license will require that certain sys-tems and components of such Auxiliary and Engineered l
Safeguards Systems will be subject to routine per-iodic test or inspection.
If prior to preliminary 11
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1 acceptance, as defined in Article VI of this Con-tract, the AEC requires that any test or inspection of systems or components of such Auxiliary and En-gineered Safeguards Systems be made in between scheduled reactor shutdown, and if such test or inspection would require a reactor shutdown, B&W, at its expense, shall modify the equipment and sys-tems delivered hereunder or shall provide means to carry out the required test and inspection without a reactor shutdown.
B&W shall not be responsible t
for field labor costs of Meted or any balance of plant equipment or systems costs under the pro-visions of this paragraph or paragraph (1).
The responsibilities of B&W under this paragraph shall be subject to the provisions of Section E of this Article II.
(3)
The Technical Description is based, wherever appro-priate, on the site data for the ihree Mile Island site, as submitted to B&W in reports from Pickard, Lowe & Associates and Gilbert Associates, Inc.,
dated September 7,, 1966.
In the event changes in or additions to such site data require modifications in the Technical Description, the contract price shall be equitably adjusted, upward or downward, to reflect changes in costa due to such changes in or additions to the site data.
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o (4)
As used in this Section B, the terms "m5d.fy" or
" modifications" include the provision of additional items of the kind within B&W's scope of supply as well as items which are in neither B&W's nor Meted's scope of supply but whose functions are more similar to the functions of equipment within B&W's scope of supply than the functions of the equipment in Meted's scope of supply.
C.
Changes in the Plant Equipment or Structures Not Within B&W's Scope of Supply Due to AEC Licensing Requirements (1)
B&W has furnished certain desi n criteria for cer-6 tain equipment, systems and' structures for the balance of the plant to be provid'ed by Meted, a copy of which is set forth in Appendix C to this Contract (the Design Criteria so furnished being,
h'ereinafter referred to as the " Design Criteria").
Except as set forth in Section '2lof this Para-'
graph C, B&W shall be responsible for changes in the Design Criteria under the circumstances and to the extent provided in this Paragraph ~ C.
(2)
(a)
B&W has provided pressure and temperature De-si n Criteria for the containment building 6
y based upon an assumed containment volume and heat sinks.
If, for equivalent containment
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O Volume and heat sinks, AEC requires that the reactor containment be designed for higher pressures or temperatures, this requirement 3
shall be deemed to be a change in Design Cri-teria covered by this Paragraph C only if such require.nent is for the purpose of controlling energy releases and if c.11 other Design Cri-teriajwhich relate to the control of energy releases and removal and [which hva a a d andf -
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1 =t Icletien.;dp]to the AEC requirement have j
been met.
j (b)
The Design Criteria do not provide for the failure of the' reactor vessel in whole or in J
part or any consequence thereof.
If changes in. the Design Criteria are required because 1
of any such failure or consequence, B&W shall-not be responsible for such changes.
l (c)
The Design Criteria for internal missile pro-
' ection assume that rupture of the reactor t
vessel or vessel head is not credible and con-template that restraints will be provided by Meted to prevent the major components of the reactor coolant system, including the reactor '
coolant piping, pressurizer and steam gener.
i ator, from becoming missiles.
If changes in the Design Criteria are required because AEC-e 9
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or vessel head, or against the major compon-ents of the reactor coolant system, as poten-tial missiles, B&W shall not be responsible for such changes.
(d)
The Design Criteria do not provide for the ejection of more than a single control rod.
If changes in the Design Criteria are required because of the actual or hypothetical ejection of two or more control rods, E&W shall not be responsible for such changes.
(e)
The Design Criteria set forth certain prelda-inary seismic criteria.
BkW shall not be re-sponsible for changes in such criteria or for any geological conditions affecting the seismic design of any balance of plant equipment, sys-tems or structures to be provided by Meted.
(3)
SubjecttotheprovisionsofSection(1)andSection(2) of this Paragraph C, if prior to preliminary accept-ance as defined in Article VI, changes in the Design Criteria are required to secure and maintain an AEC construction permit and AEC operating license, B&W shall share equally with Meted the first one million l
dollars ($1,000,000) of the cost of modifications to the balance of equipment, systems and structures covered by the Design Criteria to; satisfy the required L
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Subject to the pro-visions of Section E of this Article II, B&W shall be responsible for the entire cost of such mod A
ifications in such equipment, systems and struc-S tures in excess of one million dollars ($
(4)
The Design Criteria are based, wherever appropriate N
on the site data for the 'Diree Mile Island site as submitted to B&W in reports from Pickard, Lowe as Associates and Gilbert Associates, Inc., dated September 7, 1966.
In the event of changes in or additions to such site data, the Design Criteria shall be revised by B&W to reflect properly such changes or additions and B&W shall not be liable under this Section C for the cost of modifying the
. equipment, systems, and structures as a result of such revisions in the Design Criteria.
(5)
Except to the extent that B&W has assumed resp on-sibility for Design Criteria relating to the equip ment, systems, and structures, modifications in such equipment, systems, and structures which are I
necessary to match any changes which B&W may make in its scope of supply.in order to meet AEC licen ing requirements will be the financial responsi s-bility of Meted.
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D.
_ Choice of Changes in Plant Design If an AEC requirement can be satisfied by either a mod-ification of the equipment to be furnished'by B&W or of the equipment or structures to be provided by Meted, the choice of change shall be made by mutual agreement with
'due regard for the effect of each alternative on plant
. availability and plant operating and maintenance costs and the cost to B&W of each of the alternate methods.
E.
Lbnitation on Financial Responsibility of B&W The total liability of BkW for the cost of changes under Sections B, C and D of this Article II shall not exceed the contract price for the nuclear steam supply system.
,The time of performance shall be. appropriately adjusted to reflect delays occasioned by changes required under Sections B, C and D of this Article II.
F.
Control Rod Drives (1)
The Diamond control rod drives, proposed by B&W, must be satisfactorily tested, and accepted by the AEC Division of Reactor Licensing by January 1968.
(2)
In the event that both the ratisfactory testing and the AEC acceptance are not. achieved by Jan-uary 1968, B&W agrees to furnish, at no additional cost to Meted, an al' ternate control rod drive accept-able to Meted.
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If the Diamond control rod drive is' both satis-factorily tested, and accepted by the AEC Division of Reactor Licensing by January 1968, Meted, never-O-
theless, may require, in substitution thereof, a different control rod drive which shall be accept-able to both B&W and Meted, In such event B&W and Meted shall share equally the increase or decrease in the cost of the new control rod drive as com-pared with the cost of,the Diamond rod drive.
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G.
Site Suitability Without in any way limiting BkW's technical and finan-cial r2sponsibility under Article II, nothing in this Contract or.elsewhere shall be deemed to be or to re-
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sult in a guarantee by B&W of the licensability of the Three Mile Island Nuclear Station or the suitability of Three Mile Island as a site for such station.
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O-I Article III - Delivery, Schedule and Risk of Loss A.
Delivery and Schedule (1)
Babcock & Wilcox shall begin shipment of the fol-l lowing major items of equipment by the dates specified:
(a)
Pressurizer - May 15, 1969, (b)
Reactor vessel - July 15, 1969, (c)
Steam generator No. 1 and reactor coolant piping and pump casings for steam generator No. 1 - August 15, 1969, and (d)
Steam generator No. 2 and reactor coolant piping and puinp casings for steam generato'r 9
No. 2 - November 15, 1969 The balance of the equipment and systems to be sup-plied hereunder shall be scheduled for shipment in accordance with delivery schedules to be developed by B&W and Meted to meet an orderly sequence of erection.
(2)
B&W shall deliver the reactor vessel f.o.b. barge Philadelphia, Pennsylvania.
B&W shall also provide Meted a quotation for the unloading of the reactor vessel from the barge and the overland delivery of the reactor vessel to the Three Mile Island site 1
for unloading by others.
B&W shall deliver the steam generators and the bal-ance of the equipment supplied hereunder f.o.b. cars 6
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Reading, Pennsylvania.
B&W shall also provide Meted an alternate quotation for delivery of the steam generators and such equipment to the Three Mile Island site for unloading by others.
B.
_ Risk of Loss (1)
Title to the equipment and systems supplied by
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B&W and risk of loss thereof shall pass to Meted upon delivery of such equipment and systems in an undamaged condition to designated destinations.
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B&W shall be responsible for any loss or damage occasioned prior to'such delivery.
(2)
When the equipment is ready for shipment and g shipment is delayed or postponed by any cause 1
beyond the, control of B&W, Meted, or B&W at Meted's request, shall arrange for storage of the equipment and shall protect it agabst damage from the weather or other causes.
Meted,1.; hall assume, and shall hold B&W harmless against, the risk of loss or damage arising out of such storage.
Meted shall be re-sponsible for any charges for such storage and re-conditioning if necessary, of the equipment.
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Article IV - Contract Price and Terms of' Payment A.
Contract Price
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Meted shall pay to B&W for its performance under this
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contract the total sum of $(proposal price) (herein-after referred to as the Contract Price).
Except as otherwise expressly provided under this Contract, such payment shall constitute full compensation to B&W for all of the work to be performed and for all of the ob-
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ligations assumed by B&W under this contract.
B.
_ Terms of Payment (To be added)
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O-Article V - Plant Warranties A.
System Performance (1)
Initial Warranted Output B&W warrants that, when the nuclear steam supply system is loaded with the initial B&W furnished core and placed into operation, it will deliver a total of 10,020,000 pcunds per hour steam flow at the steam generator steam outlet nozzles at conditions of 925 psia and 570 5'. when supplied with feedwater at conditions of 450 F. and 1020 psia at steam generator feedwater distribution henders and when operated ai; steady state condi-tions with primary system letdown at or below 55 gallons,per minute and make-up at 125 F. with primary system component insulation surface tem-perature at or below 140 F.
(2)
Additional Warranted Output B&W also warrants that, when the nuclear steam supply system is refueled with the first reload batch and placed in operation, it will deliver a total of 10,521,000- pounds per hour steam flow at the steam generator steam outlet nozzles at con-ditions of 925 psia and 569 F. when supplied with feedwater at conditions of 455 F. and lo30 psia at steam generator feedwater distribution headers and when operated at steady state conditions with t
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primary system letdown at or below 55 gallons per minute and make-up at 125 F. with primary system component insulation surface temperature at or below 1140 F.
(3)
Demonstration of Initial and Additional Warranted Outputs (a)
The performance. tes to and performance calcu-lations, unless waived by Meted, shall be made in accordance with the edition of the test code for Stationary Steam Generating Units and Steam Turbines of the American Society of Mechanical Engineers, effective on November 15, 1966, where applicable.
The measure of the perform -
'ance shall be the results of such tests.
Per-formance calculations shall be. based on the steam tables in the latest edition of Thermo-dynamic Properties of Steam by J. H. Keenan d
and F. G. Keyes.
Other tests shall be con-ducted in accordance with applicable standards of'the American Standards Association, American 1
Society of Mechanical Engineers, American In-stitute of Electrical Engineers, and the Heat Exchange Institute.
(b)
The performance tests for the initial and ad-i
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l ditional warranted outputs shall each be con-ducted within 60 days, or such later date as
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may be mutually agreed upon, after notice to Meted by B&W that th'e equipment is ready for testing.
Meted shall furnish qualified test and operating personnel for such tests and shall bear all expenses of testing except for the salaries and expenses of the technical personnel furnished by B&W to supervise the tests.
By mutual agreement with Meted, with respect to the number, extent and allocation of expenses, MW may arrange for preliminary.
tests before issuing notice to Meted that the equipment is ready for testing.
(c)
MW's representative shall have access to all applicable test records, and a complete copy 4
of the test data and results shall be fur-nished to MW.
(d)
The tests shall be conducted and the equipment shall be operated in a manner acceptable to "
both Meted and MW.
Conditions under which the performance tests are to be conducted shall be agreed upon by MW and Meted prior l
to plant startup.
(e)
General performance data for the equipment are set forth in Appendix A.
It must be recog-l nized that the performance of the equipment cannot be exactly predicted for every possible
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operating condition.
In consequence, the data presented (including the performance curves and the performance indicated thereby) with the exception of the warranties specified in Subsection VA of this Article, are intended to show only the expected operating results.
(4)
Conditions of Performance Warranties (a)
The general arrangement of equipment manufac-tured and furnished by B&W, and the general design and arrangement of related equipment.
furnished by others, shall be no less favor-able, as determined by both Meted and B&W, than indicated on the arrangement drawings contained in the Technical Description.
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(b)
The equipment and materials supplied under this Contract shall be erected, operated, tested, maintained and protected from damaging agents by Meted in accordance with generally approved practices and with all reasonable operating and maintenance procedures and conditions of services which may be specified by B&W.
(c)
Meted shall provide, and maintain, those ser-vices, equipment and materials, to be. supplied by others, which affect the operation of the services, equipment and materials supplied under this Contract, in conformance with
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s generally approved practices and having char-1 acteristics which may be reasonably specified by B&W on a timely basis.
(d)
All heat transfer surfac&s shall be clean.in-side and out.
(5)
Remedy '
(a)
B&W shall repair or replace and install equip-ment and systems supplied by it as necessary to enable the nuclear steam supply system to demonstrate the initial and additional war-ranted outputs.
(b)
Meted shall decontaminate at its own expense all the equipment and systems to be repaired or replaced as well as the surrounding area 1
if necessary to facilitate such repair or re-placement.
Meted shall perform the decontam-ination and shall reduce the radiation levels in such areas and from such parts to permis-sible levels.
Permissible levels are defined as those prescribed as acceptable by the AEC at the time such repairs are made.
If any national, state or local regulatory agencies having jurisdiction determines that more stringent levels of radiation are necessary or desirable for protection against radiation hazards, the most stringent of such levels i
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1 then in effect shall be deemed to be the stan-dard to be achieved by Meted's decontamination efforts.
B.
Desis;n. Workmanship and Materials (1)
Warranty DbW warrants that the equipment, materials and ser-vices supplied under this Contract will be of the kind and quality designated or described in this Contract and in the Technical Description and will be free from defects in design, workmanship or ma-terials for a period of twelve (12) months from the date of preliminary acbeptance, as defined in Article VI of this Contract, except that for an item having a service life of less than twelve (12) months under normal practice, the applicable war-ranty term shall be such shorter period.
Any re-pair or replacement under this warranty shall be rewarranted for a twelve (12) month period from the date of the initial repair or replacement.
(2)
Conditions (a)
The equipment and materials shall be operated, tested, maintained and protected from damaging agents by Meted in accordance with generally approved practices and with all reasonable operating and maintenance procedures and
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(b)
Meted shall provide, and mainta'in, those ser-vices, equipment and materials to be supplied by others which affect the operation or the services, equipment and materials supplied under this Contract, in conformance with gen-erally ' approved practices and having character-istics which may be reasonably specified by B&W on a timely basis.
(c)
Meted agrees to secure and preserve, for exam-ination by B&W, appropriate records of operation and maintenance adequate to enable the parties to properly ascertain their rights and duties arising.out of the warranty of this Article V.
(d)
Meted shall give written notice of each claimed defect to B&W within thirty (30) calendar days from the date the defect is detected by Meted.
'No claim under the warranty specified in Sub-section B(1) of this Article V shall be made unless notice thereof in conformity with this paragraph is given by Meted during the tenure of the warranty period.
(e)
Meted shall decontaminate at its own expense all the defective parts to be repaired or re-placed as well as the surrounding area if 4
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Meted shall perform the, decontamination and shall redube the radiation levels in such areas and from such parts to permissible levels.
Permissible levels are defined as those pre-.
scribed as acceptable by the AEC at the time such repairs are made.
If any national, state or local' regulatory agencies having jurisdic-tion determines that more stringent levels of radiation are necessary or desirable for pro-tection against radiation hazards, the most stringent of such levels then in effect shall f
be deemed to be the standard to be achieved by Meted's decontamination efforts.
(3)
_ Remedy (a)
MW, upon timely notice by Meted, shall repair, or at its option, replace, and install any part of the equipment or materials supplied under this Contract which fail to conform to the warranty in Subsection B(1) of thi.s Article V.
(b)
I[ B&W does not repair or replace sucli defec-i tive part within a reasonable time after writ-l ten notice' of such defect is received by it, or if any emergency exists rendering it im-possible or impracticable for Meted to call upon B&W to repair or replace the defedtive l
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part, Meted af ter written notice to B&W shall make or cause to be made such repair or re-placement.
In such event, B W shall reimburse Meted for.the reasonable cost of the replace-ment part, including the cost of installation and labor, exclusive, however, of any charges for decontamination.
(c)
The liability of B&W under the warranty spec-ified in Subsection B(1) of this Article V shall be limited to the cost of repair or re-Placement of defective parts including instal-lation, as specified herein.
B&W shall not be responsible for the suitability or perform-ance of materials, equipment or parts furnished, or repairs made, or work done by'others, or for any loss or expenses arising from such work, material, equipment, parts or repairs unless the work is specifically ordered by B&W.
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O-Article VI - Prcoperat. ion t1 To.q tinr:. Prc3tminary and Final Acceptance A.
Preoperational Testint As the equipment and systems supplied by MW are ins'tal-
. led, and as MW and Meted agree that such testing is appropriate, Meted shall conduct ~and supervise preoper-ational tests on such equipment and systems.
MW, on a timely basis, shall propose to Meted, and MW and Meted shall agree upon, operating or test procedures for pur-poses' of this Article VI.
The objective of such. tests shall be to demonstrate'that the various equipment and systems perform satisfactorily and meet the design and performance objectives specified for such equipment and systems in the Technical Description.
When the results I
of a preoperational test for an equipment item or system show that the design and performance objective'has been satisfied for such item or system, Meted shall so indi
- cate to B6dW in writing.
B.
Preliminary Acceptance Upon satisfactory ecmpletion of all preoperational tests on auxiliary equipment and systems supplied by MW, and upon successful demonstration of the initial warranted output (Article V /6(1)) of the nuclear steam supply sys-tem, MotEd chall preliminarily accept the nuclear. steam supply cycten o.ad the au).111ary equipcent and systems to e _ - _ _ - - - -
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Such preliminary acceptance shall dis-charco E/S from its obligations under Article V A(1).
C.
Final Accentance Upon successful demonstration of the additional warranted output (Article V A(2)) of the nuclear steam supply sys-tem, Meted shall finally accept, in writing to BkW, the nucle 2r steam supply system and the auxiliary equipment and systems furnished hereunder by B&W.
Such final ac-ceptance shall diccharge B&W from its obligations under Article V A(2).
D.
_ Release by Preliminary and Final Acceptances No acceptance unrJr:r this Article VI shall release B&W from uncompleter) work or frc= warranty or other liabil-ities, which, by the terms of this Contract, are not expressly' discharged by the preliminary and final ac-ceptances.
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t Article VII - Inde nMy nnd Innurance A.
Meted (1)
From the date that risk of loss of or damage to the equipment and systems furnished hereunder pacses to MotEd, as provided in Sectioil B of Article III of this Contract, and until the nu-clear energy property insurance is acquired in conformance with Subsection A(2) of this Article, Meted shall provide and maintain insurance in the n'ames of Meted, B&W, its suppliers and subcontrac-tors, covering the equipment and systems against reasonably insurable risks of loss'of or damage to i.he equipment.
'(2)
Mated, prior to the date of receipt of fuel assem-blies at the job site will secure and maintain, at least until final acceptance, as defined in Art-icle VI of this Contract, nuclear energy, property insurance in an amount equal to the completed value of the project or equal to the maximum amount which can be secured through the insurance pools (NEPIA and/or Mt.ERP), whichever amount is lesser, under which B&W will be a named insured.
Such in-surance shall provide that Meted and the insurance carrier, or carriers, waive any and all rights of l
recovery and/or subrogation which they or any of l
i them micht have or acquire against F.25, its suppliers i
and cubconi,ractoro.
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(3)' MotEd acrocs that the material, equipment and/or services to be furniched hereunder chall not be used or operated in connection with a nuclear or atomic energy activity or facility unicas and un-til (a) Meted shall have entered into an agreement
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of indemnification with the AEC, as provided under Section 170 of the Atomic Energy Act of 1954, as amended, and (b) Meted shall have obtained such policy or policies of insurance, or shall have pro-vided financial protection of such type and in such amounts, as the AEC shall require as a con-dition of its entering into the indemnity agree-ment referred to in (a) above.
Meted agrees that B&W, its suppliers and subcontractors, shall be included among the persons indemnified under (a) above, and among the named insureds or persons protected under (b) above.
Meted agrees to main-tain such indemnification agreement, and insurance or other financial protection in full force and effect in conformance with AEC regulations, and generally accepted utility practice, so long as the materials, equipment, and services to be fur-nished hereunder shall be used.
(4)
Meted indemnifies and holds harmless B&W, its sup-pliers and subcontractors against all losses, claims, damaces or liabilities arising.out of or G.
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based upcn bodily injury (including death at any time resulting therefrom) and loss of or damage to any property located on or off the site when-ever or wherever occurring, when due to the neg-ligence of Meted, in the performance of this Contract or in the operation of the Three Mile
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Island Nuclear Station, or regardless of negli-gence when resulting in whole or part directly or indirectly from nuclear reaction, nuclear radia-tion, or radioactive contamination, resulting from incidents at the site, whether controlled,or unL controlled.
B.
B&W (1)
Except to the extent Meted is or would be compen-sated by insurance secured under Section A of this Article VII or by Meted's other existing insurance coverage, B&W indemnifies and holds harmless Meted against all losses, claims, damages, or liabilities arising out of or based upon bodily injury (includ-ing death at any time resulting therefrom) and loss of or damage to property occurring prior to final acceptance, as defined in Article VI of this Con-tract and due to the negligence of'B&W, its sup-pliers or subcontractors, provided such bodily injury (includin6 death at any time resulting therefrom) and i
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or radioactive contamination, resulting from.inci-dents at the site, whether controlled or uncontrolled.
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(2)
For its own protection and for the protection of Meted, with respect to B(1) above, B&W at its sole expense, will secure and maintain in force (and shall
-cause,its subcontractors to secure and ma{ntain.in,
force), during the time employees of'B&W or of its.
suppliers or subcontractors are pres'ent at the 1hree Mile Island site for or in connection with -
the performance of site work or operations, policies of insurance of the following types:
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(a)
Workmen's Compensation Insurance with limits of liability at least as high as the statutory limits of liability in any state in'.which B&W
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may be required to pay compensation; (b)
Employers Liability Insurance with limits not less than $500,000 for each occurrence or l
disease;
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(c)
Comprehensive Automobile Liability Insurance including owned and non-owned automobiles operated by employees of B&W or its suppliers or subcontractors with bodily injury limits of i
not less than $100,000 for each person and not l
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less than $300,000 for cach accident and with Property damace limits of not less than $100,000 per accident.
A certificate of such insurance must be filed with and approved by Meted prior to commencement of said work or operations at the Three Mile Island site.
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A.
B&W chall defend at its own expence any cuit or action I
brought a6ainst Meted based on a claim that any individ-ual piece of equipment or any system furnished by B&W i
hereunder, constitutes infringement of an apparatu's or system claim of any patent of the United States, and j
BEW shall also pay all costs and damages awarded therein against Meted.
In case any such B&W furnished equipment or system, or any part thereof, is held to constitute i
infringement, and its use is enjoined, B&W promptly shall, 4
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at its own expense, either procure for Meted the right to'..
continue using the equipment or systems or replace same with non-infringing equipment or systems, or modify it
'so it becomes non-infringing.
Where Meted has given writ-ten instructions to B&W which direct (1) a specified manner of performance of the contract or (2) a specific design or arrangement of the equipment or a part or parts thereof to be furnished hereunder, other than a manner of performance, design or arrangement, proposed by B&W, Meted shall defend at its own expense any suit or action based on a claim l
that the equipment or a part thereof furnished hereunder constitutes infringement of a United States patent, where such infrin5ement'results from such written instructions, and Meted shall also' pay all costs and damages awarded therein accinst E&W.
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ticither IbtEd nor BW.shall have the ri ht to claim in-C demnity under this paragraph unicas prompt notice of the assertion of any claim for which indemnity is sought is given in writing and unless the party seeking indemnity makes available to the other party all other needed in-formation, assistance, and authority it possesses'for the defense of any suit or proceeding in which such claim is asserted.
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k, b-Art.$ cle IX - Governmen t Au t.hn ri.~ t. ion:;
t The partics recoCnize that certain construction permits, license: and other government authorizations will have to be obtained frcm the AEC and other fedcral, state and local agencies.
MW shall obtain all authorizations which are re-quired to carry on work which will be performed in its own facilities.
Meted shall be responsible for obtaining all authorizatio'ns for work at the 'Ihree Mile Island site..
A.
AEC Licensing (1)
Meted and B&W shall provide such reasonable assist-ance as may be requested by either of the other parties in obtaining the nec'essary AEC authori-zations.
(2)
EW shall perform the nuclear sa'fety analysis for its scope of supply for the Three Mile Island Nu-clear Station as required for Meted to obtain an AEC construction permit and operating license auth-orizing operation'of the plant at the initial and additional warranted output levels.
(3)
MW shall prepare, for Meted's review and approval, or assist in the preparation of (a) those sections of the Safety Analysis Reports to be submitted to the AEC which relate to nuclear safety of MW-supplied equipment, sys-tems and services';
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O-(b) other reports, data, descriptions, drawings and calculations, which relate to SkW-supplied equipment, systems and services, as may be reasonably requestod by Meted to obtain ths necessary permits, licenses and approvals,for the construction and operation of the plant at the initial and additional warranted output levels; and (c) any' reports which Meted is required to make to
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the AEC under the Three Mile Island Nuclear Station construction permit and operating li-cense, to the extent that such reports require information which is developed by B&W and re-lates to B&W scope o,f supply.
Such reports shall be furnished by B&W without additional cost to Meted, if required prior to final ac-ceptance as defined in Article VI of this Con-tract.
If required thereafter, the reports shall be furnished at a charge which provides B&W with reasonable compensation for the ser-vices rendered.
(4)
B&W shall furnish the services of such technical personnel as B&W and Meted consid'er necessary to make -presentations at meetin6s and hearings with the AEC.
(5) with the exception of the' responsibilities accepted.
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O-by D&W under thic Contract all costa incurred in obtaining AEC authorizations, including the repro-duction of the prelimina'ry and final safety analysis reports shall be the responsibility of MotEd.
B.
Regulatory Auprovals By Other Governmental Agencies (1)
Meted and B&W shall provide such reasonable assist-ance as may be requested by either of the other parties in obtaining such authorizations.
(2)
All costs incurred in obtaining such suthorizations shall be paid by the party responsible for obtaining the particular authorization.
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Articic X - Taxes The prices provided for herein are exclusive of any present or future Federal, State, Municipal or other sales or use tax with respect to the n.'aterial or equipment or services covered hereby, of an'y other present or future excise tax upon or measured by the gross receipts from this transaction or any allocated portion thereof or by the gross value of the material or equipment covered hereby, and of any present or future property tax or similar charge with respect to the material or equipment covered hereby.
If B&W is required by applicable law or regulation to pay or collect any such tax or taxes-on account of this transaction or the material or equipment or services covered hereby, such amount of tax shall be paid by Meted in addition to the prices.
herein'provided.
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Articic XI - Delays - D.m von Neither Meted nor BS:N shall bc liabic to the other for any loss or damage resulting from any delay in performance or from any failure to perform ito respective contractual obli ations, within the time specified herein, due to fires, 6
floods, strikes, labor disputes, labor shortages, inability to secure materials, riots, thefts, accidents, acts or fail-ure to act of government, or any other cause whatsoever, whether similar or dissimilar to those enumerated ab'ove, bes yond the reasonable control of the party concerned which may delay or prevent performance hereunder.
The time of perform-ance shall be extended for a peiiod equal to the time lost by reason of any such delay.
Both parties shall make every effort to keep delays in performance at a minimum.
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Connonuential Damtces 11 B&W chall not be liable in any event for loss of antici-pated profits, loss by reason of plant shutdown, non-operation or increased expence of operation of other equipment, or any special or consequential loss or damage of any nature arising out of the construction or operation of the Three Mile Island Nuclear Station.
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Articic XIII - Accinnment and Subcontracting A.
_Ac ci.~nment Any assignment by either B&W or Meted of this Contract or any rights thereunder, without the prior written ap-proval of the other, shall be void and not merely void-able.
B.
Subcontracting (1)
BS:W shall advise Meted of the equipment or system proposed to be subcontracted and the names and locations of the potential subcontractors.
(2)
Before B&W places any subcontract for the equipment
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-desi-6nated in paragraph (1) of this section, Meted shall have the right to designate an alternate vendor or subcontractor, which must be acceptable to B&W with respect to the technical, delivery and contractual aspects of the contract, provided Meted pays B&W the amount, if any, by which the cost of the acquired equipment exceeds the cost of the i
equipment proposed to be selected by B&W.
(3)
B&W shall assume as full responsibility to Meted for the acts or omissions of its subcontractors as for the acts or omissions of persons directly employed by B&W.
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O Article XIV - Foundations B&W shall not be responsible for the depth of the foot-ings, size or accuracy of the foundations, or the character of the materials selected for their construction.
B&W shall not be responsible for any damage, or repairs necessary to the equipment furnished by it, caused by or resulting from defects in the foundations.
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o Article XV - Stoc3 work Unlocs otherwise stated, any supporting steel to be fur-niched by B&W will be designed to support the equipment to be furnished and will be designed in accordance with the Rules of the American Institute of Steel Construction effec-tive as of November 15, 1966.
Except as required under Art-icle II B(1), if BSM is required to increase the size or weight of its supporting structures to conform to other than these Rules or because of additional loadings imposed by Meted, the CONTRACT shall be equitably adjusted for any additional costs and time of performance occasioned B&W thereby.
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Articic XVI - Arbitration Any controversy or claim (except any claim for damages because of bodily injuries, including death at any time re-sulting therefrom, sustained by any person or persons, and except any claim for damages because of injuries t'o or de-struction of property) arising out of or relating to this Contract or the breach thereof, shall be settled by arbitra-tion in accordance with the Arbitration Rules of the American Arbitration Association.
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s Articic XVII - Notification of Cla4.m:,
Meted shall notify B&W immediately, by Registered Mail addressed to B&W at ldl East 42nd Street, New York, of all claims broucht against Meted for which B&W may be liable, and B&W shall notify Meted immediately, by Registered Mail addressed to Meted at Reading, Pennsylvania, of all claims brought against EkW for which Meted may be liable.
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V Article XVIII - Cancellation by Meted t
Meted may cancel the contract only upon written notice i
and upon payment to MW of reasonable and proper cancella-1 tion charges.
Such charges shall include direct labor and material expenses; vendor cancellation charges; requisition en61'neering and draf ting expense, based on the percentage i
of completion of the engineering 'and drafting work; develop-ment engineering specially incurred fo'r the cancelled order 1
including special tools, dies, fixtures and patterns; and
~all other direct and indirect costs properly allocable or I.
apportionable to the order under B&W's standard accounting practice, and profit on the work p' rformed.
Meted shall be 3
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. entitled to all material specially accumulated for the order
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and included in the above charges; shipped at expense, or, i
at its option, the selvage value thereof shall be deducted from the cancellation charges.
Meted may, at its option 4
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and expense, have a firm of independent accountants conduct l
an independent examination and certify that the charges are i
in accordance with standard MW practice.
Such firm shall b.e the independent accountants of B&W at the time unless Meted 1
shall in good faith 2nd for reasonable cause object to such i
accountants, in which case such independent accountants shall be a firm mutually acceptable to B&W and Meted.
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o Artic.lc XIX - Contract Chan cc and Extra Work The terms of this Contract shall not be changcd, super-seded or supplemented except by written contract change order duly executed by an officer of Meted or}by officerp a..
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or[d'esignatedrepresentativeyofB&W.
No claim for extra equipment, systems or services shall be valid unless author ized by a written contract change order duly executed b
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representatives of P.&W.
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0 Article XX - Mninistration of Contr.'.ct t
Meted shall designate, in writing, a Three Mile Island project manager, and B&W shall designate, in writing, a project manager to administer this contract.
Any designa-tions so made may be changed by written notice and individ-
'uals may be designated to cet in the absence of either of the designees.
Subject to the provisions of Article XIX, the individualc so designated.shall have responsibility and authority on behalf of their respective principals, to ad-minister operations under this Contract, 'o formalize and t
agree upon contract procedure, to handle disputes, to re-ceive notices, and to do all things necessary to carry out the contract work.
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r Article ZXI - Governin.- Law This Contract shall be deemed to be a Pennsylvania con-tract and shall be construed in acccrdance with, and governed C.~.,...:.. sk by the statutos and common law of the Stategof Pennsylvania.
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Article XXII - Waivers N
The failure of Meted to enforce at any time any of the provisions of this Contract, or to require at any time per-formance by P14W of any of the provisions hereof, shall in no way be construed to be a waiver of such provision, nor in any way to affect the validity of this Contract or any part thereof, or the ri ht of Meted to thereafter enforce each S
.and every such provision.
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q y-t Articic ZZIII - Inte.graticn With respect to the subject matter hereof, this Contract N
supersedes all previous representations, understandings and ncGotiations, either written or oral, between the parties hereto or their representatives, and constitutes-the entire contract between the parties.
IN WITNESS EdEREOF, Meted and B&W have caused this Contract to be executed in duplicate by their duly authorized repre-sentatives to be effective as of the day and year hereinabove first mentioned.
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