ML20105B848

Draft Std Consulting Agreement,Gpu Svc Corp

ML20105B848
Person / Time
Site:	Three Mile Island
Issue date:	04/23/1981
From:	GENERAL PUBLIC UTILITIES CORP.
To:
References
TASK-05, TASK-5, TASK-GB B&W-0024, B&W-24, NUDOCS 8307020164
Download: ML20105B848 (18)

Text

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STANDARD CONSULTING AGREE 1ENT GPU SEP.VIC2 CORPORATION - )&

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Preamble 1 Article I Stope of Services 1

Article 11 Contractual Relationship 2 Article III Period of Perfor=ance 2 Article IV Compensation and Payment 2 Article V Authorized Representatives and Notices 4 Article VI Taxes 4 Article VII Laws and Regulations 5 Articia VIII Insurance 5 Article IX Warranties /Indennifica: ion 6 Article X Consequential Da= ages 7 ..

Article XI Audit and Records 7

Articl'e XII Cwnership'of Documents 8 Article XIII Assignment and Subcontecct 8 Article XIV Force Majeure 8

Article XV Suspension of Work 9

Article XVI Termination 1Dift. Eldt For ifi hl' 9

Article XVII Inspection Mi. L k h 21 Charles Shapiro CSR hf[

Article XVIII Quality Assut.nce Doyle Reporting 'ac.,.0it Article XIX Governing Laws / Disputes f

12 Article XX Reports 12 Article XXI Client Furnished Data 12 Article XXII Inventions and Data

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Articia XXIII Consultant's Personnel 13 i

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INDEX (Continued)

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Article XXIV Funding Liability 13 Article XXV New Features of Design 13 Article 23VI Changes 14 Article XXVII Proprietary Infor=ation 15 Article XXVIII Entire Agree =ent 15 Signatures 16 Attach =ent 1 Attach =ent 2 O

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This Agreement entered into as of this day of 1977, between GPU SERVICE CORPORATION (hereinafter " Client"), 260 Cherry Hill Road, Parsippany, New Jersey 07054 and 1 I

(hersinaf ter (" Consultant"),

WITNESSETH:

WHEREAS, Client desires to retain Consultant to provide certain 4

Consultinr, Services; and WHEREAS, Consultant represents it is properly qualified to render such services; and WHEREAS, the parties desire to set forth herein the ter=s and conditions under which said Consulting Services shall be furnished; NOW, THEREFORE, in consideration of the premises and of the mutual convenants herein contained, the parties hereto agree as follows:

ARTICLE I - SCOPE OF SERVICES During the term of this Agreement, and subject to the covenants and conditions herein set forth, whenever it is determined by Client as desirable or necessary in the performance of its work, Client may call upon Consultant to perform consulting services as set forth in Attachment 1, attached hereto, incorporated herein and made a part hereof. In each case, 4

the Scope of Services to be performed. shall be developed by Client and agreed upon mutually between Client and Consultant and shall be set forth in a separate supplement to this Agreement which shall be binding upon the Client if (a) such supplement is executed by a duly authori:ed representative

• of the Client, or (b) the Client issues to the Consultant a purchase order, (T()qtg

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executed by a duly authorized representative of the Client, setting forth or incorporating by reference the Scope of Services contained in such supplement. Such services shall be performed during the period specified and at ti es and locations denoted herein, and subject to all conditions and covenants set forth herein.

ARTICLE II - CONTRACTUAL RELATIONSHIP In contracting for these services, Client is acting for itself as well as for its affiliated companies of the General Public Utilities Corporation, namely Jersey Central Power & Light Company, Metropolitan Edison Company, and Pennsylvania Electric Company.

In perfor=ing the services under this Agreement , Consultant shall operate as and have the status of an independent contractor and shall not act as or be an agent or employee of Client. As an independent contractor, Consultant will be responsible for determining the means and methods for performing satisfactorily the consulting services described in the Scope of Services; such =eans and methods shall be made known to Client prior to co=sence=ent of any work hereunder, ARTICLE III - PERIOD OF PERFORMANCE This Agree =ent shall re=ain in full force and effect from the date

. hereof until ,

at which ti=e it shall expire for ordering purposes; any work ordered prior to that date vill be completed under the tarms of this Agree =ent.

ARTICLE IV - COMPENSATION AND PAYMENT As full consideration for the performance of services as described in Attachment 1, Client shall pay to Consultant cocpensation in accordance with the fees, rentals, charges and pay =ent provisions of this Agreement.

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( A. Compensation (Set forth in Attachment No.2)

B. Payment i 1. Consultant shall submit to Client in quadruplicata an invoice detailing the services performed in the preceding conth and the

, charges therefor. Censultant shall reference each invoice with l

Client's purchase order number and shall include a su==ary of actual hours worked by Consultant's employees engaged directly on the project

, by name, classification and rate. Direct non-salary expenses (if applicable) and other direct expenses, if any, shall be shown separately.

2. Each submitted invoice shall contain a certification by Consultant that all costs, fees, rates and ex7enses have been incurred by Consultant in the perfor=ance of the work hereuncer; that such costs are accurate, reasonable, justifiable and verifiable and that such costs are no higher than those charged to Concultant's most favored customer (s) for supplies or services si=ilar to those performed hereunder. In addition, in certain areas of work, including but not limited to computer work, reproduction services and printing, the Consultant shall certify that its costs are ce=pe-itite with those rates charged by other suppliers for si=ilar services and work. The latter certification with confirming data is aisc applicable for any services supplied by an affiliate or subsidiary of the Consultant.

3. Within thirty (30) days after receipt of an invoice, Client shall review the invoice to ascertain that the costs are correct, accurate and properly reflect the work / services performed by Consultant or in process, in accordance with this Agreement. In the event that .

Client determines that all or any portion of the invoice is incorrect or incomplete, then such invoice will be returned to Consultant for appropriate revisions thereto and Client will set forth the reasons .

for disapproval of such disputed invoice.

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ARTICLE V - AUTHORIZED REPRESENTATIVES AND NOTICES 1

For each project, Ccasultant shall promptly designate a competent authorized representative to represent and act for Consultant who shall have authority to maka binding and enforceable decisions on behalf of Consultant and to accept service of all notices which Client desires to serve, or which are required *oy this Agreement to be served, on Consultant. I Consultant shall, upon co=mence:ent of perfor=ance of this Agreement, advice Client in writing of che .a:a, address and telephone nu=ber of such authorized representative and of any change in such designation.

Si=ilarly, the Client will designate an authorized representative for each project who shall have authority to make binding and enforceable decisions on behalf of Client and to accept service of all notices which Consultant desires to serve or which are required by this Agreement.

Any notices provided for hereunder may be served personally on Client's authorized representative and Ccasultant's authorized representative at their respective places of business or by registered mail to the address of each party shown on the first paragraph of this Agreement.

ARTICLE VI - TAXES Consultant shall have total and exclusive liability for the payment of any and all taxes and contributions for une=ployment insurance, old age retire =ent benefits, life pensions, annuities and si=ilar benefits, which may now or hereafter be i= posed by law or collective bargaining agreements with respect to persons employed by Consultant for performance of services under this Agreement.

The compensation to be paid to Consultant includes, and Consultant shall be liable for and shall pay and shall indemnify, defend and save ~

harmless Client fron all such taxes and contributions or any interest accrued and penalities imposed, and all taxes, duties, assessments and i

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other charges levied by any government agency or authority on or because of the services performed .hareunder, or any caterials, equipment, services or supplies furnished or used in the perfor=ance of services under this A6 reement.

i ARTICLE VII - LAWS AND REGULATIONS  !

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Consultant, its employees and representatives shall at all ti=es i comply with all applicabia ederal, State and local laws, ordinances, statutes, rules or regulations including those relating to wages, hours, fair employment practices, equal opportunity, antidiscrimination, safety, fire prevention and working conditions. Consultant shall procure all permits and inspections which it is required to obtain in th'e performance of its services, at its own expense. i I

ARTICLE VIII - INSURANCE Consultant represants tnat it now carries, and agrees it will continue during the term of this Agreement to carry, Workmen's Compensation, Comprehensive General and Contractual Liability and Co=prehensive Automobile Liability insurance in the f-llowing amounts:

Limits of Liability Workmen's Compensation Employer's Liability Statutory S300,000 Comprehensive General Liability (including Contractual Liability insurance)

Bodily Injury S1,000,000 each person S1,000,000 each occurrence

$1,000,000 aggregate Property Damage S 500,000 each occurrence Comprehensive Automobile Liability Bodily Injury

$1,000,000 each person S1,000,000 each occurrence Property Damage S

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. l Ca'rtificates of all insurance provided by Consultant shall be available for Client's r. view and will be furnished to Client if requested. Such copies of certificates shall state that the insurance carrier will give Client thirty (30) days' prior written notice of any cancellation of or material change in such policies.

ARTICLE IX - UARRE'CIES/1)!DEMNIFICATION Consultan t snai l, per: ors the services specified within the Scope of Services, and includad in Attachment 1, to be furnished by it hereunder, with the degree of skill and care that is required by customarily accepted good and sound professional practices and procedures at the time the work is perfor=ed to ensure that all work is correct and appropriate for the purpose intended. .\1 trough under Article X of this Agree =ent, Consultant is not liable for "cansequential damages" as therein defined, Consultant hereby agrees at its can expense (a) to correct or reperform any services furnished by it which fail to meet standards and (b) to reimburse Client for the actual, direct damages incurred by Client as a result of such non-conformity, including the correction or replace =ent of unsuitable, defective or de :ged equipment, buildings or structures (or parts thereof) which vere so designed, eagineered, purchased, built or impaired as a result of Consultant's negligence, and incidental damages relating thereto including without limiting the daretality of the foregoing, additional legal or engineering expensa, "in and out" and salvage costs and testing expense.

It is understoed and agreed that if Consultant provides, at its own expense, insurance acceptable to Client which,would indemnify Client against such damages from Cansultant's negligence in the perfor=ance of its services hereunder, Client will, ucon receiving the proceeds therefrom, hold Consul-tant liable for only such of its damages under clause (b) above as are not reimbursed to it by reason of the deductible provisions of such policies.  !

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i Consultant shall indemnify and hold har=lesa Client from and against all claims and actions, and all expenses incidential to such claims or actions, based upon or arising out of damages or injuries to persons or \

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property caused or contributed to by Consultant or anyone acting under its l

l direction or control or in its behalf in the course of its performance l under this Agreement, provided the Consultant's aforesaid indemnity and hold harmless agreement shall not be applicable to any liability based upon the sole negligence of Client.

Client shall indemnify and hold harmless Consultant from and against all claims and actions, and all expenses incidental to such claims or actions, based upon or arising out of da=2ges or injuries to persons or property caused or contributed to by Client or anyone acting under its direction or control or on its behalf in the course of the planning, design, construction and operation of the facility, including operation thereof, for t'esting or maintenance purposes, provided that Client's aforesaid indemnity and hold harmless agreement shall not be applicable to any liability based upon the sole negligence of Consultant.

ARTICLE X - CONSEOUENTIAL DAMACES Consequential damages as defined in this Agreement shall mean all indirect damages other than the actual, direct da= ages and incidential damages cencioned in clause (b) of the first paragraph of Article IX of this Agreement.

Consultant shall not be liable for said consequential

-damages arising out of or pursuant to this Agreement.

ARTICLE XI - AUDIT AND RECORDS Consultant shall keep accurate records and books of account showing all charges, disbursements or expenses made or incurred by Consultant in the performance of the carvices herein.

Client shall have the right, upon reasonable notice, to audit at any time up to one year after completion of

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its services, the direct costs, expenses and disbursements ma3i or incurred in connection with the services to be performed herein as well as for the i

validity of the representations made and in the Compensation provision of i

this Contract, and may examine Consultant's boob and records relating to these several areas.

ARTICLE XII - OWNERS $IP OF DOCUMENTS Client shall have complete and unrestricted right henceforth and forever to use all drawings and documents prepared by Consultant under this Agreement in connection with the performance of the services described herein. Said documents are to be the property of Client and are not to be used on other projects except by agrea=ent of Client in writing.

ARTICLE XIII - ASSIGNMENT AND SUBCONT2ACT Consultant's duties and obligations under this Agreement may not be assigned by it; however, with the nritten approval of Client, Consultant may employ suitably trained and skilled persons or firms under subcontracts to perform any part of the said duties and obligations.

Client reserves the right tc enter into direct contracts with any cutually acceptable subcontractor, but such subcontractor shall be under the direction of the Consultant for establishing and maintaining project schedules and quality of work.

ARTICLE XIV - FORCE MAJEURE Should completion of any portion of the services be dalayed beyond the estimated date of its completion by a Force Majeure, the parties to this Agreement shall mutually agree on the terms and conditions upon which the services shall be continued or terminated. Force Majeure means unfor- .

seeable causes beyond the control and without the fault or negligence of Consultant including the following: acts of God or the public enemy, acts UO0170 l

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i of the Government of the United Stacos or of the coveral States or any of them acting in their suvereign capacity, acts of other contractors of Client (as could not have been averted by tim 61y and appropriate actions of Consultant), fires, floods, epidemics, riots, cuarantine restrictions, strikes, civil insurrections, freight e=bargoes, and unusually severe weather and other similar causes.

ARTICII XV - SUSPENSION OF WORK A. Client may, at its sole option, by notice in writing to Consultant, suspend at any ti=e the performance of all or any portion of services to be performed under this Agreement. Upon recaipt of any such notice, Consultant shall i= mediately discontinue services, placin; of orders, contracts and rental agree =ents to the extent they relate to services suspended, on the date and to the extent specified in the notice; and, unless otherwise specifically stated in the notice, Consultant shall continue to protect -

and' maintain the wock theretofore complaced, including those portions on which services have been suspended.

B. In the event of such suspercion, Consultant will be rei=bursed for those costs, reasonably incurred, without duplication of any items, to the extent that such costs are deemed by Client reasonable, accurate, verifiable, justifiable or directly result from such suspension of services.

ARTIC12 XVI - TERMINATION A. Convenience Client shall have the right to terminate this Agreement in whole or in part for its convenience at any time during the course of performance by written or telegraphic notice. Upon receipt of any termination notice, Consultant will i= mediately discontinue services on the date and to the extent specified in the notice in the manner specified in Article XV. A.

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Consultant shall be paid the amount earned by or reimbursable to it hereunder to the time specified in said notice, including fee payments received or otherwise due, all actual, necessary, reasonable and verifiable costs incurred by Consultant prior to and in connection with discontinuing the work hereunder, including the costs associated with subcontract terminations, and shall have no further claim against Client with respect hereto.

3. Default (1) Client may cancel or terminate for default this Agreement in whole or in part by written or telegraphic notice to the Censultant: .

(a) if Consultant shall become insolvent or maka a general assign =ent for the benefit of creditors; or (b) if a petition under the Bankruptcy Act is filed; or (c) if Consultant becomes involved in some legal proceedings that in the opinion of Client interfere with the diligent, ~

efficient perfor=ance and satisfactory ecmpletion of the services; or (d) if Consultant fails to make delivery of the supplies or to perform the services within the ti=e specified er any Client-authorized extention thereof; or (e) if Consultant fails to perform any of the other provisions of the Agreement or fails to make progress as to endanger performance of this Agreement in accordance with its teTus and conditions, and in either of these two circumstances does not cure such failure within a period cf ten (10) days (or such longer period as Client may authorize in writing) af ter receipt of notice from Client specifying such failure; or .

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. l (f) if after notice of termination of thi: Agreement under the provisions of this clause, Client deter =ines that Consul-tant was not in default under the provisions of this clause or that Consultant's failure to perform or to make progress in performance is due to causes beyond the control and without the fault or negligence of Consultant pursuant to the provisions of the Article of this Agreecent relating to Force Majeure, the notice of termination shall be dee=ed a termination for convenience; or (g) the rights and remedies of Client provided in this clause are in addition to any other rights and remedies provided by law or under this Agreement.

ARTICLE XVII - INSPECTION Client shall have the right to inspect the facilities or offices maintained by Consultant to ' perform the work described in this Agree =ent and to be present at any test to be performed, but such inspections, if made, shall not in any way relieve Consultant frem its responsibility with respect to its obligations and duties under this Agreement. If Client elects to make any inspection, it will notify Consultant in advance to permit Consultant to make appropriate arrangements.

ARTICLE XVIII - OUALITY ASSURANCE Consultant shall conduct all work in a systematic manner tnd shall establish a quality assurance program and control procedures which will provide a systematic independent check and confir=ation of data collected and analyses made therefrom and the recording of the quality control efforts. ~

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,. 1 ARTICLE XIX - G0"ZRNING LAWS / DISPUTES Notwithstanding any other provisions of this Agreement, any dispute concerning any question of fact or law arising under this Agreement which is not disposed of by agreecent between Consultant and Client shall be decided by a court of competent jurisdiction of the State of New Jersey in accordance with the laws of New Jersey.

ARTICLE XX - 12?OF.TS C11 ant shall have the right to request written reports at any ti=e during the perfor=ance of this Agreement which shall be furnished within seven (7) days after such request, in the manner direccad, describing progress, sescus of, cost data and other matters pertaining to the servicas rendered, c: n: additional cost to Client.

ARTICLE XXI - CLIENT FURNISHED DATA All en*,ineering data, maps, plans, specifications , drawings, or other Client furniahed property shall remain the exclusive property of Client.

Consultant agrees that such Client property will be used for no purpose other than for work for Client under this Agreement. Consultant shall sign and deliver s *:ritten itemi:ed receipt for all such property and shall be responsible for its safekeeping. Upon conclusion of the work / services hereunder, such property shall be returned to Client.

ARTICLE XXII - INVENTIONS AND DATA If Consultant shall first actually reduce to practice any patentable invention or discovery at the expense of Client in the perfor=ance of an'y work hereunder, then Client shall be granted and is hereby granted an irrevocable, non-exclusive, royalty free, fully paid-up license to ~

practice said invention or discovery in connection with any power plant designed, built, owned, controlled and/or serviced by Client.

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l Client shall own all drawings , designs , documents , information, l data and the like generated by Consultant and delivered to Client in the j specific performance of any work hereunder. 'However, Consultant shall be free to retain copies of all such drawings, designs, docu=ents, information and data, and Consultant shall be free to use the same for its own purposes.

ARTICLE XXIII - CONSULTANT'S PERSONNEL It is agreed and understcod that Consultant shall employ for the services required hereunder, persons known to it, and personnel who shall be experienced, qualified and trusted employees. Eowever, at any time during this Agreement, Client shall have the right to request the immediate replacement of any Consultant e=ployee whose services or conduct in the opinion of Client are not consistent with the satisfactory performance of this Agree =ent.

At Client's request, Consultant shall furnish a qualified employee to replace such employee whose services have been terminated at the expense of the Consultant.

ARTICLE XXIV - FUNDING LIABILITY Client's funding liability under this Agreement will be only as set forth in the individual supplements issued hereunder.

ARTICLE XXV - NEW FEATURES OF DESIGN If, prior to the completion of work hereunder and whether or not in connection with the performance of such work, Consultant develops: (a) an improvement in the design of articles / services called for by this Agreement, which is not incorporated in the article / services to be delivered, or (b) any alternative or improved mathed of accomplishing the objectives of this Agreement which is not employed in the performance hereof which the -

Consultant has not reported or disclosed to Client, Consultant shall promptly give written notice to Client. Such notice shall include a general (T(X;1.75 t

description sufficient to show the celationship thereof to the work under this Agreement and a statement giving the Consultant's best appraisal a s to the prospective effect or influence which such improvement or methodould w have on the work required under this Agreement if such improvement or i

method were incorporated as a requirement hereunder.

ARTICLE XXVI - CHANGES A. Client may at

.Ary time by a written order and without notice to sureties (if any) make changes, within the general scope of this Agreement .

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If any such change requires an increase or decrease in the cost previded for in this Agreement, whether changed or not changed by any such order, or otherwiss affects any provisions of this Agreement,an equitable adjustment shall be made in the price, delivery schedule, and in such other provisions of this Agreement as may be so affected, and the Agreement shall be modif1ed in writing accordingly.

Any claim by Consultant for adjustment ~

under- this Article must 5'e asserted withih seven (7) working days fro m the date of receipt by the Ccasultant of the modification or change; provided ,

however, that if Client deides that the facts justify such action, it may receive and act upon such claim asserted at any time prior to ent final paym under this Agreement.

Failure to agree to any adjustment shall be a dispute concerning a question of fact within the meaning of th this Agreement e article in entitled " Governing, Laws / Disputes".

All work called for hereunder shall be performed in accordance with this Agreement unless a change hereto is subsequently authorized by a representative of Client .

However, nothing in this clause shall excu:- Consultant from proceeding with the work as changed.

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Client's Engineering and Technical personnel may, from o time t "

time, render assistance or give technical advice to or effect an exchange of information with Consultant's personnel in a liaison neffort ng concer i (IE}5II.*76

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i the services to be furnished hereunder. However, such exchange of infor=a-t tion or advice shall not vest Consultant with authority to change the services hereunder or the provisions of this- Agreement; nor shall such change in services or provisions of this Agreement be binding on Client unless incorporated as a change in accordance with Paragraph B hereof.

ARTICLE XXVII - PROPRIETARY INFCRMATION Any proprietary information concerning Client, its products, data, documentation services or manufacturing processes which are designated as proprietary informatica by Client and disclosed to the Consultant incident to the performance of this . Agreement shall remain the property of Client and are disclosed in confidence, and no rights are granted to Consultant to prcduca or have produced any such products or to practice or cause to be practiced any such canufacturing processes or other processes, or reveal, disclose, or publish any such data and documentation.

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ARTICLE XXVIII - ENTI2E AGREEMENT This Agree =ent constitutes the entire agreement between Client and Consultant.

It cupersedes all prior or contemporaneous co==unications, representations of agreements whether oral or written with respect to the subject matter thereof and has been induced by no representations, stataments or agree =ents cener than those herein expressed. No c:3reement here'after made between the parties shall be binding on either party unless reduced to writing and signed by an authorized officer of the party sought to be bound thereby.

This Agreement shall in all respects be interpreted and construed and the rights of the parties hereto shall be governed by the laws of the State of New Jersey. .

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g IN WITNESS WHEREOF, the parties hereto have cause this Agreement to be executed by their duly authorized officers.

OPU SERVICE CORPORATION l Attest: By .

Attest: By Titla O

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rmee Memorancium l

Care August 16, 1977 k E Service Scec' Proposed Master Services Contract (MSC) with B&W for TMI Unic I MH-ME-19-77 To P., Peter Eet: Location Mountain Lakes i

From: M. Haicowit:

We have reviewed the proposed MSC and would offer the following for your consideration:

3.0 PRICE We concur that Met-Ed should be given advance notice concerning changes in billing rates, however, you should consider the following: "The new rates shall be applicable to those new tasks which are authorized subsequent to the effective date of the new rates." In this way, work authorized prior to the effective date of the new rates will be billed at the old races.

4.0 TERMS OF PAT.E'.~T

1. Pay =ent may be cade within thirty days of receipt of an invoice, but you should reserve the right to return any invoice (unpaid) which is ques- -

tiened.

2. The audit provision is unacceptable. Cost rei=bursable contracts should be subjec't to audit by the Owner and not by an independent auditor. The billing rates are fixed and not subject to audit, but the manheurs e:: pended and expenses incurred should be subject to our atiditors. Independent certi-fications are not required. The audit provision should be effective for one year af ter final payment of the last invoice, since you will then have a longer period to conduct audits if an invoice is protested.

8.0 TITLE AND RISK OF LOSS It =ay be more advantageous from a tax point to have title pass at the job site. Risk of loss by Met-Ed at the f.o.b. point (B&W's factory) should be discussed with the cognizant insurance personnel to ensure that premiums for Met-Ed's insurance are less than B&W's costs and that deductibles are similar.

9.0 TERM OF PERFOR'L\NCE AND TERMINATION -

1. Termination for convenience should require payment of all necessary and actual expenses and should be subject to verification.

2. You may wish to insert our usual Termination for Default provision.

Deft. Exh. For m M~

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.. . . ._ , Charles Shapiro CSR ][93l8f Doyle Reporting Inc.

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l g g To: R. Peter Betz August 16, 1977 Page Two Re: Proposed Master Services Contract (MSC) with B&W for TM1 Unit I 10.0 WARRAh'TY The Warranty provisien as written distinguishes the various types of services and/or supplies which B&W cay provide under this MSC. We would recommend the following:

10.1 Soare or Reclacement Parts - Such orders should be pla'ced under the ter=s and conditicas previously negotiated between GPUSC (on behalf of Met-Ed) and B&W during the TMI-2 spare parts negottacions.

10.2 Reoair Work - A provision which unly provides a warranty for ninety days would appear to be totally unacceptable. Additionally, the warranty is only effective if such defect is caused soleiv by negli-gence of B&U, which would appear to be difficult to prove. We therefore reco==end the following:

(a) Each task order should specify a warranty period of at least one year after acceptance, with the provision that repairs required to correct warranty defects also be warranted for an additional year.

(b) The require ent for sole negligence shou,ld be eliminated.

10.3 Ecuionent - The equip =ent warranty is also unacceptable since the effective warranty period is only ninety days from the date of delivery. Consequently, we would reco==end that equipment be pur-chased under a separate order with negotiated terms and conditions.

10.4 Encineerinz and Technical Advice and Consultation (Services) - We feel that this ninety-day limitation is also unacceptable but would suggest that you consult with your counsel to determine if such a i clause is legally enforceable. It is our opinion that the Pennsylvania Statute precludes such limitation on warranty.

In su==ary, we would recommend that the entire Article on Warranty be stricken including those sections dealing with Conditions of Warranty and the Disclaimer.

11.0 LIMITATION OF LIABILITY The blanket limitation of liability sought by B&W appears unreasonable since the limitation includes not only relief from the patent inde=nification clause but also from any negligent actions performed by B&W which cause injury or da= age to third parties.

12.0 INDE C IFICATIO::

In view of the legal ramifications with respect to the Price-Anderson Act, we would recommend the insertion of a provision whereby the Purchaser would inden-nify B&W and its ageurs only to the exter.: that the Purchaser obtains protection under the provisions of the Act.

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, y To: R. Peter Betz August 16, 1977 Page Three Re: Proposed Master Services Contract (MSC) with B&W for TMI Unit I 14.0 DELAY IN PERFORMANCE B&W's force majeure provision should be modified to exclude labor shortages or inability to secure materials or equipment since such causes are within the reasonabla cor. trol of B&W. We would also recom=end that in the event of a force majeure provision, oniv schedule relief should be given.

16.0 CHANGES We~would reco==end that if Purchaser authorizes a change, B&W immediately co=mence with implementation of such change and that negotiations may take place subsequent to such authorization.

20.0 DATA B&W should have no right to retain data developed as a result of expenditures made by Met-Ed unless specifically authorized in writing by Met-Ed.

24.0 THIRD PARTY BENEFICIARY We would recem=end that this clause be adjusted to allow for assignment by Met-Ed to any company within the GPU system.

In smry, we find the draf t Contract objectionable and would hope that your negotiations would alter many provisions.

In the event of any questions, please do not hesitate to co==unicate with the undersigned.

. Haimowit:

bjs cc: F. Clickman J. L. Hulsebus l A. J. Mazella '

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