|
Back to top
PART A. GENERAL TERMS AND CONDITIONS
- Definitions.
The following terms shall have the meanings set forth below throughout this Contract.
- "Buyer" means National Steel and Shipbuilding Company.
- "Contract" means the purchase order between Buyer and Seller, including these Terms and Conditions, the Specifications, and any other documents incorporated by reference.
- "Contract Products" means the products, material, apparatus, equipment, supplies, articles, information, data or other goods to be furnished by Seller under this Contract.
- "Owner" means Totem Ocean Trailer Express, Inc.
- "Prime Contract" means the contract between Buyer and Owner for the construction of the Vessel(s).
- "Seller" means the individual, association, partnership, corporation or other entity identified on the face of the purchase order of this Contract who is to perform the Work or supply the Contract Products.
- "Specifications" means all technical specifications, plans, data, drawings, diagrams, work schedules, purchase specifications, and any other documents which describe the Work and/or the Contract Products.
- "Vessel(s)" means any one or more of the Roll-on/Roll-off vessels to be constructed as described under the terms of the Prime Contract.
- "Work" means the services and/or goods which are the subject of this Contract. Unless otherwise specifically defined, "Work" includes any Contract Products called for by this Contract.
- Contract Acceptance, Integration and Amendment.
- Seller agrees that it will strictly perform this Contract. Acceptance of this Contract is expressly limited to the terms and conditions hereof and shall be made by executing the acknowledgment copy of the purchase order and returning the same to Buyer, to the attention of the person executing the purchase order for Buyer. If for any reason Seller should fail to accept this Contract in writing, any performance by Seller of any portion of this Contract shall constitute complete acceptance of this Contract. Any terms proposed in the acceptance of this Contract which add to, vary from, or conflict with the terms and conditions of this Contract are hereby objected to. Any such proposed terms shall be void. If this Contract has been issued by Buyer in response to an offer from Seller, then issuance of this Contract by Buyer shall constitute an acceptance of such offer subject to the express condition that Seller assent to such additional and different terms and conditions herein. Seller shall be deemed to have so assented if it begins any performance whatsoever of this Contract.
- This Contract constitutes the entire agreement between the parties and supersedes all previous communications, representations or agreements, whether oral or written, between the parties. No terms other than those set forth herein or in the purchase order shall apply. Seller represents that, in entering into this Contract, it does not rely on any previous oral or implied representation, inducement, or understanding of any kind.
- This Contract may be amended or modified only by a written instrument executed by authorized representatives of both Buyer and Seller. Any other attempt to change the terms of this Contract shall be null and void.
- Scope of Performance.
- Work.
Seller agrees to perform for Buyer the Work described by this Contract. Seller shall provide at the location where the Work is to be performed all labor, materials, equipment, tools and supervision, and Seller shall bear all items of expense necessary, for the complete and satisfactory performance of the Work, except such items that Buyer, in this Contract, expressly agrees to supply or furnish for the use of Seller. Seller agrees to perform the Work to the standards of care, skill and diligence, professional or otherwise, normally provided by a competent person in the performance of services identical or substantially similar to the Work hereunder.
- Contract Products.
Seller agrees to deliver the Contract Products in strict conformity with the Specifications. Seller shall make no changes in the Specifications without Buyer's written consent. All materials incorporated into the Contract Products shall be new and of suitable grade and quality for their purposes, and Seller shall not substitute materials for those specified without Buyer's written approval.
- Time of Performance.
Seller agrees to perform the Work and/or deliver the Contract Products, as the case may be, in a diligent manner and in no event later than the time specified on the face of the purchase order. Time of performance specified in this Contract is of the essence of this Contract. If at any time it reasonably appears to Buyer that Seller is failing to make progress, such that performance may not be timely completed in accordance with this Contract, Seller shall, within five (5) business days of a written request by Buyer, notify Buyer in writing indicating its best completion date. If Seller's completion date is not within the original Contract performance time, or if such completion date is, in Buyer's reasonable opinion, unachievable, Buyer may terminate this Contract for default in accordance with Part A, subparagraph 11(a)(ii), hereof. Buyer shall further have the right, but not the duty, and without waiver of any other rights or remedies which it may have, and regardless of Seller's best completion date, to extend the time for completion of performance. The new date for completion of performance shall be final, of the essence of this Contract, and subject to further change only in accordance with this Contract.
- Independent Contractor.
In performing this Contract, Seller and its employees and agents shall operate as and have the status of an independent contractor and shall not act as or be an employee of Buyer. Seller assumes full and sole responsibility for the payment of all compensation, expenses, and benefits (including, but not limited to, Workers' Compensation and medical benefits) of its employees and for all local, state and United States income tax, unemployment insurance, social security, disability insurance, and other applicable withholdings. Seller is solely responsible for determining the means and methods for performing the Work. Buyer shall have no right to control or to exercise supervision over Seller as to how the Work will be accomplished. Seller will determine the time, place, and manner in which it will accomplish the Work within the overall time of performance agreed upon herein.
- Acceleration.
If Buyer, for its own convenience, accelerates the Contract delivery date such that Seller is required to work overtime, Buyer shall pay therefor an amount equal only to Seller's actual additional labor costs occasioned by such overtime. If, however, Seller is behind schedule such that, in the reasonable opinion of the Buyer, Seller cannot assure performance in accordance with Part A, Paragraph 4, hereof, Seller shall, at its own expense, work such overtime as is necessary to regain schedule and eliminate delay.
- Inspection and Acceptance.
- The Work (which term throughout this Paragraph 7 includes, without limitation, raw materials, components, intermediate assemblies and data), together with Seller's manufacturing processes and quality systems, shall be subject to inspection and test by Buyer, Owner, any governmental authorities, classification societies or other regulatory bodies having jurisdiction over the Vessels or Contract Products at all places and reasonable times, including, but not limited to, Seller's subcontractors' and vendors' facilities, before delivery of the Vessel to Owner.
- Acceptance of delivery of the Contract Products does not alone constitute acceptance of performance under this Contract. The inspection or test by Buyer of any portion of the Work, or the failure of Buyer to inspect or test, does not relieve Seller from its responsibility to correct defects or non-conformities which may be discovered in Work which are discovered prior to acceptance or during the Guarantee Period. When the Work is not ready at the time specified by Seller for inspection or test, Buyer may deduct from the Contract price the additional costs to Buyer of inspection or test. Buyer may further deduct from the Contract price any reasonable costs to Buyer of inspection or test when prior rejection makes re-inspection or re-test necessary.
- If any inspection or test is made by Buyer on the premises of Seller or its vendor or subcontractor, Seller, without additional charge, shall provide reasonable facilities and assistance for the safety and convenience of inspectors in the performance of their duties. All inspections and tests by Buyer shall be performed in such a manner as not to unduly delay the Work. Buyer assumes no obligation to perform any inspection or test for the benefit of Seller unless specifically set forth elsewhere in this Contract. Seller shall be solely responsible for any reduction in the value of samples used in any inspection or test.
- The Work shall be accepted when, upon final inspection and testing, it is found to conform to this Contract. If any time prior to such acceptance, the Work is found to be defective in material or workmanship, or otherwise does not conform to this Contract, Buyer shall at any time have the right to require its correction or replacement at Seller's expense. Notwithstanding the foregoing, this right specifically extends to any period after acceptance of the Work and prior to commencement of the Guarantee Period. Any and all such defects shall be corrected and made good within twenty (20) days of notice thereof by Buyer to Seller. Buyer may reject nonconforming Work with or without disposition instructions. Seller shall have a reasonable opportunity to examine the Work before it is rejected. Work which has been rejected shall not thereafter be re-tendered for acceptance until the nonconformity is corrected and the corrective action taken disclosed to Buyer.
- If Seller fails to promptly replace or correct rejected Work, Buyer may either (i) correct such Work to the account of Seller, or (ii) terminate this Contract for default as provided in Part A, Paragraph 11, of this Contract. If Seller fails to correct or replace such Work within the Contract delivery schedule, Buyer may nevertheless accept performance of the re-tendered Work and equitably reduce the Contract price.
- Final acceptance of the Work shall be conclusive except with respect to fraud or gross mistakes amounting to fraud. In such cases, Buyer, in addition to any other rights and remedies provided by law, or under other provisions of this Contract, shall have the right to require Seller to either: (i) at no increase in Contract price, correct or replace the defective or nonconforming Work at the original point of delivery, or at Seller's plant, or at the location of the Vessel, at Buyer's election, and in accordance with a reasonable delivery schedule as may be agreed upon between Seller and Buyer; provided that Buyer may require a reduction in Contract price if Seller fails to meet such delivery schedule, or (ii) within a reasonable time after receipt by Seller of notice of defects or nonconformance, repay such portion of the Contract price as is equitable under the circumstances. When Work is returned to Seller, Seller shall bear the transportation cost from Buyer to Seller's plant and return to Buyer. Where Buyer elects to replace the Work, Seller shall bear all transportation costs to deliver replacement Work in accordance with the original Contract terms. If Seller fails to perform or act as required in (i) or (ii) above and does not cure such failure within a period of ten (10) days (or such longer period as Buyer may authorize in writing) after receipt of notice from Buyer specifying such failure, Buyer shall have the right to such Work and charge to Seller all costs occasioned by Buyer.
- Guarantee.
- Seller guarantees that the Work will be free from defects in material, workmanship and design, and will conform to this Contract for a period of three hundred sixty-five (365) days after delivery of the Vessel to Owner (the "Guarantee Period"). The Guarantee Period shall be extended by the time during which the Vessel is not available for service to any extent by reason of any Guarantee Defect.
- If at any time during the Guarantee Period, any weakness, deficiency, defect, failure, breaking down, or deterioration not caused by Buyer or Owner ("Guarantee Defect") in the Work shall appear or be discovered, such Guarantee Defect shall be corrected, or at Buyer's option, replaced, promptly and at Seller's expense, including any travel and/or transportation costs and other incidental costs which may be incurred. In the event a Guarantee Defect in an item of equipment or machinery causes any damage to such item of equipment or machinery, Seller shall be liable for not only the cost of correcting or repairing the Guarantee Defect, but also for the cost of correcting or repairing such damage to such item of equipment or machinery caused by such Guarantee Defect.
- If any repair or correction of a Guarantee Defect is completed within ninety (90) days of the expiration of the Guarantee Period, the Guarantee Period shall be extended for a period of ninety (90) days with respect to the item(s) repaired or corrected from the date of completion of such repairs or correction.
- Seller's guarantee, and Buyer's guarantee rights to enforce such guarantee against Seller, shall be separately assignable to Owner.
- Assignment.
Neither this Contract nor monies due hereunder may be assigned by Seller in whole or in part, voluntarily or by operation of law, without Buyer's prior written consent. Buyer may, however, without prior notice to Seller or Seller's sureties, assign this Contract in whole or in part to Owner.
- Indemnity.
Seller shall defend, indemnify and save Buyer, its affiliated companies, and each of their directors, officers, agents and employees, harmless from and against all claims, demands, actions, proceedings, and losses of any nature, and all costs and expenses incurred in connection therewith, including attorneys fees, for injury or death to persons, (including, but not limited to, agents and employees of Seller and its subcontractors) and for damage to or loss of property, including loss of use, arising directly or indirectly out of or in connection with the performance of the Work under this Contract, whether such injury, death, damage, or loss is caused in whole or in part by the negligence or other liability of Seller, including Sellers' subcontractors and vendors.
- Default.
- The following acts shall each be considered a default in performance of this Contract by Seller:
- if Seller fails to perform the Work or deliver the Contract Products within the time specified in this Contract or any written extension thereof; or
- if Seller fails to make progress so as to endanger performance of this Contract and fails to assure performance in accordance with Part A, Paragraph 4, hereof; or
- if Seller fails to perform any other material provision of this Contract after five (5) days written notice from Buyer; or
- upon the insolvency of Seller, as evidenced by the inability of Seller to pay its obligations when due, or the filing by Seller of a petition under the United States Bankruptcy Code or under state law, or a petition for reorganization, or the appointment of a trustee or receiver of any kind, or by a general assignment for the benefit of creditors.
- In the event of a default by Seller, Buyer may, without prejudice to any other remedy under this Contract or at law:
- suspend or stop payment on all outstanding invoices from Seller;
- stop work and/or terminate this Contract in whole or as to any part;
- apply any monies due Seller to the completion of the Contract by Buyer or any third party.
- In the event Buyer terminates this Contract in whole or in part as provided in paragraph (b), above, Buyer may procure, upon such terms and in such manner as Buyer may reasonably determine, goods or services similar to the Work specified herein, and Seller shall be liable to Buyer for any excess cost for such similar procurement. If this Contract is terminated for default only in part, Seller shall continue the performance of this Contract to the extent not terminated.
- Except with respect to defaults of subcontractors at any tier, Seller shall not be liable for any excess costs if Seller has exercised due diligence and if the failure to properly perform the Contract arises out of causes beyond the control and without the fault or negligence of Seller. Such causes include:
- delay due to government priorities, intervention by or delays caused by civil, naval, or military authorities, acts of God (other than ordinary storms or ordinary inclement weather conditions), earthquakes, lightning or flood;
- explosions, fire or vandalism, provided such explosion, fire or vandalism did not result from gross negligence of Seller;
- strikes or other industrial disturbances (not including any strikes or industrial disturbances resulting from unilateral changes made by Seller in violation of the National Labor Relations Act under existing labor contracts), riots, insurrections, war, sabotage, blockades, embargoes, and epidemics;
- inability to obtain labor, provided Seller has exercised diligence in the recruitment and training of labor; and
- accidents which adversely affect Seller's schedule and which are not the result of Seller's or a subcontractor's negligence or intentional malfeasance;
- interruption or curtailment of essential utility services; but in every case, the failure to perform must be beyond the control and without the fault or negligence of Seller. For any such delay, Seller shall take reasonable steps to try to overcome the delay and to mitigate Buyer's damages, including good faith bargaining intended to terminate any strike or industrial disturbance, and the cause and period of such delay is clearly documented to Buyer by Seller. The documentation submitted by Seller to Buyer shall include documentation of the demonstrated effects of the delay on the most current schedule documents submitted to Buyer by Seller. Seller shall not be entitled to any extension of any Contract delivery date for any delay resulting from a cause of delay in existence as of the execution of this Contract if such cause was known to Seller at the time of execution of this Contract, or for any delay resulting from late performance or delivery of a vendor or subcontractor, if such delay results from the continuation of a cause of delay known to Seller in effect as of the date of execution of the purchase order to such vendor or subcontractor. Upon the occurrence of any such delaying event, written notice shall be given by Seller to Buyer within fifteen (15) days after knowledge thereof has come to Seller or within fifteen (15) days after the date on which Seller should have known of such delaying event, whichever is the earlier date. Upon the cessation of any such event, written notice thereof and of the anticipated effect thereof, if any, on the Contract delivery date(s) shall be given by Seller to Buyer within fifteen (15) days. The failure of Seller to give the required notices within the periods specified by this Paragraph shall constitute a waiver by Seller of its excuse from liability for excess costs.
- If the failure to perform is caused by the default of a subcontractor at any tier, and if such default arises out of the causes set forth in subparagraph (d), above, and if Seller's issuance of a subcontract was expeditious and prudent, and if both Seller and subcontractor have exercised due diligence, Seller shall not be liable for any excess costs for failure to perform, unless the Work to be furnished by the subcontractor was obtainable from other sources in sufficient time to permit Seller to meet the required delivery schedule.
- If this Contract is terminated for default, Seller agrees, at Buyer's request, to transfer title (insofar as not previously transferred) and deliver to Buyer, in the manner and to the extent directed by Buyer, any completed Work, and such partially completed Work, including but not limited to materials, parts, tools, dies, jigs, fixtures, plans, drawings, information, and contract rights as Seller has specifically produced or specially acquired for the performance of the terminated portion of this Contract. Seller shall, upon direction of Buyer, protect and preserve property in possession of Seller to which Buyer has gained title pursuant to this subparagraph.
- Payment for completed Work delivered to and accepted by Buyer pursuant to this paragraph shall be at the Contract price. Payment for manufacturing materials delivered to and accepted by Buyer and for the protection and preservation of property shall be in an amount equal to the Contract price for the Work for which the manufacturing materials have been produced or procured, multiplied by the percentage of completion of such Work and decreased by such sum as Buyer determines to be necessary to protect Buyer against losses because of outstanding liens or claims of former lien holders and other losses arising out of the termination.
- Disputes.
- Except as otherwise expressly provided in this Contract, any dispute relating to this Contract which is not disposed of by mutual agreement shall be decided initially by Buyer, who shall reduce its decision to writing and furnish a copy thereof to Seller. The written decision of the Buyer shall be final and conclusive unless, within thirty (30) days from the date of receipt of such decision, Seller provides to Buyer written notification of its disagreement with said decision. Such notification of disagreement shall identify each element of Buyer's decision with which Seller disagrees, and for each such element, provide all reasons for disagreement. Following Buyer's receipt of Seller's notice of disagreement, the parties shall negotiate in good faith for sixty (60) days in an effort to resolve the dispute.
- Any dispute not resolved in accordance with subparagraph (a), above, may be resolved by either party by any lawful means, including litigation, which may be initiated by either party only in any court of competent jurisdiction in San Diego County, California, and both parties consent to such exclusive jurisdiction and venue.
- Changes.
- Buyer may at any time, by written order, and without notice to any surety under any performance bond, change any provision of this Contract, and Seller shall accept and perform any such change order.
- If any such change order causes an increase or decrease in the cost of, or the time required for, performance of this Contract, Buyer shall make an equitable adjustment in the Contract price, the delivery schedule, or both, and shall so modify this Contract.
- Seller must assert its right to an equitable adjustment for a written change order within twenty (20) days from the date of receipt of any such written change order. However, if Buyer decides that the facts justify it, Buyer may receive and act upon a proposal for equitable adjustment submitted before final payment of the Contract price.
- Failure to agree to any equitable adjustment shall be a dispute to be resolved pursuant to the Disputes paragraph of this Contract. However, nothing in this Paragraph shall excuse Seller from proceeding with diligent performance of this Contract as changed.
- Seller shall notify Buyer in writing of any act or omission of Buyer that Seller considers to constitute a constructive change to this Contract. In such event, Seller shall be entitled to claim only those costs incurred by Seller within fifteen (15) days of the date such notice is provided to Buyer.
- Subcontracts.
Seller shall give advance notification to Buyer of any proposed subcontract for goods or services not identified in Seller's proposal having a value greater than ten percent (10%) of the Contract price, or more than $100,000, whichever amount is less. Seller shall not, without Buyer's prior written approval, place any such proposed subcontract except any subcontract for procurement of standard commercial off-the-shelf components or raw materials.
- Third Party Property Rights.
Seller represents and warrants that it has read the Specifications, and based on such reading and its past experience and superior knowledge with respect to the Contract Products, Seller warrants to Buyer and its successors in interest that the manufacture, sale or use of the Contract Products, whether manufactured in accordance with the Specification or otherwise, does not and will not infringe or interfere with any business or property rights(s) of any third party, including, without limitation, patent, trademark or copyright. Seller shall defend, indemnify and hold Buyer and its employees, agents and successors in interest free and harmless from and against any and all claims, demands, costs and liabilities, including legal expenses, arising out of any such infringement, interference or claim of infringement or interference.
- Confidentiality.
- The Specifications, the Prime Contract, and other intellectual property furnished by Buyer to Seller and marked conspicuously and appropriately to indicate its proprietary and confidential nature ("Proprietary Information") shall be and remain the property of Buyer and shall be used, duplicated and disclosed only to the extent necessary for the performance of this Contract, and upon completion of such performance shall be returned to Buyer or disposed of as Buyer directs.
- Seller shall protect Proprietary Information, using the same degree of care as Seller uses to protect its own proprietary, confidential or trade secret information, but no less than a reasonable degree of care; provided, however, that this obligation shall not apply to Proprietary Information previously known to Seller, is lawfully obtained from a third party, is independently developed, or comes into the public domain without breach of this Contract.
- Technical Data Rights.
- All plans, sketches, drawings, programs, calculations, test data and other written documents prepared by Seller, its subcontractors or vendors relating to the manufacture of the Contract Products which are produced by Seller in the performance of this Contract are the property of Seller (the "Seller Trade Secrets"). As part of this Contract, Seller grants a royalty free license to Buyer and Owner with respect to the Seller Trade Secrets to use, and to furnish to third parties, including ship repair and construction companies, in connection with such use, all or part of the Seller Trade Secrets to repair, maintain, modify and operate the Vessel(s) without further license from or payment to Seller. The Seller Trade Secrets have been, or will be, marked appropriately by Seller to indicate the proprietary and confidential nature thereof and shall be maintained in confidence by Buyer and Owner and shall not be disclosed by either party to third parties except as permitted herein; provided, however, that Buyer shall have the right to utilize the Seller Trade Secrets in the construction, repair and maintenance of the Vessel(s) and to disclose the Seller Trade Secrets to third parties on a need-to-know basis in connection therewith. In any disclosure of Seller Trade Secrets by Owner or Buyer to third parties permitted by this paragraph, Buyer or Owner shall impose on any third party conditions relating to the confidential treatment thereof to the same effect as those imposed upon it herein, provided that such third parties shall not be entitled to reveal the Seller Trade Secrets to any other third parties. These restrictive provisions do not apply to information which is or hereafter becomes public information (otherwise than through the default of Buyer or Owner) or which becomes lawfully available to the Buyer or Owner otherwise than directly or indirectly from Seller and without restriction against its subsequent disclosure to the party to whom it is thus supplied or disclosed.
- Seller grants Owner a license to use the Seller Trade Secrets to have one or more vessels constructed for Owner at one or more shipyards other than the Buyer. If Buyer shall have purchased from Seller one or more shipsets of Work in addition to the two shipsets purchased under this Contract at the time Owner uses this license, there shall be no fee for the use of such license; otherwise Buyer shall pay to Seller for each such other shipyard (regardless of the number of vessels purchased by Owner from such shipyard) to which Buyer provides all or part of the Seller's Trade Secrets, a reasonable sum to be agreed upon by the parties. Failure to agree to such a sum shall be a dispute under this Contract.
- Owner's use of the license granted by subparagraph (b) of this Paragraph shall be by use of the copies of the documents comprising the Seller Trade Secrets which shall have been provided to Buyer during Seller's performance of this Contract, and Seller shall have no obligation to provide to Owner or another shipyard any of such documents in connection with Owner's use of such license.
- Shipment and Delivery.
- Not later than sixty (60) days after date Buyer releases Seller to manufacture, or not later than sixty (60) days prior to the scheduled delivery date of any Contract Products, whichever occurs first, Seller shall furnish to Buyer, to the attention of the person executing the purchase order for Buyer, a complete listing of all individual Contract Products items to be provided pursuant to this Contract (including all material to be provided directly to Buyer by lower-tier subcontractors of Seller) coded for identification in accordance with the Specifications, together with Seller's delivery schedule, if any. Nothing in any "expediting" communication shall constitute a modification of this Contract.
- All Contract Products must be shipped by the route and in the manner specified on the face of the purchase order to this Contract; otherwise, any additional costs of shipment will be to Seller's account. Rail delivery is to be to a siding in Buyer's facility, or as otherwise specified by Buyer. Seller's price shown herein shall include all materials and labor required to adequately package the Contract Products so as to assure in-transit protection and delivery, in an undamaged condition. No Contract price increase will be allowed for special tooling, setup, or preparation.
- Deliveries are to be made both in quantities and at the times specified in this Contract. Buyer shall not be required to pay for Contract Products delivered which are in excess of the quantity specified unless such excess is agreed upon in advance by Buyer in writing. Buyer may reject any delivery made in excess of fifteen (15) days in advance of the Contract delivery date without authorization in writing by Buyer.
- Title and Risk of Loss.
- Title to the Contract Products shall pass to Buyer upon delivery of the Contract Products in accordance with this Contract, except as may be otherwise expressly provided for herein. A rejection or other refusal by the Buyer to receive or retain the Contract Products, whether or not justified, or a justified revocation of acceptance, revests title to the Contract Products in the Seller.
- Except as provided for hereafter, risk of loss, destruction or damage to the Contract Products ("Risk of Loss") shall be as determined by the shipping terms set forth on the face of the purchase order. To the extent not so determined by said shipping terms:
- the Seller shall be responsible for Risk of Loss until the Contract Products are delivered at the designated delivery point, regardless of the point of inspection;
- after delivery to Buyer at the designated point and prior to Buyer accepting or giving notice of rejection, Seller shall remain solely responsible for Risk of Loss until Buyer accepts or rejects the Contract Products unless such loss, destruction or damage results from the gross negligence of Buyer; and,
- after rejection, Seller shall remain solely liable for Risk of Loss, unless such loss, destruction or damage results from the gross negligence of Buyer.
- Payment.
- Seller shall submit to Buyer for the Work performed an invoice conforming to the following:
- The Work performed by Seller must be detailed for each date/item worked, and the price of such Work.
- Seller's invoice number and Buyer's purchase order number, and line item numbers must appear on the invoice.
- If the invoice reflects any progress/milestone payments, the invoice must comply with the separate "Provisions for Progress/Milestone Payments."
- Invoices incorrectly or incompletely executed will be returned for correction or completion.
- Seller shall be paid, upon the submission of proper invoices or vouchers, the prices stipulated herein for Contract Products delivered and accepted, less deductions, if any, as herein provided. Unless otherwise stated, all payments shall be made in United States dollars. In no event shall payment waive any breach of the guarantee or any other obligations of Seller under this Contract or any of Buyer's rights under this Contract or at law. Buyer reserves the right to withhold payment on this Contract until all Contract requirements (including, but not limited to, the delivery of technical data) are met.
- For Contract Products, an original and two (2) copies of the invoice should be mailed no earlier than the day of shipment. The invoice shall contain itemized prices, discounts, order number, transportation description and name of carrier. Any cash discount period, notwithstanding anything to the contrary on any packing list or invoice, will commence on the date Buyer receives the Contract Products in conformance with the packing list and a complete and correct invoicer.
- Taxes.
The Contract price is inclusive of all taxes. Seller shall pay, as part of the Contract price, all United States, state, foreign, and local taxes, assessments and duties of every kind lawfully assessed or levied against or with respect to the Work and any material, supplies, or equipment used in the performance of this Contract.
- Liens.
- The term "Lien" means any lien, security interest, encumbrance or other right in personam or in rem against the Vessel or Contract Products enforceable in a court of competent jurisdiction.
- Seller waives any and all rights to any Lien, and Seller shall not permit or cause any Lien by Seller or by any subcontractor furnishing goods or performing Work under this Contract to lie or attach against the Vessel or Contract Products.
- Anything herein to the contrary notwithstanding, Buyer shall have the right to withhold any payment until Seller shall furnish, as requested, current written releases and waivers of all rights to claim or file liens, properly executed by Seller, its subcontractors, vendors and others furnishing labor, services or material in the performance of this Contract. It is further understood and agreed that acceptance by Seller of the final payment hereunder shall constitute satisfaction in full and release of all claims or demands by Seller against Buyer and arising out of or in any way connected with this Contract. If Seller fails or neglects to pay any admitted claims for labor or material, Buyer may pay same and deduct from funds due hereunder, or, if such claims be disputed, withhold sufficient funds to pay same until such claims are adjusted. Seller shall immediately discharge or cause to be discharged any Lien of any kind which at any time is filed against the Contract Products or the Vessel with respect to or arising from the Work. If any such Lien is not immediately discharged, Buyer may discharge or cause to be discharged, said Lien at the expense of Seller.
- Waiver.
Buyer's waiver of any provision of this Contract shall not constitute a waiver of any such provision in any later circumstance or a waiver of any other provision of this Contract, and such waiver shall not affect Buyer's right to thereafter exercise any right or remedy under any provision of this Contract, or at law.
- Compliance with Law.
Seller shall comply fully with all applicable United States, state and local laws, rules, regulations, and ordinances and with all rules, regulations and requirements of any government authority, classification society or regulatory body with jurisdiction over the Vessel, and shall defend, indemnify and hold Buyer harmless from any and all liability resulting from any failure to so comply.
- Interpretation.
- This Contract shall be governed by and interpreted under the laws of the State of California as modified herein. Any right expressly conferred on Buyer shall not limit or modify any right which Buyer would otherwise have. If any one or more of the provisions of this Contract is found to be invalid, the remaining provisions shall not be affected, and this Contract shall be interpreted as if not containing such provisions. This Contract shall not be varied, supplemented, qualified or interpreted by any prior course of dealing, or course of performance between the parties and shall be interpreted without regard to which party is deemed to have drafted this Contract. Paragraph headings are for convenience only and shall not be used to interpret this Contract.
- In the event of any conflict or inconsistency between any provisions of this Contract, wherever appearing, such conflict or inconsistency shall be resolved by giving precedence to the following provisions and documents in the order below:
- Provisions on the face of the purchase order;
- These Terms and Conditions including, if incorporated herein, any progress payment provisions;
- The Specifications, and within the Specifications, the purchase specifications and other technical specifications shall prevail over the drawings; and,
- Any other documents incorporated herein by reference.
- Notice.
Unless expressly directed otherwise, notices required by this Contract to be given by Seller or Buyer to the other shall be personally served upon Seller or Buyer or delivered by facsimile and first class mail addressed to the appropriate address hereinafter set forth or to such other address as Seller and Buyer may hereafter designate by written notice. If served by facsimile and first class mail, service will be considered complete and binding on the party served twenty-four (24) hours after completion of said facsimile transmission, as evidenced by a confirmation of successful transmission.
- To Seller:
As indicated on face of the purchase order
To Buyer:
National Steel and Shipbuilding Company
28th Street and Harbor Drive
P.O. Box 85278
San Diego, California 92186-5278
Attn: Director, Purchasing
Facsimile Number: (619) 544-3677
- Export Control Compliance.
In performing this Contract, Seller shall comply with the Export Administration Regulations (Title 15, Code of Federal Regulations, Parts 730 through 774), the regulations issued by the Office of Foreign Assets Control (Title31, Code of
Federal Regulations, Parts 500 through 590), and all other applicable laws, regulations and orders which control the exports of material and technical data as defined and required therein, including, but not limited to, obtaining all required licenses and other approvals.
- Suspension and Termination for Convenience.
- In the event of any suspension of Work under the Prime Contract, Buyer may by written notice to Seller suspend performance of the Work in whole or in part. Upon receipt of such notice, Seller shall immediately comply with its terms and take all reasonable measures to minimize the incurrence of costs. Upon receipt of notice to resume performance of the Work, Seller shall immediately comply with its terms. If the suspension of performance of the Work causes an increase in the cost of, or the time required for, performance of this Contract, Buyer shall make an equitable adjustment in the Contract price, the delivery schedule, or both, and shall so modify the Contract.
- Buyer may at any time by written notice to Seller terminate this Contract in whole or in part if the Prime Contract is terminated in whole or in part, or if any government authority, classification society or regulatory body directs Owner or Buyer to undertake or refrain from undertaking any portion of the Work such that the Work or Contract Products become unnecessary in whole or in part. Upon receipt of such notice, Seller shall immediately cease performance of the Work; terminate all subcontracts and purchase orders; refrain from placing further orders; and, as directed by Buyer, transfer title and deliver to Buyer all Work completed in whole or in part and all materials, parts, plans, drawings and contract rights produced or acquired for performance of the terminated Work and protect and preserve property in the possession of Seller. Buyer shall pay Seller for all Work performed and Contract Products delivered and accepted and for the cost of preserving and protecting property.
PART B. SHIPYARD PERFORMANCE
If this Contract requires performance at any of Buyer's facilities, including its shipyard at 28th Street and Harbor Drive, San Diego, California, or any other facility owned, leased or operated by Buyer, Seller agrees to comply with the following additional terms and conditions.
- Insurance.
During the time that Seller is in Buyer's facilities, and as a condition to its entry into such facilities, Seller shall keep and maintain in effect, at its sole cost and expense, the following policies of insurance:
- Comprehensive public liability, broad form property damage and personal injury insurance with coverage to include premises operations, products liability, completed operations hazard, contractual liability (specifically including the risks assumed hereunder) and independent contractors. Combined bodily injury and property damage coverage shall have minimum limits of liability of $2,000,000 per occurrence and $2,000,000 in the aggregate.
- Comprehensive automobile liability insurance with coverage to include owned, hired and non-owned vehicles. Combined bodily injury and property damage coverage shall have a minimum liability limitation of $2,000,000 per occurrence.
- Workers' Compensation and Longshore and Harbor Workers' Compensation Act insurance with limits conforming to the statutory requirements of the State of California and the United States of America, respectively. If Seller's employees are assigned aboard the Vessel for any reason and to any extent, Jones Act coverage with minimum limits of liability of $2,000,000 per occurrence and $2,000,000 in the aggregate.
- Each such policy shall be underwritten by an insurance company satisfactory to Buyer; shall provide that it is primary insurance to, and noncontributing with, any other insurance carried by Buyer; and, shall obligate the insurer to give Buyer not less than thirty (30) days prior written notice in the event of policy cancellation or any material change therein. Certificates evidencing such policies, in a form satisfactory to Buyer, shall be delivered to Buyer upon the Seller's execution of this Contract, and renewals thereof shall be sent to Buyer at least ten (10) days prior to the expiration of the respective policy terms. Buyer shall have the right to withhold payment of sums due under this Contract until such certificates and/or renewals are received by Buyer. The policies referred to in subparagraphs (a) and (b) above shall be endorsed to name Buyer as an "additional insured," and the insurance certificates provided to Buyer shall so reflect such endorsement.
- Security.
Seller shall comply with Buyer's Access Control Plan and with Buyer's security policies and procedures regarding personnel administration, vehicle operations, and general security practices. Substantial noncompliance by Seller or any of its subcontractors with any such security procedures shall constitute a default.
- Safety.
- Seller shall comply with Buyer's safety policies and procedures and with all applicable United States, state and local safety laws and regulations. As a condition to Seller's entry to Buyer's facilities, Seller will do the following:
- Provide to Buyer's Safety Department the name, work and home address and phone numbers of an officer or other person with authority and responsibility over the Work and in particular with the responsibility and authority to correct any unsafe conditions at any time until performance of the Work is completed.
- Attend and complete a safety orientation meeting with Buyer's Safety Department. This meeting must be completed prior to commencement of any performance by Seller in Buyer's facilities.
- Provide to Buyer's Safety Department a copy of Seller's Injury and Illness Prevention Program.
- Provide to Buyer's Safety Department a copy of all Material Safety Data Sheets (MSDS) for all chemical compounds that Seller anticipates using in performing Work at Buyer's facilities, together with a statement of the nature and estimated quantity of hazardous waste Seller anticipates generating.
- Cause each of Seller's employees who will be in Buyer's facilities to complete a "Personal Protective Equipment" statement acknowledging their responsibilities.
- Seller represents and warrants that all equipment used by Seller to perform any Work at Buyer's facilities conforms to all United States and state safety standards.
- Seller shall report all injuries or illnesses occurring at Buyer's facilities during performance of the Work in accordance with the following procedure:
- An initial safety report shall be made to the Buyer's Safety Department within four (4) hours of the incident. This report shall consist of the name of the injured, place of occurrence, nature of the injury, and a brief description of the accident. This report may be made orally.
- A formal written, final safety report shall be submitted in the form of a formal accident investigation report, within three (3) working days of the incident, using NASSCO Subcontractor Supervisors Injury Analysis, NASSCO Form Number 587. This form is available from Buyer's Safety Department.
- Notwithstanding the foregoing, the safe conduct of all persons employed or retained by Seller or its subcontractors shall be the sole responsibility of Seller. Seller shall notify Buyer, in writing, of the existence of any hazardous conditions, property or equipment at Buyer's facilities which are not under Seller's control. Seller shall take all reasonable precautions in the performance of the Work to protect the health and safety of its employees and others and to minimize danger from all hazards to life and property, and shall comply with all United States, state, and local health, safety, and fire protection laws and regulations. Under no circumstance shall compliance with Buyer's safety policies and procedures alone be considered complete satisfaction of the requirements of this subparagraph.
- Seller shall immediately notify Buyer's Safety Department, in writing, upon receiving notice of any inspection by either United States OSHA or California OSHA of their work area (in Buyer's facilities) which is not part of a larger inspection of Buyer's facility. In the event of such an inspection, Seller shall permit Buyer's personnel to be present at any opening conference, the inspection, and any closing conference, and shall provide Buyer with copies of all correspondence, including citations, received from OSHA.
- In the event that Seller fails to comply with this Part B, Paragraph 3, Buyer may without prejudice to any other legal or contractual rights of Buyer, issue an order stopping all or part of the Work. Seller shall have no claim for extension of time or for compensation or damages by reason of or in connection with such work stoppage.
- Environmental.
- Seller shall comply with Buyer's environmental policies and procedures and with all United States, state and local laws and regulations regarding the use of any hazardous substances, and shall be responsible for all hazardous waste (both as defined by United States and California law) generated by Seller's employees and subcontractors during the performance of this Contract. Seller shall inform Buyer of all hazardous waste generated at Buyer's facility, and unless indicated otherwise on the face of the purchase order to this Contract, shall deliver or make available all such hazardous waste to Buyer for disposal or recycling, in Buyer's sole discretion. Seller shall be solely responsible for the consequences of its failure to perform the foregoing obligations and shall defend, indemnify and hold Buyer harmless from any and all losses, costs and expenses, including attorneys fees, arising from Seller's failure to perform its obligations hereunder, negligent or otherwise.
- If Seller causes, to any extent, the actual or potential release, spill, discharge or other loss of control of a hazardous substance or hazardous waste (an "Incident"), such that Buyer's On-Scene Emergency Coordinator is notified to respond through Buyer's existing Environmental Incident Communication Policy and Procedure, Buyer will incur response costs which are extremely difficult and impractical to ascertain. Buyer and Seller agree that the sums set forth herein represent the minimum amount of cost and expenses incurred by Buyer to respond to each Incident. Accordingly, Seller agrees to pay to Buyer for each Incident, Buyer's actual response costs, which are agreed to be not less than the sum of two thousand dollars ($2,000,00). Such payment shall not relieve Seller of the responsibility to pay Buyer the actual costs of Buyer's response and remediation costs resulting from the Incident in excess of such agreed upon sum, and shall not impair or waive Buyer's indemnification rights as set forth elsewhere in this Contract. Buyer shall have the right to reduce any payments due to Seller under this Contract by the amount of any sums assessed hereunder.
- Buyer's Medical Treatment.
Buyer shall have no obligation to furnish medical treatment to Seller's employees while such employees may be working in Buyer's facilities. In the event that Buyer's Medical Department furnishes medical treatment to any such employee, Seller shall defend, indemnify and hold harmless Buyer, its affiliated companies, and the directors, officers and employees of each of them, from and against any and all claims, demands or causes of action, by Seller's employees or their representatives, heirs or assigns for costs or damages (including, without limitation, punitive damages and reasonable attorney fees) arising out of or in connected with medical treatment furnished by Buyer, including claims based upon the negligence of Buyer.
- Use of Buyer Equipment.
In the event Seller uses, or allows any third party to use with or without the consent of Buyer, any equipment, tools, devices, apparatus or any property whatsoever (the "Equipment") belonging to Buyer, Seller agrees as follows:
- Seller represents and warrants that Seller, and each employee thereof who will actually use the Equipment, has satisfactorily completed all training and courses and has the certification necessary to operate the Equipment. Copies of approved training documentation and applicable certifications will be provided to Buyer upon request.
- Seller agrees at all times, as a condition to continued use of the Equipment, to obey all Buyer safety rules and all United States, state, and/or local laws relating to use of the Equipment. Failure to follow any such rule or law is agreed to be negligence per se, for which this Contract may be terminated, and Seller and any employee thereof barred from further work on Buyer's premises.
- Seller at all times is responsible for maintaining the Equipment in good working condition, and shall return the Equipment to Buyer at the end of the period of use, in the same condition as originally taken, reasonable wear and tear excepted. Seller agrees to pay Buyer upon demand for the cost of repair or replacement and all incidental costs, for damage to the Equipment caused in whole or in part by Seller or its employees.
- In the event Buyer lets the Equipment to Seller, such letting is on an "as-is" basis with no warranty, express or implied as to its merchantability or fitness for any particular use. Buyer makes no representation as to the condition or maintenance of the Equipment. Seller takes the Equipment accepting full risk of loss.
- Clean Up of Work Site.
During the performance of this Contract, and upon completion of the Work or earlier termination of the Work, Seller shall remove all debris, garbage or other waste material, including excess materials, scrap and equipment used or generated in performance of this Contract from Buyer's facilities. Seller shall pay to Buyer, upon demand, all costs of removal for materials or equipment not so removed.
- Substance Abuse Prevention.
- Sellers who perform Work only, without providing Contract Products, shall require, in writing, that each employee assigned to work at Buyer's facilities be drug tested prior to that employee starting work at said facilities and retested when said employee has not worked at Buyer's facility for a period of ninety (90) days or longer. Drug tests shall conform to at least the same standards as provided by the current version of Buyer's Human Resources Policy Manual, Section IV, Industrial Health/Safety, Subsection IV-1, NASSCO Substance Abuse Program and Work Rule, Attachment 1, Poison Lab Drug Screen, a copy of which will be provided to Seller upon request.
- Upon Buyer's request, Seller shall provide the documents needed to verify Seller's compliance with subparagraph (a), above, to include a copy of Seller's written employee drug testing requirement and a listing of the employees assigned to perform Work at any of Buyer's facilities who have been properly tested under these provisions.
- Export Control Compliance.
Seller understands and acknowledges that Buyer is a manufacturer of defense articles as defined in the International Traffic in Arms Regulations (Title 22, Code of Federal Regulations, Part 120, et seq.). In recognition thereof, Seller agrees on behalf of its employees, agents and subcontractors, to comply with Buyer's Export Management System. In addition, Seller shall inform Buyer in writing of the name and citizenship of each employee of Seller and of Seller's subcontractors at any tier who will participate in the performance of this Contract at Buyer's facilities who is not a United States citizen or lawful permanent resident and the name and address of each subcontractor at any tier who will participate in such performance which is not organized under the laws of any state of the United States. Seller shall cooperate fully with Buyer in applying for any export license or approval which may be required for any such employee or subcontractor and in justifying and documenting any license or approval exception, and Seller shall not permit any such employee or subcontractor to participate in the performance of this Contract over Buyer's objection.
|
