THIS SUPPLEMENTAL AGREEMENT is made and entered into this 20th day of November, 1992, effective October 1, 1992, by and between the UNITED STATES OF AMERICA (hereinafter called the "Government") represented by the UNITED STATES DEPARTMENT OF ENERGY (hereinafter called the "DOE"), and THE REGENTS OF THE UNIVERSITY OF CALIFORNIA (hereinafter called the "University"), a corporation of the State of California.
ARTICLE I: PREAMBLE
WHEREAS, The Department of Energy (DOE) is a component of the executive branch of the United States government and discharges its responsibilities for conducting research and development in a number of scientific and technological areas at highly specialized facilities owned by the United States and managed by contractors through Management and Operating (M & O) contracts. These responsibilities are executed pursuant to and this Supplemental Agreement is authorized by provisions of the Atomic Energy Act of 1954, as amended (42 U. S. C. Section 2100, et seq.), DOE Organization Act, as amended (42 U. S. C. Section 7101, et seq.), and other applicable laws. In discharging these duties, the DOE is responsible for the preparation of the budget and its support before Congress, and overall programmatic direction and guidance;
WHEREAS, The University of California (University), a state university in California is a non-profit organization, has managed the Lawrence Livermore National Laboratory (Laboratory) is a public service to the nation, for no loss or gain, in recognition of which the federal government provides a general indemnification of the University against liability or losses associated with its role as contractor, pursuant to provisions of this contract;
WHEREAS, the Laboratory is a multi-program and multidiscipline Laboratory which performs a unique mission of design, development, and testing of nuclear weapons, and research and development for other DOE programs, including Energy Research, Nuclear Energy, Fossil Energy, Conservation and Renewable Energy, Waste Management and Environmental Restoration, research in biological and biomedical sciences, and fostering science and engineering education, including encouraging students at various levels to pursue careers in mathematics and science. In addition, the Laboratory performs the important function of fostering the rapid nation's ability to compete economically;
WHEREAS, The Laboratory also performs research sponsored by agencies and organizations other than DOE, provided that the work is complementary to its principal mission, not in competition with the private sector, results in an overall benefit to the nation, and is consistent with other criteria required by DOE;
WHEREAS, The University is responsible for performance of agreed-upon programs of the highest possible technical quality, maintenance of programs across the spectrum of science relevant to the DOE mission, fostering an environment at the Laboratory conducive to scientific inquiry and the development and pursuit of new knowledge and creative and innovative ideas related to important national interests, and the application of cost efficient management;
WHEREAS, The DOE and the University both desire to restructure the existing M & O contractual relationship to provide for significantly expanded and enhanced University management oversight of the Laboratory which will enable the DOE to lessen its oversight presence at the Laboratory;
WHEREAS, Both the DOE and the University recognize that the contractual relationship must strike an appropriate balance between the ability to conduct science and responsible management oversight;
WHEREAS, The University will establish a Council on National Laboratories to be advisory to the President of the University on all matters related to the management and operation of the DOE laboratories that it manages;
WHEREAS, Both the DOE and the University recognize the importance and mutual benefit to be derived from continued and enhanced complementary and beneficial programs between the University and the Laboratory;
WHEREAS, Both the University and DOE intend that this contract include provisions appropriate for application to not-for-profit contractors. This will be accomplished in part by the incorporation of justified modifications to those standard contract provisions which are not appropriate for application to not-for-profit contractors;
WHEREAS, Both the University and DOE intend that the standards as established in the contract against which the management performance of the University is to be evaluated will be reasonable, clear, and mutually understood;
WHEREAS, Both the DOE and the University recognize that the unique nature of work performed at DOE research facilities requires a particularly cooperative and professional relationship between the parties in performing the obligations rising under this agreement in order to achieve their common objectives and fulfilling obligations of public accountability; and
WHEREAS, the DOE and the University, by Modification M201, extended the performance of this agreement through November 29, 1992, and both parties intend that said extension be superseded by this modification, and be effective October 1, 1992.
NOW THEREFORE, the parties agree that the entire agreement of the panties under Contract No W-7405 ENG-48 shall be as follows:
ARTICLE II: GENERAL DEFINITIONS (APR 1984) - FAR 52.201-1 AS MODIFIED BY DEAR 952.202-1 AND 970.204-18
Except as otherwise provided by other clauses of this contract, as used in this contract
(a) The term "Secretary" means the Secretary, Deputy Secretary or Under Secretary of the Department of Energy or any duly authorized representative of the Secretary
(b) "Contracting Officer" means a person with the authority to enter into, administer, and/or terminate this contract and make related determinations and findings. The term includes certain authorized representatives of the Contracting Officer acting within the limits of their authority as delegated by the Contracting Officer.
(c) Except as otherwise provided in this contract, the term "subcontracts" includes, but is not limited to, purchase orders and charges and modifications to purchase orders under this contract.
(d) The term "DOE" means the Department of Energy, the Secretary of Energy, or any duly authorized representative of the Secretary, including the Contracting Officer.
(e) The term "Government" shall mean the United States of America or any duly authorized representative thereof.
(f) The term "Laboratory" shall mean the Lawrence Livermore National Laboratory, which is operated by the University of California.
(g) The term "Laboratory Director" shall mean the Director of the Lawrence Livermore National Laboratory.
(h) The term "University" shall mean The Regents of the University of California.
(i) The term "officer or officers of The Regents of the University of California" shall mean the President of the Board of Regents (Governor of California), Chairman, Vice Chairman, General Counsel, Secretary, and Treasurer of The Regents.
(j) The term "someone acting as the Laboratory director " shall mean the person appointed as Laboratory Director, the Deputy Director acting in the absence of the Laboratory Director, or a person specified in writing to have authority to act in the absence of the Laboratory Director and Deputy Director. This term shall not refer to a person having delegated authority for part, but not a11, of the authorities of the Laboratory Director.
(k) The term Laboratory employees shall mean those University employees whose payroll and benefits are administered by the Laboratory.
(l) The term "central and branch office" shall mean the facilities and operations of the Office of the President of the University, and shall not refer to any satellite operations of the Laboratory.
(m) The term "Contracting Officer directive" ("directive") shall mean a regulation, order, or other written directive issued by the DOE for the purpose of imposing standing operational requirements on the University in the performance of work under this contract; but shall not include temporary written instructions issued by the Contracting Officer for the purpose of addressing short-term or urgent DOE concerns relating to security, safeguards, health, safety or the environment.
(n) The term "nonprofit management and operating contractor or subcontractors" shall mean one which receives no fee and is considered nonprofit under the laws of the jurisdiction where it is incorporated. A subsidiary may be a nonprofit contractor or subcontractor if a11 entities above in the corporate structure are considered nonprofit under the laws of the incorporating jurisdiction. The Contracting Officer may also treat as nonprofit a contractor whose particular corporate organization or circumstances, in the judgment of the Contracting Officer, warrants such consideration. All other management and operating contractors are considered profit making.
(o) The term "no gain/no loss" reflects the University's status as a not for profit instrumentality of the State of California and shall not be considered so as to preclude the payment of compensation to the University or to preclude a determination by DOE as to the disposition of costs incurred as unallowable costs under this contract in accordance with its terms.
ARTICLE III: STATEMENT OF WORK
ARTICLE III CL. 1 - SCOPE OF WORK - DEAR 970.1002
The University shall furnish intellectual leadership and the necessary personnel and management expertise required for the management and operation of the Lawrence Livermore National Laboratory in the performance of work under this contract in accordance with it terms. The underlying purpose of the work under this contract shall include:
The Laboratory's mission statement, attached as Appendix K to this contract, shall be amended from time to time as approved by the Contracting Officer.
ARTICLE III, CL. 2 - GENERAL RESPONSIBILITIES OF THE PARTIES (SPECIAL)
Basic considerations . The primary purpose of DOE and the University in executing this Supplemental agreement is to structure the management relationship between the parties to establish the contractual terms and conditions under which the University will manage and operate the Government-owned Lawrence Livermore National Laboratory and perform research and development and basic research for DOE in the most effective manner. The parties agree that the following principles are important to reach this goal:
(a) A management and operating contract for the performance of research and development and basic research is an agreement under which DOE authorizes the University to manage and operate the Los Alamos National Laboratory on DOE's behalf.
(b) A management and operating contract for the performance of research and development and basic research is characterized by its special purpose and by the special relationship it creates between the Government and the University. Government-owned facilities must be utilized to further national interests and to perform DOE's statutory mission in the areas of national defense, energy research and development and basic and applied research.
(c) Because of the nature of the work and because the work is to be performed in Government-owned facilities, the DOE must maintain a close relationship with the University and the University's personnel in various important areas such as environment, health and safety and safeguards and security. The conduct of the work under this contract is substantially separate from the University's other business.
(d) The performance of the work under this contract is directly related to the accomplishment of DOE's statutory mission and is of a long-term and continuing nature, and there is a need (1) to ensure its continuity and (2) for special protection covering the orderly transition of personnel and work in the event of a change of contractors.
(e) The benefits of the University's management and operation of the Government-owned research and development installations, such as the Lawrence Livermore National Laboratory, are most fully attained when the University's the contractor, within the terms of the contract, effectively brings its scientific and technical leadership, as well as its management expertise and capabilities to bear upon the performance of the work under this contract.
(f) The direction of the Laboratory must be in the hands of leaders of widely respected scientific, technical, and managerial competence, capable of attracting, retaining and managing outstanding scientific and technical personnel, and possessing the administrative skills to effectively and efficiently manage and operate a complex operation with extensive facilities and a wide range of programs.
(g) The competence and quality of any research organization derives from the competence and quality of those individuals who are actively engaged in the creative scientific, technical and engineering work carried on by the organization. However, there must be an appropriate balance between scientific freedom and accountability and responsible management oversight.
(h) Experience has demonstrated that high quality basic research can most effectively and best be conducted by permitting the individual investigator to pursue the work with scientific freedom essential for an effective creative effort. However, there must be an appropriate balance between scientific freedom and accountability and responsible management oversight.
(i) The conduct of applied research and development requires a very high degree of program coordination between the Laboratory and DOE or the sponsor. Responsiveness by the Laboratory to DOE and the sponsor's needs and requests strengthens the effectiveness of the Government-owned Contractor-operated research and development laboratory arrangement.
(j) The conduct of research and development at the forefront of the scientific and technical fields which lie within the scope of the Laboratory's responsibility often requires the best and most modern (state-of-the-art) equipment, experimental facilities and library resources available. Since experience has demonstrated that obsolescence of equipment in these fields is rapid, a continuing, active and affirmative program of supplementing and replacing such equipment is essential to scientific progress.
(k) Business and administrative aspects of the operation of the Laboratory such as salaries and budgets, procurement, property, overhead, audit and internal controls, must be controlled and managed by the University in a manner responsive to the obligations of public accountability.
(l) The parties recognize the importance of protecting the environment and the health and safety of laboratory employees and the public in the conduct of laboratory activities.
(m) The parties recognize that the work under this contract involves national security and agree that laboratory activities must be carried out in accordance with Safeguards and Security requirements of the Department.
ARTICLE III, CL. 3 - PROGRAM DEVELOPMENT (SPECIAL)
(a) Due to the critical character of the work from the standpoint of the national defense and security, it is understood by the parties hereto that very close collaboration will be required between the University and DOE with respect to direction, emphasis, trends and adequacy of the total program.
(b) Program Development, Work Authorizations and Approved Funding Programs
(1) Basic Consideration.
(i) The annual work program and budget are principal devices used by DOE in program development, integration, and cost estimating. To make the work program and budget most effective in assuring comprehensive coverage of the research and development potentials of the energy field, it is the responsibility of DOE to keep the operators of DOE's laboratories continually advised of its overall program, its scientific and technological problems, and its current long range objectives. In the light of which information, the Laboratory will propose possible new objectives and present preliminary work programs in the area of its competence which, from its point of view, will either strengthen the overall DOE program or provide additional support in areas which, in the Laboratory's judgment, are being inadequately exploited, or initiate new areas of investigation which appear of potential importance.
(ii) It is the responsibility of DOE to formulate an overall program, taking into consideration the proposals submitted by the Laboratory, consistent with funds appropriated by the Congress and a11 its other program needs.
(iii) The Laboratory shall prepare a final work program and budget in accordance with the actions taken by DOE. Upon DOE approval, it is the University's responsibility to conduct its operations as closely as possible within the limits established by these approvals unless and until they are modified.
(iv) Throughout the process of program and budget development and approval, both the DOE and the University recognize the desirability for close consultation, for advising each other of plans or developments on which subsequent action will be required, and for attempting to reach mutual understanding in advance of the time that action needs to be taken.
(2) Annual Programs and Financing. In accordance with the basic principles stated in paragraph (b)(1) of this clause, it is the intent of the University and DOE to utilize the Program Budget procedures on a Government fiscal year basis for the establishment of the Laboratory Program Budget Procedures for the presentation of work programs and cost estimates shall be jointly developed. In order to meet the requirements of Government budgetary practice, the parties agree:
(i) As early as possible in each calendar year, DOE shall supply the University with the dollar amounts for the Laboratory contained in the President's Budget, with Program Assumptions which the University will be expected to consider in its development of its program and budget, and with all changes to existing budget and accounting policies and procedures to be used in the current budget preparation.
(ii) Prior to April 1 (or such other date as may be agreed upon) the University shall submit a comprehensive work program for the next two succeeding fiscal years, together with a description of the current work program, and the University shall submit a budget estimate for the next two succeeding fiscal years, together with a revised budget estimate for the current fiscal year.
(iii) As soon s possible after October 1 of each year, DOE shall issue Work Authorizations and an Approved Funding Program to the University for the current fiscal year.
(iv) DOE approval of the work program and budget estimates shall be reflected in Work Authorizations/Annual Program Letters/Activity Data Sheets and Approved Funding Programs. Those documents will be issued to the University as soon as possible after funds become available. If, in preparing Work Authorizations/Annual Program Letters/Activity Data Sheets and Approved Funding Programs, it is determined that changes are needed in the work program and budget estimates submitted by the University, DOE and the University shall agree upon the changes in the work before final issuance of those documents.
(A) The Work Authorizations/Annual Program Letters, and with respect to the work of the Assistant Secretary for Environmental Management, Activity Data Sheets, and Approved Funding Programs specify the funds available for work under the contract for the fiscal year and, in addition, may establish limitations on costs to be incurred for individual portions of the work. The University agrees to comply with such limitations and shall promptly notify the Contracting Officer, in writing, whenever it becomes apparent that there is likely to be an overrun with respect to any specific limitation in the Work Authorization/Annual Program Letters, and with respect to the work of the Assistant Secretary for Environmental Management, Activity Data Sheets, and Approved Funding Programs. Funds made available for work under the contract, and set forth in Approved Funding Programs or other funding documents, shall not be reduced except by written agreement of the parties.
(B) Additional programs and projects to be conducted by the laboratory may be established by agreement between the DOE and the University.
(C) If the DOE develops a Work Authorization Plan for nonprofit management and operating contractors, the University will treat the Plan, as proposed by the Contracting Officer, pursuant to the provisions of Article XV Clause 1, "Contract ModificationsGeneral."
(v) A contract modification shall be issued to the University on or before September 30 of each year (or such other dates may be agreed upon) to provide additional funds, and further contract modifications may be issued or entered into from time to time to provide appropriate modifications in the total amount of funds made available under the contract. DOE agrees to use its best efforts to provide stable funding in support of the contract work and it is therefore DOE's intention that there shall be so provided a a11 times sufficient funds to support the contract operations at the level authorized by DOE.
(vi) During the course of the work, DOE shall review the work program and its costs based upon information submitted by the University and may, after consultation with the University, revise the Work Authorizations and Approved Funding Programs established by DOE under subsection (iv) above and with the agreement that the University make any necessary revisions to the documents cited in this clause.
(3) Long-Term Programs. It is the intent of the University and DOE to agree from time to time upon long-term work programs covering certain portions of the work to be performed under this contract.
(c) Estimates and Cost Information. The University shall maintain current cost information adequate to reflect the cost of performing the work under this contract at a11 times while the work is in progress, and shall prepare and furnish to the Government such written estimates of cost and information in support thereof as the Contracting Office may request.
ARTICLE III, CL. 4 - WORK FOR OTHERS (SPECIAL)
(a) The University may perform non-DOE funded work for other federal agencies, DOE cost-type contractors, State agencies, educational institutions, private and public corporations, and other sponsors, involving the use of DOE facilities and resources and Laboratory employees, provided that the work is (1) related to the mission of this contract or is within any special capabilities of the Laboratory, (2) is accepted by the University and funded by the sponsor and is in accordance with University policies and procedures approved by the Contracting Officer, (3) is performed consistent with the terms of this contract. In the absence of approved policies and procedures, such work will be approved on a case-by-case basis by the Contracting Officer.
(b) In the event that a work for others project is intended to be continuous, but funding authorizations are not provided on a timely basis to the Laboratory, DOE authorizes the University to continue work at the University's expense with the University's money, when assured by the sponsor as to the continuation of funding, for a period not to exceed 90 days, and to retroactively charge costs to the work for others sponsor for any periods during which the University provided financing for the work and for which the sponsor has provided funding.
(c) Nothing herein authorizes the Laboratory to start work prior to initial authorization of funds or, except as provided in (b) above to continue work beyond available funding
ARTICLE III, CL. 5 - UNIVERSITY-DIRECTED RESEARCH AND DEVELOPMENT (SPECIAL)
The University reserves the right to fund University-directed research and development at the Laboratory. Such work will be within the general scope of work and performed in accordance with the terms of this contract.
ARTICLE IV UNIVERSITY ORGANlZATlON (SPECIAL)
(a) The University shall provide at Livermore, California, a Laboratory Director acceptable to the Contracting Officer. Any official performing the function of the Deputy Director must also be acceptable to the Contracting Officer.
(b) Subject to the security requirements of DOE, individual Regents of the University, the Officers of the University, and other administrators of the University, and various members of the University faculty engaged in scientific and technical studies may visit the Laboratory sites and advise and assist in the performance of work under this contract. In accordance with the provisions of Appendix A of this contract, members of the Laboratory staff may visit the University's several academic institutions and participate in studies and discussions.
ARTICLE V: CONTRACT ADMINISTRATION
ARTICLE V, CL. I - APPROVAL OF CONTRACT AND SEVERABILITY OF PROVISIONS RELATING TO OTHER CONTRACTS (SPECIAL)
(a) This contract is subject to the written approval of the DOE Procurement Executive or designee and shall not be binding until so approved.
(b) This contract is subject to a vote of approval by The Regents of the University of California and shall not be binding until so approved.
(c) In the event that either the contract for management and operation of the Lawrence Berkeley Laboratory (Contract No. DE-AC03-76SF00098) or the Los Alamos National Laboratory (Contract No. W-7405-ENG-36), or both, are not approved for extension in the manner provided in paragraphs (a) and (b) of this clause for Contract No. W-7405-ENG-48, the following actions in severability shall occur:
(I) The Contract Administration CompensationFixed Payment in Lieu of Indirect Costs in Article V, Clause 3, of this contract shall be equitably adjusted to reflect a changed total scope of work for the University.
(2) The Contract Administration CompensationProgram Performance Fee in Article V, Clause 4, of this contract shall be equitably adjusted to reflect a changed total scope of work for the University.
(3) The Special Cost agreement for the University's Laboratory Administrative Management and Oversight Unit in Article V, Clause 6, of this contract, shall be charged only to this contract, and not allocated to any of the other cited contracts as are not approved.
ARTICLE V, CL. 2 - ORDER OF PRECEDENCE (JAN 1986) - FAR 52.215-33
(a) Order of precedence. Any disagreement between the parties as to their rights under this contract which flows from an asserted inconsistency between one or more provisions of this contract other than the provisions of Article Vl shall be resolved by giving precedence to the disputed interpretations in the following order (1) specially negotiated clauses and appendices, (2) the remaining clauses, and (3) other documents incorporated by reference into this contract. Any resolution of disputed interpretation of any clause of this contract, other than the provisions of Article Vl, shall be consistent with the Principles of Operation set forth in Article Vl.
(b) Contract construction. An appendix referred to in a clause shall provide an elaboration of the parties' understanding on the subject matter of the clause.
ARTICLE V, CL. 3 - CONTRACT ADMlNlSTRATlON COMPENSATIONFIXED PAYMENT IN LIEU OF INDIRECT COSTS (SPECIAL)
(a) The University shall receive a fixed payment in lieu of indirect costs to be used in the sole discretion of the University.
(b) The amounts payable to the University for the fixed payment in lieu of indirect costs for Contracts W-7405-ENG-36, W-7405-ENG-48, and DE-AC03-76SF00098 shall bePERIOD.............................................. ......................... FIXED PAYMENT
(c) The parties acknowledge that the above amount includes $5,727,150 to be provided annually for the State of California.
(d) The fixed payment in lieu of indirect costs shall be paid by the Laboratory to the University in equal monthly installments under Contract W-7405-ENG-36 and shall be allocated among the three identified contracts.
ARTICLE V, CL .4 - CONTRACT ADMlNlSTRATlON COMPENSATIONPROGRAM PERFORMANCE FEE (SPECIAL)
(a) The University shall receive a program performance fee, as set forth below, for its non-profit purposes.PERIOD.......................................... PERFORMANCE MANAGEMENT FEE
(b) The program performance fee shall be paid by the Laboratory to the University in equal monthly installments under Contract W-7405-ENG-36 and shall be allocated among Contracts W-7405-ENG-36, W-7405-ENG-48, and DE-AC03-76SF00098. The parties agree that the University has the absolute right to expend the payment received under this clause at its sole discretion.
ARTICLE V, CL .5 - GROUND LEASE PAYMENTS (SPECIAL)
(a) In consideration of the ground lease identified in Article IX, Clause 9, of Contract DE-AC03-76SF00098, the University will receive the following:PERIOD.............................................. ......................... FIXED PAYMENT
(b) The ground lease shall be paid by the Laboratory to the University in equal monthly installments under Contract W-7405-ENG-36 and shall be allocated among Contracts W-7405-ENG-36, W-7405-ENG-48, and DE-AC03-76SF00098. The parties agree that the University has the absolute right to expend the payments received under this clause at its sole discretion.
ARTICLE V, CL 6 - SPECIAL COST AGREEMENT FOR THE UNIVERSITY'S LABORATORY ADMlNlSTRATlVE MANAGEMENT OVERSIGHT UNIT (SPECIAL)
The following provisions apply to the costs associated with the University's administrative unit providing management oversight in accordance with Article Vl, Clause 5, "Enhanced University Management Efforts and Concomitant Restructuring of DOE On-Site Oversight at the laboratories," of this contract.
(a) The cost and expense of the administrative unit responsible for management oversight of the laboratory shall be a direct charge to the overhead component of Contracts W-7405-ENG-36, W-7405-ENG-48, and DE-AC03-76SF00098. The costs shall be paid by the laboratory to the University in equal monthly installments under Contract W-7405-ENG-36 and allocated among the three identified contracts.
(b) Allowability of the costs under this clause shall be determined under OMB Circular A-21. However, any costs determined to be unallowable under OMB A-21, the administrative unit costs shall be processed in accordance with Article V, Clause 9, "Procedure to Disallow Costs."
(c) Each year, the University will furnish the Contracting Officer an estimate of costs for the administrative unit and such cost reports as the Contracting Officer may from time to time request. In additional to OMB Circular A-21, the administrative unit costs shall be subject to the provisions of Article V, Clause 10, "Procedure for
Issuance of Prospective Contracting Officer Special Instructions."
(d) The estimated costs for the administrative unit during the first fiscal year of this Supplemental Agreement is $5,000,000.
(e) Transition costs. The costs of the following may be charged to the Government even though incurred prior to execution of this Supplemental Agreement:
(1) The development of the performance based management system.
(2) The compensation for the surrogate managers for their management activities related to the management oversight of the laboratories.
(3) The recruitment and hiring and compensation of the University personnel for the new administrative unit.
(4) To expedite the formation and operations of the administrative unit responsible for management oversight of the laboratory, the University is hereby authorized to purchase new equipment and to transfer property from the laboratory to the unit. A schedule of property transferred will be prepared by the University and submitted to the Contracting Officer.
(f) The parties agree that the activities of the University's Laboratory administrative oversight unit, to the extent they may involve discussions between University employees and (i) the Department of Energy concerning modifications which can be expected to occur during the course of this contract, (ii) employees of other federal agencies concerning administration of this contract; and (iii) members of Congress and Congressional staff where the University employees agree responding to a Congressional inquiry, are not intended to be prohibited by Article VII, Clause 19, "Limitation on Payments to Influence Certain Federal Transactions," of this contract.
ARTICLE V, CL .7 - INSPECTION OF RESEARCH & DEVELOPMENT (APR 1984) * - FAR 52.24-9
(a) The Government has the right to inspect and evaluate the work performed or being performed under the contract and the Laboratory premises where the work is being performed, at all reasonable times and in a manner that will not unduly delay the work or compromise safety. If the Government performs inspection or evaluation on the premises of the Laboratory or a subcontractor, the University shall furnish and shall require subcontractors to furnish all reasonable facilities and assistance for the safe and convenient performance of these inspections and evaluations.
(b) The following is agreed to by the parties to be applicable to DOE inspection activities carried out under the authority of the Contracting Officer.
(1) Formal audits, appraisals, and evaluations will be conducted in accordance with established procedures which, including "no notice" or similar inspections, include management notification, and in-briefing and out-briefing provisions.
(2) Access to facilities (sites, buildings, property) is subject to site-specific requirements and will by provided by the facility manager at all reasonable times and in a manner which will not unduly delay work or compromise safety. As a general criterion, DOE personnel will be subject to the same access controls as regular laboratory employees.
(3) Access to Laboratory employees will be on a non-interference basis and, except for suspending or stopping work when an imminent danger of death or physical harm to an individual is presented by an operation as provided for in Article V, Clause 8, of this contract, will not include authority to direct or change employee work assignments or otherwise manage University employees. Requests by DOE for policy decisions or interpretation of Laboratory policies shall be provided through established DOE/Laboratory management channels.
(4) Access to classified matters will be restricted to an established "need to know."
(5) Access to documents containing information concerning individuals, including personnel records, medical records, employee assistance records and other similar personnel records shall be given in accordance with Article Vl, Clause 10, "Contract Records," of this contract.
(c) Any question with regard to DOE right of inspection or access to the laboratory premises or classified matters which has not been resolved after reasonable efforts to do so, shall promptly be referred to the Laboratory Director and the Contracting Officer for resolution. Access to information concerning individuals will be coordinated with the University.
ARTICLE V, CL. 8 - STOP WORK ORDERS (SPECIAL)
(a) It is the intent of the parties that work performed under this contract shall be conducted under the supervision of competent employees of the University who shall be responsible for the orderly performance of work here under in accordance with all of the provisions of this contract.
(b) In the event that any employee of the University or the DOE shall observe any activity under this contract which represents an imminent threat of danger to the life or health of any individual, the employee is authorized to direct that such work be immediately stopped. In the event such order is given by an employee, the fact of such a notice by either a University or DOE employee shall be immediately communicated to the Contracting Officer and the Laboratory Director for such further investigation or disposition as they may direct.
(c) Other notices by DOE employees to stop or discontinue an activity which does not represent an imminent threat to the life or health of an individual shall be communicated in writing to the senior University employee responsible for the work in question by the Contracting Officer or his designee.
ARTICLE V, CL. 9 - PROCEDURE TO DISALLOW COSTS (SPECIAL)
(a) General. The University and DOE agree that this contract is a government advance funded cost reimbursement contract. If either party believes that advanced payments have been used to pay for costs which are unallowable under this contract, the following procedure will be invoked.
(b) The party which initially identifies as cost of questionable allowability will inform the other party of the issue. If preliminary review leads the DOE to pursue the questionable allowability of the cost, the Contracting Officer will provide formal written notice to the University of its concerns. The notice will be provided to the University Point of Contact identified in Article XVI, Clause 2, "Issues Resolution Process," of this contract. The University will respond in writing to the Contacting Officer within 60 days of receipt of the notice.
(c) The Contracting Officer will provide a determination as to the allowability of the cost in question to the University within 60 days of receipt of the University's response.
(d) The following process will be followed for costs which may be contractually unallowable:
(i) If the Contracting Officer determines that the cost is unallowable, the University either will pay the cost by check with University funds, or the University may seek relief through the Issues Resolution Process provided for in Article XVI. Clause 2, of this contract.
(ii) If the University seeks relief through the Issues Resolution Process, one of the following outcomes may occur the University may pay the cost in question by check with University funds; the DOE may determine that the cost is allowable and the issue will not be further pursued; or either of the parties may seek relief through the formal contract disputes process provided for in Article XVI. Clause 3, of this contract.
(iii) Prior to the initiation of the formal contract disputes process, the University, at its sole discretion, has the right to pay the amount in question to the DOE by check. Also prior to the initiation of the formal contract disputes process, the DOE has the right to offset against future obligations to be paid the University the amount in question, if the University has not paid by check by a specified time.
(iv) Should the DOE prevail in the formal contract disputes process, one of the following outcomes may occur: the University will pay the amount in question by check if no payment was made previously; the DOE will retain the payment made earlier by the University; or the University will pay the DOE by check with University funds for the amount offset and the offset will be reversed.
(v) Should the University prevail in the formal contract disputes process, the DOE will refund by check any payment made by the University, or the DOE will reverse any offset that may have been made.
(e) Nothing in this clause will preclude either party from seeking legal remedy after the exhaustion of this procedure.
ARTICLE V, CL 10 - PROCEDURE FOR ISSUANCE OF PROSPECTIVE CONTRACTING OFFICER SPECIAL INSTRUCTIONS (SPECIAL)
(a) The Contracting Officer reserves the right to notify the University in writing as to a specific practice or activity and instruct the University to refrain from the specific practice or activity as of a specified date 90 days in the future. If the Contracting Officer so specifies in the written notice to the University, the costs of the specific practice or activity incurred after the future date identified in the written notice will be unallowable under the contract. Such unallowable costs will be payable by the University from its funds, without recourse to funds advanced for performance of work under this contract.
(b) This clause will be interpreted and applied consistent with the provisions of Clause 3 of Article VI of this contract and with principles of fair notice and opportunity to act within the time specified in the Contracting Officer's notice and will be utilized by the Contracting Officer in a prospective manner in order to preserve the University's no gain/no loss status hereunder. Actions of the Contracting Officer under this clause shall be subject to the Issues Resolution Process (IRP) as provided in Article XVI, Clause 2, of this contract. In the event the Issues Resolution Process set forth in Article XVI, Clause 2 of this contract is resorted to in connection with a Contracting Officer's suggestion, said instruction shall not be held in abeyance except as set forth in paragraph (c) below.
(c) In extraordinary circumstances, upon request of the President of the University to the Secretary of Energy, the Contracting Officer's instructions will be held in abeyance during the pendency of the Issues Resolution Process. The parties agree that the Issues Resolution Process will be expedited to be completed within 60 days.
(d) Authority under this clause shall not be delegated by the Contacting Officer nor shall it be applied so as to limit or control individual salary actions or the decisions of the University with respect to the employment or retention of individual employees under this contract.
ARTICLE Vl: PRINCIPLES OF OPERATION
ARTICLE Vl, CL. I - GENERAL STATEMENT (SPECIAL)
This article embodies essential and fundamental principles to which the University and the DOE subscribe. The Principles of Operation are formally recognized in Article V, Clause 2, "Order of Precedence," of this contract in that any resolution of a disputed interpretation of clauses, other than those set forth in this Article VI, shall be consistent with the Principles of Operation set forth below.
ARTICLE VI, CL. 2 - NO GAIN/NO LOSS OPERATION (SPECIAL)
(a) The University of California is chartered through Article IX of the State Constitution as the research university of the State of California. The University has managed the Laboratory as a public service to the nation, an undertaking from which the government agrees the University should neither gain nor lose financially.
(b) The DOE and the University agree that the government shall fund the operations under this contract by advance payments and that the University, by virtue of its public charter and the not for profit nature of its operation as an instrumentality of the State, is not obligated to advance any funds or to otherwise expend University funds in any operations under this contract.
ARTICLE VI, CL. 3 - INTELLECTUAL AND SCIENTIFIC FREEDOM (SPECIAL)
(a) The DOE and the University recognize the importance of fostering an atmosphere at the Laboratory conducive to scientific inquiry and the development of new knowledge and creative and innovative ideas related to important national interests. The federal government has further agreed that the University is vested with unique capabilities to provide such an environment which is essential to the optimal performance of the Laboratory and accomplishment of its missions.
(b) The parties further recognize that the free exchange of ideas among scientists and engineers at the Laboratory and colleagues at universities, colleges, and other laboratories or scientific facilities is vital to the success of the scientific, engineering, and technical work performed by Laboratory personnel.
(c) In order to further the goals of the Laboratory and the national interest, it is agreed by the parties that the scientific and engineering personnel at the Laboratory shall be accorded the equivalent rights and obligations of University faculty with respect to the publication or other dissemination of research, and participation in open debate and in scientific, educational, or professional meetings or conferences, subject to the limitations included in technology transfer agreements and such other limitations as may be required by the terms of this contract. Nothing in this clause is intended to interfere with the obligations of the parties to protect classified or other sensitive information as provided by law or reflected in Article XIII, Clause 2, "Classification," of this contract.
ARTICLE VI, CL .4 - BALANCE OF SCIENCE AND RESPONSIBLE MANAGEMENT (SPECIAL)
The University and DOE have structured this contract in a manner intended to strike the appropriate balance between responsible management oversight and scientific freedom. Both parties recognize the importance of structuring Laboratory management oversight efforts in a manner which will foster the conduct of the highest level of scientific, engineering, and technical endeavors and will permit the University to perform its obligations under this contract.
ARTICLE Vl, CL. 5 - ENHANCED UNIVERSITY MANAGEMENT EFFORTS AND CONCOMITANT RESTRUCTURING OF DOE ON-SITE OVERSIGHT AT THE LABORATORIES (SPECIAL)
(a) The University and the DOE agree that a significant enhancement in Laboratory management oversight will be provided by the University, consistent with the terms of this contract.
(b) The enhanced management oversight will include formation of a President's Council on the National Laboratories which will be advisory to the President of the University on operational and programmatic aspects of the Laboratory. The University also will establish in the Office of the President of the University an administrative unit responsible for management oversight of the Laboratory.
(c) The enhanced University management role will permit the DOE to restructure its on-site oversight at the Laboratory to achieve greater cost efficiency in its operations and to avoid duplication of efforts. The University will cooperate with the DOE in facilitating this restructuring of DOE's oversight functions.
ARTICLE VI, CL. 6 - USE OF OBJECTIVE STANDARDS OF PERFORMANCE, SELF-ASSESSMENT AND PERFORMANCE EVALUATION (SPECIAL)
(a) The University and DOE agree that the University will utilize a performance based management system for Laboratory oversight. The performance based management system will include the use of clear and reasonable objective performance measures agreed to in advance as standards against which the University's overall performance of administrative and/or managerial obligations under this contract will be assessed.
(b) The parties agree that the University will conduct an on-going self-assessment process, including self -assessments performed at the Laboratory, as the principal means by which to evaluate compliance with the performance measures which are contained in Appendix F against which the University's overall performance of obligations under the contract will be determined.
(c) Further, the University and the DOE agree that the parties will utilize a specially designated process described in Appendix F, Section B, to evaluate administrative, scientific, engineering, and technical work of the Laboratory. The performance evaluation process will be the basis for determining the University's Laboratory Executive Program salary increase authorization multiplier. DOE will determine the value of the multiplier to be applied to the Laboratory Executive Program salary increase authorization, from a range of not less than 0.75 to not more than 1.50, in accordance with Appendix A to this contract. The DOE and the University further agree that the evaluation process, described in Appendix F, Section B, will be reviewed annually and modified, if necessary, by agreement of the parties.
(d) DOE, as a part of its responsibility for oversight, evaluation and information exchange, is responsible for providing programmatic and administrative appraisals and reviews of the laboratory's and the University's performance of authorized research and development programs in accordance with the terms and conditions of this contract.
(e) The DOE shall conduct a validation program to appraise and evaluate the performance of the work under this contract, based upon its inspection, as a means of fulfilling its public accountability role in accessing contract compliance. Annually, the Contracting Officer shall provide a written estimate of the Laboratory's performance hereunder to the University which shall be based upon the DOE appraisal program and the Contracting Officer's evaluation of the University's self-assessment.
ARTICLE Vl, CL. 7 - PUBLIC AFFAIRS AND NEWS RELEASES (SPECIAL)
(a) The University and the DOE agree that the University, as a public institution of higher education, has an obligation and long standing tradition of academic freedom and openness to public inquiry. The University and the DOE also recognize the importance of coordination between the parties with regard to the areas covered in this clause so as to achieve public policy objectives important to the nation. As a federal agency, DOE must assure that news releases which describe its policies and procedures as related to the operation of its national scientific laboratories do so on an accurate and timely basis. Accordingly, the parties recognize the importance of advanced coordination of media releases pertaining to laboratory activities so as to assure achievement of their respective goals in this regard.
(b) Consistent with these principles, the University and DOE will exercise diligent efforts to inform each other in advance of significant public affairs, events or other major activities. When such advance exchange is not possible operationally, each party shall promptly furnish the released information to the other party concurrent with its release.
(c) The University shall not release information attributed directly to DOE or which purports to represent established DOE policy without the advance concurrence of DOE. Nothing in this clause shall be construed so as to limit the right of the University to publicize the results of its scientific research.
(d) In order to facilitate the timely exchange of information between the University and DOE related to media releases and public affairs, discussions among appropriate staff will occur on a regular basis.
(e) In all public releases of information related to the Laboratory, there shall be prominently displayed a statement that the Laboratory is a DOE facility which is operated by the University of California under management and operating contract.
(f) Nothing in this clause is intended to interfere with the requirements associated with information which has received national security classification.
ARTICLE VI, CL. 8 - PROSPECTIVE CONTRACTING OFFICER DIRECTIVES - ADVANCE CONSULTATION AND TREATMENT (SPECIAL)
(a) The University and DOE agree that consultation shall occur on the content of proposed Contracting Officer directives, as defined in Article II, paragraph (m), in advance of a determination by the Contracting Officer as to the applicability of a directive to this contract. The consultation will permit the University to evaluate the potential financial or programmatic impact of the proposed directive on the management and operation of the Laboratory. This process shall be in accord with the provisions of Article XV, Clause 3, "Procedure for Treatment of Prospective DOE Directives and Extent DOE Orders," of this contract.
(b) The DOE shall, to the maximum extent practicable, furnish the University drafts of such directives for the purpose of seeking an assessment of potential financial or programmatic impact of the proposed draft directive as far as possible in advance of finalization of the directive.