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with FPR 1-3.902 and 1-3.903 and shall be applied in the review and approval of cost-type contractor procurement systems and subcontracts for supplies and services in lieu of such FPR's, except that 1-3.902, "Make-or-buy" programs, applies where the contract clause in 1-3.902-3 is incorporated in the prime contract.

(b) Pursuant to section 602(d) (13) of the Federal Property and Administrative Services Act of 1949, as amended, the limitations in section 304 (b) of that Act concerning advance notification of costplus-a-fixed-fee subcontracts (provided such contracts do not exceed an estimated cost of $500) and fixed-price subcontracts over $25,000 or 5 per centum of the total estimated cost of the prime contracts are not applicable, provided the prime contractor's procurement methods and system have been reviewed and approved in accordance with Part 9-59. See Subpart 9-51.2 for policy on subcontracts which require prior approval by AEC.

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9-4.5107

9-4.5107-1

Notification of contract execu

tion.

Standard contract forms.

General.

9-4.5107-2 Special research support agree

9-4.5107-3

ments.

Cost-type contract.

Ownership of property.

Reporting requirements.

9-4.5108

9-4.5109

9-4.5109-1

Purpose of reports.

9-4.5109-2

Summary-200 words.

9-4.5109-3 Progress reports.

Technical reports.

9-4.5109-4

9-4.5109-5

Special reports.

9-4.5109-6

Final report.

9-4.5109-7 Equipment report.

9-4.5109-8 Summary and distribution of re

ports.

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AUTHORITY: The provisions of this Part 9-4 issued under sec. 161, as amended, 68 Stat. 948; 42 U.S.C. 2201; sec. 205, as amended, 63 Stat. 390; 40 U.S.C. 486.

SOURCE: The provisions of this Part 9-4 appear at 34 F.R. 15122, Sept. 27, 1969, unless otherwise noted.

§ 9-4.000 Scope of part.

This part implements and supplements the policies and procedures set forth in FPR Part 1-4.

Subpart 9-4.4-Public Utilities

SOURCE: The provisions of this Subpart 9-4.4 appear at 36 F.R. 2782, Feb. 10, 1971, unless otherwise noted.

§ 9-4.400 Scope of subpart.

This subpart implements and supplements FPR Subpart 1-4.4, Public Utili

ties, which prescribes policies and procedures for the economic and efficient procurement of public utility services by executive agencies.

§ 9-4.401 Definitions.

As used in this Subpart 9-4.4, "utility services" include all utility services (except telecommunications services), such as electricity, gas, steam, water, and sewerage, including facilities on both sides of the delivery point for the supply of such services.

§ 9-4.402 Applicability.

(a) The provisions of this subpart apply to the procurement by the AEC of utility services, including the modification and extension of existing utility contracts.

(b) The requirements of FPR 1-4.4 and this subpart shall be applied to costtype contractors that manage and operate Government-owned facilities for AEC when such contractors are authorized pursuant to § 9-4.406(b) to procure utility services.

§ 9-4.406 Policy.

(a) All utility services that are required for Government-owned and contractor-operated facilities shall be procured directly by the AEC and not by the cost-type contractors that manage and operate these facilities for the AEC.

(b) However, when it is economically advantageous or otherwise in the best interest of the Government, and subject to the provisions of § 9-4.411(b), Managers of Field Offices may authorize a cost-type contractor that manages and operates an AEC facility to procure utility services on a subcontract basis. When a manager does authorize an operating contractor to subcontract for utility services, under the authority of this paragraph (b), a copy of the authorization, together with a statement of justification, should be sent to the Director, Division of Construction, Headquarters, for informational purposes. Managers of Field Offices shall require cost-type contractors which they authorize to subcontract for utility services to comply with the requirements of § 9-4.411, dealing with the prior review of certain proposed procurements. § 9-4.411

Prior review of certain proposed procurements.

(a) In accordance with the provisions of FPR 1-4.411-3, GSA has authorized AEC to accomplish its own prior review

of the proposed utility procurements specified in FPR 1-4.411-1(a). FPR 14.411-4 requires that this prior review be conducted in accordance with the guidelines set forth therein.

(b) Managers of Field Offices shall submit for headquarters review and approval, proposed contracts for utility services, including proposed authorizations under applicable GSA area-wide contracts, and proposed memorandums of understanding for consolidated purchase, joint use, or cross-service by the AEC with other government agencies, when one or more of the following circumstances applies:

(1) The annual cost of the service to be procured is estimated to exceed $50,000;

(2) A proposed connection charge, termination liability, or any other facilities charge (whether or not refundable) is estimated to exceed a total of $5,000;

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The requirements of FPR Subpart 1-4.6 apply to cost-type contractor procurement.

Subpart 9-4.50—Indemnification of AEC Contractors

§ 9-4.5000 Scope of subpart.

This subpart describes the established policies of the Atomic Energy Commission concerning (a) indemnification of AEC contractors against public liability for a nuclear incident arising out of or in connection with the contract activity and (b) indemnification of AEC contractors against liability for nonnuclear risks arising out of or in connection with the contract activity.

§ 9-4.5001 Applicability.

(a) With respect to indemnification against public liability for a nuclear incident the pertinent policies and procedures set forth in this subpart shall be applicable in entering into indemnity agreements with:

(1) AEC contractors engaged in the operation of production or utilization facilities,

(2) AEC contractors whose work entails the risk of public liability for a substantial nuclear incident.

(b) With respect to indemnification

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(a) The term "AEC contractor" means any AEC prime contractor, including any agency of the Federal Government with which AEC has entered into an interagency agreement.

(b) The term "construction contractor" means an AEC contractor who is constructing an installation for AEC which, when completed, will be a production or utilization facility.

(c) The term "nuclear incident" means (1) any occurrence within the United States causing, within or outside the United States, bodily injury, sickness, disease, or death, or loss of or damage to property, or loss of use of property, arising out of or resulting from the radioactive, toxic, explosive, or other hazardous properties of source, special nuclear, or byproduct material, and (2) any such occurrence outside the United States if such occurrence involves a facility or device owned by, and used by or under contract with, the United States.

(d) The term "person indemnified" means (1) with respect to a nuclear incident occurring within the United States, the person with whom an indemnity agreement is executed and any other person who may be liable for public liability; or (2) with respect to any nuclear incident occurring outside the United States, the person with whom an indemnity agreement is executed and any other person who may be liable for public liability by reason of his activities under any contract with the Commission or any project to which indemnification under the provisions of section 170d. of the Atomic Energy Act of 1954, as amended, has been extended or under any subcontract, purchase order or other agreement, of any tier, under any such contract or project.

(e) The term "production facility"

means:

(1) Any nuclear reactor designed or used primarily for the formation of plutonium or uranium 233; or

(2) Any facility designed or used for the separation of the isotopes of uranium or the isotopes of plutonium, except laboratory scale facilities designed or used for experimental or analytical purposes only; or

(3) Any facility designed or used for the processing of irradiated materials containing special nuclear material, except laboratory scale facilities designed or used for experimental or analytical purposes only.

(f) The term "public liability" means any legal liability (including liability for loss of, or damage to, or loss of use of property which is located at the site of and used in connection with the contract activity) arising out of or resulting from a nuclear incident, except: (1) Claims under State or Federal workmen's compensation acts of employees of persons indemnified who are employed at the site of and in connection with the activity where the nuclear incident occurs and (2) claims arising out of an act of war. "Public liability" also includes damage to property of persons indemnified: Provided, That such property is covered under the terms of any financial protection that may be required, except property which is located at the site of and used in connection with the activity where the nuclear incident occurs.

(g) The term "substantial nuclear incident"-see § 9-4.5005.

(h) The term "utilization facility" means any nuclear reactor other than one designed or used primarily for the formation of plutonium or U23.

(i) The term "nuclear reactor" means an apparatus, other than an atomic weapon, designed or used to sustain nuclear fission in a self-supporting chain reaction.

§ 9-4.5003 Statutory indemnity — section 170d of the Atomic Energy Act of 1954, as amended.

Section 170d of the Atomic Energy Act of 1954, as amended, authorizes the AEC "to enter into agreements of indemnifiIcation with its contractors for the construction or operation of production or utilization facilities or other activities under contracts for the benefit of the United States involving activities under the risk of public liability for a substantial nuclear incident." Contractors identified in § 9-4.5001(a) are eligible for such statutory indemnity.

§ 9-4.5004 Authority of Managers of Field Offices to negotiate statutory indemnity agreements.

(a) Managers of Field Offices are authorized to negotiate statutory indemnity agreements with contractors identified in § 9-4.5001(a)(1).

(b) Pursuant to § 9-4.5005, Managers of Field Offices are authorized to enter into a statutory indemnity agreement whenever it has been determined that a contractor in subparagraph (2) of § 9-4.5001(a) is engaged in activities involving the risk of public liability for a substantial nuclear incident. Such a determination may be based upon either the risk of liability for the occurrence of a substantial nuclear incident in the course of performance of the contract work or the risk of liability for a substantial nuclear incident caused by a product delivered to or for AEC under the contract where such product is expected to be used in connection with a facility or device not covered by a statutory indemnity agreement. If, pursuant

to

§ 9-4.5005, a Manager of a Field Office determines that the maximum conceivable damage which could result from a nuclear incident arising in the course of a contractor's activities falls between 1 million dollars and 60 million dollars, he shall submit the proposed indemnification with a recommendation, and all supporting data, to the Assistant General Manager for Operations for appropriate action.

§ 9-4.5005 Substantial nuclear incident.

With respect to subparagraph (2) of § 9-4.5001(a), and pursuant to the provisions of § 9-4.5004, a Manager of a Field Office may be required to determine whether a contractor's activities involve the risk of public liability for a substantial nuclear incident and thus make the contractor eligible to obtain a statutory indemnity agreement from the AEC. The determination by a Manager of a Field Office shall be based on the following criteria:

If, after a study of the maximum conceivable damage which can result from an incident arising out of or in connection with the contractor's activities, the Manager of a Field Office concludes that the maximum conceivable damage per incident to property and persons is $60 million or more, then the contractor may be found to be under risk of public liability for a substantial nuclear incident and the Manager of a Field Office is authorized to execute a statutory indemnity agreement under such a contract. If such a study of the maximum conceivable damage indicates a figure of $1 million or less, the contractor should not be considered to have a risk of public liability for a substantial nuclear incident and, therefore, should not be made a party to a statutory indemnity agreement. If the study indicates

that the maximum conceivable damage falls between $1 million and $60 million, the Manager of a Field Office will submit the proposed indemnification of such contractor to the Assistant General Manager for Operations with a recommendation and all supporting data.

The Assistant General Manager for Operations, on such a recommendation, may take one of the following actions:

(a) Determine that the contractor is under risk of public liability for a substantial nuclear incident and that the contractor should be extended a statutory indemnity agreement.

(b) Determine that the contractor should not be extended a statutory indemnity. In this case the Assistant General Manager for Operations may authorize the Manager of a Field Office to authorize the contractor to purchase nuclear liability insurance or to offer the contractor a general authority indemnity agreement.

§ 9-4.5006 Statutory indemnity contract article.

The contract article contained in § 97.5004-24 shall be incorporated in all contracts in which a statutory indemnity agreement is to be included upon a determination that the contractor is under risk of public liability for the occurrence of a substantial nuclear incident in the course of performance of the contract work. The contract article contained in § 9-7.5004-25 shall be incorporated in all contracts in which a statutory indemnity agreement is to be included upon a determination that the contractor is under risk of public liability only for a substantial nuclear incident caused by a product delivered to or for AEC under the contract where such product is expected to be used in connection with a facility or device not covered by a statutory indemnity agreement.

§ 9-4.5007

Contractual assurance.

Managers of Field Offices are authorized to include in all contracts for:

(a) Architect-engineer services in connection with the construction of a production or utilization facility;

(b) The supply of component parts (including construction contracts where the work does not entail the risk of occurrence of a substantial nuclear incident) for a production or utilization facility; and

(c) The supply of equipment or services which would be a part of, or contribute to, or be used in connection with the construction or operation of a production or utilization facility, assurances that the AEC will enter into a statutory

indemnity agreement with the contractor who will operate a facility on its completion. Assurances will be given, however, only to those contractors and suppliers who might be held liable in connection with a substantial nuclear incident occurring after completion of the facility. The form of contractual assurance which shall be utilized is contained in § 9-7.5004-26.

§ 9-4.5008 "Representation" for use in subcontracts and purchase orders of prime contractor holding statutory indemnity agreement.

An AEC contractor with whom a statutory indemnity agreement has been executed in the form contained in § 9-7.5004-24 may include in any of its subcontracts and purchase orders a representation that the work under the prime contract is covered by a statutory indemnity agreement with the AEC and that this indemnity covers all persons who may be liable for public liability for any nuclear incident arising out of or in connection with the activity under the prime contract. A suggested form of "representation" follows:

The Contractor represents that there is included in its prime contract with the Commission an indemnity agreement, entered into by the Commission under the authority of Section 170 of the Atomic Energy Act of 1954, as amended by Public Law 85-256 (the "Price-Anderson Act"), a copy of which may be obtained from the Contractor [is attached hereto]; that, under said agreement, the Commission has agreed to indemnify the Contractor and other persons indemnified, including the subcontractor, against claims for public liability (as defined in said Act) arising out of or in connection with the contractual activity; that the indemnity applies to covered nuclear incidents which (1) take place at a "contract location" (which term, as defined in the indemnity agreement, does not include the location of the subcontractor's plant and facilities); or (ii) arise out of or in the course of transportation of source, special nuclear or byproduct material to or from a "contract location"; or (iii) involve items produced or delivered under the prime contract. The obligation of the Commission to indemnify is subject to the conditions stated in the indemnity agreement.

The AEC will not approve the inclusion, in the subcontracts and purchase orders of an indemnified prime contractor, of any provision whereby the prime contractor indemnifies the subcontractor or supplier against public liability fo

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