APPENDIX B MODIFICATION NO. 1 то 49-18-12-1 BRC'S INDEMNITY OBLIGATIONS UNDER 1/ BRC shall indemnify and hold Utility” harmless against any loss, damage, liability or expense, including attorney's fees, incurred by Utility which arise out of claims asserted by any third party for personal injury, death or property damage resulting from the negligent conduct of work performed in connection with the Project by PMC, CE, TVA or AEC or any of their contractors; provided, that Utility shall give BRC timely notice of any such claim, whereupon BRC shall have the right, but not the obligation to assume or to have another participant in the Project assume the defense of such claim. In the event BRC does assume, or have another participant in the Project assume the defense of such a claim, Utility shall have the right, at its own expense, to have its counsel consult with BRC or such other Project participant as to the defense thereof. 17 Edison Electric Institute is included as a named indemnitee in those Utility Contribution Agreements to which it is a party. ་ ་ The Honorable Marilyn L. Bouquard Research and Production Committee on Science and Technology Dear Madam Chairman: This replies to your May 13, 1981, letter in which you asked several questions concerning the Clinch River Breeder Reactor project (CRBRP). Your questions focus primarily upon the responsibilities and obligations of the Government and participating utility companies in connection with the utilities' financial contributions to the project. The questions and our responses follow: I. QUESTION: "Whether the Government has breached the contract with the utilities by its failure during the Carter Administration to use its best efforts to continue the project, or has breached the contract for any other reason. We do not have, nor could we readily obtain, the information essential to address whether for any reason the Government may be held to have breached its contract with the utilities. We believe such issues are more amenable to resolution by courts of law or agency disputes procedures. QUESTION: "Assuming the contract was not breached by the Government, is there a contractual commitment or other legal responsibility to return the utility contributions?" We are not aware of any contractual provision that deals directly with the question of whether the utilities' contributions should be returned if the CRBRP is terminated. Moreover, certain portions of the contract may imply that this matter was not contemplated by the parties. Paragraph 11.5 of the contract deals with the financial obligations of the Project Management Corporation (PMC) and ERDA (now DOE) to each other following termination of the project. Paragraph 11.5.1 specifically states that ERDA has the right to collect any monies held by PMC and the right to collect any monies due to PMC but unpaid as of the date of termination under any B-199272 Utility Contribution Agreement (UCA). Article XII(a) of the UCA incorporates paragraph 11 by reference. These terms do not appear consistent with a responsibility on the part of ERDA to return the utilities' contributions. As with your first question, however, this question raises a matter of contract construction that can only be resolved definitively in accordance with the agreed-upon disputes resolution procedure or through litigation. III. QUESTION: "Could the Government conceivably be responsible for repaying the utility contributions pursuant to Pub. L. 85-804 and through either a management decision or a Board of Contract Appeals decision rendered on the basis of equity. to the utilities?" Public Law 85-804, 50 U.S.c. $1431 et seq. (1976), was enacted to facilitate the amendment and modification of contracts entered into in connection with the national defense. The statute sets forth a two-pronged test for its application to any given contract. First, the contract must be one entered into by an agency that has national defense responsibilities (50 U.S.C. $1431), and, second, the statute is only effective during a declared national emergency (50 U.S.C. §1435). Generally, the courts have approached the 1976 law and its predecessor provisions (the First War Powers Act, 50 U.S.C. App. 611) as embracing national defense contracts entered into by agencies with defense functions. See, e.g., Winder Aircraft Corp. of Florida v. United States, 412 F.2d 1270, 188 Ct. Cl. 799 (1969); and Bolinders Co. v. United States, 153 F. Supp. 381 (Ct. Cl. 1957). Regarding the declaration of a national emergency, while the National Emergencies Act, Pub. L. 94-412, September 14, 1976, terminated certain declarations of national emergency, it did not do so with regard to Pub. L. 85-804. See 50 U.S.c. 1651 (a)(6) as added by Pub. L. 94-412. Thus, while one part of the two-pronged test under Pub. L. 85-804 apparently is satisfied, there remains the question of whether the CRBRP undertaking is to be regarded as a "national defense" matter. In this connection, representatives of the Department of Energy informally told us that the AEC, the original governmental party to the contract pursuant to §106 of Pub. L. 91-44, July 11, 1969, traditionally took the view that all AEC contracts were related to national defense. The Department representatives, however, expressed no view as to whether DOE adopts the AEC position regarding the CRBRP agreement. 2 B-199272 The responsibility to render decisions of whether and to what extent DOE contracts are for handling under Pub. L. 85-804 rests initially with DOE and, on appeal, the Energy Board of Contract Appeals. See 41 C.F.R. 9-17.101(a) (1979). We have no authority to render Pub. L. 85-804 determinations, and therefore, it would be inappropriate for us to express an opinion concerning the possible applicability of Pub. L. 85-804 to the CRBRP contract. 3 Sincerely yours, Hilton J. Aorolan Acting Comptroller General |