UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended March 31, 1996,
Commission File Number 1-5109
TODD SHIPYARDS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 91-1506719
(State or other jurisdiction of (IRS Employer I.D.No.)
incorporation or organization)
1801-16th Avenue SW, Seattle, WA 98134-1089 (206) 623-1635
(Address of principal executive offices)(zip code) Registrant's
telephone number
Securities registered pursuant to Section 12(g) of the Act:
Name of each exchange on
Title of each class which registered
Common stock, $.01 par value per share New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of voting stock held by non affiliates
of the registrant was approximately $73 million as of June 12,
1996. There were 9,910,187 shares of the corporation's $.01 par
value common stock outstanding at June 13, 1996 held by non
affiliates.
TABLE OF CONTENTS
PART I
Item 1. Business.............................................
Item 2. Properties...........................................
Item 3. Legal Proceedings....................................
Item 4. Submission of Matters to a Vote of Security Holders..
PART II
Item 5. Market for the Registrant's Common Equity and
Related Shareholder Matters..........................
Item 6. Selected Financial Data..............................
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................
Item 8. Consolidated Financial Statements and
Supplementary Data..................................
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.................
PART III
Item 10. Directors and Executive Officers of the
Registrant..........................................
Item 11. Executive Compensation..............................
Item 12. Security Ownership of Certain Beneficial Owners
and Management.....................................
Item 13. Certain Relationships and Related Transactions......
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K ................................
<PAGE>
ITEM 1. BUSINESS
INTRODUCTION
Todd Shipyards Corporation (the "Company") was organized in 1916
and has operated a shipyard in Seattle, Washington (the
"Shipyard") since incorporation. The Company operates the
Shipyard through its wholly-owned subsidiary named Todd Pacific
Shipyards Corporation ("Todd Pacific"). Todd Pacific is engaged
in the repair/overhaul, conversion and construction of commercial
and military marine vessels. In addition, through TSI
Management, Inc., the Company's investment management subsidiary,
the Company operates three FM-radio stations in Monterey
California.
Until early in this decade, a substantial portion of the
Company's revenues and profits were attributable to long-term
government contracts. The significant decline in the annual
shipbuilding budgets of the U.S. Navy (the "Navy") has greatly
reduced the Company's bidding opportunities for long-term
government contracts. This reduction in long-term government
contracts has created excess ship construction and repair
capacity in all of the Company's markets. This excess shipyard
capacity, both nationally and locally, has resulted in intense
price competition. The Company has responded to this competition
by carefully reviewing its overhead, streamlining its operations
and introducing advanced shipyard production techniques.
Recent Shipyard activity has included construction of Jumbo Mark
II Class ferries ("Mark II Ferry")for the Washington State Ferry
System ("Ferry System"), short-term repair, overhaul and phased
maintenance work on government vessels, as well as commercial
repair, overhaul and conversion work on container vessels,
tankers, fishing industry vessels, cruise ships, barges, tug
supply vessels and ferries.
The Company believes that it will continue to perform a
substantial amount of maintenance and repair work on commercial
vessels engaged in various seagoing trade activities in Puget
Sound (near Seattle). It plans to pursue repair, maintenance,
overhaul and new construction work for the ferry fleets operated
by the states of Washington and Alaska. Additionally, the
growing number of military vessels home ported in Puget Sound
waters with the activation of the Everett, Washington Navy home
port facility is expected to provide business opportunities to
Puget Sound shipyards.
The Company has from time to time considered opportunities to
diversify in marine industries and businesses unrelated to the
Shipyard.
OPERATIONS OVERVIEW
Repair and Overhaul Operations
The Company's repair and overhaul work ranges from relatively
minor repair to major overhauls and often involves the drydocking
of the vessel under repair. The level of repair and overhaul
business available to domestic private-sector shipyards has been
impacted by the downsizing of the active Navy fleet. Also
affecting private shipyards is the impact of stationing vessels
at Navy home ports, the location of marine accidents, the
availability and scheduling of maintenance and overhauls, and
conditions within the maritime industry as a whole.
Commercial repair and overhaul contracts are obtained by
competitive bidding, awarded by negotiation or assigned by
customers who have a preference for a specific shipyard. On jobs
that are advertised for competitive bids, owners usually furnish
specifications and plans which become the basis for an agreed
upon contract. Repair and overhaul jobs are usually contracted
on a fixed-price basis with additional work contracted on a
negotiated-price basis.
U.S. Government ship repair and overhaul work is usually awarded
through a formal bidding process. The Company also performs
repair/overhaul work for the Navy under flexibly-priced
contracts. These contracts provide for reimbursement of costs, to
the extent allocable and allowable under applicable regulations,
and payment of an incentive or award fee based on the customer's
judgment of the contractor's performance with respect to certain
pre-established criteria. The government regulates the methods
by which overhead costs are allocated to government contracts.
The Company's commercial and U.S. Government repair and overhaul
contracts contain terms of customer payment determined by mutual
agreement. Typically the Company is periodically reimbursed
through progress payments based on the achievement of certain
agreed to benchmarks subject to a specified level of retention.
Some vessel owners contracting for repair, overhaul and new
construction work require some form and amount of performance and
payment bonding, particularly state agencies.
Construction Operations
The Company has a $181 million (including $6 million of optional
growth items) Ferry System contract for the construction of three
Mark II Ferries. The Mark II Ferries are designed to transport
218 automobiles and 2,500 passengers on the waterways of Puget
Sound and will be the largest ferries in the Ferry System fleet.
Distribution of Work
The approximate distribution of the Company's Shipyard activities
for each of the last three fiscal years are summarized as
follows:
1996 1995 1994
U.S. Government 35% 60% 24%
Commercial 65% 40% 76%
Total 100% 100% 100%
As the table indicates, a majority of the Company's work in the
year ended March 31, 1996 was comprised of commercial activity.
Commercial activity increased in 1996, principally due to the
construction activities related to the three Mark II Ferries
discussed above in "Construction Operations".
Employees
The number of persons employed by the Company varies considerably
from time to time depending primarily on the level of shipyard
activity, averaging approximately 900 employees during fiscal
year 1996 and totaling approximately 1,175 employees on March 31,
1996. During fiscal year 1996 an average of approximately 750 of
the Company's shipyard employees were covered by a union contract
at the Shipyard which expires on July 31, 1996. At March 31,
1996 approximately 1,025 Company employees were covered under
this agreement.
During fiscal year 1996, the Company, along with the two other
major west coast unionized shipyards, formed a multi-employer
bargaining group ("Bargaining Group") for the purposes of
negotiating a west coast multiple year union contract. In May
1996, the Bargaining Group completed negotiations for a new
contract with the consortium of unions that form the Pacific
Coast Metal Trades District Council. This contract allows for
skill based compensation and relaxation in historic work rules.
On June 5 1996, a majority of the shipyard workers at the three
shipyards comprising the Bargaining Group did not ratify the
contract. The Bargaining Group is currently working with union
workers and union leadership to resolve contractual issues. The
Company expects work to continue under the existing contract
until contractual issues are resolved. Over the past fiscal year
the Company has invested heavily in its labor relations efforts
including the establishment of labor/management committees and
conflict resolution education for all parties. The Company
believes that its relations with its employees are good.
Availability of Materials
The principal materials used by the Company in its Shipyard are
steel and aluminum plate and shapes, pipe and fittings, and
electrical cable and fittings. The Company believes that each of
these items can presently be obtained in the domestic market from
a number of different suppliers. In addition, the Company
maintains a small on site inventory of these items that is deemed
sufficient for emergency ship repairs.
Competition
Competition in the domestic shipyard industry is intense. The
Company competes for commercial and government work with a number
of other northwest shipyards, some of which have more
advantageous cost structures. The Company's competitors for
overhaul/conversion and repair work include non-union shipyards,
shipyards with excess capacity and government subsidized
facilities. The Company's competitors for new construction work
include shipyards on the gulf coast and east coast with
substantial financial resources and significant recent
investments in productivity enhancing facilities. The reduced
size of the U.S. Government's active duty fleet has resulted in a
significant decline in the total amount of government business
available to the private sector shipyards, has created excess
shipyard capacity, and has led to acute price competition.
Commercial ship construction and, and to a lesser extent, repair
work performed in certain foreign markets is less costly than
domestic ship construction and repair. Many contracts are
awarded pursuant to competitive bidding and profitability is
dependent upon effective cost controls, production efficiencies
and the ability to meet strict schedules, among other factors.
With respect to repair work, the location, availability and
technical capability of repair facilities are important factors.
Environmental Matters
The Company is subject to federal, state and local environmental
laws and regulations that impose limitations on the discharge of
pollutants into the environment and establish standards for the
treatment, storage and disposal of toxic and hazardous wastes.
Fines and penalties may be imposed for non-compliance with these
laws. Such laws and regulations may expose the Company to
liability for acts of the Company which are or were in compliance
with all applicable laws at the time such acts were performed.
The Company is covered under its various insurance policies for
some, but not all, potential environmental liabilities. See Note
12 of the Notes to Consolidated Financial Statements.
Safety Matters
The Company is also subject to the federal Occupational Safety
and Health Act ("OSHA") and similar state statutes. The Company
has an extensive health and safety program and employs a staff of
safety inspectors and industrial hygiene technicians, whose
primary functions are to develop Company policies that meet or
exceed the safety standards set by OSHA, train production
supervisors and make periodic inspections of safety procedures to
insure compliance with Company policies on safety and industrial
hygiene. All employees are required to attend routine periodic
safety training meetings.
Backlog
At March 31, 1996 the Company's backlog consists of approximately
$146 million of construction, repair and overhaul work. This
compares with backlogs of $76 million and $35 million at April 2,
1995 and April 3, 1994 respectively. Substantially all of the
Company's firm backlog is for the construction of three Mark II
Ferries that are scheduled for delivery during fiscal years 1997,
1998 and 1999.
In May 1996, the Company was awarded a cost-type contract for
phased maintenance repairs to four Navy supply ships currently
scheduled over eleven availabilities in five-years. The notional
value of the contract is $79 million. The Company can provide no
assurance as to the timing or level of work that may be performed
as part of the maintenance contract.
The Company plans to actively pursue additional commercial and
government construction contracts, as well as targeted government
and commercial repair/overhaul opportunities. International
construction and repair opportunities are limited because
shipbuilders in foreign countries are often subsidized by their
governments. These subsidies allow foreign shipbuilders to enter
into production contracts at prices below their actual production
costs. Passage of the proposed Organization for Economic
Cooperation and Development ("OECD") legislation currently being
considered in Congress would reduce these shipbuilding subsidies
and enhance the Company's ability to pursue international
shipbuilding prospects. Competition for domestic construction
and repair opportunities will be intense as certain of the
Company's larger east coast competitors have better shipbuilding
facilities and access to more financial resources. The Company
is working to maximize its advantages of geographic location, its
Navy and United States Coast Guard ("Coast Guard") experience,
its current Ferry Construction activities and the skills of its
experienced workforce.
INVESTMENTS AND ACQUISITIONS
The Company has from time to time pursued opportunities to
diversify its business, in areas such as metal fabrication,
marine transportation, other marine industries and businesses
unrelated to the Shipyard. The Company, through a subsidiary,
purchased three radio stations in fiscal year 1996. The Company
continues to evaluate suitable investment opportunities that
would appropriately utilize the Company's resources.
ITEM 2. PROPERTIES
The Company's corporate headquarters and the Shipyard are located
on the northwest portion of Harbor Island in Seattle, Washington.
The Shipyard includes approximately 27 acres of Company-owned
land and 19 acres of leased water rights, piers, building ways,
drydocks, buildings, cranes, machinery, tools and related
equipment and is capable of performing all types of ship
conversion and repair/overhaul work. In addition the Shipyard is
capable of constructing a wide variety of vessels up to 500 feet
in length and is licensed by two European manufacturers to repair
large marine diesel engines. The Company's Monterey, California
radio station operations include leased offices, studios,
transmitter sites and antenna sites. The Company's leases are
for various terms extending into calendar 1997 and beyond.
The Company has three drydocks, two steel and one wood, all of
which are located at the Shipyard. The design capacities of the
drydocks are as follows:
Year Type Max.Displacement Date of Lease
Name Built Owned Leased Capacity(in tons) Expiration
Emerald Sea 1970 Steel 40,000 -
YFD-70 1945 Steel 17,500 4/15/01
YFD-54 1943 Wood 5,700 9/30/99
The Company is required to maintain Navy certification on its
drydocks and cranes in order to qualify its facilities to bid on
and perform work under certain Navy and Coast Guard contracts.
The Company's current certification for the drydocks listed above
are 30,000 tons, 14,000 tons and 4,205 tons, respectively. While
such certification is less than the maximum design capacity, it
is sufficient to allow the Company to perform work on most Navy
and all Coast Guard vessels. The Company also maintains
certification of its cranes.
The Company believes that its owned and leased properties at the
Shipyard are in reasonable operating condition given their age
and usage, although, from time to time, the Company has been
required to incur substantial expenditures to ensure the
continuing serviceability of its owned and leased machinery and
equipment.
ITEM 3. LEGAL PROCEEDINGS
See Notes 12 of the Notes to Consolidated Financial Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders, through
solicitation of proxies or otherwise, during the fourth quarter
of fiscal year 1996.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The Company's stock is listed on the New York Stock Exchange (the
"NYSE"). The following table sets forth for the fiscal quarters
indicated the high and low composite sales prices of the stock as
reported by the NYSE.
Quarter Ended High Low
July 3, 1994 4.50 4.13
October 2, 1994 4.88 4.13
January 1, 1995 5.75 4.38
April 2, 1995 5.88 5.00
July 2, 1995 6.50 5.38
October 1, 1995 7.00 5.50
December 31, 1995 6.50 5.88
March 31, 1996 7.50 5.88
On June 12, 1996 the high and low prices of the Company's common
stock on the NYSE were $7.50 and $7.38, respectively.
At June 12, 1996 there were approximately 2,167 holders of record
of the outstanding shares of common stock. The Company does not
presently anticipate the declaration of dividends.
ITEM 6. SELECTED FINANCIAL DATA (In thousands of dollars,
except per share data)
March 31, April 2, April 3, March 28, March 29,
1996 1995 1994 1993 1992
Revenue $101,687 $69,096 $68,552 $54,278 $147,500
Income (loss)
from operations 1,017 1,102 (6,724) (14,018) 22,206
Income (loss)
before cumulative
effect of change
in accounting
principles 4,132 3,402 (2,714) (11,802) 29,021
Cumulative effect
of change in
accounting
principles(1) - 438 - - -
Net income(loss) 4,132 3,840 (2,714) (11,802) 29,021
Per share of common stock
Income (loss)
before cumulative
effect of change
in accounting
principles 0.42 0.32 (0.24) (0.99) 2.43
Cumulative effect
of change in
accounting
principles(1) - 0.04 - - -
Net income (loss) 0.42 0.36 (0.24) (0.99) 2.43
Financial position:
Working capital 48,880 50,704 52,337 57,311 67,195
Fixed assets 26,499 24,552 24,001 24,636 27,192
Total assets 117,380 110,924 111,447 129,287 138,988
Stockholders'
equity 67,380 62,433 63,740 70,700 83,240
per common share 6.80 6.28 5.83 5.99 6.96
(1) Effective April 4, 1994 the Company changed its method of
accounting for general and administrative costs from
recognizing these expenses as contract costs to recognizing
them as incurred which reflects the change, over time, in
the Company's business from predominately longer term
Department of Defense contracts to predominately shorter
term commercial and government contracts. This change has
been applied to general and administrative costs of prior
years and results in a cumulative effect credit of $438
thousand ($0.04 per share).
ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Notes to Consolidated Financial Statements are an integral
part of Management's Discussion and Analysis of Financial
Condition and Results of Operations and should be read in
conjunction herewith. The following discussion and analysis of
financial condition and results of operations contains forward-
looking statements which involve risks and uncertainties. The
Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of
factors discussed below and elsewhere in this Form 10-K.
Overview:
The Company's future profitability depends largely on the ability
of the Shipyard to maintain an adequate volume of ship repair,
overhaul and conversion business to augment its longer term
contracts. The variables affecting the Company's business volume
include subsidies provided to competing northwest shipyards,
excess west coast and industry-wide shipyard capacity, foreign
competition, governmental legislation and regulatory issues,
activity levels at the Everett Navy home port, competitors
pricing behavior, and Company labor efficiencies and work
practices.
The Company continues to respond to the increasingly competitive
shipbuilding and repair industry. The Company's Shipyard is
focusing on profitably serving its government and commercial
customers. To accomplish this goal, Shipyard management has
worked to increase business volume, reduce operating costs and
improve production efficiencies.
The Company's backlog at March 31, 1996 was approximately $146
million. This backlog consists primarily of Mark II Ferry work
to be performed. In May 1996, the Company was awarded a cost-
type contract for phased maintenance repairs to four Navy supply
ships currently scheduled over eleven availabilities in five-
years. The notional value of the contract is $79 million. The
Company can provide no assurance as to the timing or level of
work that may be performed as part of the maintenance contract.
The Company believes that the supply ship contract combined with
the Mark II Ferry contract will provide a steady base of business
through fiscal year 2001. The Company is working to identify and
win additional new construction work that would match the
Shipyard's production capacity.
The Company's Mark II Ferry program, awarded in fiscal year 1995,
is just over 20% complete at March 31, 1996. Construction of the
first ferry began in the fall of 1995. The Company anticipates
delivering the first ferry in the fourth quarter of fiscal year
1997.
The Company's quarterly revenue varies period to period depending
primarily on the timing of customer maintenance efforts. Based
on current known repair backlog, Company management expects sales
revenue to decrease in the first and second quarters of fiscal
year 1997 as compared to fourth quarter 1996 results. While the
Company anticipates total revenue for fiscal year 1997 to benefit
from higher levels of Mark II Ferry construction activity, these
increases may be offset in part by decreases in repair activities
which by their very nature are impossible to predict.
As addressed further in Note 12 of the Notes to the Consolidated
Financial Statements, the Environmental Protection Agency ("EPA")
released for public comment the Proposed Plan for the clean-up of
sediments in an area defined as the Shipyard Sediments Operable
Unit at the Seattle Shipyard. The Company has communicated its
opposition to the Proposed Plan and intends to vigorously contest
a Record of Decision should it not address the Company's
concerns.
Year to year comparisons:
1996 Compared with 1995
Net income for 1996 increased by 8% from 1995 levels as a result
of the following components.
Revenues
Revenues for the fiscal year ended March 31, 1996 increased $32.6
million (47%) compared to the prior fiscal year. The increase in
fiscal year 1996 sales was primarily attributable to the Mark II
Ferry construction program partially offset by lower government
maintenance work.
Cost of Sales
Fiscal year 1996 cost of sales increased $26.5 million (59%)
compared to 1995 results as the Company's 1996 Mark II Ferry
margins recognized were lower than the margins earned on
maintenance work in 1995. As a result of this difference, costs
of sales were 70% of sales in fiscal year 1996 compared to 65% of
sales in 1995.
Administrative Expenses
Administrative expenses for the year were up $5.3 million (22%)
from prior year results as the Company incurred higher than usual
repair and maintenance costs preparing for the new construction
project and added costs relating to the radio station
acquisitions. These repair cost increases and radio station
start-up costs were partially offset by changes in the estimate
of workers' compensation insurance refunds for favorable claims
experience during past fiscal years.
Contract Loss Reserves
In 1995, the Company utilized $1.0 million in contract loss
reserves.
Operating Profit
Fiscal year 1996 operating profit decreased $.1 million (8%)
compared to the prior fiscal year. The decrease in operating
profit reflects lower contract margins on repair activities,
increased administrative costs and modest start-up losses for the
Company's radio station operations largely offset by increased
Mark II Ferry construction overhead contribution.
Provision for Environmental Reserves
In fiscal year 1996, the Company did not add to its environmental
provisions. In fiscal year 1995, the Company added $2.0 million
in provisions for environmental liabilities for sites and
circumstances where it was possible to make reasonable estimates
of the Company's potential liability.
Investment and Other Income
Investment and other income decreased $.7 million compared to
fiscal year 1995 results. Higher interest rates earned in fiscal
year 1996 were offset by decreased investment balances compared
to fiscal year 1995. Fiscal year 1995 investment and other
income results included a $.4 million bankruptcy distribution.
Fiscal year 1995 also benefited from a $.5 million gain on a land
sale. Included in 1996 and 1995 other income results was a gain
of $.2 million reflecting principal payments on bonds relating to
the sale of the Company's former Galveston facility.
Income Taxes
For fiscal year 1996 and fiscal year 1995, the Company recognized
no income tax expense as the expense was offset by a reduction in
the deferred tax valuation reserve.
1995 Compared with 1994
Net income for 1995 was $3.8 million compared to a 1994 loss of
$2.7 million as a result of the following factors.
Revenues
Revenues for the fiscal year ended April 2, 1995 increased $.5
million (1%) compared to the prior fiscal year. The increase in
sales was primarily attributable to a high level of activity on a
Navy contract. The increase in Navy revenues was largely offset
by prior year activity on a conversion contract and an overhaul
contract.
Cost of Sales
Fiscal year 1995 cost of sales decreased $14.9 million (25%)
compared to 1994 results as the Company benefited from high
margin work in 1995. Costs of sales were 65% of sales in fiscal
year 1995 compared to 88% of sales in 1994 as fiscal year 1994
included two difficult conversion and overhaul contracts.
Administrative Expenses
Administrative expenses for fiscal year 1995 were $23.7 million
in 1995 down $1.7 million (7%) compared to $25.4 million in 1994.
The Company attributes this reduction in cost to its streamlining
efforts partially offset by increased bid and proposal costs.
Contract Loss Reserves
In 1995, the Company utilized $1.0 million in contract loss
reserves compared to $10.2 million in 1994.
Operating Profit
Fiscal year 1995 operating profit of $1.1 million increased $7.8
million from the fiscal year 1994 operating loss of $6.7 million
as 1995 benefited from higher margin work and lower
administrative expenses.
Provision for Environmental Reserves
In fiscal year 1995, the Company added $2.0 million in provisions
for environmental liabilities for sites and circumstances where
it was possible to make reasonable estimates of the Company's
potential liability. In fiscal year 1994, the Company
established environmental reserves of $6.5 million.
Gain on sale of facility
During the second quarter of fiscal year 1995, the Company sold
its Alameda, California property to the U.S. Government for $.6
million and recognized a net gain of $.5 million. The Company
sold its Galveston shipyard facilities in December 1993 to
Galveston Wharves for $6 million, consisting of $.6 million cash
with the balance financed with special revenue bonds issued to
the Company. The Company is recognizing the gain on the sale as
the bond payments are received and recognized a net gain of $.6
million in 1994. Included in 1995 other income was a gain of $.2
million reflecting a current period bond principal payment.
Investment and Other Income
Investment and other income decreased $.2 million compared to
fiscal year 1994 results. Fiscal year 1995 activity benefited
from Galveston bond interest income and principal payments of $.7
million, unclaimed bankruptcy distributions of $.4 million and
increased interest income of $.6 million. 1994 activity included
a $1.8 million gain from the settlement of a dispute with a
former insurer.
Income Taxes
For fiscal year 1995, the Company recognized no income tax
expense as the expense was offset by a reduction in the deferred
tax valuation reserve. Fiscal year 1993 income tax benefits of
$.3 million represent a refund of fiscal year 1993 estimated tax
payments.
Cumulative Effect of Change in Accounting Principles
Effective April 4, 1994 the Company changed its method of
accounting for general and administrative costs from recognizing
these expenses as contract costs to recognizing them as incurred
which reflects the change, over time, in the Company's business
from predominately longer term Department of Defense contracts to
predominately shorter term commercial and government contracts.
This change has been applied to general and administrative costs
of prior years and resulted in a cumulative effect credit of $.4
million, which was included in income of the first quarter of
fiscal year 1995. The effect of the change was to decrease
fiscal year 1995 income before the cumulative effect of the
accounting change by $1.3 million ($.12 per share) There was no
income tax effect as a result of the change.
Liquidity, Capital Resources and Working Capital:
During fiscal year 1995, working capital decreased modestly by
$1.8 million to $48.9 million at March 31, 1996 which includes
restricted and unrestricted cash, cash equivalents and marketable
securities of $43.1 million. The decrease in working capital is
attributable to fixed asset additions and acquisition activity.
Expenditures for property, plant and equipment in fiscal year
1996 were $5.0 million compared to $3.3 million for the prior
fiscal year and were attributable to Shipyard equipment
purchases. These expenditures are in addition to ongoing repair
and maintenance expenditures in the Shipyard of $6.1 million,
$3.7 million, and $3.8 million in fiscal years 1996, 1995 and
1994, respectively. The Company anticipates a decrease from
fiscal year 1996 property, plant and equipment expenditures and
repair and maintenance expenditures levels as 1996 included
efforts to prepare for construction of the Mark II Ferries. The
future business plans of the Shipyard are not expected to require
capital expenditures in excess of annual depreciation. Capital
expenditures are expected to be financed out of cash flow.
The Company is required on some of its projects to provide
customers with performance, contract and payment bonds. On
December 28, 1994 Todd Pacific entered into an agreement with a
surety pursuant to which the surety provided a contract bond for
the Mark II Ferry contract. The contract bond is secured by Todd
Pacific's machinery, equipment, inventory and trade accounts
receivable on certain bonded jobs. The surety has also issued
bonds totaling $4.1 million for current commercial repair jobs
Todd Pacific established an annually renewable $3 million
revolving credit facility secured by a first lien on certain
trade receivables. Outstanding borrowings under the credit
facility may not exceed certain percentages of Todd Pacific's
trade receivables.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA
See following page.
<PAGE>
REPORT OF ERNST & YOUNG LLP INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Todd Shipyards Corporation
We have audited the accompanying consolidated balance sheets of
Todd Shipyards Corporation and subsidiaries (the "Company") as of
March 31, 1996 and April 2, 1995 and the related consolidated
statements of income, stockholders' equity and cash flows for
each of the three years in the period ended March 31, 1996. Our
audits also included the financial statement schedule listed on
the index at item 14(a). The financial statements and schedule
are the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial
statements and schedule based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statements presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion the consolidated financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of Todd Shipyards Corporation and subsidiaries
at March 31, 1996 and April 2, 1995 and the consolidated results
of its operations and its cash flows for each of the three years
in the period ended March 31, 1996 in conformity with generally
accepted accounting principles. Also, in our opinion, the
related financial statements schedule, when considered in
relation to the basic financial statements taken as a whole,
presents fairly in all material respects the information set
forth therein.
As more fully described in Note 1 to the financial statements,
the Company changed its method of applying general and
administrative costs on contracts.
/s/Ernst & Young LLP
Seattle, Washington
May 17, 1996
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1996 and APRIL 2, 1995
1996 1995
(in thousands)
ASSETS:
Cash and cash equivalents $ 8,552 $ 11,966
Restricted cash 1,546 313
Securities available for sale 33,036 41,901
Accounts receivable, less allowance for
losses of $511 and $548, respectively
U.S. Government 2,731 435
Other 6,299 6,331
Costs and estimated profits in excess of
billings on incomplete contracts 15,063 6,392
Inventories 1,225 1,063
Other 254 61
Total current assets 68,706 68,462
Property, plant and equipment, at cost 65,607 61,129
Less accumulated depreciation 39,108 36,577
26,499 24,552
Deferred pension asset 17,201 15,564
Other 4,974 2,346
Total assets $117,380 $110,924
LIABILITIES AND STOCKHOLDERS' EQUITY:
Accounts payable and accruals $ 11,831 $ 7,076
Payrolls and vacations 3,896 3,596
Treasury stock purchases payable - 2,525
Other 656 323
Taxes other than income taxes 1,073 1,136
Income taxes 2,370 3,102
Total current liabilities 19,826 17,758
Environmental reserves 7,896 8,423
Accrued post retirement health benefits 22,278 22,310
Stockholders' equity:
Common stock $.01 par value-authorized
19,500,000 shares, issued 11,956,033
shares at March 31, 1996 and April 2, 1995,
and outstanding 9,910,187 at March 31, 1996
and 9,939,009 at April 2, 1995 120 120
Additional paid-in capital 38,181 38,181
Retained earnings 38,696 33,576
76,997 71,877
Less treasury stock 9,617 9,444
Total stockholders' equity 67,380 62,433
Total liabilities and stockholders'
equity $117,380 $110,924
The accompanying notes are an integral part of this statement.
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
Years Ended March 31, 1996, April 2, 1995, and April 3, 1994
(In thousands of dollars)
1996 1995 1994
Revenues $101,687 $ 69,096 $ 68,552
Operating Expenses:
Cost of sales 71,674 45,234 60,080
Administrative expense 28,996 23,740 25,428
Contract reserves utilization - (980) (10,232)
Subtotal 100,670 67,994 75,276
Operating Income (Loss) 1,017 1,102 (6,724)
Provision for environmental
reserves - (2,000) (6,500)
Closed facilities adjustment
Galveston - - 3,131
Los Angeles - - 2,522
Gain on sale of facility - 505 613
Investment and other income 3,115 3,795 3,981
Income (Loss) Before Income
Taxes and Cumulative Effect of
Change in Accounting Principle 4,132 3,402 (2,977)
Income tax provision (benefit) - - (263)
Income (Loss) Before Cumulative
Effect of Change in Accounting
Principle 4,132 3,402 (2,714)
Cumulative effect to April 3,
1994 of accounting change,
net of tax - 438 -
Net Income (Loss) $ 4,132 $ 3,840 $(2,714)
Net Income (Loss) per Common Share:
Income (Loss), before Cumulative
Effect of Change in Accounting
Principle $ 0.42 $ .32 $ (.24)
Cumulative effect of change
in accounting principle - .04 -
Net Income (Loss) $ 0.42 $ .36 $ (.24)
Proforma amounts, Assuming the New
Accounting Method is Applied
Retroactively:
Net Income (Loss) $ 4,132 $ 3,402 $ (4,034)
Net Income (Loss) per Share .42 .32 (.35)
Weighted Average Number of Shares
(thousands) 9,931 10,740 11,540
The accompanying notes are an integral part of this statement.
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended March 31, 1996, April 2, 1995, and April 3, 1994
(in thousands of dollars)
1996 1995 1994
OPERATING ACTIVITIES:
Net income (loss) $ 4,132 $3,840 $(2,714)
ADJUSTMENTS TO RECONCILE NET INCOME
(LOSS) TO NET CASH PROVIDED BY
(USED IN) OPERATING ACTIVITIES:
Effect of change in accounting
principle - (438) -
Depreciation and amortization 3,208 3,078 3,173
Increase (decrease) in
environmental reserve (527) 1,923 6,500
Decrease in accrued loss on
contracts - (980) (10,232)
Los Angeles facility closure
adjustment - (35) (2,636)
Galveston facility closure
adjustment - (50) (3,246)
CHANGES IN OPERATING ASSETS
AND LIABILITIES
Decrease (increase) in costs
and estimated profits in
excess of billings on
incomplete contracts (8,671) (4,178) 2,479
Increase (decrease) in
accounts payable
and accruals 4,755 (190) 438
Decrease (increase) in
accounts receivable (2,264) 1,377 9,460
Increase in deferred
pension asset (1,637) (1,627) (1,925)
Decrease in income taxes (732) (850) (27)
Increase (decrease) payrolls
and vacations 300 44 (1,105)
Other 835 83 (640)
Net cash - operating activities (601) 1,997 (475)
1996 1995 1994
INVESTING ACTIVITIES:
Purchases of securities
available for sale $(19,774) $(10,297) $(46,278)
Maturities of securities
available for sale 22,959 15,358 16,487
Sales of securities
available for sale 6,721 1,466 9,756
Purchases of property, plant
and equipment (4,954) (3,287) (2,655)
Acquisition (3,850) - -
Other 16 106 648
Net cash - investing activities 1,118 3,346 (22,042)
FINANCING ACTIVITIES:
Purchases of treasury stock (2,698) (2,570) (3,611)
Decrease (increase) in
restricted cash (1,233) 5,406 5,242
Net cash - financing activities (3,931) 2,836 1,631
NET CHANGE IN CASH AND CASH
EQUIVALENTS (3,414) 8,179 (20,886)
BEGINNING CASH AND CASH EQUIVALENTS 11,966 3,787 24,673
ENDING CASH AND CASH EQUIVALENTS $ 8,552 $ 11,966 $ 3,787
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest $ 3 $ 3 $ 26
Income taxes 541 900 27
Noncash financing activities:
Treasury stock purchases payable - 2,525 -
The accompanying notes are an integral part of this statement
<PAGE>
TODD SHIPYARDS CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended March 31, 1996, April 2, 1995, and April 3, 1994
(in thousands of dollars/shares)
Additional
Common Paid-in Retained Treasury Total
Stock Capital Earnings Stock Equity
Balance at
March 28, 1993 $ 120 $ 38,181 $33,137 $ (738) $70,700
Purchase of common
shares for treasury (3,611) (3,611)
Unrealized losses on
marketable securities
available-for-sale,
net of tax (635) (635)
1994 Net loss (2,714) (2,714)
Balance at
April 3, 1994 120 38,181 29,788 (4,349) 63,740
Purchase of common
shares for treasury (5,095) (5,095)
Unrealized losses on
marketable securities
available-for-sale,
net of tax (52) (52)
1995 Net income 3,840 3,840
Balance at
April 2, 1995 120 38,181 33,576 (9,444) 62,433
Purchase of common
shares for treasury (173) (173)
Unrealized gains on
marketable securities
available-for-sale,
net of tax 988 988
1996 Net income 4,132 4,132
Balance at
March 31, 1996 $ 120 $ 38,181 $38,696 $(9,617) $67,380
The accompanying notes are an integral part of this statement.
<PAGE>
TODD SHIPYARDS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years Ended March 31, 1996, April 2, 1995, and April 3, 1994
1. PRINCIPAL ACCOUNTING POLICIES
(A) Basis of Presentation - The consolidated financial
statements include the accounts of Todd Shipyards Corporation
(the "Company") and its wholly-owned subsidiaries Todd Pacific
Shipyards Corporation ("Todd Pacific"), TSI Management, Inc.
("TSI") and Elettra Broadcasting, Inc. ("Elettra"). All
intercompany transactions have been eliminated. The Company's
policy is to end its fiscal year on the Sunday nearest March 31.
Certain reclassifications with the consolidated financial
statements have been made to conform to the current year
presentation.
(B) Business - The Company's primary business is shipbuilding,
conversion and repair for the United States Government, state
ferry systems, and domestic and international commercial
customers. Substantially all of the Company's work is performed
at its Seattle Washington facility by a unionized production
workforce. Through TSI, the Company's investment subsidiary, the
Company has invested in Elettra, a radio station operator.
(C) Depreciation and Amortization - Depreciation and amortization
are determined on the straight-line method based upon estimated
useful lives or lease periods; however, for income tax purposes,
depreciation is determined on both the straight-line and
accelerated methods, and on shorter periods where permitted.
Intangible assets, predominantly broadcasting licenses held by
Elettra, are amortized using the straight-line method over the
expected period of benefit ranging from 5 to 40 years.
(D) Revenues - Revenues consist of the estimated realizable value
of work performed under construction, repair and conversion
contracts. Profits on major contracts, those in excess of $3
million or six months duration, are recorded on the percentage-of-
completion method (determined based on direct labor hours).
Losses on contracts are reported in the period when first
estimated. Revisions to contract estimates are recorded as the
estimating factors are refined. The effect of these revisions is
included in income in the period the revisions are made.
(E) Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
(F) Changes in Accounting Principles - Effective April 4, 1994
the Company changed its method of accounting for general and
administrative costs from recognizing these expenses as contract
costs to recognizing them as incurred which reflects the change,
over time, in the Company's business from predominately longer
term Department of Defense contracts to predominately shorter
term commercial and government contracts. This change has been
applied to general and administrative costs of prior years and
results in a cumulative effect credit of $.4 million, which is
included in income of the first quarter of fiscal year 1995. The
effect of the change was to decrease income before the cumulative
effect of the accounting change by $1,314 ($.12 per share) for
the fiscal year ended April 2, 1995. There was no income tax
effect as a result of the change.
(G) Income Taxes - Income taxes are determined in accordance with
Statement of Financial Accounting Standards No. 109 which
requires an asset and liability approach for financial accounting
and reporting of income taxes. A valuation allowance is recorded
to reduce deferred tax assets when realization of the tax benefit
is uncertain.
(H) Inventories - Inventories, consisting of materials and
supplies, are valued at lower of cost (principally average) or
replacement market. The Company has many available sources of
supply for its commonly used materials.
(I) Cash and Cash Equivalents - The Company considers all highly
liquid debt instruments with a maturity of three months or less
to be cash equivalents. Cash equivalents consist primarily of
money market instruments, investment grade commercial paper and
U.S. Government securities. The carrying amounts reported in the
balance sheet are stated at cost which approximates fair value.
(J) Securities Available for Sale - The Company considers all
debt instruments purchased with a maturity of more than three
months to be securities available for sale. Securities available
for sale consist primarily of U.S. Government securities,
investment grade commercial paper and equities and are valued
based upon market quotes.
In accordance with Statement of Financial Accounting Standards
No. 115 "Accounting for Certain Investments in Debt and Equity
Securities", Company management determines the appropriate
classification of debt and equity securities at the time of
purchase and reevaluates such designation as of each balance
sheet date. All of the Company's short-term and long-term
investments are classified as available-for-sale as of the
balance sheet date and are reported at fair value, with
unrealized gains and losses, net of tax, recorded as a component
of stockholders' equity.
(K) New Accounting Standards -
The Company implemented Statement of Financial Accounting
Standards (Statement) No. 121 "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of,"
during the first quarter of fiscal year 1996. Statement 121
establishes new accounting standards for measuring the impairment
of long-lived assets. There was no impact of adopting Statement
121 on the Company's consolidated financial statements.
During fiscal year 1996, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards (Statement)
No. 123 "Accounting for Stock-Based Compensation." Statement 123
is effective for fiscal years beginning after December 15, 1995.
The Company anticipates continuing to account for stock based
compensation according to Accounting Principles Board Opinion 25
"Accounting for Stock Issued to Employees." The Company will
adopt the disclosure provisions of Statement 123 at the beginning
of fiscal year 1997. It is anticipated that the impact of
adopting Statement 123 will not have a material effect on the
consolidated financial statements.
2. RESTRICTED CASH AND SURETY LINE
On December 28, 1994 Todd Pacific entered into an agreement with
a surety pursuant to which the surety will provide a contract
bond for a contract to build three Jumbo Mark II class ferries
("Mark II Ferries")for the Washington State Ferry System ("Ferry
System"). The contract bond is secured by Todd Pacific's
machinery, equipment, inventory and trade accounts receivable on
certain bonded jobs. The surety has also issued bonds totaling
$4.1 million for current commercial repair jobs.
Prior to December 1994, Todd Pacific utilized a cash
collateralized surety arrangement or posted cash in lieu of a
performance bond. There were no cash collateralized surety
arrangements on March 31, 1996 and $.1 million in such
arrangements on April 2, 1995. Cash collateralized surety
arrangements are classified as other current assets on the
balance sheet.
Restricted cash includes retention relating to Mark II Ferry
construction progress payments pursuant to contract terms.
3. SECURITIES AVAILABLE FOR SALE
The following is a summary of available-for-sale securities:
Amor- Gross Gross Estimated
tized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
March 31, 1996
U.S. Treasury securities
and agency obligations $13,424 $ - $ 128 $13,296
U.S. corporate securities 8,131 8 51 8,088
Mortgage-backed
securities 6,524 1 36 6,489
Total debt securities 28,079 9 215 27,873
Equity securities 4,603 560 - 5,163
$32,682 $ 569 $ 215 $33,036
Amor- Gross Gross Estimated
tized Unrealized Unrealized Fair
(In thousands) Cost Gains Losses Value
April 2, 1995
U.S. Treasury securities
and agency obligations $21,417 $ - $ 357 $21,060
U.S. corporate securities 4,021 2 66 3,957
Mortgage-backed
securities 15,724 - 538 15,186
Total debt securities 41,162 2 961 40,203
Equity securities 1,426 272 - 1,698
$42,588 $ 274 $ 961 $41,901
The Company had no gross realized gains on sales of available-for-
sale securities for the fiscal year ending March 31, 1996 or
April 2, 1995. Gross realized gains on sales of available-for-
sale securities were $19 thousand for the fiscal year ending
April 3, 1994. The Company had gross realized losses of $24
thousand on sales of available-for-sale securities during fiscal
year 1996. The Company had no realized losses on sales of
available-for-sale securities in fiscal years 1995 or 1994.
The amortized cost and estimated fair value of the Company's
available-for-sale debt, mortgage-backed and equity securities
are shown below:
Estimated
Amortized Fair
(In thousands) Cost Value
March 31, 1996
Due in one year or less $ 6,978 $ 6,968
Due after one year through three years 14,577 14,416
21,555 21,384
Mortgage-backed securities 6,524 6,489
Equity securities 4,603 5,163
$32,682 $33,036
Estimated
Amortized Fair
(In thousands) Cost Value
April 2, 1995
Due in one year or less $11,989 $11,852
Due after one year through three years 13,449 13,165
25,438 25,017
Mortgage-backed securities 15,724 15,186
Equity securities 1,426 1,698
$42,588 $41,901
4. CONTRACTS
Mark II Contract
The Company has a $181 million contract to construct three Mark
II Ferries for the Washington State Ferry System. The Mark II
Ferries are designed to transport 218 automobiles and 2,500
passengers each and will be the largest ferries in the Washington
State Ferry System fleet. Fabrication of the Mark II Ferries
began in August 1995. Delivery of the first ferry is scheduled
for the fourth quarter of fiscal year 1997 and delivery of the
second and third ferries is scheduled for fiscal year 1998 and
1999, respectively. As construction of the ferries progresses,
revisions in cost and profit estimates for the contract will be
made. Changes in these estimates may be a result of productivity
factors, overhead costs, material costs, production schedules and
levels of shipyard activity. Changes in the these factors could
materially affect the Company's financial results.
Unbilled Receivables - Certain unbilled items on completed
contracts included in accounts receivable were approximately $.3
million at March 31, 1996 and $2.7 million at April 2, 1995.
Retainages - Costs and estimated profits in excess of billings on
incomplete contracts include $.4 million in retainages at March
31, 1996 and $0 million at April 2, 1995 (after deducting
progress billings of $196 million and $154 million at March 31,
1996 and April 2, 1995, respectively). Retainages are generally
due upon completion or acceptance of the contracted work and
completion of related warranty periods.
Customers - Revenues from the U.S. Government were $35.5 million
(35%), 41.2 million (60%) and $16.2 million (24%) in fiscal years
1996, 1995 and 1994, respectively. Revenues from the Washington
State Ferry System were $40.7 million (40%), $8.3 million (12%)
and $18.5 million (26%) in fiscal year 1996, 1995 and 1994,
respectively.
5. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment and accumulated depreciation at
March 31, 1996 and April 2, 1995 consisted of the following:
1996 1995
Land $ 1,151 $ 1,151
Buildings 9,755 8,555
Piers, shipways and drydocks 26,105 25,992
Machinery and equipment 28,596 25,431
Total plant and equipment, at cost 65,607 61,129
Less accumulated depreciation 39,108 36,577
Plant, property and equipment, net $26,499 $24,552
6. EMPLOYEE BENEFIT PLANS
Union Pension Plans - Operating Shipyard- The Company
participates in several multi-employer plans, which provide
defined benefits to the Company's collective bargaining employees
at its Shipyard. The expense for these plans totaled $2.5
million, $1.8 million and $2.2 million, for fiscal years 1996,
1995 and 1994, respectively.
Union Pension Plans - Previously Operated Shipyards- The Company
is a sponsor of several union pension plans due to the prior
operation of other shipyards. The ongoing operation and
management of these plans is the responsibility of boards of
trustees made up of equal numbers of Company and union
representatives.
Nonunion Pension Plans - The Company sponsors the Todd Shipyards
Corporation Retirement System (the "Retirement System"), a
noncontributory defined benefit plan under which substantially
all nonunion employees are covered. The benefits are based on
years of service and the employee's compensation before
retirement. The Company's funding policy is to fund such
retirement costs as required to meet allowable deductibility
limits under current Internal Revenue Service regulations. New
membership in the Retirement System was frozen on July 1, 1993.
The components of net periodic pension cost (benefit) for the
Retirement System defined benefit plan in fiscal years 1996, 1995
and 1994 are as follows (in thousands):
1996 1995 1994
Service cost during the time period $ 195 $ 248 $ 333
Interest cost on projected benefit
obligation 2,184 2,179 2,325
Actual return on plan assets (5,583) (2,367) (1,981)
Net amortization and deferral 342 (3,093) (4,098)
Net periodic pension benefit before
OBRA '90 (2,862) (3,033) (3,421)
Transfer of assets for payment of
retiree medical benefits
(401(h) Plan) 1,225 1,406 1,496
Net periodic pension cost (benefit) $ (1,637) $(1,627) $(1,925)
Significant assumptions used in determining pension obligations,
and the related pension expense, include a weighted-average
discount rate of 7.25% at March 31, 1996 and 8% at April 2, 1995
and April 3, 1994, an assumed rate of increase in future
compensation of 4.5% at March 31, 1996 and 5% at the end of
fiscal years 1995 and 1994, and an estimate of expected long-term
rate of return on plan assets of 7% at March 31, 1996 and 6.5% at
the end of fiscal years 1995 and 1994. The decrease in the
discount rate reflects the decrease in interest rates at March
31, 1996. The change in assumed increases in future compensation
incorporates reduced inflation expectations. The increase in
long-term plan asset rates of return reflects current and
expected plan asset portfolio investment allocations.
The following table sets forth the Retirement System plan's
funded status and amounts recognized in the Company's
consolidated balance sheets at March 31, 1996 and April 2, 1995
for the Retirement System defined benefit plan (in thousands):
1996 1995
Actuarial present value of benefit obligation:
Accumulated benefit obligations,
fully vested $28,371 $27,566
Projected benefit obligation $29,810 $28,651
Plan's assets at fair value 52,525 49,932
Plan's assets in excess of projected
benefit obligation 22,715 21,281
Unrecognized net loss 6,559 8,771
Unrecognized net transition asset being
recognized over 15 years (12,073) (14,488)
Deferred pension asset $17,201 $15,564
The Retirement System plan assets consist principally of common
stocks and U.S. Government and corporate obligations.
Under a provision of the Omnibus Budget Reform Act of 1990 ("OBRA
'90") the Company transferred approximately $1.2 million in
excess pension assets from its Retirement System into a fund to
pay fiscal year 1996 retiree medical benefit expenses. OBRA '90,
was modified by the Retirement Protection Act of 1994 to extend
annual excess asset transfers through the fiscal year ending
March 2001.
Savings Investment Plan
The Company sponsors a Savings Investment Plan (the "Savings
Plan"), under Internal Revenue Code Section 401, covering
substantially all non-union employees. Under the Savings Plan,
the Company at its sole discretion can contribute an amount equal
to up to 6% of each participant's annual salary depending on the
participant's Savings Plan contributions, and the Company's
profits and performance. The Company has made no contributions
to the Savings Plan during the last three years.
Post Retirement Group Health Insurance Program - The Company
sponsors a defined benefit retirement health care plan that
provides post retirement medical benefits to former full-time
exempt employees, and their spouses, who met specified criteria.
The Company terminated post retirement health benefits for any
employees retiring subsequent to May 15, 1988. The retirement
health care plan contains cost-sharing features such as
deductibles and coinsurance. These benefits are funded monthly
through the payment of group health insurance premiums.
The actuarially calculated components of net periodic post
retirement health care benefit cost for the defined benefit plan
in fiscal years 1996, 1995 and 1994 are as follows (in
thousands):
1996 1995 1994
Service costs $ - $ - $ -
Interest cost on projected
benefit obligation 1,180 1,343 1,533
Return on plan assets - - -
Net amortization of gain (276) (182) (200)
Net period postretirement benefit
cost $ 904 $ 1,161 $ 1,333
Current year plan contributions $ 1,274 $ 1,467 $ 1,551
Since such benefit obligations do not accrue to current employees
of the Company, there is no current year service cost component
of the accumulated post retirement health benefit obligation.
For fiscal year 1996, the weighted average discount rate and rate
of increase in the per capita cost of covered benefits (i.e.,
health care cost trend) used in determining the actuarial present
value of the accumulated health benefit obligation were 6.5% and
8% grading down to 5% over 20 years, respectively. The 1996
weighted average discount rate reflects changes in economic
conditions. The 1996 health care cost trend reflects the
expectation that long term medical cost growth trends will not
stay at current levels. For fiscal year 1995, the weighted
average discount rate and rate of increase in the per capita cost
of covered benefits were 7% and 8%, respectively. For fiscal
year 1994, the weighted average discount rate and rate of
increase in the per capita cost of covered benefits were 8% and
12% grading down to 5% over 21 years, respectively. In
accordance with Statement of Financial Accounting Standards 106,
"Employers' Accounting for Post retirement Benefits Other Than
Pensions", retirement health care plan gains or losses exceeding
10% of the benefit obligation are amortized over the
beneficiaries average remaining life expectancy (11 years). The
health care cost trend rate assumption has a significant effect
on the amounts reported. Increasing the assumed health care cost
trend rate by one percentage point in each year would increase
the accumulated post retirement health benefit obligation as of
March 31, 1996 by $2.0 million and the interest cost component of
net periodic post retirement benefit cost for 1995 by $.1
million.
The following table sets forth the amounts recognized in the
Company's consolidated balance sheet at March 31, 1996 and April
2, 1995 for the post retirement health benefit obligation (in
thousands):
1996 1995
Accumulated post retirement health benefit
obligation $20,016 $19,877
Plan assets - -
Accumulated post retirement health benefit
obligation in excess of plan assets 20,016 19,877
Unrecognized net gain 3,378 3,887
Accrued post retirement health benefits 23,394 23,764
Less estimated current portion of obligations
classified as accrued expenses 1,116 1,454
Long-term portion of accrued post retirement
health benefits $22,278 $22,310
7. INCOME TAXES
The provision for income taxes consists of the following (in
thousands):
1996 1995 1994
Current: federal $ - $ - $ (263)
state and local - - -
Deferred: federal - - -
state and local - - -
Total income tax provision $ - $ - $ (263)
The Company records its deferred tax benefits on the balance
sheet net of a valuation reserve due to the lack of reasonable
assurance that they will be realized.
The provision (benefit) for income taxes differs from the amount
of tax determined by applying the federal statutory rate for the
following reasons (in thousands):
1996 1995 1994
Tax provision (benefit) at
federal statutory tax rate $ 1,446 $ 1,344 $(1,042)
Increase (decrease) in valuation
allowance (829) (908) 1,261
Tax rate differential - - (232)
Tax effect of adjustment of
contingent liabilities (541) (850) (27)
Other - net (76) 414 (223)
$ - $ - $ (263)
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used
for income tax purposes. Significant components of the Company's
deferred income tax assets and liabilities at March 31, 1996,
April 2, 1995 and April 3, 1994 were as follows (in thousands):
1996 1995 1994
Deferred income tax assets:
Business credit carryforwards $7,269 $8,092 $9,429
Alternative minimum tax credit
carryforwards 2,874 2,874 2,874
Accrued employee benefits 9,214 9,272 10,026
Environmental reserve 2,490 2,815 2,138
Contract deferrals 1,115 958 1,442
Deferred gain on sale of facility 601 627 847
Securities available-for-sale - 241 -
Reserve for doubtful accounts 179 192 228
Other 1,087 802 607
Total deferred income tax assets 24,829 25,873 27,591
Valuation reserve for deferred
tax assets (13,872) (14,701) (15,609)
Net deferred tax assets 10,957 11,172 11,982
Deferred income tax liabilities:
Accelerated depreciation 4,739 5,488 6,344
Deferred pension income 6,020 5,447 4,878
Completed contracts - - 703
Securities available-for-sale 124 - -
Other 74 237 57
Total deferred income tax liabilities 10,957 11,172 11,982
Net deferred taxes $ - $ - $ -
The Company had, for federal income tax purposes, tax credit
carryforwards of $7.3 million and $8.1 million at March 31, 1996
and April 2, 1995, respectively. If not utilized, these
carryforwards will expire in fiscal years 1997 through 2001
In addition, the Company has paid approximately $2.9 million of
alternative minimum taxes on alternative minimum taxable income
from fiscal years 1988 through 1992, which will be allowed as a
credit carryforward against regular federal income taxes in
future years in the event regular federal income taxes exceed the
alternative minimum tax.
8. LEASES
Operating lease payments charged to expense were $.9 million, $.5
million, and $.7 million for fiscal years 1996, 1995 and 1994,
respectively. Certain leases contain renewal options and
escalation clauses. Minimum lease commitments at March 31, 1996
are summarized below (in thousands):
Operating
Leases
1997 $ 345
1998 333
1999 299
2000 273
2001 244
Thereafter 1,172
Total minimum lease commitments $ 2,666
9. INCENTIVE STOCK OPTION PLAN
On September 23, 1993 Company shareholders approved an incentive
stock compensation plan under which key employees may be granted
stock purchase options, restricted stock and stock appreciation
rights. The purpose of the plan is to encourage the acquisition
of the Company's common stock by key employees who perform
significant services for the benefit of the Company and to serve
as a means of attracting and retaining outstanding employees.
There are five hundred thousand shares of common stock of the
Company reserved for award under this plan. Stock option awards
require, among other things, that the key employee remain an
employee of the Company during the period of the stock option,
subject to certain provisions, and that the stock option price
will not be less than 100% of the fair market value of the common
stock on the date of the grant.
A summary of the Company stock options issued and outstanding is
as follows:
Exercise
Shares Price
Outstanding at April 3, 1994 - -
Granted 210,000 $4.25-$4.50
Outstanding at April 2, 1995 210,000 $4.25-$4.50
Granted 100,000 $6.00
Outstanding at March 31, 1996 310,000 $4.25-$6.00
Available for grant at March 31, 1996 190,000
Options totaling 192,333 and 134,500 shares were exercisable at
March 31, 1996 and April 2, 1995, respectively. As of March 31,
1996 there have been no awards of restricted stock or stock
appreciation rights.
10. OTHER CONTINGENCIES
The Company is subject to various risks and is involved in
various claims and legal proceedings arising out of the ordinary
course of its business. These include complex matters of contract
performance specifications, environmental protection and
Government procurement regulations. Only a portion of these
risks and legal proceedings involving the Company are covered by
insurance, since the availability and coverage of such insurance
generally has declined or the cost has become prohibitive.
11. FINANCING ARRANGEMENTS
Todd Pacific utilizes an annually renewable $3 million revolving
credit facility secured by a first lien on certain trade
receivables. Outstanding borrowings under the credit facility
may not exceed certain percentages of Todd Pacific's trade
receivables. There were no balances outstanding at March 31,
1996.
12. ENVIRONMENTAL MATTERS
The Company faces potential liabilities in connection with the
alleged presence of hazardous waste materials at certain of its
closed shipyards, at its Shipyard and at several sites used by
the Company for disposal of alleged hazardous waste. The Company
continues to analyze environmental matters and associated
liabilities for which it may be responsible. No assurance can be
given as to the existence or extent of any environmental
liabilities until such analysis has been completed. The eventual
outcome of all environmental matters cannot be determined at this
time, however, the analysis of some matters have progressed
sufficiently to warrant establishment of reserve provisions in
the accompanying consolidated financial statements.
The Company and several other parties have been named as
potentially responsible parties ("PRPs") by the Environmental
Protection Agency ("EPA") pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act
("CERCLA") in connection with the documented release or
threatened release of hazardous substances, pollutants and
contaminants at the Harbor Island Superfund Site (the "Site"),
upon which the Shipyard is located.
To date, the EPA has separated the Site into two operable units
(Soil and Groundwater Unit and Shipyard Sediments Unit). The
Company, along with a number of other Harbor Island PRPs,
received a Special Notice Letter from the EPA on May 4, 1994
pursuant to section 122 (e) of CERCLA. The Company entered into
a Consent Decree for the Soil and Groundwater Operable Unit in
September 1994 under which the Company has agreed to remediate
the designated contamination on its property. That remediation
is anticipated to begin during late 1996 or early 1997. The
Company and EPA currently are negotiating the extent and
methodology of that remediation. The Company has included an
estimate of the potential clean-up liability in its below stated
reserve.
In October 1995 the EPA released for public comment the Proposed
Plan ("Proposed Plan") for the clean-up of sediments within the
Shipyard Sediments Operable Unit. That Proposed Plan includes
four possible clean-up alternatives ranging from taking no-action
to dredging and removing the alledged contaminated sediments.
The EPA Proposed Plan estimates the CompanyOs share of any clean-
up effort could range from no cost if no-action were taken to $30
million for a broadly defined effort. The Company provided
comments to the EPA during the public comment period for the
Proposed Plan and challenged the EPAOs conclusions. The Company
disputes the identification of a separate Shipyard Sediment Unit,
the scope of the work identified in the Proposed Plan and the
timing of the clean-up effort. After the EPA considers the
public comments received, it will issue a Record of Decision
("ROD") stating which clean-up action EPA believes should be
undertaken. Subsequent to the issuance of the ROD, the EPA will
meet with the Company and other affected parties to negotiate the
scope of clean-up activities. The Company intends to vigorously
contest the ROD should it not reflect issues addressed by the
Company in its public comments to the EPA. The Company cannot
estimate a timeline for resolving the issues relating to any
potential clean-up of the Shipyard Sediment Unit. The Company
does not believe an estimate of any potential liability related
to the alledged contaminated sediments can be made at this time.
Consequently, the Company has not included an estimate of its
potential sediments liability in the below stated accrual.
In January 1990, the Company was notified that it was a PRP in an
action brought by the National Oceanic and Atmospheric
Administration ("NOAA") for alleged damages caused to the coastal
and marine natural resources in the Duwamish River and Elliott
Bay off the Harbor Island Site. Subsequent to this notification,
NOAA brought suit against the City of Seattle and the
Governmental agency responsible for sewage treatment in the
Seattle area ("Metro") for their contributions of hazardous
materials to the Duwamish River and Elliott Bay. This litigation
was settled between the parties. While NOAA, the City of Seattle
and Metro retain the right to bring suit against all the other
named PRPs, including the Company, the Company has not been
contacted since the January 1990 notification. The Company does
not believe that an estimate of any potential liability relating
to these actions can be made at this time.
The Company has been notified by the EPA that the Casmalia
Resources Hazardous Waste Management Facility in Santa Barbara
County, California is undergoing remediation and closure under
the Resource Conservation and Recovery Act. It is alleged that
the Los Angeles Division of Todd Pacific deposited certain
production wastes and by-products at this disposal site
throughout the 1980's. The Company has been participating in
settlement discussions with other PRPs and the EPA as a member of
the Steering Committee. The Company has included an estimate of
the potential liability for this site in its below stated
reserves. Investigation continues on this site.
In June 1989, the Company was notified by the City of Hoboken,
New Jersey (the "City") that a volume of oil had been discovered
on the surface of the property that had been owned and operated
as the Hoboken Division of the Company. In June 1992, the City
and the Company were named as PRPs by the State of New Jersey
(the "State"). The City has undertaken a clean-up of the
property. The State has issued a Notice of Violation against the
Company pursuant to the New Jersey Spill Act ("Spill Act"). The
City and the State allege that the Company abandoned three
underground storage tanks in 1969 when the property was sold to
the City and that the discovered surface oil spilled from those
tanks. In April 1994 the City of Hoboken initiated a civil
action against the Company entitled City of Hoboken v. Todd et
al. for contribution under the Spill Act seeking reimbursement
for all monies expended for the cleanup of the Hoboken property.
Also named in the suit is the developer who allegedly trespassed
onto the property and caused the oil spill and several insurance
companies who allegedly issued comprehensive general liability
insurance policies in favor of the City of Hoboken covering the
property. The Company is vigorously defending this action. The
Company has included an estimate of the potential liability for
the site in its below stated reserves.
Todd Pacific has been notified by the California Environmental
Protection Agency that it may be considered a potentially
responsible party for the cleanup of the Omega Chemical
Corporation site ("Omega Site") in Whittier, California. It is
alleged that the Los Angeles Division of Todd Pacific caused
certain production wastes and by-products to be transported to
this hazardous waste treatment and storage facility between 1976
and 1991. The California Department of Toxic Substances Control
is pursuing the clean up of the Omega Site pursuant to state and
federal regulations. The Company is investigating these
allegations. No estimation of potential liability is currently
available.
The Company was identified in 1983 as a generator of materials
deposited at the Western Processing Site in Kent, Washington.
Since that time the Company has executed, along with several
hundred other PRPs, a Consent Decree committing to its
proportionate share of the cleanup to take place at the site.
While it is not possible to predict the entire liability due
under the terms of the Consent Decree, the known costs to the
Company are included in the below stated reserve.
In November 1987, the Company was identified as a PRP by the EPA
in conjunction with the cleanup of the Operating Industries, Inc.
("OII") hazardous materials disposal site at Monterey Park,
California. In September 1995 the Company entered into a Partial
Consent Decree with the EPA to contribute $.6 million as its
partial share of remediation costs at the OII site which
encompasses all costs assessed to date. Payment to the EPA is
expected in summer 1996. A proposed final consent decree for
site remediation is not expected from the EPA until calendar
1997. The cost of the partial settlement and future final
consent decree settlement is assumed in the below stated reserve.
The Company was identified as a PRP in 1986 as a generator of
materials deposited at the Maxey Flats Disposal Site in Fleming
County, Kentucky and specifically has been identified as a de
minimis contributor based on its volume of less than .25% of the
total site makeup. These materials were allegedly generated from
work the Company performed for the United States Department of
Commerce Maritime Administration ("MARAD") on the nuclear ship NS
SAVANNAH during the 1960's and 1970's. The EPA invited the
Company to participate with the de minimis coordinating committee
to resolve its alleged liability on a volume contribution basis
and as a result, the Company has agreed to settle its potential
liability in this matter for a cash payment of $.2 million.
Payment to the EPA is anticipated in summer 1996. The Company
has included the settlement payment in the below stated reserve.
The Company plans to pursue MARAD reimbursement for this cash
payment.
The Company has been named as a defendant in civil actions by
parties alleging damages from past exposure to toxic substances
at Company facilities. The Company and its insurers are
vigorously defending these actions. The Company has included an
estimate of the potential liability for these issues in its below
stated reserves.
The Company has provided aggregate reserves of $7.9 million for
these contingent liabilities. No amount has been taken into
consideration for the possible recovery of these amounts through
right of contribution actions against prior landowners and others
that may have been responsible for the alleged damage to the
various sites. No assurance can be given that the $7.9 million
reserve is adequate to cover all potential remediation costs and
related expenses or awards the Company could incur. Where
appropriate, the Company has recognized insurance recoveries that
are probable of realization.
13. SUBSEQUENT EVENT
The Company owned 120,200 shares of another corporation's common
stock ("Investee") at March 31, 1996, reflected as an available-
for-sale marketable security investment in the accompanying
consolidated balance sheet. There is a common director of the
Company and the Investee. The fair market value of the Investee
common stock was approximately $1.8 million at March 31, 1996.
Subsequent to fiscal year end March 31, 1996, the Company sold
70,000 shares of the Investee common stock for $1.7 million, a
gain of $.9 million ($.09 per share). This gain will be recorded
in the Company's first quarter 1997 results for the period ending
June 30, 1996. The remaining shares will continue to be
classified as available-for-sale securities on the balance sheet.
14. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Financial results by quarter for the fiscal years ended March 31,
1996 and April 2, 1995 are as follows (in thousands):
Cumulative
Operating effect of Net
income Income accounting income
Revenues (loss) (loss) change (loss)
1st Qtr 1996 $ 12,952 $ (800) $ 59 $ - $ 59
2nd Qtr 1996 26,837 (1) 689 - 689
3rd Qtr 1996 21,783 1,240 2,059 - 2,059
4th Qtr 1996 40,115 578 1,325 - 1,325
$101,687 $ 1,017 $ 4,132 $ - $ 4,132
1st Qtr 1995 $ 14,469 $ (1,963) $(1,013) $ 438 $ (575)
2nd Qtr 1995 10,372 ( 499) 1,117 - 1,117
3rd Qtr 1995 15,551 337 1,250 - 1,250
4th Qtr 1995 28,704 3,227 2,048 - 2,048
$ 69,096 $ 1,102 $ 3,402 $ 438 $ 3,840
Earnings per share of common stock:
Cumulative
effect of Net
Income accounting income
(loss) change (loss)
1st Qtr 1996 $ 0.01 $ - $ 0.01
2nd Qtr 1996 0.07 $ - $ 0.07
3rd Qtr 1996 0.21 $ - $ 0.21
4th Qtr 1996 0.13 $ - $ 0.13
1st Qtr 1995 $ (0.09) $ 0.04 $ (0.05)
2nd Qtr 1995 0.10 - $ 0.10
3rd Qtr 1995 0.12 - $ 0.12
4th Qtr 1995 0.19 - $ 0.19
The cumulative effect of changes in accounting principles amount
is net of income tax effect. Each quarter is 13 weeks in length.
Fiscal year 1995 fourth quarter net income reflects high Navy
contract activity.
Todd Shipyards Corporation
Schedule II - Valuation and Qualifying Reserves
For years ending March 31, 1996, April 2, 1995 and April 3, 1994
(in thousands)
Reserves deducted from assets to which they apply - Allowance for
doubtful accounts:
Year Year Year
ended ended ended
March 31, April 2, April 3,
1996 1995 1994
Balance at beginning of period $ 548 $ 653 $ 1,807
Charged to costs and expenses 68 - -
Deductions from reserves (1) (105) (105) (1,154)
Balance at close of period $ 511 $ 548 $ 653
Notes:
(1) Deductions from reserves represent uncollectible accounts
written off less recoveries. Deductions to the allowance account
include $100 thousand and $604 thousand credited to other income
in fiscal years 1995 and 1994, respectively, for changes in the
Company's business volume.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCED DISCLOSURE
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
**
ITEM 11. EXECUTIVE COMPENSATION
**
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
**
ITEM 13. CERTAIN RELATIONSHIPS AND TRANSACTIONS
**
** The information for the above items will be provided in the
1996 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
REPORTS ON FORM 8-K
(a) 1 & 2. Financial Statements
The financial statements and financial statement schedule
listed in the accompanying index to financial statements and
financial statement schedules are filed as part of this annual
report.
3. Exhibits
The exhibits listed on the accompanying Index to Exhibits are
filed as part of this annual report.
(b) Reports on Form 8-K
The Company filed no reports on Form 8-K during the fourth
quarter ended March 31, 1996.
TODD SHIPYARDS CORPORATION
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
COVERED BY REPORT OF INDEPENDENT AUDITORS
Items 14(a) 1 & 2
<PAGE>
Report of Ernst & Young LLP Independent Auditors.............
Consolidated Balance Sheets at March 31, 1996
and April 2, 1995..........................................
Consolidated Statements of Operations
For the years ended March 31, 1996,
April 2, 1995 and April 3, 1994 ..........................
Consolidated Statements of Cash Flows
For the years ended March 31, 1996,
April 2, 1995 and April 3, 1994 ..........................
Consolidated Statements of Stockholders Equity
For the years ended March 31, 1996,
April 2, 1995 and April 3, 1994 ..........................
Notes to Consolidated Financial Statements
For the years ended March 31, 1996,
April 2, 1995 and April 3, 1994 ..........................
Supplementary Information:
Quarterly Financial Data (unaudited).......................
Consolidated Financial Statement Schedule:
II-Valuation and Qualifying Reserves.......................
<PAGE>
TODD SHIPYARDS CORPORATION INDEX TO EXHIBITS
Item 14(a)3
Exhibit
Number
3-1 Certificate of Incorporation of the Company *
dated November 29, 1990, filed in the Company's
Form 8-B Registration Statement dated January
15, 1991 Exhibit 3-1.
3-2 By-Laws of the Company dated November 29, 1990, *
as amended October 1, 1992 filed in the Company's
Form 10-K Report for 1993 as Exhibit 3-2.
10-1 Lease Agreement of floating drydock YFD-70 dated #
April 16, 1996 between the Company and NAVSEA.
10-2 Lease Agreement of floating drydock YFD-54 dated *
April 1, 1987 between the Company and NAVSEA and
amendments thereto filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-2.
10-3 Collective Bargaining Agreement between Todd *
Pacific, Seattle Division and the Metal Trades
Dept. of the A.F.L.- C.I.O., the Pacific Coast
Metal Trades District Council, the Seattle Metal
Trades Council and the International Unions
signatory thereto dated April 1, 1993 filed in the
Company's Form 10-K Annual Report for 1994 as
Exhibit 10-4.
10-4 Project Agreement between Todd Pacific, Seattle *
Division and the Metal Trades Dept. of the A.F.L.
- C.I.O., the Pacific Coast Metal Trades District
Council, the Seattle Metal Trades Council and the
International Unions signatory thereto dated August
1994 filed in the Company's Form 10-K Report for
1995 as Exhibit 10-4.
10-5 Unsigned executed copy of Harbor Area Lease *
Agreement No. HA-2202 dated March 21, 1985 between
the Company and the State of Washington Dept. of
Natural Resources filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-5.
10-6 Harbor Area Lease Agreement No. 2590 dated *
December 13, 1982 between the Company and the State
of Washington Dept. of Natural Resources filed in the
Company's Form 10-K Report for 1995 as Exhibit 10-6.
10-7 Harbor Area Lease Agreement No. 22-090038 dated *
September 1, 1986 between the Company and the State
of Washington Dept. of Natural Resources filed in the
Company's Form 10-K Report for 1995 as Exhibit 10-7.
10-8 Harbor Area Lease Agreement No. 22-090039 dated *
September 1, 1986 between the Company and the State
of Washington Dept. of Natural Resources filed in the
Company's Form 10-K Report for 1995 as Exhibit 10-8.
10-9 Savings Investment Plan of the Company effective *
April 1, 1989 filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-9.
10-10 Todd Shipyards Corporation Retirement System Plan *
and Amendments thereto filed in the Company's Form
10-K Report for 1995 as Exhibit 10-10.
10-11 Contracts for the Modification and Repair of the *
SS Kauai and for the SS Maui for the Matson
Navigation Company, Inc. by Todd Pacific dated
February 4, 1993 filed in the Company's Form 10-K
Annual Report for 1994 as Exhibit 10-12.
10-12 Contract with the State of Washington for repair *
of the MV Tillikum by Todd Pacific dated May 10,
1993 filed in the Company's Form 10-K
Annual Report for 1994 as Exhibit 10-13.
10-13 Purchase and Sale Agreement and Deed of Trust *
relating to the sale of the Company's Galveston
facility to the Galveston Wharves dated December
16, 1993 filed in the Company's Form 10-K
Annual Report for 1994 as Exhibit 10-14.
10-14 Employment contract between Todd Pacific and Roland *
H. Webb dated December 27, 1994 filed in the Company's
Form 10-K Report for 1995 as Exhibit 10-14.
10-15 Contract between Todd Pacific and the Washington *
State Ferries, a division of the Washington State
Department of Transportation for the construction of
one Jumbo Mark II Class Ferry dated January 30, 1995
filed in the Company's Form 10-K Report for 1995 as
Exhibit 10-15.
10-15(a) Change Order Estimate from the Washington State
Ferries, amending Exhibit 10-15 and exercising its
Option for the construction of the second and third
Jumbo Mark II Class Ferries dated June 14, 1995. #
10-16 Contract No. N000024-91-C-8503 between Todd Pacific *
and the Department of the Navy for the maintenance
and repair of supply ships filed in the Company's Form
10-K Report for 1995 as Exhibit 10-16.
10-17 Documents pertaining to the bonding arrangements of *
Todd Pacific relating to the Ferry Contract (Exhibit
10-16): Underwriting and Continuing Indemnity Agreement,
Security Agreement, Pledge Agreement, Intercompany
Credit Agreement, Preferred Mortgage of vessel
EMERALD SEA, UCC-1 Financing Statement, and UCC-2
Fixture Statement filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-17.
10-18 Documents pertaining to revolving line of credit *
agreement between Todd Pacific and U.S. Bank of
Washington, National Association: Security Agreement,
Commercial Guaranties, Corporate Resolution to Borrow,
Corporate Resolutions to Guaranty/Grant Collateral,
Business Loan Agreement, Disbursement Request and
Authorization Agreement, Accounts Receivable Collateral
Parameters Agreement, Promissory Note, and UCC-1
Financing Agreement filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-18.
10-19 Todd Shipyards Corporation Incentive Stock *
Compensation Plan effective October 1, 1993, approved
by the shareholders of the Company at the 1994 Annual
Meeting of Shareholders filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-19.
10-20 Grant of Nonqualified Stock Option dated *
June 24, 1994 to Patrick W.E. Hodgson pursuant
to the Incentive Stock Compensation Plan
(Exhibit 10-19) filed in the Company's Form 10-K
Report for 1995 as Exhibit 10-20.
10-21 Grant of Incentive Stock Option dated June 24, 1994 *
to Roland H. Webb pursuant to the Incentive
Stock Compensation Plan (Exhibit 10-19) filed in the
Company's Form 10-K Report for 1995 as Exhibit 10-21.
10-22 Grant of Incentive Stock Option dated September 29, *
1994 to Stephen G. Welch pursuant to the Incentive
Stock Compensation Plan (Exhibit 10-19) filed in the
Company's Form 10-K Report for 1995 as Exhibit 10-22.
10-23 Grant of Incentive Stock Option dated September 29, *
1994 to Michael G. Marsh pursuant to the Incentive
Stock Compensation Plan (Exhibit 10-19) filed in the
Company's Form 10-K Report for 1995 as Exhibit 10-23.
10-24 Separation Agreement between the Company and David *
K. Gwinn dated March 3, 1995 filed in the Company's
Form 10-K Report for 1995 as Exhibit 10-24.
10-25 Form of Grant of Non-Qualified Stock Options dated #
July 17, 1995 to Patrick W.E. Hodgson pursuant
to the Incentive Stock Compensation Plan
(Exhibit 10-19).
10-26 Form of Grant of Incentive Stock Options dated #
July 17, 1995 to certain key employees pursuant to
the Incentive Stock Compensation Plan (Exhibit 10-19).
18-1 Letter dated 8/17/94 from Ernst & Young, LLP *
regarding changes in accounting principles.
22-1 Subsidiaries of the Company. #
27 Financial Data Schedule. #
28-1 Unsigned unexecuted copy of Indemnity Agreement *
between the Company and ACSTAR Insurance Company
filed in the Company's Form 10-K Report for 1995 as
Exhibit 28-1.
Note: All Exhibits are in SEC File Number 1-5109.
* Incorporated herein by reference.
# Filed herewith.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Exchange Act of 1934 the registrant has duly caused
this Annual Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
TODD SHIPYARDS CORPORATION
Registrant
By: /s/ Patrick L. Duong
Patrick L. Duong
Chief Financial Officer
and Treasurer
June 1, 1996
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated:
/s/ Brent D. Baird /s/ Steven A. Clifford
Brent D. Baird, Director Steven A. Clifford, Director
June 1, 1996 June 1, 1996
/s/ Patrick W.E. Hodgson /s/ Joseph D. Lehrer
Patrick W.E. Hodgson, Joseph D. Lehrer, Director
Chairman, Chief Executive June 1, 1996
Officer, and Director
June 1, 1996
/s/ Philip N. Robinson /s/ John D. Weil
Philip N. Robinson, Director John D. Weil, Director
June 1, 1996 June 1, 1996
/s/ Patrick L. Duong
Patrick L. Duong
Chief Financial Officer
and Treasurer
Principal Financial Officer and
Principal Accounting Officer
June 1, 1996
DEPARTMENT OF THE NAVY
NAVAL SEA SYSTEMS COMMAND
2531 JEFFERSON DAVIS HWY
ARLINGTON VA 22242-5160
IN REPLY REFER
TO
4200
QPR:
02812/JBH
Ser:
02812/092
25 March
1996
Todd Pacific Shipyards Corporation
Attn: Mr. R. Webb
1801 16th Avenue Southwest
Seattle, WA 98134
Gentlemen:
An executed copy of lease N00024-96-L-8103 for floating
drydock YFD 70 is enclosed.
You are requested to perform the Inventory and Inspection
requirement of Section C 2. in accordance with Special
Contract Requirement H-2 and to provide the final report to
this office within 45 days of the date of this letter. You
are also requested to furnish the Performance Bond required
by Section C 2. and Clause 4, and the proof of insurance
required by Section C 2. and Clause 3 to this office within
45 days of the date of this letter.
If you have any questions on this letter or the enclosed
lease, please contact the undersigned at (703) 602-6911.
/s/ J.B. Hall
J.B. HALL
CONTRACTING OFFICER
<PAGE>
PART I - THE SCHEDULE SECTION A - SOLICITATION/CONTRACT
FORM
SOLICITATION, OFFER AND ACCEPTANCE
1. THIS CONTRACT IS A RATED ORDER UNDER DPAS (15 CFR 350)
PAGE 1 OF 77 PAGES
2. CONTRACT NO. N00024-96-L-8103
3. SOLICITATION NO. N00024-96-R-8103
4. TYPE OF SOLICITATION ( ) SEALED BID (x) NEGOTIATED (RFP)
5. DATE ISSUED 22 DEC 95
5. REQ/PURCHASE YFD 70
ISSUED BY ADDRESS OFFER TO (If
other than Item 7)
NAVAL SEA SYSTEMS COMMAND DEPARTMENT OF THE NAVY
BUYER/SYMBOL: NAVAL SEA SYSTEMS
COMMAND, SEA 0291
2531 JEFFERSON DAVIS HWY 2531 JEFFERSON DAVIS
HWY, RM 5E40
ARLINGTON, VA 22242-5160 ARLINGTON, VA 22242-
5160
NOTE: If sealed bid solicitations, "offer" and "offeror"
mean "bid" and "bidder"
SOLICITATION
9. Sealed offers in original and 1 signed copies for
furnishing the supplies or services in the Schedule will be
received at the place specified in Item 8, or if
handcarried, in the depository located in Block 8 unless
2:00 p.m. Eastern 01 MARCH 96
CAUTION - LATE Submissions, Modifications and Withdrawals:
See Section L, Provision No. 52.214-7 or 52.215-10. All
offers are subject to all terms conditions contained in this
solicitation.
10. FOR INFORMATION CALL
A. JONATHAN B. HALL
B. (703) 602-6911 EXT. 265 NO COLLECT CALLS
11. TABLE OF CONTENTS
PART I - THE SCHEDULE PAGES
X A SOLICITATION/CONTRACT FORM 1
X B SUPPLIES OR SERVICES AND PRICES/COSTS 2
X C DESCRIPTION/SPECS/WORK STATEMENT 5
X D PACKAGING AND MARKING 8
X E INSPECTION AND ACCEPTANCE 8
X F DELIVERIES OR PERFORMANCE 8
X G CONTRACT ADMINISTRATION DATA 10
X H SPECIAL CONTRACT REQUIREMENTS 11
PART II - CONTRACT CLAUSES
X I CONTRACT CLAUSES 24
PART III - LIST OF DOCUMENTS, EXHIBITS AND OTHER ATTACH.
X J LIST OF ATTACHMENTS 54
PART IV - REPRESENTATIONS AND INSTRUCTIONS
X K REPRESENTATIONS, CERTIFICATIONS
AND OTHER STATEMENTS OF OFFERORS 55
X L INSTS., CONDS, AND NOTICE TO OFFERORS 67
X M EVALUATION FACTORS FOR AWARD 77
OFFER (Must be fully completed by offeror)
NOTE: Item 12 does not apply if the solicitation includes
provisions in 52.214-16 Minimum Bid Acceptance Period
12. In compliance with the above, the undersigned agrees,
if this offer is accepted within 60 calendar days (60 days
unless a different period is inserted by the Offeror) from
the date for receipt of offers specified above, to furnish
any or all items upon which prices are offered at the price
set opposite each item, delivered at the designated
point(s), within the time specified in the schedule.
13. DISCOUNT FOR PROMPT PAYMENT
14. ACKNOWLEDGMENT OF AMENDMENTS (The offeror acknowledges
receipt of amendments to the SOLICITATION for offers and
related documents numbered and dated:
AMENDMENT NO. DATE
0001 1/2/96
0002 1/25/96
15A. NAME AND ADDRESS OF OFFEROR 16. NAME
AND TITLE OF PERSON
CEC NO.
AUTHORIZED TO SIGN OFFER
Todd Pacific Shipyards Corporation Roland
H. Webb
1801 16th Avenue S.W.
President & COO
Seattle, WA 98134
TIN NO: 13-2906669
15B. TELEPHONE NO. (Include area code)
(206) 623-1635
15C. CHECK IF REMITTANCE ADDRESS IS DIFFERENT FROM ABOVE,
ENTER SUCH ADDRESS IN SCHEDULE ( )
17. SIGNATURE /s/ Roland H. Webb
18. OFFER DATE 3/1/96
AWARD
19. ACCEPTED AS TO ITEMS NUMBERED 0001 with options 0002-
0004
20. AMOUNT N/A
21. ACCOUNTING AND APPROPRIATION N/A
22. AUTHORITY FOR USING OTHER THAN FULL AND OPEN
COMPETITION
( ) 10 U.S.C. 2304(c) ( )
( ) 41 U.S.C. 253(c) ( )
23. SUBMIT INVOICES TO ADDRESS SHOWN IN N/A
24. ADMINISTERED BY (If other than Item 7)
Supervisor of Shipbuilding, Conversion & Repair, USN
Puget Sound, 2802 Wetmore Ave. Suite 500, Code 400
Everett, WA 98201-3518
25. PAYMENT WILL BE MADE BY N/A
EFFECTIVE DATE: 16 April 1996
26. NAME OF CONTRACTING OFFICER Jonathan B. Hall,
Contracting Officer
27. UNITED STATES OF AMERICA /s/ Jonathan B. Hall
28. AWARD DATE 25 March 96
IMPORTANT - Award will be made on this Form, or on Standard
Form 26, or by other authorized official written notice.
<PAGE>
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
PAGE 1 OF 2 PAGES
AMENDMENT/MODIFICATION NO. 0001
3. EFFECTIVE DATE 02 JAN 96
4. REQUISITION/PURCHASE REG. NO. N/A
5. PROJ NO. YFD 70
6. ISSUED BY
NAVAL SEA SYSTEMS COMMAND CODE N00024
BUYER/SYMBOL: JONATHAN B. HALL/SEA 02812
2531 JEFFERSON DAVIS HWY
ARLINGTON, VA 22242-5160
PHONE: Area Code 703/602-6911/Ext 265
8. NAME AND ADDRESS OF CONTRACTOR (No. street, State and
ZIP Code)
CEC NO:
Todd Pacific Shipyards Corporation X 9A. AMENDMENT OF
SOLICITATION NO.
1801 16th Avenue S.W. N00024-96-R-8103
Seattle, WA 98134 9B DATED 22 DEC
95
TIN 1302906669
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
X The above numbered solicitation is amended as set forth in
Item 14. The hour and date specified for receipt of Offers
__ is extended X is not extended.
Offers must acknowledge receipt of this amendment prior to
the hour and date specified in the solicitation as amended,
by one of the following methods:
(a) By completing items 8 and 15, and returning 2 copies of
the amendment; (b) By acknowledging receipt of this
amendment on each copy of the offer submitted; or (c) By
separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR
THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED
MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted,
such change may be made by telegram or provided in each
telegram or letter makes reference to the solicitation and
this amendment, and is received prior to the opening hour
and date specified.
12. ACCOUNTING AND APPROPRIATION DATA NA
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS AND
CONTRACTS/ORDERS, IT MODIFIES THE CONTRACT/ORDER NO. AS
DESCRIBE DIN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN
ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT
THE ADMINISTRATIVE CHANGES (such as changes in paying
office, appropriation data, etc.) SET FORTH IN ITEM 14
PURSUANT TO THE AUTHORITY OF FAR 43.103(b)
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
D. OTHER
E. IMPORTANT: Contractor () is not (x) is required to sign
this document and return 2 copies to the issuing office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF
section headings, including solicitation/contract subject
matter where feasible.)
SEE PAGE 2
Except as provided herein, all terms and conditions of the
document referred to in Items 9A or 10A as heretofore
changed, remains unchanged and in full force and effect.
15A. NAME AND TITLE OF SIGNER Roland H. Webb President &
COO
16A NAME AND TITLE OF CONTRACTING OFFICER
15B. CONTRACTOR/OFFEROR /s/ Roland H. Webb
15C. DATE SIGNED 2/28/96
16B. UNITED STATES OF AMERICA
16C. DATE SIGNED
<PAGE>
1. Section H-1, page 12, paragraph (b), change the first
sentence to read as follows:
"In addition, the Lessee shall operate the dock using the
guidelines for the procedures as detailed in the Dock's
Operating Manual. (See Section C)"
2. Section L, page 75, paragraph 14.e. subparagraph (1)(b),
Factor 2, add the following:
"The plan must also show the Lessee's understanding of, and
plan to be able to provide the typical "Temporary Services"
required in a U.S. Navy Ship Repair availability at their
proposed dry dock site/facility."
3. All other terms and conditions of the solicitation
remain the same.
<PAGE>
AMENDMENT OF SOLICITATION/MODIFICATION OF CONTRACT
1. CONTRACT ID CODE
PAGE 1 OF 2 PAGES
AMENDMENT/MODIFICATION NO. 0001
3. EFFECTIVE DATE 02 JAN 96
4. REQUISITION/PURCHASE REG. NO. N/A
5. PROJ NO. YFD 70
6. ISSUED BY
NAVAL SEA SYSTEMS COMMAND CODE N00024
BUYER/SYMBOL: JONATHAN B. HALL/SEA 02812
2531 JEFFERSON DAVIS HWY
ARLINGTON, VA 22242-5160
PHONE: Area Code 703/602-6911/Ext 265
8. NAME AND ADDRESS OF CONTRACTOR (No. street, State and
ZIP Code)
CEC NO:
Todd Pacific Shipyards Corporation X 9A. AMENDMENT OF
SOLICITATION NO.
1801 16th Avenue S.W. N00024-96-R-8103
Seattle, WA 98134 9B DATED 22 DEC
95
TIN 1302906669
11. THIS ITEM ONLY APPLIES TO AMENDMENTS OF SOLICITATIONS
X The above numbered solicitation is amended as set forth in
Item 14. The hour and date specified for receipt of Offers
__ is extended X is not extended.
Offers must acknowledge receipt of this amendment prior to
the hour and date specified in the solicitation as amended,
by one of the following methods:
(a) By completing items 8 and 15, and returning 2 copies of
the amendment; (b) By acknowledging receipt of this
amendment on each copy of the offer submitted; or (c) By
separate letter or telegram which includes a reference to
the solicitation and amendment numbers. FAILURE OF YOUR
ACKNOWLEDGMENT TO BE RECEIVED AT THE PLACE DESIGNATED FOR
THE RECEIPT OF OFFERS PRIOR TO THE HOUR AND DATE SPECIFIED
MAY RESULT IN REJECTION OF YOUR OFFER. If by virtue of this
amendment you desire to change an offer already submitted,
such change may be made by telegram or provided in each
telegram or letter makes reference to the solicitation and
this amendment, and is received prior to the opening hour
and date specified.
12. ACCOUNTING AND APPROPRIATION DATA NA
13. THIS ITEM APPLIES ONLY TO MODIFICATIONS AND
CONTRACTS/ORDERS, IT MODIFIES THE CONTRACT/ORDER NO. AS
DESCRIBE DIN ITEM 14.
A. THIS CHANGE ORDER IS ISSUED PURSUANT TO: THE CHANGES
SET FORTH IN ITEM 14 ARE MADE IN THE CONTRACT ORDER NO. IN
ITEM 10A.
B. THE ABOVE NUMBERED CONTRACT/ORDER IS MODIFIED TO REFLECT
THE ADMINISTRATIVE CHANGES (such as changes in paying
office, appropriation data, etc.) SET FORTH IN ITEM 14
PURSUANT TO THE AUTHORITY OF FAR 43.103(b)
C. THIS SUPPLEMENTAL AGREEMENT IS ENTERED INTO PURSUANT TO
AUTHORITY OF:
D. OTHER
E. IMPORTANT: Contractor () is not (x) is required to sign
this document and return 2 copies to the issuing office.
14. DESCRIPTION OF AMENDMENT/MODIFICATION (Organized by UCF
section headings, including solicitation/contract subject
matter where feasible.)
SEE PAGE 2
Except as provided herein, all terms and conditions of the
document referred to in Items 9A or 10A as heretofore
changed, remains unchanged and in full force and effect.
15A. NAME AND TITLE OF SIGNER Roland H. Webb President &
COO
16A NAME AND TITLE OF CONTRACTING OFFICER
15B. CONTRACTOR/OFFEROR /s/ Roland H. Webb
15C. DATE SIGNED 2/28/96
16B. UNITED STATES OF AMERICA
16C. DATE SIGNED
<PAGE>
1. Section B, entitled SUPPLIES OR SERVICES, pages 2 and 3,
Item 0001, Item 0002, Item 0003 and Item 0004, amend
paragraph b. as follows:
a. After the words "Lay Day Rate" delete "(per registered
gross ton)" and insert "per long ton (based on "light ship"
weight)"
b. After the words "Haul Day Rate" delete "(per registered
gross ton" and insert "per long ton (based on "light ship"
weight)"
2. Section B, entitled SUPPLIES OR SERVICES, page 4, amend
Notes C and D as follows:
a. Add the following third paragraph to Note C:
"Lay Day Rate - The cost of maintaining a ship in drydock
per day including overhead (including the cost to secure the
YFD 70 and make it operational in the operating basin to
attain the maintain navy certification and to maintain the
drydock in accordance with the lease) and utilities. Labor,
overhead, material or vendor costs, allowable and allocable
to the ship repair availability contract and the services
required to accomplish the contract work package will not be
included in the lay day rate applied to U.S. Navy ship
availability contract cost."
b. Add the following third paragraph to Note D:
"Haul Day Rate - Cost per day including labor and overhead
(including the costs to secure the YFD 70 and make it
operational in the operating basin, to attain and maintain
Navy certification and to maintain the drydock in accordance
with the lease) to dock or undock ships."
3. Section H, entitled SPECIAL CONTRACT REQUIREMENTS, page
23, paragraph H-9 USE OF DRY DOCK FOR U.S. NAVY SHIP
AVAILABILITIES, delete the second sentence and insert the
following:
"Additionally, if the YFD 70 is available because the lessee
has not previously contracted to use the dock for a U.S.
Navy, other U.S. Government or commercial drydocking job,
the lessee is required to make it available to any and all
ship repair firms holding Master Ship Repair Agreement
(including Agreements for Boat Repair) wishing to propose on
U.S. Navy drydocking availabilities."
4. Section H, entitled SPECIAL CONTRACT REQUIREMENTS, add
the following new paragraph H-10 YFD 70 DOCKING REPORTS
H-10 YFD 70 DOCKING REPORTS
The Lessee shall submit to the ACO prospective quarterly
reports of the planned/scheduled dockings in the YFD 70.
The first report shall be due within 30 days of the time the
lessee receives certification from NAVSEA 07.
In addition, the lessee shall also submit to the ACO (within
30 days after the end of each lease year) annual
retrospective reports of the drydockings performed in the
YFD 70 over the previous lease year.
5. Section L entitled INSTRUCTIONS, CONDITIONS AND NOTICES
TO OFFERORS, page 71, paragraph 9.a., change last line to
read as follows:
"proposed lay day rate is the lowest offered."
6. Section L, entitled INSTRUCTIONS, CONDITIONS AND NOTICES
TO OFFERORS, page 71, paragraph 9.c., third line, delete the
word "rent" and insert the words "lay day rate".
7. All other terms and conditions of the solicitation
remain the same.
<PAGE>
SCHEDULE
Section B -- SUPPLIES OR SERVICES
ITEMS 0001-0004 - LEASE OF FLOATING DRY DOCK YFD-70
Item 0001 - First Five Year Lease Term
a. The lump sum annual rental amount referred to in
Contract Clause 2, Rent is $100,000.00 (See Note A and B).
b. For U.S. Navy ship repair availabilities, the maximum
dry dock usage fees charged to the U.S. Navy or ship repair
firms holding a MSRA (including Agreements for Boat repair)
(See Special Contract Requirement H-9) are as follows:
Lay Day Rate per long ton (based on "light ship" weight)
$.36
(See Note C)
Haul Day Rate per long ton(based on "light ship" weight)
.42
(See Note D)
Item 0002- First Additional Five Year Lease Term (See
Section F)
a. The lump sum annual rental amount referred to in
Contract Clause 2 (See Note B).
b. For U.S. Navy ship repair availabilities, the maximum
dry dock usage fees charged to the U.S. Navy or ship repair
firms holding a MSRA (including Agreements for Boat repair)
(See Special Contract Requirement H-9) are as follows:
Lay Day Rate (per registered gross ton) $.36
(See Note C)
Haul Day Rate (per registered gross ton) .42
(See Note D)
Item 0003 - Second Additional Five Year Lease Term (See
Section F)
a. The lump sum annual rental amount referred to in
Contract Clause 2 (See Note B).
b. For U.S. Navy ship repair availabilities, the maximum
dry dock usage fees charged to the U.S. Navy or ship repair
firms holding a MSRA (including Agreements for Boat repair)
(See Special Contract Requirement H-9) are as follows:
Lay Day Rate (per registered gross ton) $.36
(See Note C)
Haul Day Rate (per registered gross ton) .42
(See Note D)
Item 0004 - Third Additional Five Year Lease Term (See
Section F)
a. The lump sum annual rental amount referred to in
Contract Clause 2 (See Note B).
b. For U.S. Navy ship repair availabilities, the maximum
dry dock usage fees charged to the U.S. Navy or ship repair
firms holding a MSRA (including Agreements for Boat repair)
(See Special Contract Requirement H-9) are as follows:
Lay Day Rate (per registered gross ton) $.36
(See Note C)
Haul Day Rate (per registered gross ton) .42
(See Note D)
<PAGE>
Note A: This annual rent amount applies to the initial five
year term.
Note B: Annual lump sum rent amount for first, second and
third additional five year lease term is as follows: The
lump sum annual rent for lease terms beyond the first five
year lease term are determined by escalating the previous
term's annual rent amount by 15%.
Note C: The bid lay day rate must be less than $.72 per
registered ton and will apply during the initial five year
lease term. The lay day rate for the first, second and
third additional five year lease term is as follows:
The lay day rate for the lease terms beyond the first five
year lease term is determined by escalating the previous
term's lay day rate by 15%.
Amendment #2: "Lay Day Rate - the cost of maintaining a
ship in drydock per day including overhead (including the
cost to secure the YFD 70 and make it operational in the
operating basin, to attain and maintain Navy certification
and to main the drydock in accordance with the lease) and
utilities. Labor, overhead, material or vendor costs,
allowable and allocable to the ship repair availability
contract and the services required to accomplish the
contract work package will not be included in the lay day
rate applied to U.S. Navy ship availability contract cost."
Note D: The haul day rate for the initial five year lease
term shall be 116.7% of the lay day rate for the initial
five year lease term (Line item 0001). The haul day rate
for the first, second and third additional five year lease
terms is as follows:
The haul day rate for the lease terms beyond the first five
year lease term is determined by escalating the previous
term's haul day rate by 15%.
Amendment #2: "Haul Day Rate - Cost per day including labor
and overhead (including the costs to secure the YFD 70 and
make it operational in the operating basin, to attain and
maintain Navy certification and to maintain the drydock in
accordance with the lease) to dock or undock ships."
<PAGE>
SCHEDULE
SECTION C -- DESCRIPTION/SPECIFICATIONS/WORK STATEMENT
Items 0001, 0002, 0003 and 0004 - Floating Dry Dock YFD 70
(mullet piece steel dock) - The Government does hereby lease
and rent floating Dry Dock YFD 70 to the Lessee and the
Lessee does hereby hire and rent the same from the
Government.
1. GENERAL DESCRIPTION (Note: All figures are approximate)
Certified Capacity 14,000 LT
Dock Overall 528 feet
Keel Block Length 528 feet
Clear Dock Body Width 87 feet
Water Over Floor/Pontoon 32 feet, 9 inches
Dock Entry Width 87 feet
Dock Entry Depth 32 feet, 9 inches
Minimum dredging depth required for maximum dock submergence
is 52 feet (includes 3 feet overdredge).
Minimum dredge depth for a navigable channel to the dock is
35 feet at mean low tide.
Dry dock drawings and technical manuals for all systems and
dock equipment are available for prospective offerors review
aboard the YFD 70 at Todd Pacific Shipyards Corp.
Prospective offerors should review these documents. (SEE
SECTION L-11, ENTITLED INSPECTION INSTRUCTIONS AND
CONDITIONS.)
2. REQUIREMENTS
(a) Within 45 days of the award of the Lease, the Lessee
shall submit the following documents to the PCO for
approval:
Final Towing Plan
Final Operating Basin and Mooring Plan
Performance Bond required by Contract Clause 4, Performance
Bond
Proof of Insurance per Contract Clause 4 Insurance and Risk
of Loss and as required by Contract Clause 11 Movement of
Dock
(b) Upon PCO approval of the plans the Lessee shall prepare
the mooring site for installation of the YFD 70.
(c) As soon as the preparations of the Operating
Basin/Mooring site are complete the Lessee shall contact the
ACO and
1. Make arrangements to inspect the drydock in accordance
with Special Contract Requirement H-2 "Inspection and
Inventory".
2. Take delivery of YFD 70 (see Section F)
3. Tow it to their approved operating basin/mooring site.
4. Moor the dry dock in accordance with the PCO approved
plans.
(d) The Lessee shall complete all necessary hook up and
other arrangements and have the YFD 70 fully operational.
(e) The Lessee shall obtain certification in accordance with
Special Contract Requirement H-6 "Safety Certification".
CAUTION
The dry dock and related equipment, material and other
supplies are leased to the lessee on an "as is, where is"
basis without warranty or representation of any kind,
express or implied, on the part of the government. See
contract clause 8, DISCLAIMER OF WARRANTY AND CONDITION OF
DRY DOCK.
SCHEDULE
SECTION D -- PACKAGING AND MARKING
Not applicable to this Lease Agreement.
SECTION E -- INSPECTION AND ACCEPTANCE
1. Inspection - See Contract Clause 8, Disclaimer of
Warranty and Condition of Dry Dock.
2. Acceptance - The location at which the Lessee will
accept the Dry Dock is its present location, Todd Pacific
Shipyards Corporation, Seattle, WA. and shall be in
accordance with Section F, Deliveries or Performance.
SECTION F -- DELIVERIES OR PERFORMANCE
1. Delivery - The location at which the Lessee will accept
delivery and take custody of the Dry Dock is its current
location, Todd Pacific Shipyards Corporation, Seattle, WA
(SEE Clause 11, MOVEMENT OF DOCK).
2. The place of performance of this lease shall be as set
forth below:
NAME Todd Pacific Shipyards Corporation
STREET ADDRESS 1801 16th Avenue S.W.
CITY/STATE/ZIP Seattle, WA 98134
3. This lease is for a period of five (5) years, commencing
on 16 April 1996, unless this lease is terminated in
accordance with Contract Clause 9, Termination by the
Government, or Contract Clause 10, Termination by the
Lessee. The Lessee has the right to extend this lease for
three (3) additional terms of five (5) years each by giving
written notice to the PCO at least twelve (12) months prior
to expiration of the Lease term. **The Lessee's right to
extend is conditional upon the concurrence of the PCO based
on full compliance with all terms and conditions of the
Lease, including achieving certification and performing the
necessary maintenance to maintain the certification of the
Dry-dock at the maximum rated capacity in accordance with
Special Contract Requirement H-6, Safety Certification.
* To be filled in at time of award.
**SEE Contract Clause 33.
4. After delivery of the dry dock to the Lessee, the Lessee
will, at its own expense, promptly remove the Dry Dock to
the operating basin provided therefor, moor it therein, and
furnish all facilities and accomplish all work required to
place the Dry Dock in operation. Prior to delivery, the
Lessee will comply with the provisions set forth in Section
C, paragraph 2, Requirements. In the event the Dry Dock is
not delivered to the Lessee by reason of the Lessee's
failure to perform any of the Section C requirements or
other obligations under this lease, or by reason of any
other act, fault or failure of the Lessee, the Lessee will
remain liable for the full performance of all the
obligations of this lease including the payment of rent
effective as of the date specified in paragraph 3 above for
the commencement of the term. The Government will not be
liable to the Lessee for damages or loss of profit by reason
of any delay or failure to deliver the Dry Dock occasioned
by an act or fault of the Government, provided, however,
that in such event the date upon which the rental obligation
commences will be adjusted to reflect the term of delay or
failure to deliver the Dry Dock.
5. Return of the Dry Dock upon expiration or termination
will be in accordance with Special Contract Requirement H-8,
Return of Dry Dock.
SECTION G -- CONTRACT ADMINISTRATION DATA
1. The Contract Administration Office is the office
specified in Block 24 of the Standard Form 33.
2. The Leasing Office Representative is as specified in
Block 7 of Standard Form 33.
3. Enter below the address (street and number, city,
county, state and zip code) of prospective Lessee's facility
which will administer the proposed contract if such address
is different from the address shown on the cover page
(Standard Form 33).
_________________________________
_________________________________
_________________________________
Name of Offeror or Lessee
TODD PACIFIC SHIPYARDS CORPORATION
<PAGE>
SCHEDULE
SECTION H -- SPECIAL CONTRACT REQUIREMENTS
The following are the Special Contract Requirements of this
Lease Agreement:
TITLE
PAGE
H-1 OPERATION AND USE OF THE DRYDOCK AT THE LESSEE'S
COMMERCIAL FACILITY
12
H-2 INSPECTION AND INVENTORY
12
H-3 NORMAL MAINTENANCE OF THE DRYDOCK OPERATED AT THE
LESSEE'S COMMERCIAL FACILITY
13
H-4 DRY-DOCKING REQUIREMENTS
16
H-5 CAPITAL MAINTENANCE
16
H-6 SAFETY CERTIFICATION
17
H-7 PROTECTION OF THE ENVIRONMENT
18
H-8 RETURN OF DRY DOCK
18
H-9 USE OF DRY DOCK FOR U.S. NAVY SHIP AVAILABILITIES
23
<PAGE>
SCHEDULE
CAUTION
THE NAVY DOES NOT GUARANTEE ANY WORK FOR THIS
DRYDOCK
H-1 OPERATION AND USE OF THE DRYDOCK AT THE LESSEE'S
COMMERCIAL FACILITY
(a) The Lessee has the right to use the Dry Dock at the site
in Seattle, WA, unless otherwise authorized by the PCO, in
the performance of shipbuilding, ship repair and ship
conversion work. The Lessee shall at all times give
priority to work for the Government as the Procuring
Contracting Officer (PCO) or Administrative Contracting
Officer (ACO) may require. The Lessee shall operate shall
operate the dock in a manner consistent with the practices
of the Marine Industry.
* to be filled in at time of award -
(b) in addition, the Lessee shall operate the dock using the
guidelines for the procedures as detailed in the Docks
Operating Manual (See Section C1). The Lessee's plans for
the operating basin and the mooring of the Dry Dock are
subject to the approval of the PCO, and the Dry Dock must be
moored at the Shipyard in accordance with the plans as
approved. In addition, the depth of the harbor must be
dredged to a depth to ensure there is a minimum clearance of
thirty six (36) inches between the bottom of the dock and
the harbor bottom at Mean Low Water (MLW).
H-2 INSPECTION AND INVENTORY
(a) Immediately prior to delivery of the Dry Dock to the
Lessee, the Lessee and the ACO will conduct a joint
inspection of the physical condition of the Dry Dock. A
joint report of the findings will be made and will be
conclusive evidence of the physical condition of the Dry
Dock at the time of delivery to the Lessee. This inspection
report will also address PCBs hazardous material and
Asbestos on the dry dock.
(b) Also immediately prior to delivery of the Dry Dock to
the Lessee, the Lessee and the ACO will conduct a full and
complete inventory of all Government-owned property,
including the current condition of all portable tools, shop
machinery, spare parts and instruments, and all consumable
supplies and materials on board the Dry Dock. A joint
report of the inventory and condition will be made and will
be conclusive of the inventory of property on board the Dry
Dock at time of delivery to the Lessee.
(c) Joint inspections and reports will also e made by both
parties upon the termination or expiration of this lease and
prior to return of the YFD 70. The findings of these
reports will be conclusive evidence for the physical
condition of the Dry Dock on the date of termination or
expiration of this lease. In the event that the inventor
discloses a deficiency in either its expense and, as
directed by the PCO or the ACO, shall instruments or such
consumable supplies or materials required to correct any
such deficiency. In the event that the inventory discloses
an excess quantity of portable tools or instruments or
consumable materials or supplies, the Lessee may remove the
excess quantity; if Lessee does not promptly remove any such
items, title to such excess quantity shall thereupon vest in
the Government.
H-3 NORMAL MAINTENANCE OF THE DRYDOCK OPERATED AT THE
LESSEE'S COMMERCIAL FACILITY
(a) From the time of delivery of the Dry Dock until the
return of the Dry Dock, the Lessee, at the Lessee's own
expense, shall perform all normal maintenance, and in so
doing is obligated to expend annually a minimum of $500,000
(See Note 1) for normal maintenance and repair of the YFD
70. However, if the performance of maintenance requires the
expenditure of funds in excess of the specified minimum
amount, then the Lessee shall continue to perform, at the
Lessee's own expense, any normal maintenance that may be
required to protect, preserve, repair and maintain the Dry
Dock.
Note 1: The annual minimum normal maintenance expenditure
for the first, second and third additional (optional) five
year lease term is as follows:
The annual minimum normal maintenance expenditure for lease
terms beyond the first five year (basic) lease term is
determined by escalating the previous term's annual normal
maintenance minimum amount of 15%.
(b) Normal maintenance includes, but is not limited to, the
following:
(1) Keep the slip and Dry Dock basin properly dredged and
maintain the moorings in a manner which will permit the safe
and efficient operation of the Dry Dock.
(2) Protect, preserve, repair and maintain the Dry Dock in
good working order and condition in a manner consistent with
practices of the marine industry and as prescribed in MIL-
STD-1625(SH) and all revisions in order to assure the full
availability and utility of the Dry Dock at all times.
(3) Clean, test, paint, preserve and repair of the exterior
and interior of accessible hull structures. Doubler plates
are not an acceptable repair. Plating and structural
members which are holed or wasted in excess of 25% of
original design thickness must be cropped out and renewed.
(4) Blocking renewals, replacement of bilge runners and
fenders, structural supports and cradle renewals. Replace
deteriorated keel and bilge blocks and outriggers.
(5) Repairs, replacement or renewal, where necessary, of
parts of the pumping and flooding systems.
(6) Repair and maintain the electric power-generating and
distribution systems.
(7) Repairs and calibrations of water level and draft-
indicating systems.
(8) Repairs and replacements or renewals of parts of service
equipment such as compressed air, water, steam, carbon
dioxide, fire protection and sewage systems.
(9) Repair and maintain cranes, capstans, flying bridges,
ladders, ventilation systems, fittings and similar items.
(10) Repair and maintain interior and exterior Cathodic
Protection System.
(11) Repair and replacement of Galvanic Anode (Sacrificial)
Zinc System.
(12) Operate for approximately a thirty (30) minute period
every thirty (30) days all equipment not in regular use;
except that Lessee may place any equipment not required for
operation of the Dry Dock in an approved sate of partially
or totally immobilized preservation or storage at locations
not aboard the Dry Dock. It is understood that the Lessee
will, at its own expense, return and restore any preserved
equipment to operating condition not later than the
termination or expiration of this lease.
(13) The Lessee is required to perform an annual inspection
of the Dry Dock. At the time of each annual inspection, the
Dry Dock must be careened or inspected by underwater camera
sufficiently to expose as much as possible of the exterior
underwater hull in order to determine its condition. When
this inspection discloses deterioration of the underwater
hull, or the pain coatings thereon, the Dry Dock must be dry-
docked and any necessary repairs including painting of the
underwater hull and other underwater parts performed.
(c) The performance of maintenance is subject to the
approval of, or may be directed in writing by, the PCO or
ACO.
(d) If in any annual period the Lessee expends less than the
minimum specified amount for normal maintenance, the
unexpended balance will be carried over to the next year of
the lease or be paid in cash as additional rent, at the
election of the PCO.
(e) The Lessee is responsible for any loss or damage of the
Dry Dock resulting from failure to comply with the
provisions of the cause to the extent that the loss of
damage is found by the PC to constitute a risk not of the
type customarily covered by insurance.
(f) Joint annual inspections and other inspections that may
be determined necessary by the PCO or ACO will be made of
the material condition of the Dry Dock, including its
machinery and equipment after performance of any maintenance
work. Compliance with instructions, however, may not in
itself be construed as a complete discharge of Lessee's
obligations to protect, restore, repair and maintain the Dry
Dock.
(g) During the first six months of this lease, the Lessee
shall submit to the ACO for review and comment and
forwarding to the PCO for approval, a proposed normal
maintenance program indicating the manner and time for the
accomplishment of the normal maintenance work set forth in
the above paragraphs, including an appropriate maintenance
records system, in sufficient detail to show its adequacy as
a normal maintenance program. The normal maintenance
program must also include a planned timetable for the dry-
docking the Dry Dock requirement in Special Contract
Requirement H-4, dry-docking Requirements.
H-4 DRY-DOCKING REQUIREMENTS
In addition to the minimum normal maintenance requirements
required in the Special Contract Requirement H-3, Normal
Maintenance, the Lessee, at its expense, shall also dry-dock
the Dry Dock at least once during the basic term of five (5)
years of the lease, no later than the third year. The Dry
Dock shall also be dry docked at Lessee's expense in each of
the five year option terms that are exercised, no later than
the third year of each option term. During the performance
of this "dry-docking of the Dry Dock" requirement, the
Lessee, at its own cost and expense, shall conduct a
complete certified Marine survey of the Dry Dock. The
normal maintenance requirements which are identified in the
Marine Survey report must be accomplished during the dry-
docking of the Dry Dock. During this dry-docking, as a
minimum, the underwater hull parts, both interior and
exterior areas, must be cleaned, repaired, completely
painted or treated as may be necessary.
H-5 CAPITAL MAINTENANCE
(a) Capital Maintenance is repair or restoration work that
is beyond the scope of normal maintenance and is approved by
the ACO. Capital Maintenance projects may either be
requested by the Lessee or directed by the PCO/ACO.
(b) Any Lessee proposed Capital Maintenance project must be
submitted in writing to the ACO with a copy to SEA 07Q at
the following address:
Department of the Navy
Naval Sea Systems Command
SEA-07Q21 (R. Weiser)
2531 Jefferson Davis Highway
Arlington, VA 22242-5160
Each request must include, as a minimum, the estimated costs
to perform the work, broken down by material, subcontract
costs, labor and burden costs, and the time required to
perform the project. Work may not start until written
approval is received from the ACO. Each project will be
approved on a "not to exceed" cost basis. In urgent
circumstances, the Lessee may seek oral approval from the
ACO pending written confirmation.
(c) To the extent that any directed repair or restoration
work is determined to be Capital Maintenance, the audited,
allocable and allowable costs incurred in performing such
repair or restoration will be credited against the annual
rent amounts, as approved by the ACO. However, the
Goverment will not be obligated to credit the annual rent
amounts unless prior written approval from the ACO has been
obtained. Any disagreement by the Lessee with such
determination is deemed a dispute within the meaning of
Contract Clause 23, Disputes.
(d) For the purposes of determining the credit against the
rental amounts to be paid, the amount to be allowed will be
the approved "not to exceed" cost to perofrm such work
adjusted on the basis of the audited, allocable and
allowable actual costs as determined under the provisions of
Contract Clause 27, Audit By Department of Defense. If the
audited cost is less than the "not to exceed" cost
authorized for repair or restoration, any authorized credit
against the rent or reimbursement will be adjusted
accordingly. If the audited cost is greater than the "not
to exceed" cost authorized for repair or restoration, excess
costs are deemed to be costs of performing normal
maintenance. As such, these costs are at the Lessee's
expense.
(e) In no event is the Government under any obligation to
credit the rental amounts for, or be required to approve,
any alterations, additions, betterments to obtain
certification or recertification in accordance with Special
Contract Requirement H-6, Safety Certification. Any work
performed to obtain certification or recertification will be
performed at Lessee's expense.
(f) The Lessee is not requried to give notice to the ACO if
the Lessee estimates that the cost of any repair or
restoration is Five Hundred Dollars ($500.00) or less and
the Lessee elects to perform such repairs or restoration at
its own expense.
H-6 SAFETY CERTIFICATION
(a) Within twelve (12) months after award of this lease (or
before dry-docking a U.S. Naval vessel, if earlier), the
Lessee shall obtain certification of the Dry Dock in
accordance with MIL-STD-1625(SH) and all published
revisions. Twoard this end, this Lessee shall submit a
complete Facility Certification Report in accordance with
MIL-STD-1625(SH). The Lessee will achieve the maximum
certified rated capacity obtainable without performing
alternations, additions or betterments to the Dry Dock, as
described in Contract Clause 12, Alterations. Participation
in the maintenance program described in paragraph 4.10 of
MIL-STD-1625(SH) is mandatory after the Dry Dock receives
certification. here is no express or implied warranty of
any kind regarding the condition of the Dry Dock with regard
to certification pursuant to MIL-STD-1625(SH) or to any
later published version or revision. Lessee's failure to
achieve or maintain certification may be grounds for the
Navy's termination of the lease in accordance with Contract
Clause 9, Termination by the Government.
(b) In no event shall the Government be under any obligation
to provide funds for, or be required to approve, any
alternations, additions, or betterments to obtain
certification or recertification. Failure to obtain
certification or recertification shall in no event form the
basis for any claim by the Lessee against the Government.
(c) The navy does not guarantee U.S. Navy shipbuilding, ship
repair or ship conversion work at the Dry Dock.
H-7 PROTECTION OF THE ENVIRONMENT
The Lessee shall comply with all Federal, state, and local
environmental laws and regulations in existence or that may
be hereinafter enacted that are applicable to the
transportation, operation and maintenance of the drydock.
H-8 RETURN OF THE DRY DOCK
(a) Except as may be directed under (e)(2) below, the place
to which the Dry Dock is to be returned is the Inactive Ship
Maintenance Facility, Bremerton, WA.
(b) Except as otherwise provided, before expiration,
termination, or cancellation of the Lease, the Lessee shall,
at its own expense, restore the Dry Dock to as good a
condition as when delivered to the Lessee, reasonable wear
and tear excepted. An exception to the above is any loss of
or damage to the Dry Dock for which the Lessee is relieved
of liability udner this Lease. In the event the Government
terminates this lease upon less than thirty (3) days'
notice, the Lessee shall, atthe election of the PCO, either
(i) have thirty (3) days from receipt of notice of
termination to accomplish restoration, or (ii) pay to the
Government as additional rent the cash equivalent of the
cost of performing such work.
(c) Upon expiration of the Lease Term, or any extension
thereof, or upon termination pursuant to Contract Clause 9,
Termination by the Government, under any other Contract
Clause or provision of this lease, this lease will remain in
full force and effect for a Standby Period of ninety (90)
days from such expiration, cancellation, or termination of
the Lease Term. However, in the event this lease is
temrinated by the Lessee pursuant to Cotnract Clause 10,
Termination by the Lessee, then the Standby Period indicated
above is one (1) year from the date of such terminatoin.
During the Standyb Period all Contract Clauses, Special
Contract Requirements and other provisions in the Schedule
of this lease remain in full force and effect except that
the Lessee is not permitted to use the Dry Dock nor is the
Lessee required to pay additional rent. The PCO may
terminate the Standby Period at any time either (i) upon
thirty (30) days written notice to the Lessee, or (ii) if
this lease is terminated pursuant to Contract Clause 9,
Termination by the Government, subparagraph (a) or (b), upon
notice to the Lessee of termination of the Standby Period.
(d) In effecting the return of the Dry Dock, the Lessee
shall, at its own expense, carry out the following actions
during the Standby Period: (i) establish liaison with the
ACO and PCO and provide a plan for safe stowage of the Dry
Dock, (ii) conduct a joint inspection with the ACO to
certify that the dry dock has been restored as required by
paragraph (b) above and tha tthe lessee has completed the
required work to place the dry dock in safe stowage prior to
the Government's accepting custody, and (iii) return the
available Dry Dock blueprints, Booklet inspection report,
and any other Dry Dock or dry-docking reports to the
Gvoernment. During the Standby Period, the Lessee shall, at
its own expense, continue to provide a secure mooring
arrangement and the necessary security to protect the Dry
Dock.
(e) Upon expiration, cancellation or termination fot he
Lease Term, and prior to the expiration of the Standby
Period, the Lessee shall, at its own expense, subject to the
specifications and procedures set forth for the applicable
Dry Dock:
(1) Perofrm all work required to place the Dry Dock in
a safe stowage condition. Such work shall include, as a
minimum, the following:
(I) externally blank all overboard discharges
above the waterline; (See XXXII below)
(II) wire all sea valves shut;
(III) clean tanks, voids, and compartments;
(IV) (RESERVED)
(V) (RESERVED)
(VI) secure all topside closures;
(VII) (RESERVED)
(VIII) fabricate and install cradles on the center
section of the dock for storage of the dock's two end
sections;
(IX) fabricate and install a breakwater at the
towing end of the Dry Dock;
(X) remove all trash, rages, debris, oil, grease
and other fire hazards and clean and dry spaces;
(XI) secure in place all weathertight/watertight
closures, doors, hatches, scuttles, weather-deck
lifelines/lifelines, stanchions/safety chains, deck plates,
gratings, and vent duct openings;
(XII) secure all lockers, wardrobes, desk drawers
and file cabinets;
(XIII) remove all flammables;
(XIV) remove all compressed gas cylinders except
five full 15-lb CO2 bottles;
(XV) all refridgerants have been recovered and
removed;
(XVI) remove all portable PKP, fixed PKP cylinders
and other firefighting liquids;
(XVII) deenergize and red tab all switchboards and
electrical circuits except lighting;
N00024-96-R-
8103
PART II-- CONTRACT CLAUSES
SECTION I-- CONTRACT CLAUSES
This Lease Agreement incorporates the following Contract
Clauses in full text as follows:
CONTRACT
CLAUSE NO TITLE AND DATE
PAGE
1. PURPOSE
26
2. RENT
26
3. INSURANCE AND RISK OF LOSS
26
4. PERFORMANCE BOND
29
5. INTEREST
29
6. RIGHT TO SUBLEASE OR ASSIGN
30
7. INDEMNIFICATION
30
8. DISCLAIMER OF WARRANTY AND CONDITION OF DRY DOCK
30
9. TERMINATION BY THE GOVERNMENT
31
10. TERMINATION BY THE LESSEE
32
11. MOVEMENT OF DOCK
33
12. ALTERATIONS
33
13. GOVERNMENT ACCESS
34
14. NON-REHABILITATION
34
15. PAYMENT AND DISBURSEMENTS
34
N00024-96-R-
8103
16. STATE AND LOCAL TAXES
35
17. PRORATION IN EVENT OF TERMINATION
35
18. FAILURE TO INSIST ON COMPLIANCE
36
19. NOTICES
36
20. COVENANT AGAINST CONTINGENT FEES
36
21. OFFICIALS NOT TO BENEFIT
36
22. GRATUITIES
36
23. DISPUTES
37
24. EQUAL OPPORTUNITY
39
25. EXAMINATION OF RECORDS
41
26. LABOR PROVISIONS
42
27. AUDIT BY DEPARTMENT OF DEFENSE
44
28. CERTIFICATION OF CLAIMS AND REQUEST FOR ADJUSTMENT OR
RELIEF
EXCEEDING $ 100,000
46
29. ORDER OF PRECEDENCE
47
30. DRUG FREE WORK PLACE
47
31. ANTI-KICKBACK PROCEDURES
49
32. CLEAN AIR AND WATER
51
33. NAVSEA AUTHORITY TO SELL THE YFD 70
53
N00024-96-R-
8103
1. PURPOSE
These additional Contract clauses form a part of the lease
bearing the number designated above.
2 RENT
For the right to use the Dry Dock, the Lessee shall pay to
the Government the rent due for the previous annual period
less the sum of all amounts allowed as credit against the
Amount To Be Paid during the preceding annual period. The
amount due the Government is to be paid within (15) days
after the end of the annual period.
3. INSURANCE AND RISK OF LOSS
(A) From the date of delivery of the Dry Dock to
Lessee until return of the Dry Dock to custody of the
Government, the Lessee at its own expense and without
reimbursement under this lease, shall procure and maintain
the following insurance and pay any applicable deductible.
(1) Marine floating dry dock insurance for a minimum
amount of $2,000,000 during any tow, including tow required
to redeliver the Dry dock in accordance with Special
Contract Requirement H-8, Return of Dry dock, and a minimum
of $1,000,000 hull damage insurance while the Dry Dock is
locates at the shoreside facility. At Lessee's expense and
within thirty (30) days after lease award, Lessee will
forward to the PCO the recommendation of a Certified Marine
Surveyor for the amount of hull damage insurance. If the
figure is higher than $1,000,000, this clause will then be
modified to include that amount for hull damage liability.
(2) Workmen's compensation( including longshoremen and
harbor worker's coverage) and employer's liability in the
minimum amount of $100,000 per occurrence; bodily injury
liability in the minimum amount of $500,000 per occurrence;
and third party property damage liability in the minimum
amount of $500,000 per occurrence. Each such policy shall
contain an endorsement reading substantially as follows:
"The insurer waives any right of subrogation against
the Unites States of America which might arise by reason of
any payment under this policy".
(b) All insurance shall protect the Government and the
Lessee against there respective risks and liabilities in
connection with the dry dock, shall name the Lessee and the
United States of America (Department of the Navy) as
insured, and for hull insurance shall contain a loss payable
clause reading substantially as follows:
" Loss if any, under this policy shall be adjusted
with (lessee) and the proceeds, at the direction of
the
Government, shall be payable to (Lessee) proceeds
not
paid to (Lessee) shall be payable to the United
States
of America".
(c) Except as otherwise specifically provided herein, all
insurance required to be carried by the Lessee must be in
such form, for such amounts, and for such periods of time as
the Naval Sea System Command may specify and with such
insurers as the Naval Sea Systems Command, represented by
the Insurance examiner of the Navy, may approve. Each
policy of insurance shall provide for thirty(30) days
advance notice to the Insurance Examiner before cancellation
of the policy by the insurer. A certificate or certified
copy of each policy of insurance procured hereunder must be
deposited with the said Insurance Examiner at the following
address: Office of the Assistant Secretary of the Navy, (
Research, Development and Acquisition) APIA PP, Washington
DC 20350-1000, with a copy to the PCO, promptly following
the date of delivery of the Dry Dock, and like evidence of
renewal of insurance must be deposited with the Insurance
Examiner not less than thirty (30) days before expiration of
the term of insurance.
(d) Nothing in this Contract Clause may be construed as a
waiver of Lessee's obligations under Contract Clause 7,
Indemnification.
(e) All risk of loss of or damage to the Dry Dock during
the term of this lease, whether or not caused by the failure
of the Lessee to exercise due diligence in complying with
the provisions hereof, shall be borne by the Lessee, and the
Lessee shall, upon demand and at the election of the Naval
Sea Systems Command, either compensate the Government in
full for any loss or damage, or rebuild, replace or repair
any part of the Dry Dock lost or damaged; provided, however,
that the Lessee is liable for loss or destruction of, or
damage to, the Dry Dock
(i) that results from a risk expressly required to be
insured under this lease, but only to the extent of the
insurance required to be purchased and maintained or to the
extent of insurance actually purchased and maintained,
whichever is greater; (ii) that results from a risk that is
in fact covered by insurance or for which the Lessee is
otherwise reimbursed, but only to the extent of such
insurance or reimbursement; and provided, further, that the
Lessee is not liable for loss of or damage to the Dry Dock
arising from causes beyond the control of the Lessee
occasioned by a risk not in fact covered and customarily
covered by insurance in the locality in which the Dry Dock
is situated. Nothing contained herein,, However shall
relieve the Lessee of liability with respect to any loss of
or damage to the Dry Dock, not fully compensated for by
insurance, which results from the willful misconduct, lack
of good faith, or failure to exercise due diligence on the
part of any of the Lessee's officers, directors or
representatives having supervision or direction of the Dry
Dock.
(f) In the event the Dry Dock or any part of it requires
repair or restoration resulting from loss or damage the risk
of which is required hereunder to be covered by insurance,
the Lessee shall promptly give notice to the Naval Sea
Systems Command and submit a report on the extent of damage
together with an estimate of the cost to repair the damage
and the time needed to complete repairs. The Lessee shall
effect any repairs or restorations the Naval Sea Systems
Command may direct or approve. The Naval Sea Systems
Command shall direct the payment to the Lessee of as much of
the proceeds of the available insurance covering the loss or
damage necessary to reimburse the Lessee for the allowable
costs of effecting an authorized repair or restoration. If
the insurance proceeds are not sufficient to cover the
allowable costs of a repair or a restoration, and if the
loss or damage has resulted from any cause the risk of which
is not required by this lease to be borne by the Lessee
without regard to the sufficiency of insurance proceeds, the
excess of the allowable costs over the insurance proceeds
shall be applied as a credit against the Amount To Be Paid
for the annual period in which the Lessee commenced the
repair or restoration and any balance not so credited will
be credited against the Amount To Be Paid for the succeeding
annual periods of the then current term of the lease. If
the Lessee was not required or authorized to effect a repair
or a restoration, the Lessee shall promptly refund to the
Government the amount of any insurance proceeds paid the
Lessee on account of the loss or damage.
(g) (1) The Lessee shall provide, maintain, change or
discontinue such insurance as the Government may from time
to time require; provided, that the Lessee's liability for
loss or damage to the Dry Dock is modified accordingly.
(2) If any insurance requirement is changed pursuant
to (1) above, an equitable adjustment in rent will be made
to reflect any resulting saving or increased costs to the
Lessee.
4. PERFORMANCE BOND
Prior to the delivery of the Dry Dock to the Lessee, the
Lessee shall furnish a performance bond in the penal sum of
$500,000. This performance bond shall be substantially in
accordance with U.S. Government Standard Form 25 Performance
Bond, be satisfactory in all respects to the Government, and
be for the full lease period.
5. INTEREST
Notwithstanding any other provisions of this contract, all
amounts that become payable by the Contractor to the
Government under this contract (net of any applicable tax
credit under the Internal Revenue Code (26 U.S.C. 1481)),
unless paid within 30 days, shall bear interest from the
date due until paid and is subject to adjustments as
provided by Part 32 of the Federal Acquisition Regulation in
effect on the date of this lease. The interest rate shall
be the interest rate established by the Secretary of the
Treasury pursuant to Public Law 95-563, as of the date the
amount becomes due as herein provided, Amounts are due upon
the earliest of; (I) the date fixed under this contract;
(ii) the date of the first written demand for payment
consistent with this contract, including any demand
consequent upon default termination; (iii) the date of
transmittal by the Government to the Contractor of a
proposed supplemental agreement to confirm completed
negotiations fixing the amount; or (iv) if the contract
provides for revision of prices, the date of written notice
to the Contractor stating the amount of refund payable in
connection with a pricing proposal or in connection with a
negotiated pricing agreement not confirmed by contract
supplemental agreement.
place specified herein prior to the direction of the PCO,
and the audited unquestioned estimated costs to effect
return of the dry dock as directed.
(f) The PCO reserves the right, with regard to the
obligations set forth in the above paragraphs (d) and (e)
either:
(1) to accept performance by the Lessee of all of the work
specified in paragraphs (d) and (e) above;
(2) to direct the Lessee to perform any part of the work
specified in paragraphs (d) and (e) above and to require the
Lessee to pay to the Government as additional rent the cash
equivalent of the cost of performing any such work that the
Lessee did not perform prior to direction and that the PCO
did not direct hte Lessee to perform; or
(3) to require the Lessee in lieu thereof, to pay to the
Government as additional rent the cash equivalent of the
cost of performing all of such work.
If the parties are unable to agree on the amount
representing the cost of performing such work, the lessee
shall pay to the Government in cash the amount the PCO
determines; provided, that if the Lesee disputes the
reasonableness of the amount, the dispute is deemed to be a
dispute within the meaning of Contract Clause 23, Disputes.
(g) if the lease is extended for an additional Lease Term of
otherwise continued or a follow-on lease is awarded to the
Lessee, then the obligations set forth in this Contrac
tcluase will be deferred until such time as the then current
Lease Term expires or is terminated or canceled.
H-9 USE OF DRY DOCK FOR US NAVY SHIP AVAILABILITIES
Special Contract Requirement H-1, Operation and Use,
requires that the Lessee will at all times give priority to
work for the Government as the PCO or ACO may require.
"Additionally, if the YFD 70 is available bcause the lessee
has not previously contracted to use the dock for a US Navy,
other US Government or commercial drydocking job, the lessee
is required to make it avaialable to any and all ship repair
firms holding Master Ship Repair Agreement (including
Agreements for Boat Repair) wishing to propose on US Navy
drydocking availabilities."
The lessee will charge the same rate(s) to all ship repair
contractors or the US Navy (if the Lessee chooses to
compete/submit proposals for availabilities on Navy ships)
for use of the drydock and associates "Temporary Services."
H-10 YFD 70 DOCKING REPORTS
The Lessee shall submit to the ACO prospective quarterly
reports of the planned/scheduled dockings in the YFD 70.
The first report shall be due within 30 days of the time the
lessee receives certification from NAVSEA 07.
In addition, the lessee shall also submit to the ACO (within
30 days after the end of each lease year) annual
retrospective reports of the drydockings performed in the
YFD 70 over the previous lease year.
PART II-- CONTRACT CLAUSES
SECTION I-- CONTRACT CLAUSES
This Lease Agreement incorporates the following Contract
Clauses in full text as follows:
CONTRACT
CLAUSE NO TITLE AND DATE
PAGE
1. PURPOSE
26
2. RENT
26
3. INSURANCE AND RISK OF LOSS
26
4. PERFORMANCE BOND
29
5. INTEREST
29
6. RIGHT TO SUBLEASE OR ASSIGN
30
7. INDEMNIFICATION
30
8. DISCLAIMER OF WARRANTY AND CONDITION OF DRY DOCK
30
9. TERMINATION BY THE GOVERNMENT
31
10. TERMINATION BY THE LESSEE
32
11. MOVEMENT OF DOCK
33
12. ALTERATIONS
33
13. GOVERNMENT ACCESS
34
14. NON-REHABILITATION
34
15. PAYMENT AND DISBURSEMENTS
34
16. STATE AND LOCAL TAXES
35
17. PRORATION IN EVENT OF TERMINATION
35
18. FAILURE TO INSIST ON COMPLIANCE
36
19. NOTICES
36
20. COVENANT AGAINST CONTINGENT FEES
36
21. OFFICIALS NOT TO BENEFIT
36
22. GRATUITIES
36
23. DISPUTES
37
24. EQUAL OPPORTUNITY
39
25. EXAMINATION OF RECORDS
41
26. LABOR PROVISIONS
42
27. AUDIT BY DEPARTMENT OF DEFENSE
44
28. CERTIFICATION OF CLAIMS AND REQUEST FOR ADJUSTMENT OR
RELIEF
EXCEEDING $ 100,000
46
29. ORDER OF PRECEDENCE
47
30. DRUG FREE WORK PLACE
47
31. ANTI-KICKBACK PROCEDURES
49
32. CLEAN AIR AND WATER
51
33. NAVSEA AUTHORITY TO SELL THE YFD 70
53
1. PURPOSE
These additional Contract clauses form a part of the lease
bearing the number designated above.
2 RENT
For the right to use the Dry Dock, the Lessee shall pay to
the Government the rent due for the previous annual period
less the sum of all amounts allowed as credit against the
Amount To Be Paid during the preceding annual period. The
amount due the Government is to be paid within (15) days
after the end of the annual period.
3. INSURANCE AND RISK OF LOSS
(A) From the date of delivery of the Dry Dock to
Lessee until return of the Dry Dock to custody of the
Government, the Lessee at its own expense and without
reimbursement under this lease, shall procure and maintain
the following insurance and pay any applicable deductible.
(1) Marine floating dry dock insurance for a minimum
amount of $2,000,000 during any tow, including tow required
to redeliver the Dry dock in accordance with Special
Contract Requirement H-8, Return of Dry dock, and a minimum
of $1,000,000 hull damage insurance while the Dry Dock is
locates at the shoreside facility. At Lessee's expense and
within thirty (30) days after lease award, Lessee will
forward to the PCO the recommendation of a Certified Marine
Surveyor for the amount of hull damage insurance. If the
figure is higher than $1,000,000, this clause will then be
modified to include that amount for hull damage liability.
(2) Workmen's compensation( including longshoremen and
harbor worker's coverage) and employer's liability in the
minimum amount of $100,000 per occurrence; bodily injury
liability in the minimum amount of $500,000 per occurrence;
and third party property damage liability in the minimum
amount of $500,000 per occurrence. Each such policy shall
contain an endorsement reading substantially as follows:
"The insurer waives any right of subrogation against
the Unites States of America which might arise by reason of
any payment under this policy".
( b) All insurance shall protect the Government and the
Lessee against there respective risks and liabilities in
connection with the dry dock, shall name the Lessee and the
United States of America (Department of the Navy) as
insured, and for hull insurance shall contain a loss payable
clause reading substantially as follows:
" Loss if any, under this policy shall be adjusted
with (lessee) and the proceeds, at the direction of
the
Government, shall be payable to (Lessee) proceeds
not
paid to (Lessee) shall be payable to the United
States
of America".
(c) Except as otherwise specifically provided herein, all
insurance required to be carried by the Lessee must be in
such form, for such amounts, and for such periods of time as
the Naval Sea System Command may specify and with such
insurers as the Naval Sea Systems Command, represented by
the Insurance examiner of the Navy, may approve. Each
policy of insurance shall provide for thirty(30) days
advance notice to the Insurance Examiner before cancellation
of the policy by the insurer. A certificate or certified
copy of each policy of insurance procured hereunder must be
deposited with the said Insurance Examiner at the following
address: Office of the Assistant Secretary of the Navy, (
Research, Development and Acquisition) APIA PP, Washington
DC 20350-1000, with a copy to the PCO, promptly following
the date of delivery of the Dry Dock, and like evidence of
renewal of insurance must be deposited with the Insurance
Examiner not less than thirty (30) days before expiration of
the term of insurance.
(d) Nothing in this Contract Clause may be construed as a
waiver of Lessee's obligations under Contract Clause 7,
Indemnification.
(e) All risk of loss of or damage to the Dry Dock during
the term of this lease, whether or not caused by the failure
of the Lessee to exercise due diligence in complying with
the provisions hereof, shall be borne by the Lessee, and the
Lessee shall, upon demand and at the election of the Naval
Sea Systems Command, either compensate the Government in
full for any loss or damage, or rebuild, replace or repair
any part of the Dry Dock lost or damaged; provided, however,
that the Lessee is liable for loss or destruction of, or
damage to, the Dry Dock
(i) that results from a risk expressly required to be
insured under this lease, but only to the extent of the
insurance required to be purchased and maintained or to the
extent of insurance actually purchased and maintained,
whichever is greater; (ii) that results from a risk that is
in fact covered by insurance or for which the Lessee is
otherwise reimbursed, but only to the extent of such
insurance or reimbursement; and provided, further, that the
Lessee is not liable for loss of or damage to the Dry Dock
arising from causes beyond the control of the Lessee
occasioned by a risk not in fact covered and customarily
covered by insurance in the locality in which the Dry Dock
is situated. Nothing contained herein,, However shall
relieve the Lessee of liability with respect to any loss of
or damage to the Dry Dock, not fully compensated for by
insurance, which results from the willful misconduct, lack
of good faith, or failure to exercise due diligence on the
part of any of the Lessee's officers, directors or
representatives having supervision or direction of the Dry
Dock.
(f) In the event the Dry Dock or any part of it requires
repair or restoration resulting from loss or damage the risk
of which is required hereunder to be covered by insurance,
the Lessee shall promptly give notice to the Naval Sea
Systems Command and submit a report on the extent of damage
together with an estimate of the cost to repair the damage
and the time needed to complete repairs. The Lessee shall
effect any repairs or restorations the Naval Sea Systems
Command may direct or approve. The Naval Sea Systems
Command shall direct the payment to the Lessee of as much of
the proceeds of the available insurance covering the loss or
damage necessary to reimburse the Lessee for the allowable
costs of effecting an authorized repair or restoration. If
the insurance proceeds are not sufficient to cover the
allowable costs of a repair or a restoration, and if the
loss or damage has resulted from any cause the risk of which
is not required by this lease to be borne by the Lessee
without regard to the sufficiency of insurance proceeds, the
excess of the allowable costs over the insurance proceeds
shall be applied as a credit against the Amount To Be Paid
for the annual period in which the Lessee commenced the
repair or restoration and any balance not so credited will
be credited against the Amount To Be Paid for the succeeding
annual periods of the then current term of the lease. If
the Lessee was not required or authorized to effect a repair
or a restoration, the Lessee shall promptly refund to the
Government the amount of any insurance proceeds paid the
Lessee on account of the loss or damage.
(g) (1) The Lessee shall provide, maintain, change or
discontinue such insurance as the Government may from time
to time require; provided, that the Lessee's liability for
loss or damage to the Dry Dock is modified accordingly.
(2 If any insurance requirement is changed pursuant to
(1) above, an equitable adjustment in rent will be made to
reflect any resulting saving or increased costs to the
Lessee.
4. PERFORMANCE BOND
Prior to the delivery of the Dry Dock to the Lessee, the
Lessee shall furnish a performance bond in the penal sum of
$500,000. This performance bond shall be substantially in
accordance with U.S. Government Standard Form 25 Performance
Bond, be satisfactory in all respects to the Government, and
be for the full lease period.
5. INTEREST
Notwithstanding any other provisions of this contract, all
amounts that become payable by the Contractor to the
Government under this contract (net of any applicable tax
credit under the Internal Revenue Code (26 U.S.C. 1481)),
unless paid within 30 days, shall bear interest from the
date due until paid and is subject to adjustments as
provided by Part 32 of the Federal Acquisition Regulation in
effect on the date of this lease. The interest rate shall
be the interest rate established by the Secretary of the
Treasury pursuant to Public Law 95-563, as of the date the
amount becomes due as herein provided, Amounts are due upon
the earliest of; (I) the date fixed under this contract;
(ii) the date of the first written demand for payment
consistent with this contract, including any demand
consequent upon default termination; (iii) the date of
transmittal by the Government to the Contractor of a
proposed supplemental agreement to confirm completed
negotiations fixing the amount; or (iv) if the contract
provides for revision of prices, the date of written notice
to the Contractor stating the amount of refund payable in
connection with a pricing proposal or in connection with a
negotiated pricing agreement not confirmed by contract
supplemental agreement.
6. RIGHT TO SUBLEASE OR ASSIGN
Neither this lease nor any interest herein may be
transferred, assigned or subleased by the Lessee except with
the written consent of the PCO. The Dry Dock may not be
sublet or otherwise be made available by the Lessee to any
third party, including any other Federal Government agency,
without such written consent.
7. INDEMNIFICATION
The Lessee expressly agrees to indemnify and hold harmless
the United States Government, its officers, employees,
agencies, and instrumentality's against all suits, actions,
claims, costs, or demands (including, without limitation (I)
suits, actions, claims, costs, or demands resulting from
death, personal injury, and property damage; and (ii) suits,
actions, claims, costs, demands fees and penalties arising
out of violations of any Federal, State or local
environmental protection law, regulation or ordinance) to
which the Government, its officers, employees, agencies and
instrumentality's may be subject as a result of the use or
possession of the leased property by the Lessee or any Sub-
Lessee.
8. DISCLAIMER OF WARRANTY AND CONDITION OF DRY DOCK
The Dry Dock is leased to the Lessee on an "as is, where is"
basis without warranty of any kind, express or implied, on
the part of the Government. The Lessee acknowledges that no
representations concerning the condition or state of repair
to the Dry Dock or any part of it has been made by the
Government prior to, or at the time of, the execution of
this lease which are not set forth herein and that this
lease contains the entire agreement of the parties. The
Lessee further acknowledges that the Government has made no
agreement or promise to alter, improve, adapt, or repair the
Dry Dock, any part of it, or any related equipment, prior
to, or at the time of the execution of this lease. The
Lessee further acknowledges that the Lessee is responsible
for taking delivery of the Dry Dock and towing the Dry Dock
to the Lessee's Navy-approved mooring site.
9. TERMINATION BY THE GOVERNMENT
This lease may be terminated by the Government at any time
prior to the expiration of the term:
(a) During any national emergency declared by the
President or Congress;
(b) Upon written notice to the Lessee whenever the
Secretary determines that the interests of national defense
require it;
(c) Upon ten (10) days' written notice to the Lessee if
the Lessee defaults in the performance of any of its
obligations hereunder and fails to cure or initiate action
to cure such default within thirty (30) days after receipt
of notice from the PCO specifying such default or within
such longer time as may have been specified in said notice;
provided, however, that in lieu of terminating this lease,
the Government may elect to perform, or cause to be
performed, the defaulted obligations for the account of and
at the expense of the Lessee;
(d) Upon thirty (30) days' written notice to the Lessee
after determination by the PCO that the Dry Dock is not
being used to an extent commensurate with ship repair work
available in the area;
(e) In the event of proceedings in any Federal or State
court for adjudication of the Lessee as bankrupt by the
Lessee or others, for corporate reorganization of the
Lessee, for an arrangement within the meaning of the
Bankruptcy Act and any amendments thereto, for other similar
debtor or creditor relief available under State or local
law, or upon the appointment of a Receiver or Trustee for
the property of the Lessee;
(f) Upon ninety (90) days' written notice to the Lessee
following a determination by the Secretary that the Dry Dock
is surplus to the further needs and responsibilities of the
Government;
(g) Upon thirty (30) days' written notice to the Lessee
after determination by the Contracting Officer that the
Lessee has failed to meet the requirements of Special
Contract Requirement H-6, Safety Certification.
(h) If the Government terminates this lease under
paragraph (c), (d), (e) or (g) of this clause, it may
immediately re-enter and resume possession of the Dry Dock
and remove all persons and property therefrom, but such
entry is not deemed an acceptance or surrender of this
lease. In the event of termination and re-entry the
Government may, at its election, release the Dry Dock for
any period, less than, equal to, or greater than the
remainder of the term of this lease or any extension
thereof, for any rental and upon any terms and conditions
deemed by the Government to be reasonable and satisfactory,
and the Lessee is liable to and shall pay the Government the
amount of the difference between the rental and charges
received by the Government from such releasing of the Dry
Dock. This amount is due and payable at the time specified
for the payment of rent in Contract Clause 2, Rent. It is
expressly agreed and understood that, whether or not the
Government releases the Dry Dock, the Lessee is obligated to
reimburse the Government for any costs incurred by the
Government in (I) resuming possession of the Dry Dock, and
(ii) performing or having performed the maintenance and any
other obligation for which the Lessee is responsible under
this lease but has failed to perform. The Government is not
liable for any costs incurred by the Lessee under the
Contract Clause H-5, Capital Maintenance, which exceed the
total amount of rent due at the time of said determination.
10. TERMINATION BY THE LESSEE
This lease may be terminated by the Lessee at any time prior
to the expiration of the term upon thirty (30) days' written
notice to the PCO in the event of damage to or destruction
of all or a substantial part of the Dry Dock so as to render
the Dry Dock incapable of use for the purposes for which it
is leased hereunder; provided, that (I) such damage or
destruction is occasioned by a risk not in fact covered and
not customarily covered by insurance in the locality in
which the Dry Dock is located or by a risk which is covered
by insurance and the Government either has not authorized or
directed the repair, rebuilding or replacement of the Dry
Dock or does not make provision for repayment for such
repair, rebuilding or replacement by the application of
insurance proceeds or otherwise, and (ii) the damage or
destruction is not occasioned by the fault or negligence of
the Lessee or by any failure or refusal on its part fully to
comply with its obligations hereunder.
11. MOVEMENT OF DOCK
Any movement of the Dry Dock including tow preparations is
at the sole expense of the Lessee. Prior to any movement of
the Dry Dock, including sea towing, approval of the PCO must
be obtained of the Lessee's plans to move the dock including
preparation for towing the Dry Dock, towing the Dry Dock,
preparation of the operating berth for the Dry Dock, and
mooring of the Dry Dock.
The Lessee shall also provide the PCO, along with the above
plan(s), documented proof of adequate insurance covering the
move.
12. ALTERATIONS
The Lessee may not, so long as this lease is in effect, make
any substantial alterations, additions or betterments to the
Dry Dock without the prior approval or consent of the PCO.
All approved alterations, additions or betterments shall
become the property of the Government when annexed to any
property included in the Dry Dock, except those items of
personal property belonging to the Lessee which can be
readily removed without injury to the Dry Dock. Such items
must be removed by the Lessee prior to the expiration of the
lease within such additional periods as the Government may
allow. All property not removed is deemed abandoned by the
Lessee and may be used or disposed of by the Government
without liability or any obligations to account for it to
the Lessee. Nothing contained herein authorizes any
alterations, additions, or betterments to the Dry Dock which
will render the Dry Dock unsuitable for the purpose for
which the Dry Dock was designed or is being retained by the
Government unless, in addition to securing the prior
approval or consent of the Government thereto, the Lessee
agrees to restore the Dry Dock to its condition at the time
of delivery, at its own expense, within ninety (90) days
after being required so to do by the Government (I) during
any period of national emergency, or (ii) after
determination by the Secretary of the Navy that such
restoration is in the interest of national defense. The
Lessee shall not do or suffer anything to be done upon or in
connection with the Dry Dock anything which could subject it
or any part of it to any liens or rights in rem and shall
promptly discharge or cause to be discharged any lien or
right in rem of any kind other than one in favor of the
Government which at any time may arise or exist with respect
to the Dry Dock or to any alterations, additions or
betterments to it.
13. GOVERNMENT ACCESS
The Government or its designated representative shall have
access at all reasonable times to the Dry Dock for the
purpose of inspecting or inventorying it and for other
purposes under this lease.
14. NON-REHABILITATION
The Government is not under any duty or obligation to
restore or rehabilitate, or to pay the costs of the
restoration or rehabilitation of, any part of the land or
any other property of the Lessee affected by the
installation, possession, operation, or removal of the Dry
Dock under this lease or otherwise.
15. PAYMENTS AND DISBURSEMENT
(a) Payments required to be made by the Lessee pursuant
to Contract Clause 2, Rent, must be made to Defense Finance
Accounting Service - Columbus Center, DFAS - CO/Capital
Division, P.O.Box 182263, Columbus, OH 43218-2263.
(b) At the end of each annual period, the Lessee may
submit to the PCO certified bills in respect of all items
for which the Lessee is entitled to reimbursement under this
lease. Promptly after receipt of each submission of bills,
the Government shall, within the limits of the
appropriations available therefor, pay to the Lessee the
amount determined to be allowable costs reimbursable to the
Lessee under this lease on account of such items and not
previously paid or credited. Such allowable costs will be
determined in accordance with Part 31 of the Federal
Acquisition Regulation in effect on the date of this lease,
and shall exclude any profit to the Lessee. The PCO's
decision on any payments to the Lessee, when reduced in
writing and received by the Lessee, are binding on the
parties hereto,subject to written appeal by the Lessee in
accordance with Contract Clause 23, Disputes.
(c) When any payment is to be made hereunder, the
Contracting Officer, as a condition precedent to approving
such payment, may, in his discretion, require that
affidavits satisfactory to him be furnished by the Lessee
that no liens or rights in rem of any kind lie under or have
attached against the Dry Dock, or any material or equipment
furnished for it, or any part of it, either for or on
account of any work done upon or about the Dry Dock, or any
material or equipment furnished for it, or in connection
with it, or any other cause or thing, or any claims or
demands of any kind except the claims of the Government.
The Lessee shall promptly discharge or cause to be
discharged any valid lien or right in rem not promptly be
discharged, the Government may discharge or cause to be
discharged said lien or right in rem at the expense of the
Lessee.
16. STATE AND LOCAL TAXES
In the event that, as a result of any future Act of Congress
subjecting Government-owned property to ad valorem taxation,
taxes, assessments, or similar charges are imposed by State
or local authorities upon the lease property (other than
upon the Lessee's possessory or use interest therein), the
Lessee shall pay it when due and payable and this lease
shall be re-nogotiated to accomplish an equitable reduction
in the rent, which shall not be greater than the amount of
such taxes, assessments, or similar charges; provided, that,
in the event that the parties are unable to agree, within
ninety (90) days from the date of the imposition of such
taxes, assessments, or similar charges, on a rental which,
in the opinion of the Government, constitutes a reasonable
return to the Government on the lease property, then, in
that event, the Government
may determine the amount of the rental, which shall be
binding on the Lessee, subject to appeal in accordance with
Contract Clause 23, Disputes.
17. PRORATION IN EVENT TERMINATION
In the event of termination of this lease pursuant to
Contract Clause 9, Termination by the Government, or
Contract Clause 10, Termination by the Lessee, the amount to
be paid to the Government will be prorated to the date of
Termination.
18. FAILURE TO INSIST ON COMPLIANCE
The failure of the Government to insist, in any one or more
instances, upon performances of any of the terms, covenants
or conditions of this lease may not be construed as a waiver
or relinquishment of the Government's right to the future
performance of any such terms, covenants or conditions; and
the Lessee's obligations in respect of such future
performance shall continue in full force and effect.
19. NOTICES
Except as provided in Special Contract Requirement H-5,
Capital Maintenance, paragraph (b), no notice, order,
direction, determination, requirement, consent or approval
under this lease is of any effect unless in writing.
20. COVENANT AGAINST CONTINGENT FEES
The Lessee warrants that no person or agency has been
employed or retained to solicit or secure this lease upon an
agreement or understanding for a contingent fee, excepting a
bonafide employee or agency maintained by the Lessee for the
purpose of securing business. For breach or violation of
this warranty, the Government may annul this contract
without liability.
21. OFFICIALS NOT TO BENEFIT
No member of or delegate to Congress, or resident
commissioner, may be admitted to any share or part of this
lease or to any benefit that may arise therefrom, but this
provision may not be construed to extend to this lease if
made with a corporation for its general benefit.
22. GRATUITIES
(a) The right of the Lessee to proceed may be terminated by
written notice if, after notice and hearing, the agency head
or a designee determines that the Lessee, its agent, or
another representative---
(1) Offered or gave a gratuity (e.g., any
entertainment or gift) to an officer, official, or employee
of the Government; and
(2) Intended, by the gratuity, to obtain a lease or
favorable treatment under a lease.
(b) The facts supporting the determination may be reviewed
by any court having lawful jurisdiction.
(c) If this lease is terminated under paragraph (a) above,
the Government is entitled--
(1) To pursue the same remedies as in a breach of the
lease, and
(2) In addition to any other damages provided by law,
to exemplary damages of not less than 3 nor more than 10
times the cost incurred by the Lessee in giving gratuities
to the person concerned, as determined by the agency head or
designee.
(d) The rights and remedies of the Government provided in
this clause are not exclusive and are in addition to any
other rights and remedies provided by law or under this
lease.
23. DISPUTES
(a) This lease is subject to the Contract Disputes Act of
1978, as amended (41 U.S.C. 601-613) (the Act).
(b) Except as provided in the Act, all disputes arising
under or relating to this lease shall be resolved under this
clause.
(c) "Claim" as used in this clause, means a written demand
or written assertion by one of the contracting parties
seeking, as a matter or right, the payment of money in sum
certain, the adjustment or interpretation of lease terms, or
other relief arising under or relating to this lease. A
claim arising under a lease, unlike a claim relating to that
lease, is a claim that can be resolved under a lease clause
that provides for the relief sought by the claimant.
However, a written demand or written assertion by the Lessee
seeking the payment of money exceeding $50,000 is not a
claim under the Act until certified as required by
subparagraph (d) (2) below. A voucher, invoice, or other
routine request for payment that is not in dispute when
submitted is not a claim under the Act. The submission may
be converted to a claim under the Act, by complying with the
submission and certification requirements of this clause, if
it is disputed either as to liability or amount or is not
acted upon in a reasonable time.
(d) (1) A claim by the Lessee shall be made in writing and
submitted to the Contracting Officer for a written decision.
A claim by the Government against the Lessee shall be
subject to a written decision by the Contracting Officer.
(2) (i) Lessees shall provide the certification
specified in subparagraph (d) (2) (iii) of this clause when
submitting any claim -
(A) Exceeding $50,000; or
(B) Regardless of the amount claimed,
when using -
(1) Arbitration conducted
pursuant to 5 U.S.C. 575-580; or
(2) Any other alternative means
of dispute resolution (ADR) technique that the agency elects
to handle in accordance with the Administrative Dispute
Resolution Act (ADRA).
(ii) The certification requirement does not
apply to issues in controversy that have not been submitted
as all or part of a claim.
(iii) The certification shall state as
follows: "I certify that the claim is made in good faith;
that the supporting data are accurate and complete to the
best of my knowledge and belief; that the amount requested
accurately reflects the contract adjustment for which the
Lessee believes the Government is liable; and that I am duly
authorized to certify the claim on behalf of the Lessee."
(3) The certification may be
executed by any person duly authorized to bind the Lessee
with respect to the claim.
(e) For Lessee claims of $50,000 or less, the Contracting
Officer must, if requested in writing by the Lessee, render
a decision within 60 days of the request. For Lessee-
certified claims over $50,000.00, the Contracting Officer
must, within 60 days, decide the claim or notify the Lessee
of the date by which the decision will be made.
(f) The Contracting Officer's decision shall be final
unless the Lessee appeals or files a suit as provided in the
Act.
(g) At the time a claim by the Lessee is submitted to the
Contracting Officer or a claim by the Government is
presented to the Lessee, the parties, by mutual consent, may
agree to use ADR. When using arbitration conducted pursuant
to 5 U.S.C. 575-580, or when using any other ADR technique
that the agency elects to handle in accordance with the
ADRA, any claim, regardless of amount, shall be accompanied
by the certification described in subparagraph (d) (2) (iii)
of this clause, and executed in accordance with subparagraph
(d) (3) of this clause.
(h) The Government shall pay interest on the amount found
due and unpaid from (1) the date the Contracting Officer
receives the claim (certified, if required), or (2) the date
that payment otherwise would be due, if that date is later,
until the date of payment. With regard to claims having
defective certifications, as defined in FAR 33.201, interest
shall be paid from the date that the Contracting Officer
initially receives the claim. Simple interest on claims
shall be paid at the rate, fixed by the Secretary of the
Treasury as provided in the Act, which is applicable to the
period during which the Contracting Officer receives the
claim and then at the rate applicable for each 6 month
period as fixed by the Treasury Secretary during the
pendency of the claim.
(I) The Lessee shall proceed diligently with performance of
this contract, pending final resolution of any request for
relief, claim, appeal, or action arising under the lease,
and comply with any decision of the Contracting Officer.
24. EQUAL OPPORTUNITY
(a) If, during any 12 month period (including the 12 months
preceding the award of this lease), the Lessee has been or
is awarded nonexempt Federal contracts and/or subcontracts
that have an aggregate value in excess of $10,000, the
Lessee shall comply with subparagraphs (b) (1) through (11)
below. Upon request, the Lessee shall provide information
necessary to determine the applicability of this clause.
(b) During performing this lease, the Lessee agrees as
follows:
(1) The Lessee shall not discriminate against any
employee or applicant for employment because of race, color,
religion, sex, or national origin.
(2) The Lessee shall take affirmative action to
ensure that applicants are employed, and that employees are
treated during employment, without regard to their race,
color, religion, sex, or national origin. This shall
include, but not be limited to, (I) employment, (ii)
upgrading, (iii) demotion, (iv) transfer, (v) recruitment or
recruitment advertising, (vi) layoff or termination, (vii)
rates of pay or other forms of compensation, and (viii)
selection for training, including apprenticeship.
(3) The Lessee shall post in conspicuous places
available to employees and applicants for employment the
notices to be provided by the Contracting Officer that
explain this clause.
(4) The Lessee shall, in all solicitations or
advertisements for employees placed by or on behalf of the
Lessee, state that all qualified applicants will receive
consideration for employment without regard to race, color,
religion, sex, or national origin.
(5) The Lessee shall send, to each labor union or
representative of workers with which it has a collective
bargaining agreement or other contract or understanding, the
notice to be provided by the Contracting Officer advising
the labor union or worker' representative of the Lessee's
commitments under this clause, and post copies of the notice
in conspicuous places available to employees and applicants
for employment.
(6) The Lessee shall comply with Executive Order
11246, as amended, and the rules, regulations, and orders of
the Secretary of Labor.
(7) The Lessee shall furnish to the contracting agency
all information required by Executive Order 11246, as
amended, and by the rules, regulations, and orders of the
Secretary of Labor. Standard Form 100 (EEO-1), or any
successor form, is the prescribed form to be filed within
thirty (30) days following the award, unless filed within 12
months preceding the date of award.
(8) The Lessee shall permit access to its books,
records, and accounts by the contracting agency or the
Office of Federal Contract Compliance Programs (OFCCP) for
the purposes of investigation to ascertain the Lessee's
compliance with the applicable rules, regulations, and
orders.
(9) If the OFCCP determines that the Lessee is not in
compliance with this clause or any rule, regulation, or
order of the Secretary of Labor, this lease may be canceled,
terminated, or suspended in whole or in part and the Lessee
may be declared ineligible for further Government contracts,
under the procedures authorized in Executive Order 11246, as
amended. Inaddition, sanctions may be imposed and remedies
invoked against the Lessee as provided in Executive Order
11246, as amended, the rules, regulations, and orders of the
Secretary of Labor, or as otherwise provided by law.
(10) The Lessee shall include the terms and conditions
of subparagraph (b) (1) through (11) of this clause in every
subcontract or purchase order that is not exempted by the
rules, regulations, or orders of the Secretary of Labor
issued under Executive Order 11246, as amended, so that
these terms and conditions will be binding upon each
subcontractor or vendor.
(11) The Lessee shall take such action with respect to
any subcontract or purchase order as the contracting agency
may direct as a means of enforcing these terms and
conditions, including sanctions for noncompliance; provided
that if the Lessee becomes involved in, or is threatened
with, litigation with a subcontractor or vendor as a result
of any direction, the Lessee may request the United States
to enter into the litigation to protect the interest of the
United States.
(c) Notwithstanding any other clause in this lease,
disputes relative to this clause will be governed by the
procedures in 41 CFR 60-1.1.
25. EXAMINATION OF RECORDS
(a) This clause applies if this lease exceeds $10,000 and
was entered into by negotiation.
(b) The Comptroller General of the United States or a duly
authorized representative from the General Accounting Office
shall, until 3 years after expiration of the lease, or for
any shorter period as is agreed to by the parties, have
access to and the right to examine any of the Lessee's
directly pertinent books, documents, papers, or other
records involving transactions related to this lease.
(c) The Lessee agrees to include in first-tier subcontracts
under this lease a clause to the effect that the Comptroller
General or a duly authorized representative from the General
Accounting Office shall, until 3 years after expiration of
the subcontract, or for any shorter period agreed to by the
parties have access to and the right to examine any of the
subcontractor's directly pertinent books, documents, papers,
or other records involving transactions related to the
subcontract. "Subcontract" as used in this clause, excludes
(1) purchase orders not exceeding $10,000 and (2)
subcontracts or purchase orders for public utility services
at rates established to apply uniformly to the public, plus
any applicable reasonable connection charge.
(d) The periods of access and examination in paragraphs (b)
and (c) above for records relating to (1) appeals under the
Disputes clause, (2) litigation or settlement of claims
arising from the performance of this lease, or (3) costs and
expenses of this lease to
hich the Comptroller General or a duly authorized
representative from the General Accounting Office has taken
exceptions are disposed of.
26. LABOR PROVISIONS
(a) Convict Labor -- In connection with the performance of
work under this lease, the Lessee agrees not to employ any
person undergoing sentence of imprisonment, except as
provided by 10 U.S.C. 4082 (c) (2) and Executive Order
11755, Dec 29, 1973.
(b) Contract Work Hours Standards Act - Overtime
Compensation - This contract, to the extent that it is of a
character specified in the Contract Work Hours Standards Act
(40 U.S.C. 327-330), is subject to the following provisions
and to all other applicable provisions and exceptions of
such Act and the regulations of the Secretary of Labor
thereunder.
(1) Overtime Requirements - No Lessee or subcontractor
contracting for any part of the lease work which may require
or involve the employment of laborers or mechanics (see
Federal Acquisition Regulation (FAR) 22.300) shall require
or permit any such laborers or mechanics in any workweek in
which the individual is employed on such work to work in
excess of 40 hours in such workweek unless such laborer or
mechanic receives compensation at a rate not less that 1 1/2
times the basic rate of pay for all of pay for all hours
worked in excess of 40 hours in such workweek.
(2) Violation; liability for unpaid wages; liquidated
damages - In the event of any violation of the provisions
set forth in paragraph (a) of this clause, the Lessee and
any subcontractor responsible therefor shall be liable for
the unpaid wages. In addition, such Lessee and
subcontractor shall be liable to the United States (in case
of work done under lease for the District of Columbia or a
territory, to such district or to such territory), for
liquidated damages. Such liquidated damages shall be
computed with respect to each individual laborer or mechanic
employed in violation of the provisions set forth in
paragraph (I) of this clause in the sum of $10 for each
calendar day on which such individual was required or
permitted to work in excess of the standard workweek of 40
hours without payment of the overtime wages required by
provisions set forth in paragraph (I) of this clause.
(3) Withholding for unpaid wages and liquidated
damages - The Contracting Officer shall upon his or her own
action or upon written request of an authorized
representative of the Department of Labor withhold or cause
to be withheld, from any moneys payable on account of work
performed by the Lessee or subcontractor under any such
contract or any Federal contract with the same Lessee, or
any other Federal-assisted lease subject to the Contract
Work Hours and Safety Standards Act which is held by the
same Lessee, such sums as may be determined to be necessary
to satisfy any liabilities of such Lessee or subcontractor
for unpaid wages and liquidated damages as provided in the
provisions set forth in paragraph (ii) of this clause.
(4) Payrolls and basic records
(i) The Lessee or subcontractor shall maintain
payrolls and basic payroll records during the course of the
lease work and shall preserve them for a period of 3 years
from the completion of the lease for all laborers and
mechanics working on the lease. Such records shall contain
the name and address of each such employee, social security
number, correct classifications, hourly rates of wages paid,
daily and weekly number of hours worked, deductions made,
and actual wages paid. Nothing in this paragraph shall
require the duplication of records required to be maintained
for construction work by Department of Labor regulations at
29 CFR 5.5 (a) (3) implementing the Davis-Bacon Act.
(ii) The records to be maintained under paragraph
(iv) (1) of this clause shall be made available by the
Lessee or subcontractor for inspection, copying, or
transcription by authorized representatives of the
Contracting Officer of the Department of the Labor. The
Lessee or subcontractor shall permit such representatives to
interview employees during working hours on the job.
(c) Overtime and Shift Premiums -
(1) Insofar as practicable the Lessee shall perform
any work required under this lease which is at the expense
of the Government without the use of overtime or multi-shift
labor for which premium payments are required, except to the
extent that such payments either (A) are approved in writing
on behalf of the Government by the Contracting Officer or
(B) are paid for work -
(i) necessary to cope with emergencies such
as those resulting from accidents, natural disasters, or
breakdowns of equipment;
(ii) by indirect labor employees such as
those performing duties in connection with administration,
protection, transportation, maintenance, operation of
utilities, or accounts;
(iii) in the performance of tests,
laboratory procedures, loading or unloading of
transportation media, and operations in flight or afloat,
which are continuous in nature and cannot reasonably be
interrupted or otherwise completed; or
(iv) which will result in lower
overall cost to the Government.
(2) The cost of overtime premiums or shift premiums
otherwise allowable under (i) above shall be allowed only to
the extent the amount thereof is reasonable and properly
allocable to the work under this lease.
27. AUDIT BY DEPARTMENT OF DEFENSE
(a) General. The Contracting Officer or his
representatives shall have the audit and inspection rights
described in the applicable paragraphs (b), (c) and (d)
below.
(b) Examination of Costs. The Lessee shall maintain, and
the Contracting Officer and his representatives shall have
the right to examine, books, records, documents, and other
evidence and accounting procedures and practices, sufficient
to reflect properly (1) all direct and indirect costs of
whatever nature claimed to have been incurred and
anticipated to be incurred for the performance of this lease
and (2) the use of, and
charges for the use of, the facilities. Such right of
examination shall include inspection at all reasonable times
of the Lessee's plants, or such parts, thereof, as may be
engaged in the performance of this lease.
(c) Reports. If the Lessee is required to furnish Cost
Information Reports (CIR) or Contract Fund Status Reports
(CFSR), the Contracting Officer or his representatives shall
have the right to examine books, records, documents, and
supporting materials, for the purpose of evaluating (I) the
effectiveness of the Lessee's policies and procedures to
produce data compatible with the objectives of these
reports, and (ii) the data reported.
(d) Availability. The materials described in (b), (c) and
(d) above shall be made available at the office of the
Lessee, at all reasonable times, for inspection, audit, or
reproduction, until the expiration of three years from the
date of final payment under this lease or such lesser time
as agreed to by the parties, and for such loner period, if
any, as is required by applicable statute, or by other
clauses of this lease, or by (1) and (2) below:
(1) If this lease is completely or partially
terminated, the records relating to the work terminated
shall be made available for a period of three years from the
date of any resulting final settlement.
(2) Records which relate to appeals under the
"Disputes" clause of this lease, or litigation of the
settlement of claims arising out of the performance of this
lease, shall be made available until such appeals,
litigation, or claims have been disposed of.
(e) The Lessee shall insert a clause containing all the
provisions of this clause, including this paragraph (e), in
all subcontracts exceeding $10,000 hereunder, except altered
as necessary for proper identification of the contracting
parties and the Contracting Officer under the Government
prime contract.
28. CERTIFICATION OF CLAIMS AND REQUESTS FOR ADJUSTMENT OR
RELIEF EXCEEDING $100,000
(a) Any contract claim, request for equitable adjustment to
lease terms, request for relief under Public Law 85-804 or
other similar request exceeding $100,000 shall bear, at the
time of submission, the following certificate given by a
senior company official in charge at the plant or location
involved:
I certify that the claim is made in good faith, that
the supporting data are accurate
and complete to the best of my knowledge and belief;
and that the amount
requested accurately reflects the lease adjustment for
which the Lessee
believes the Government is liable.
(Official's Name)
(Title)
(b) The certification in paragraph (a) requires full
disclosure of all relevant facts, including cost and pricing
data.
(c) The certification requirement in paragraph (a) does not
apply to:
(1) request for routine contract payments - for
example, those for payment for accepted supplies and
services, routine vouchers under cost reimbursement - type
contracts, and progress payment invoices;
(2) final adjustments under incentive provisions
of contracts.
(d) In those situations where no claim certification has
been submitted prior to the inception of a contract dispute,
a single certification, using the language prescribed by the
Contract Disputes Act but signed by a senior company
official in charge at the plant or location involved, will
be deemed to comply with both statutes.
29. ORDER OF PRECEDENCE
Any inconsistency in this solicitation or lease shall be
resolved by giving precedence in the following order: (a)
The Schedule (excluding the specifications); (b)
representations and other instructions; (c) contract
clauses; (d) other documents, exhibits, and attachments; and
(e) the specifications.
30. DRUG-FREE WORKPLACE
(a) Definitions. As used in this clause.
(1) "Employee in a sensitive position," as used in
this clause, means an employee who has been granted access
to classified information; or employees in other positions
that the Contractor determines involve national security,
health or safety, or functions other than the foregoing
requiring a high degree of trust and confidence.
(2) "Illegal drugs," as used in this clause, means
controlled substances included in Schedules I and II, as
defined by section 802 (6) of Title 21 of the United States
Code, the possession of which is unlawful under Chapter 13
of that Title. The term "illegal drugs" does not mean the
use of a controlled substance pursuant to a valid
prescription or other uses authorized by law.
(b) The Contractor agrees to institute and maintain a
program for achieving the objective of a drug-free work
force. While this clause defines criteria for such a
program, contractors are encouraged to implement alternative
approaches comparable to the criteria in paragraph (c) that
are designed to achieve the objectives of this clause.
(c) Contractor programs shall include the following, or
appropriate alternatives:
(1) Employee assistance programs emphasizing high
level direction, education, counseling, rehabilitation, and
coordination with available community resources;
(2) Supervisory training to assist in identifying
and addressing illegal drug use by Contractor employees;
(3) Provision for self-referrals as well as
supervisory referrals to treatment with maximum respect for
individual confidentiality consistent with safety and
security issues;
(4) Provision for identifying illegal drug users,
including testing on a controlled and carefully monitored
basis. Employee drug testing programs shall be established
taking account of the following:
(i) The Contractor shall establish a program
that provides for testing for the use of illegal drugs by
employees in sensitive positions. The extent of and
criteria for such testing shall be determined by the
Contractor based on considerations that include the nature
of the work being performed under the contract, the
employee's duties, the efficient use of Contractor
resources, and the risks to health, safety, or national
security that could result from the failure of an employee
adequately to discharge his or her position.
(ii) In addition, the Contractor may
establish a program for employee drug testing -
(A) When there is a reasonable
suspicion that an employee uses illegal drugs; or
(B) When an employee has
been involved in an accident or unsafe practice;
(C) As part of or as a follow-up
to counseling or rehabilitation for illegal drug use;
(D) As part of a voluntary
employee drug testing program.
(iii) The Contractor may establish a
program to test applicants for employment for illegal drug
use.
(iv) For the purpose of
administering this clause, testing for illegal drugs may be
limited to those substances for which testing is prescribed
by section 2.1
of Subpart B of the "Mandatory Guidelines for Federal
Workplace Drug Testing Programs" (53 FR 11980 (April 11,
1988)), issued by the Department of Health and Human
Services.
(d) Contractors shall adopt appropriate personnel
procedures to deal with employees who are found to be using
drugs illegally. Contractors shall not allow any employee
to remain on duty or perform in a sensitive position who is
found to use illegal drugs until such time as the
Contractor, in accordance with procedures established by the
Contractor, determines that the employee may perform in such
a position.
(e) The provisions of this clause pertaining to drug
testing program shall not apply to the extent they are
inconsistent with state or local law, or with an existing
collective bargaining agreement; provided that with respect
to the latter, the Contractor agrees that those issues that
are in conflict will be a subject of negotiation at the next
collective bargaining session.
31. ANTI-KICKBACK PROCEDURES
(a) Definitions.
"Kickback," as used in this clause, means any money,
fee, commission, credit, gift, gratuity, thing of value, or
compensation of any kind which is provided, directly or
indirectly, to any prime Contractor, prime Contractor
employee, subcontractor, or subcontractor employee for the
purpose of improperly obtaining or rewarding favorable
treatment in connection with a prime contract or in
connection with a subcontract relating to a prime contract.
"Person," as used in this clause, means a corporation,
partnership, business association of any kind, trust, joint-
stock company, or individual.
"Prime contract," as used in this clause, means a
contract or contractual action entered into by the United
States for the purpose of obtaining supplies, materials,
equipment, or services of any kind.
"Prime Contractor," as used in this clause, means a
person who has entered into a prime contract with the United
States.
"Prime Contractor employee," as used in this clause,
means any officer, partner, employee, or agent of a prime
Contractor.
"Subcontract," as used in this clause, means a contract
or contractual action entered into by a prime Contractor or
subcontractual for the purpose of obtaining supplies,
materials, equipment, or services of any kind under a prime
contract.
"Subcontractor," as used in this clause, (1) means any
person, other than the prime Contractor, who offers to
furnish or furnishes any supplies, materials, equipment, or
services of any kind under a prime contract or a subcontract
entered into in connection with such prime contract, and (2)
includes any person who offers to furnish or furnishes
general supplies to the prime Contractor or a higher tier
subcontractor.
Subcontractor employee," as used in this clause, means
any officer, partner, employee, or agent of a subcontractor.
(b) The Anti-Kickback Act of 1986 (41 U.S.C. 51-58) (the
Act), prohibits any person from -
(1) Providing or attempting to provide or offering to
provide any kickback;
(2) Soliciting, accepting, or attempting to accept any
kickback; or
(3) Including, directly or indirectly, the amount of
any kickback in the contract price charged by a prime
Contractor to the United States or in the contract price
charged by a subcontractor to a prime Contractor or higher
tier subcontractor.
(c) (1) The Contractor shall have in place and follow
reasonable procedures designed to prevent and detect
possible violations described in paragraph (b) of this
clause in its own operations and direct business
relationships.
(2) When the Contractor has reasonable grounds to
believe that a violation described in paragraph (b) of this
clause may have occurred, the Contractor shall promptly
report in writing the possible violation. Such reports
shall be made to the inspector general of the contracting
agency, the head of the contracting agency if the agency
does not have an inspector general, or the Department of
Justice.
(3) The Contractor shall cooperate fully with any
Federal agency investigating a possible violation described
in paragraph (b) of this clause.
(4) The Contracting Officer may (i) offset the amount
of the kickback against any moneys owed by the United States
under the prime contract and/or (ii) direct that the Prime
Contractor withhold from sums owed a subcontractor under the
prime contract the amount of the kickback. The Contracting
Officer may order that moneys withheld under subdivision (c)
(4) (ii) of this clause be paid over to the Government
unless the Government has already offset those moneys under
subdivision (c) (4) (i) of this clause. In either case, the
Prime Contractor shall notify the Contracting Officer when
the moneys are withheld.
(5) The Contractor agrees to incorporate the substance
of this clause, including subparagraph (c) (5) but excepting
paragraph (c) (1), in all subcontracts under this contract.
32. CLEAN AIR AND WATER
(a) "Air Act," as used in this clause, means the Clean Air
Act (42 U.S.C. 7401, et seq.).
"Clear air standards," as used in this clause, means -
(1) Any enforceable rules, regulations, guidelines,
standards, limitations, orders, controls, prohibitions, work
practices, or other requirements contained in, issued under,
or otherwise adopted under the Air Act or Executive Order
11738;
(2) An applicable implementation plan as described in
section 110 (d) of the Air Act (42 U.S.C. 7410 (d));
(3) An approved implementation procedure or plan under
section 111 (c) or section 111 (d) of the Air Act (42 U.S.C.
7411 (c) or (d)); or
(4) An approved implementation procedure under section
112 (d) of the Air Act (42 U.S.C. 7412 (d)).
"Clean water standards," as used in this clause, means
any enforceable limitation, control, condition, prohibition,
standard, or other requirement promulgated under the Water
Act or contained in a permit issued to a discharger by the
EPA or by a State under an approved program, as authorized
by section 402 of the Water Act (33 U.S.C. 1342), or by
local government to ensure compliance with pretreatment
regulations as required by section 307 of the Water Act (33
U.S.C. 1317).
"Compliance," as used in this clause, means compliance
with -
(1) Clear air or water standards; or
33. NAVSEA AUTHORITY TO SELL THE YFD 70
If the Lessee, in accordance with SECTION F, does not
provide written notice of their desire to exercise their
option to extend this lease for any of the three (3) five
year optional terms, the Navy will evaluate our future
requirements for the YFD 70. If no requirements exist at
that time, the Navy will evaluate their option to initiate
the disposition process. If the YFD 70 is declared excess
and subsequently struck from the Navy register of
ships/craft, authority has been granted to the Naval Sea
Systems Command to offer the Lessee a right of first refusal
to purchase the dry dock, if the YFD 70 remains after
required screening for excess property. If the Contracting
Officer offers the Lessee a right of first refusal and the
Lessee decides not to purchase the dry dock, the Lessee will
comply with clause H-8, "RETURN OF DRY DOCK". If the
contractor desires to purchase the dock from the Naval Sea
Systems Command, the contractor must also pay the
government, as additional rent, the cash equivalent of the
audited, unquestioned estimated cost of preparing the dock
for tow and returning the dock to the Inactive Ship
Maintenance Facility, Bremerton, WA. in accordance with
Contract Clause H-8.
SECTION J - LIST OF DOCUMENTS AND ATTACHMENTS
Not Applicable to this Lease Agreement.
PART IV - REPRESENTATIONS AND INSTRUCTIONS
SECTION K - REPRESENTATIONS, CERTIFICATIONS AND OTHER
STATEMENTS TO OFFERORS
1. CERTIFICATE OF INDEPENDENT PRICE DETERMINATION
(a) The offeror certifies that -
(1) The rents in this offer have been arrived at
independently, without, for the purpose of restricting
competition, any consultation, communication, or agreement
with any other offeror or competitor relating to (I) those e
rents, (ii) the intention to submit an offer, or (iii) the
methods or factors used to calculate the rents offered:
(2) The rents in this offer have not been and
will not be knowingly disclosed by the offeror, directly or
indirectly, to any other offeror or competitor before bid
opening (in the case of a sealed bid solicitation) or
contract award (in the case of a negotiated solicitation
unless otherwise required by law; and
(3) No attempt has been made or will be made by
the offeror to induce any other concern to submit or not to
submit an offer for the purpose of restricting competition.
(b) Each signature on the offer is considered to be a
certification by the signatory that the signatory -
(1) Is the person in the offeror's
organization responsible for determining the rents being
offered in this bid or proposal, and that the signatory has
not participated and will not participate in any action
contrary to subparagraphs (a) (1) through (a) (3) above; or
(2) (i) Has been authorized, in writing, to
act as agent for the following principals in certifying that
those principals have not participated, and will not
participate in any action contrary to subparagraphs (a) (1)
through (a) (3) above
Roland H. Webb, President & COO
(insert full name of person(s) in the offeror's organization
responsible for determining the rents offered in this bid or
proposal, and the title of his position in the offeror's
organization)
(ii) As an authorized agent, does certify that the
principals named in subdivision (b) (2) (I) above have not
participated, and will not participate, in any action
contrary to subparagraphs (a) (1) through (a) (3) above; and
(iii) As an agent, has not personally
participated and will not participate, in any action
contrary to subparagraphs (a) (1) through (a) (3) above.
(c) If the offeror deletes or modifies subparagraph
(a) (2) above, the offeror must furnish with its offer a
signed statement setting forth in detail the circumstances
of the disclosure.
2. CONTINGENT FEE REPRESENTATION AND AGREEMENT
(a) Representation. The offeror represents that,
except for full-time bonafide employees working solely for
the offeror, the offeror -
(Note: The offeror must check the appropriate
boxes. For
interpretation of the representation, including the
term "bona
fide employee," see subpart 3.4 of the Federal
Acquisition Regulation.)
(1) has, x has not employed or
retained any person or company to solicit or obtain this
contract; and
(2) has, x has not paid or
agreed to pay to any person or company employed or retained
to solicit or obtain this contract any commission,
percentage, brokerage, or other fee contingent upon or
resulting from the award of this contract.
(b) Agreement. The offeror agrees to provide
information relating to the above Representation as
requested by the Contracting Officer and, when subparagraph
(a) (1) or (a) (2) is answered affirmatively, to promptly
submit to the Contracting Officer -
(1) A completed Standard Form 119, Statement
of Contingent or Other Fees, (SF 119); or
(2) A signed statement indicating that the SF
119 was previously submitted to the same contracting office,
including the date and applicable solicitation or contract
number, and representing that the prior SF 119 applies to
this offer or quotation.
3. TYPE OF BUSINESS ORGANIZATION
The offeror or quoter, by checking the applicable box,
represents that -
(a) It operates as x a corporation incorporated under
the laws of the State of Delaware , an
individual, a partnership, a nonprofit
organization, or a joint venture.
(b) If the offeror or quoter is a foreign entity, it
operates as an individual, a partnership,
a nonprofit organization, a joint venture, or a
corporation, registered for business in
.
(country)
4. PLACE OF PERFORMANCE
(a) The offeror, in the performance of any contract
resulting from this solicitation, intends, x does
not intend (check appropriate box) to use one or more plants
or facilities located at a different address from the
address of the offeror as indicated in this proposal.
(b) If the offeror checks "intends" in paragraph (a)
above, it shall insert in the spaces provided below the
required information:
Place of Performance (Street
Name and Address of Owner
Address, City, County, State,
and Operator of the Plant
Zip Code)
or Facility if Other than
Bidder
5. MINIMUM OFFER ACCEPTANCE PERIOD
(a) "Acceptance period" as used in this provision,
means the number of calendar days available to the
Government for awarding a contract from the date specified
in this solicitation for receipt of proposals.
(b) This provision supersedes any language pertaining
to the acceptance period that may appear elsewhere in this
solicitation.
(c) The Government requires a minimum acceptance
period of 120 (one hundred twenty) calendar days.
(d) In the space provided immediately below, offerors
may specify a longer acceptance period: ___________________
calendar days.
(e) An offer allowing less than the Government's
minimum acceptance period will be rejected.
(f) The offeror agrees to execute all that it has
undertaken to do, in compliance with its bid, if that bid is
accepted in writing within (1) the acceptance period stated
in paragraph (c) above or (2) any longer acceptance period
stated in paragraph (d) above.
6. CERTIFICATION OF NONSEGREGATED FACILITIES
(a) "Segregated facilities" as used in this provision,
means any waiting rooms, work areas, rest rooms and wash
rooms, restaurants and other eating areas, time clocks,
locker rooms and other storage or dressing areas, parking
lots, drinking fountains, recreation or entertainment areas,
transportation and housing facilities provided for employees
that are segregated by explicit directive or are in fact
segregated on the basis of race, color, religion or national
origin, because of habit, local custom or otherwise.
(b) By the submission of this offer, the offeror
certifies that it does not and will not maintain or provide
for its employees any segregated facilities at any of its
establishments, and that it does not and will not permit its
employees to perform their services at any location under
its control where segregated facilities are maintained. The
offeror agrees that a breach of this certification is a
violation of the Equal Opportunity clause in the contract.
(c) The offeror further agrees that (except where it
has obtained identical certifications from proposed
subcontractors for specific time periods) it will -
(1) Obtain identical certification from proposed
subcontractors before the award of subcontracts under which
the subcontractor will be subject to the Equal Opportunity
clause;
(2) Retain the certifications in the files; and
(3) Forward the following notice to the proposed
subcontractors (except if the proposed subcontractors have
submitted identical certifications for specific time
periods):
NOTICE TO PROSPECTIVE SUBCONTRACTORS OF REQUIREMENT FOR
CERTIFICATIONS OF NONSEGREGATED FACILITIES
A Certification of Nonsegregated facilities must be
submitted before the award of a subcontract under which the
subcontractor will be subject to the Equal Opportunity
clause. The certification may be submitted either for each
subcontract or for all subcontracts during a period (i.e.,
quarterly, semiannually, or annually).
NOTE: The penalty for making false statements in offers is
prescribed in 18 U.S.C. 1001.
7. PREVIOUS CONTRACTS AND COMPLIANCE REPORTS
The offeror represents that -
(a) It __X__ has, _____ has not participated in a
previous contract or subcontract subject either to the Equal
Opportunity clause of this solicitation, the clause
originally contained in Section 310 of the Executive Order
10925, or the clause contained in Section 201 of Executive
Order No. 11114;
(b) It __X__ has, _____ has not filed all required
compliance reports; and
(c) Representations indicating submission of required
compliance reports, signed by proposed subcontractors, will
be obtained before subcontract awards.
8. AFFIRMATIVE ACTION COMPLIANCE
The offeror represents that (a) it __X__ has developed and
has on file, _____ has not developed and does not have on
file, at each establishment, affirmative action programs
required by the rules and regulations of the Secretary of
Labor (41 CFR 60-1 and 60-2), or (b) it _____ has not
previously had contracts subject to the written affirmative
action programs requirement of the rules and regulations of
the Secretary of Labor.
9. CLEAN AIR AND WATER CERTIFICATION
The offeror certifies that -
(a) Any facility to be used in the performance of this
proposed contract is _____, is not __X__, listed on the
Environmental Protection Agency (EPA) List of Violating
Facilities;
(b) The Offeror will immediately notify the
Contracting Officer, before award, of the receipt of any
communication from the Administrator, or a designee, of the
EPA, indicating that any facility that the Offeror proposes
to use for this performance of the contract is under
consideration to be listed on the EPA List of Violating
Facilities; and
(c) The Offeror will include a certification
substantially the same as this certification, including this
paragraph (c), in every nonexempt subcontract.
10. TAXPAYER IDENTIFICATION
(a) Definitions
"Common parent," as used in this solicitation provision,
means that corporate entity that owns or controls an
affiliated group of corporations that files its Federal
income tax returns on a consolidated basis, and of which the
offeror is a member.
"Corporate status," as used in this solicitation provision,
means a designation as to whether the offeror is a corporate
entity (e.g., sole proprietorship or partnership), or a
corporation providing medical and health care services.
"Taxpayer Identification Number(TIN)," as used in this
solicitation provision, means the number required by the IRS
to be used by the offeror in reporting income tax and other
returns.
(b) The offeror is required to submit the information
required in paragraphs (c) through (e) of this solicitation
provision in order to comply with reporting requirements of
26 U.S.C. 6041, 6041A, and 6050M and implementing regulation
issued by the Internal Revenue Service (IRS). If the
resulting contract is subject to the reporting requirements
described in 4.902(a), the failure or refusal by the offeror
to furnish the information may result in a 20 percent
reduction of payments otherwise due under the contract.
(c) Taxpayer Identification Number (TIN).
__X__ TIN: 13-2906669
_____ TIN has been applied for.
_____ TIN is not required because:
___ Offeror is a nonresident alien, foreign
corporation, or foreign partnership that does not have
income effectively connected with the conduct of a trade or
business in the U.S. and does not have an office or place of
business or a fiscal paying agent in the U.S.;
___ Offeror is an agency or instrumentality of a
foregin government,
___ Offeror is an agency or instrumentality of a
Federal, state, or local government;
___ Other. State basis.___________________
(d) Corporate Status.
_____ Corporation providing medical and health care
services, or engaged in the billing and collecting of
payments for such services;
__X__ Other corporate entity
_____ Not a corporate entity;
_____ Sole proprietorship
_____ Partnership
_____ Hospital or extended care facility
described in 26 CFR 501(c) (3) that is exempt from taxation
under 26 CFR 50(a).
(e) Common Parent
_____ Offeror is not owned or controlled by a common
parent as defined in paragraph (a) of this clause.
__X__ Name and TIN of common parent
Name __Todd Shipyards Corporation
TIN ___13-5438577________________
11. AUTHORIZED NEGOTIATORS
The offeror or quoter represents that the following persons
are authorized to negotiate on its behalf with the
Government in connection with the request for proposals:
(list names, titles, and telephone numbers of the authorized
negotiators).
Jim Hitch, Program Manager (206) 623-1625 x 100
Turp Christianson, Chief Estimator (206) 623-1635
x 220
12. CERTIFICATION REGARDING DEPARTMENT, SUSPENSION,
PROPOSED DEPARTMENT, AND OTHER RESPONSIBILITY MATTERS
(a)(1) The Offeror certifies, to the best of its knowledge
and belief, that -
(i) The offeror and/or of its principals --
(A) are / / are not /X/ presently debarred,
suspended,
proposed for debarment, or declared ineligible
for the
award of contracts by any Federal agency;
(B) Have / / have not /X/, within a three-year
period
preceding this offer, been convicted of or had
a civil
judgment rendered against them for: commission
of
fraud or a criminal offense in connection with
obtaining, attempting to obtain, or performing
a public
(Federal, state, or local) contract or
subcontract;
violation of Federal or state antitrust
statutes
relating to the submission of offers; or
commission of
embezzlement, theft, forgery, bribery,
falsification or
destruction of records, making false
statements, or
receiving stolen property; and
(C) Are / / are not /X/ presently indicted
for, or
otherwise criminally or civilly charged by a
governmental
entity with, commission of any of the offenses
enumerated
in subdivision (a) (1) (1) (B) of this
provision.
(ii) The Offeror has / / has not /X/, within a three-
year period preceding this offer, had one or more contracts
terminated for default by any Federal agency.
(2) "Principals," for the purposes of this certification,
means officers; directors; owners; partners; and persons
having primary management or supervisory responsibility
within a business entity (e.g., general manager; plant
manager; head of a subsidiary, division, or business
segment, and similar positions).
THIS CERTIFICATION CONCERNS A MATTER WITHIN THE JURISDICTION
OF AN AGENCY OF THE UNITED STATES AND THE MAKING OF A FALSE,
FICTITIOUS, OR FRAUDULENT CERTIFICATION MAY RENDER THE MAKER
SUBJECT TO PROSECUTION UNDER SECTION 1001, TITLE 18, UNITED
STATES CODE.
(b) The Offeror shall provide immediate written notice to
the Contracting Officer if, at any time prior to contract
award, the Offeror learns that its certification was
erroneous when submitted or has become erroneous by reason
of changed circumstances.
(c) A certification that any of the items in paragraph (a)
of this provision exists will not necessarily result in
withholding of an award under this solicitation. However,
the certification will be considered in connection with a
determination of the Offeror's responsibility. Failure of
the Offeror to furnish a certification or provide such
additional information as requested by the Contracting
Officer may render the Offeror nonresponsible.
(d) Nothing contained in the foregoing shall be construed
to require establishment of a system of records in order to
render in good faith, the certification required by
paragraph (a) of this provision. The knowledge and
information of an Offeror is not required to exceed that
which is normally possessed by a prudent person in the
ordinary course of business dealings.
(e) The certification in paragraph (a) of this provision is
a material representation of fact upon which reliance was
placed when making award. If it is later determined that
the Offeror knowingly rendered an erroneous certification,
in addition to other remedies available to the Government,
the Contracting Officer may terminate the contract resulting
from this solicitation for default.
13. CERTIFICATION REGARDING A DRUG-FREE WORKPLACE
(a) DEFINITIONS
"Controlled substance" means a controlled substance in
schedules I through V of section 202 of the Controlled
Substance Act (21 U.S.C. 812) and as further defined in
regulation at 21 CFR 1308.11 - 1308.15.
"Conviction" means a finding of guilt (including a plea of
nolo contendere) or imposition of the sentence, or both, by
any judicial body charged with the responsibility to
determine violations of the Federal or State criminal drug
statues.
"Criminal drug statute" means a Federal or non-Federal
criminal statute involving the manufacture, distribution,
dispensing, possession or use of any controlled substance.
"Employee" means an employee of a Contractor directly
engaged in the performance of work under a Government
contract. "Directly engaged" is defined to include all
direct cost employees and any other Contractor employee who
has other than a minimal impact or involvement in contract
performance.
"Drug-free workplace" means the site(s) for the performance
of work donw by the Contractor in connection with a specific
contract at which employees of the Contractor are prohobited
from engaging in the unlawful manufacture, distribution,
dispensing, possession, or use of a controlled substance.
"Employee" means an employee of a Contractor directly
engaged in the performance of work under a Government
contract. "Directly engaged" is defined to include all
direct cost employees and any other Contractor employee who
has other than a minimal impact or involvement in contract
performance.
"Individual" means an offeror/contractor that has no more
than one employee including the offeror/contractor.
(b) By submission of its offer, the offeror, if other than
an individual, who is making an offer that equals or exceeds
$25,000, certifies and agrees that, with respect to all
employees of the offeror to be employed under a contract
resulting from this solicitation, it will--no later than 30
calendar days after contract award (unless a longer period
is agreed to in writing), for contract of 30 calendar days
or more performance duration; or as soon as possible for
contracts of less than 30 calendar days performance
duration, but in any case, by a date prior to when
performance is expected to be completed--
(1) Publish a statement notifying such employees that the
unlawful manufacture, distribution, dispensing, possession
or use of a controlled substance is prohibited in the
Contractor's workplace and specifying the actions that will
be taken against employees for violations of such
prohibition;
(2) Establish an ongoing drug-free awareness program to
inform such employees about--
(i) The dangers of drug abuse in the workplace;
(ii) The contractor's policy of maintaining a drug-
free workplace;
(iii) Any available drug counseling, rehabilitation,
and employee assistance programs; and
(iv) The penalties that may be imposed upon employees
for drug abuse violations occurring in the workplace;
(3) Provide all employees engaged in performance of the
contract with a copy of the statement required by
subparagraph (b)(1) of this provision;
(4) Notify such employees in writing in the statement
required by subparagraph (b)(1) of this provision that, as a
condition of continued employment on the contract resulting
from this solicitation, the employee will--
(i) Abide by the terms of the statement; and
(ii) Notify the employer in writing of the employee's
conviction under a criminal drug statute for a violation
occurring in the workplace no later than 5 calendar days
after such conviction;
(5) Notify the Contracting Officer in writing within 10
calendar days after receiving notice under subdivision (b)
(4) (ii) of this provision, from an employee or otherwise
receiving actual notice of such conviction. This notice
shall include the position title of the employee; and
(6) Within 30 calendar days after receiving notice under
subdivision (b)(4)(ii) of this provision of a conviction,
take one of the following actions within respect to any
employee who is convicted of a drug abuse violation
occurring in the workplace:
(i) Take appropriate personnel action against
such employee; up to and including termination; or
(ii) Require such employee to satisfactorily
participate on a drug abuse assistance or rehabilitation
program approved for such purposes by a Federal, State, or
local health, law enforcement, or other appropriate agency.
(7) Make a good faith effort to maintain a drug-free
workplace through implementation of subparagraphs (b)(1)
through (b)(6) of this provision.
(c) By submission of its offer, the offeror, if an
individual who is making an offer of any dollar value,
certifies and agrees that the offeror will not engage in the
unlawful manufacture, distribution, dispensing, possession,
or use of a controlled substance in the performance of the
contract resulting from this solicitation.
(d) Failure of the offeror to provide their certification
required by paragraphs (b) or (c) of this provision, renders
the offeror unqualified and ineligible for award (See FAR
9.104-1(g) and 19.602-1(a)(2)(i).)
(e) In addition to other remedies available to the
Government, the certification in paragraphs (b) or (c) of
this provision concerns a matter within the jurisdiction of
any agency of the United States and the making of a false,
fictitious, or fraudulent certification may render the maker
subject to prosecution under Title 18, United States Code,
Section 1001.
SECTION L - INSTRUCTIONS, CONDITIONS AND NOTICES TO OFFERORS
1. SOLICITATION DEFINITIONS
"Offer" means "proposal" in negotiation.
"Contract" means "lease."
"Contractor" means "lessee."
"Solicitation" means a request for proposals (RFP) or a
request for quotations (RFQ) in negotiation.
"Government" means United States Government.
2. UNNECESSARILY ELABORATE PROPOSALS OR QUOTATIONS
a. Unnecessarily elaborate brochures or other presentations
beyond those sufficient to present a complete and effective
response to this solicitation are not desired and may be
construed as an indication of the offeror's or quoter's lack
of cost consciousness. Elaborate art work, expensive paper
and binding, and expensive visual and other presentation
aids are neither necessary nor wanted.
b. Offerors are advised to submit proposals that are
complete and clear in all respects without the need for
additional explanation or information. Offerors are
cautioned against the use of general, vague, or
unsubstantiated statements which prevent concise proposal
evaluations. Proposals, not including the solicitation
document, may not exceed fifty (50) pages, including
appendices and attachments.
c. Offerors shall number the pages of their proposal.
3. AMENDMENTS TO SOLICITATIONS
a. If this solicitation is amended, then all terms and
conditions which are not modified remain unchanged.
b. Offerors shall acknowledge receipt of any amendment to
this solicitation by (1) signing and returning the
amendment, (2) identifying the amendment number and date in
the space provided for this purpose on the form for
submitting an offer, or (3) letter or telegram. The
Government must receive the acknowledgment by the time
specified for receipt of offers.
4. SUBMISSIONS OF OFFERS
a. Offers and modifications thereof shall be submitted in
sealed envelopes or packages (1) addressed to the office
specified in the solicitation, and (2) showing the time
specified for receipt, the solicitation number, and the name
and address of the offeror.
b. Telegraphic offers will not be considered; however,
offers may be modified by written or telegraphic notice.
c. Facsimile offers, modifications or withdrawals will not
be considered.
5. LATE SUBMISSIONS, MODIFICATIONS, AND WITHDRAWALS OF
PROPOSALS
a. Any proposal received at the office designated in the
solicitation after the exact time specified for receipt will
not be considered unless it is before award is made and it -
(1) Was sent by registered or certified mail not later
than
the fifth calendar day before the date specified for
receipt
of offers (e.g., an offer submitted in response to a
solicitation requiring receipt of offers by the 20th of
the
month must have been mailed by the 15th);
(2) Was sent by mail or, if authorized by the
solicitation, was
sent by telegram or via facsimile and it is determined
by the Government that the late receipt was due solely
to
mishandling by the Government after receipt at the
Government installation;
(3) Was sent by U.S. Postal Service Express Mail Next
Day
Service-Post Office to Addressee, not later than 5:00
p.m. at the
place of mailing two working days prior to the date
specified
for receipt of proposals. The term "working days"
excludes
weekends and U.S. Federal holidays; or
(4) Is the only proposal received.
b. Any modification of a proposal or quotation, except a
modification resulting from the Contracting Officer's
request for "best and final" offer, is subject to the same
conditions as in subparagraphs (a)(1), (2), and (3) of this
provision.
c. A modification resulting from the Contracting Officer's
request for "best and final" offer received after the time
and date specified in the request will not be considered
unless received before award and the late receipt is due
solely to mishandling by the Government after receipt at the
Government installation.
d. The only acceptable evidence to establish the date of
mailing of a late proposal or modification sent either by
U.S. Postal Service registered or certified mail is the U.S.
or Canadian Postal Service postmark both on the envelope or
wrapper and on the original receipt from the U.S. or
Canadian Postal Service. Both postmarks must show a legible
date or the proposal, quotation, or modification shall be
processed as if mailed late. "Postmark" means a printed,
stamped, or otherwise placed impression (exclusive of a
postage meter machine impression) that is readily
identifiable without further action as having been supplied
and affixed by employees of the U.S. or Canadian Postal
Service on the date of mailing. Therefore, offerors or
quoters should request the postal clerk to place a legible
hand cancellation bull's eye postmark on both the receipt
and the envelope or wrapper.
e. The only acceptable evidence to establish the time of
receipt at the Government installation is the time/date
stamp of that installation on the proposal wrapper or other
documentary evidence of receipt maintained by the
installation.
f. The only acceptable evidence to establish the date of
mailing of a late offer, modification, or withdrawal sent by
Express Mail Next Day Service-Post Office to Addressee is
the date entered by the post office receiving clerk on the
"Express Mail Next Day Service-Post Office to Addressee"
label and the postmark on both the envelope or wrapper and
on the original receipt from the U.S. Postal Service.
"Postmark" has the same meaning as defined in paragraph (d)
of this provision, excluding postmarks of the Canadian
Postal Service. Therefore, offerors or quoters should
request the postal clerk to place a legible hand
cancellation bull's eye postmark on both the receipt and the
envelope or wrapper.
g. Notwithstanding paragraph (a) of this provision, a late
modification of an otherwise successful proposal that makes
its terms more favorable to the Government will be
considered at any time it is received and may be accepted.
6. RESTRICTION ON DISCLOSURE AND USE OF DATA
Offers or quoters who include in their proposals or
quotations data that they do not want disclosed to the
public for any purpose or used by the Government except for
evaluation purposes shall -
a. Mark the tittle page with the following legend:
"This proposal or quotation includes data that shall not
be
disclosed outside the Government and shall not be
duplicated, used, or disclosed-in whole or in part-for
any
purpose other than to evaluate this proposal or
quotation.
If, however, a contract is awarded to this offeror or
quoter
as a result of-or in connection with-the submission of
this
data, the Government shall have the right to duplicate,
use,
or disclose the data to the extent provided in the
resulting
contract. This restriction does not limit the
Government'
right to use information contained in this data if it is
obtained from another source without restriction. The
data
subject to this restriction are contained in sheets
(insert
numbers or other identification of sheets);" and
b. Mark each sheet of data it wishes to restrict with the
following legend:
"Use or disclosure of data contained in this sheet is
subject to the restrictions on the title page of this
proposal or quotation."
7. PREPARATION OF OFFERS
a. Offerors are expected to examine the dry dock drawings,
manuals, specifications (SEE SECTION C, paragraph 1),
Schedule, and all instructions. Offerors are encouraged to
inspect the Dry Dock. failure to do so will be at the
offeror's risk.
b. Each offeror shall furnish the information required by
the solicitation. The offeror shall sign the offer and
print or type its name on the Schedule and each continuation
sheet on which it makes an entry. Erasures or other changes
must be initialed by the person signing the offer. Offers
signed by an agent shall be accompanied by evidence of the
agent's authority, unless that evidence has been previously
furnished to the issuing office.
8. EXPLANATION TO PROSPECTIVE OFFERORS
Any prospective offeror desiring an explanation or
interpretation of the solicitation, drawings,
specifications, etc., must submit the request in writing at
least twenty one (21) days prior to the solicitation closing
date. Oral explanations or instructions given before the
award of the contract will not be binding. Any information
given to a prospective offeror concerning a solicitation
will be furnished promptly to all other prospective offerors
as an amendment of the solicitation, if that information is
necessary in submitting offers or if lack of it would be
prejudicial to any other prospective offerors.
9. LEASE AWARD
a. The Government may award a lease resulting from this
solicitation to the responsible offeror whose offer meets
the criteria specified in paragraph 14(e) of this Section
and whose proposed lay day rate is the lowest offered (Amnd
#2).
b. The Government may (1) reject any or all offers if such
action is in the public interest and (2) waive informalities
and minor irregularities in offers received.
c. The Government may award a lease on the basis of initial
offers received, without discussions. Therefore, each
initial offer should contain the offeror's best terms from a
lay day rate (Amnd #2) and other factors standpoint.
d. The Government may accept any item or group of items of
an offer, unless the offeror qualifies the offer by specific
limitations.
e. A written award or acceptance of offer mailed or
otherwise furnished to the successful offer within the time
for acceptance specified in the offer shall result in a
binding lease without further action by either party.
Before the offer's specified expiration time, the Government
may accept an offer, whether or not there are negotiations
after its receipt. Negotiations conducted after receipt of
an offer do not constitute a rejection or counteroffer by
the Government.
10. PRE-AWARD SURVEY
The Government reserves the right to conduct a pre-award
survey or to require other evidence of technical,
production, managerial, and financial capability, and
similar abilities to perform prior to the award of a
contract.
11. INSPECTION INSTRUCTIONS AND CONDITIONS
a. Floating Dry Dock YFD 70 is presently located at Todd
Pacific Shipyard Corporation, Seattle, WA. Arrangement for
inspecting this Dry Dock may be made by contacting Mr. Jim
Anderson, Facility Manager, 1801 16th Ave. S.W., Seattle,
WA. 98124, phone number (206) 623-1635 (ext. 171), Fax (206)
442-8505. Requests should be made my mail or fax and must
include the company name, name and citizenship of any
individual(s) making the visit. A minimum of 48 hours
notification is required.
b. All figures in Section C are approximate and any
descriptions or other information concerning the Dry Dock is
solely for general information of offerors and its accuracy
is not warranted.
c. Prospective offerors are advised that failure to inspect
the Dry Dock will in no event form the basis for the return
of any offer guarantee after the time fixed for the opening
offer, or for the decision of any contract as a result of
acceptance of a proposal.
d. CAUTION. THIS DRY DOCK IS BEING OFFERED ON AN "AS IS,
WHERE IS" BASIS. See Contract Clause 8, Disclaimer of
Warranty and Condition of Dry Dock.
12. COMPETITION RESTRICTIONS
a. Offerors will be limited to:
1. A U.S. Port Authority or United States owned,
operated and licensed firms engaged in shipbuilding, ship
repair and/or ship overhaul work for use within the United
States, its territories, possessions, and Puerto Rico.
2. Companies which will not, for the term of this
Lease, have under lease a similar Navy Dry Dock of similar
lifting capacity.
b. The Government may, at its discretion, call upon any
offeror to submit such statements or documentation or other
proof, as it may deem necessary, to satisfy the requirements
of this provision.
13. OFFER GUARANTEE
a. Failure to furnish an offer guarantee in the proper form
and amount, by the time set for submission of proposals, may
be cause for rejection of the offer.
b. The offeror shall furnish an offer guarantee in the form
of a firm commitment, such as a bid bond, postal money
order, certified check, cashier's check, irrevocable letter
of credit, or, under Treasury Department regulations,
certain bonds or notes of the United States. The offer
guarantee will be in the amount of $5,000.00. The
Contracting Officer will return bid guarantees, other than
bid bonds, (1) to unsuccessful offerors as soon as
practicable after an award determination, and (2) to the
successful offeror upon the offerors satisfactory compliance
with the requirements of Sections C and F.
c. The offeror will allow 120 days after receipt of
proposals for acceptance of its offer.
14. SUBMISSION OF OFFERS AND PROPOSALS
a. Offerors are advised to make certain that all required
blanks in the solicitation are filled in as appropriate.
b. A signed original and one signed copy of the offer must
be submitted.
c. A signed original and six signed copies of the plans and
schedule required in paragraph e(1) below must be submitted
with the offer. No mention of the proposed annual rental
amount may be included in these plans or the schedule.
d. Offerors are advised to submit proposals that are
complete and clear in all respects without the need for
additional explanation or information. Offerors are
cautioned against the use of general, vague, or
unsubstantiated statements which prevent concise proposal
evaluations. Proposals not including the Solicitation
document, N0002-95-R-8102, must not exceed fifty (50) pages,
including appendices and attachments.
e. Offerors are to ensure that proposals provide complete
and clear information that will enable the Government to
assess the offeror's response to the minimum requirements
outlined in the evaluation factors set forth below for
selection of the lessee for lease of YFD 70.
Offeror's proposal shall respond to the following
evaluation
factors:
(a) Factor 1: Dry Dock Operating Basin and Ship
Repair/Overhaul Facility
Offeror must provide a technically acceptable
plan
of action and milestones which will demonstrate
that the offeror possesses, or has the ability
to
obtain, an operating basin that is a minimum of
52
feet deep, 128 feet wide, and 700 feet long and
is
located so that ships of cruiser, destroyer and
tender size have access to the operating basin.
(Minimum depth of water for a navigable channel
is
35 feet at mean low water.)
In addition to addressing the drydock operating
basin, the plan must also demonstrate that the
offeror possesses or has the ability to obtain
the
ship repair/overhaul facilities and services
which
may be required as "temporary services" in a
U.S.
Navy Ship Repair availability.
If the offeror does not already possess a Dry
Dock
operating basin and Ship Repair/Overhaul
Facility
which meets the above requirement, the lessee
must
also provide with their plan, documentation
which
clearly shows the current condition of their
proposed Dry Dock operating site and then
provides
a comprehensive and definitive list of the
physical changes, additions, or deletions which
they plan to make to the environment of their
proposed Dry Dock Operating site to meet the
above
installation and operation and the YFD 70.
(d) Factor 2: "Operation and Use" and "Delivery"
Offeror must describe a technically acceptable
plan and timetable detailing how the offeror
will
meet the requirements of Section C and Special
Contract Requirement H-1, Operation and Use, and
Section F, Deliveries or Performance.
Specifically, the offeror must provide a plan
and
timetable for accepting the Dry Dock at the
place
of delivery, removing the Dock to the operating
basin, mooring the Dry Dock, furnishing all the
facilities and utility service hookups, and
accomplishing all work to make the Dry Dock
fully
operational. The plan must also show the
lessee's
understanding of, and plan to be able to provide
the
typical "Temporary Services" required in a U.S.
Navy
Ship Repair availability at their proposed drydock
site
facility. (Amnd #1)
(c) Factor 3: One Year Normal Maintenance Program
and
Dry-docking Requirement
offeror must describe a technically acceptable
on
year plan and timetable for:
(i) dredging Dry Dock basin and maintaining
moorings; (ii) accomplishing normal
maintenance,
including the sample listed in Special Contract
Requirement H-3, Normal Maintenance: (iii)
performing an annual inspection including
careening the Dry Dock or inspection by
underwater
camera; and (iv) accomplishing the dry-docking
of
the Dry Dock as required in Special Contract
Requirement H-4, Dry-Docking Requirements.
Offeror must also provide a description of the
quantity, type of labor, and experience levels
of
the workforce necessary to accomplish the normal
maintenance program and identify the facilities
and equipment necessary to undertake and
complete
the normal maintenance program.
(d) Factor 4: Safety Certification
Offeror must provide a technically acceptable
plan
of action and milestones for achieving
certification of the YFD 70 in accordance with
MIL-STD-1625(SH). The YFD 70 shall be certified
by the end of the twelfth (12) month of the
initial
lease term (or before dry-docking a U.S. Naval
vessel, if earlier). The plan of action must
include a description of the quantity, type of
labor, and experience level of the workforce
necessary to achieve and maintain safety
certification and safely operate the dock.
Offeror
must describe past experience in obtaining and
maintaining Dry Dock certification programs in
accordance with MIL-STD-1625(SH) and provide a
description of the facilities and equipment
necessary to achieve certification.
SECTION M - EVALUATION FACTORS FOR AWARD
1. General
The selected offeror for lease of the YFD 70 will be the
offeror that has demonstrated that it has met or can meet
the minimum requirements outlined in the Section L proposal
evaluation factors and whose plans are deemed acceptable as
set forth in SECTION L of the solicitation and whose offer
provides the lowest lay day rate.
2. Evaluation Factors
All offerors will be evaluated on the following factors:
a. A Technically Acceptable Plan and Timetable for
obtaining the required drydock site/operating basin
and
ship repair facility.
b. A Technically Acceptable Plan and Timetable for
"Operation and Use" and "Delivery."
c. A Technically Acceptable One Year Normal
Maintenance
Program and Dry-Docking Requirement Plan.
d. A Technical Acceptable Safety Certification Plan.
All of the above plans must be deemed to be acceptable
before an offeror's proposal will be evaluated on the basis
of the proposed lay day rate for use of the YFD 70 for U.S.
Navy ship repair/overhaul availabilities. If one of the
plans from an offeror's proposal is evaluated and determined
to be unacceptable the entire proposal will be unacceptable.
Therefore, all of the above factors are equal in importance.
3. Award
The offeror whose offer meets the minimum requirements
above, whose plans are deemed acceptable, and whose proposal
provides the lowest lay day rate for use of the YFD 70 for
U.S. Navy ship repair/overhaul availabilities will be
selected to lease the YFD 70. However, if only one
technically acceptable proposal is received, the Government
reserves the right to award to that offeror.
Page 1 of 2 Washington State Ferries
Change 001
Date: 14-Jun-95 CHANGE ORDER ESTIMATE
Order
Number
Group 12
X ORDERED BY PROJECT ENGINEER CONTRACT NO: 00-4464
UNDER TERMS OF THE CONTRACT
PROPOSED BY THE CONTRACTOR TO: TODD PACIFIC
SHIPYARD
ENDORSED BY: TODD PACIFIC 1801 16th Avenue S.W.
SHIPYARDS, CORP. Seattle, WA 98134
/s/T.S. Moynihan Program Manager
DATE
TITLE: Assistant Secretary
CONSENT GIVEN BY SURETY: (WHEN REQUIRED)
BY:
ATTORNEY-IN-FACT DATE PROJECT TITLE:
JUMBO MARK II CONSTRUCTION
YOU ARE DIRECTED TO PERFORM THE FOLLOWING DESCRIBED WORK UPON
RECEIPT OF AN APPROVED COPY OF THIS ORDER:
CR#: A OPTION FOR CONSTRUCTION OF
VESSELS 2 AND 3.
In accordance with Contract Article 6. Option, and TODD
Shipyard's letter of 7 June 1995, Ser M7091/044/C/0032, WSF
hereby exercises its Option for the construction of the second
and third vessels at the bid prices shown on the Bid Form with a
reduction for early exercise of the option, per TODD's 7 June
1995 letter.
Item 2.1, Vessel 2 Definite Quantity Work $55,101,748.00
Item 3.2, Vessel 2 Miscellaneous Work $ 2,297,500.00
Reduction for Early Option Placement <$ 62,500.00>
Sub Total for Second Vessel $57,336,748.00
Item 2.2, Vessel 3 Definite Quantity Work $53,839,369.00
Item 3.3, Vessel 3 Miscellaneous Work $ 2,297,500.00
Reduction for Early Option Placement <$ 62,500.00>
Sub Total for Third Vessel $56,074,369.00
Total This Order $113,411,117.00
This Change Order is contingent on your utilization of the firms
listed on the MWBE Utilization Certificate submitted under
separate cover.
TODD shall have no claim for damages, additional compensation, or
any other relief as a result of early exercise of the Option for
construction of the second and third vessels.
The Estimated Net Change includes the total compensation due the
Contractor for all costs associated with this Change Order
including compensation for the cost of all changed work and any
effect on the unchanged work, both direct and indirect; the total
effect of any and all delays, disruptions, and/or acceleration,
local and cumulative; any and all other impacts whether direct or
indirect. There will be no change in the Contract Performance
Period due to this Change Order.
S.C.E. ORIGINAL CONTRACT CURRENT CONTRACT ESTIMATED NET
CHANGE ESTIMATED CONTRACT
AMOUNT AMOUNT
THIS ORDER TOTAL AFTER CHANGE
C.N.A. $68,032,036.00 $68,032,036.00
113,411,117.00 $181,443,153.00
VESSEL CONSTRUCTION USE ENGINEERING USE
X APPROVAL RECOMMENDED APPROVED: X APPROVAL RECOMMENDED X
APPROVED:
Gary L. Cousins Project Manager Date
L. Zuidweg Manager, Vessel Engineering Date
X APPROVAL RECOMMENDED APPROVED:
D. Dubois Vessel Construction Manager Date
Sheet 2 of 2
Washington State Ferries Contract Number: 00-4464
Change
Date: 14-Jun-95 CHANGE ORDER ESTIMATE
Order Number: 001
Group No: 12
ITEM GROUP STD. DESCRIPTION UNIT
UNIT PRICE ESTIMATED ESTIMATED
NO. NO. ITEM MEASURE QUANTITY AMOUNT NO. CHANGE CHANGE
1 12
OPTION FOR CONSTRUCTION L.S. $113,411,117.00
OF VESSELS 2 AND 3.
Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF STOCK OPTION
Date of Grant: July 17, 1995
This Grant, dated as of the date of grant first stated above
(the "Date of Grant") is delivered by Todd Shipyards Corporation,
a Delaware corporation ("Todd") to Patrick W.E. Hodgson (the
"Grantee") who is an employee or officer of Todd or one of its
subsidiaries (the Grantee's employer is sometimes referred to
herein as the "Employer").
WHEREAS, the Board of Directors of Todd (the "Board") on
June 2, 1993, adopted, with subsequent shareholder approval, the
Todd Incentive Stock Compensation Plan (the "Plan"); and
WHEREAS, the Plan provides, inter alia, for the granting of
stock options by a committee to be appointed by the Board (the
"Committee") to directors, officers and key employees of Todd or
any subsidiary of Todd (excluding directors and officers who are
not employees) to purchase, or to exercise certain rights with
respect to, shares of the Class A Common Stock of Todd, par value
$.01 per share (the "Stock"), in accordance with the terms and
provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person
who is eligible for a grant of stock options under the Plan, and
has determined that it would be in the best interest of Todd to
grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to ______ shares of Stock at a price of $_____ per
share, the fair market value. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the "Option Shares". The Option is intended by the parties
hereto to be, and shall be treated as, a non-incentive stock
option (as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein,
the Options shall become exercisable as of the Date of Grant.
3. Termination of Option.
(a) The Option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised,
shall terminate and become null and void after the expiration of
five (5) years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing for any
reason to be employed by the Employer (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of retirement, disability or
death.
Upon a termination of the Grantee's employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantee's
employment in the case of disability (within the meaning of
Section 22(e)(3) of the Code), (ii) the six-month period
following the date of issuance of letters testamentary or letters
of administration to the executor or administrator of a deceased
Grantee, in the case of Grantee's death during his employment by
the Employer, but not later than one year after the Grantee's
death, and (iii) the three-month period following the date of
such termination in the case of retirement on or after the
attainment of age 65, or in the case of disability other than as
described in (i) above. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the Option
may be exercised by the Grantee's legal representative(s), but
only to the extent that the Option would otherwise have been
exercisable by the Grantee.
(d) A transfer of the Grantee's employment between Todd and
any subsidiary of Todd, or between any subsidiaries of Todd,
shall not be deemed as a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth herein
or in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantee's discharge for cause
(excluding general dissatisfaction with the performance of the
Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantee's notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may
be terminated by Todd.
(d) The date specified in the Grantee's notice as the date
of exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantee's
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
(e) Anything to the contrary herein nothwithstanding, Todd
may condition the exercise of the option or any portion thereof
(and/or restrict the delivery of certificates representing the
shares acquired upon exercise) upon the receipt in cash by Todd
from the Grantee of such amounts as may be required to be
withheld by Todd for federal, state or local income taxes in
respect of the employee and arising from the exercise.
Alternatively, by agreement between Todd and the Grantee, Todd
shall withhold from the number of shares to be delivered upon
exercise such number of shares as has a fair market value equal
to the taxes required to be withheld.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change
of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering or any other change in the
corporate structure or shares of capital stock of Todd, the
Committee shall make such adjustment as it deems appropriate in
the number and kind of shares of Stock subject to the Option or
in the option price; provided, however, that no such adjustment
shall give the Grantee any additional benefits under the Option.
6. Fair Market Value.
As used herein, the "fair market value" of a share of Stock
shall be the average of the high and low sale prices per share of
Stock on the New York Stock Exchange, as determined by the
Committee, on the applicable date or reference hereunder, or if
there is no sale on such date, then the average of such high and
low sale prices on the last previous day on which a sale is
reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall
be, or shall have any of the rights and privileges of, a
stockholder of Todd with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at
any time (i) if the Board or the Committee determines, in its
sole discretion, that amendment is necessary or advisable in the
light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal
or state securities law or other law or regulation, which change
occurs after the date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in
clause (i), with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Governing Law.
The validity, construction, interpretation and effect of
this instrument shall exclusively be governed by and determined
in accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized
officer to execute and attest this Grant of Incentive Stock
Option, and to apply the corporate seal hereto, and the Grantee
has placed his or her signature hereon, effective as of the Date
of Grant.
Todd Shipyards Corporation ACCEPTED AND AGREED TO:
____________________________ _____________________________
By: Michael G. Marsh
Patrick W.E. Hodgson, Grantee
Secretary and General Counsel
Todd Shipyards Corporation Incentive Stock Compensation Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: July 17, 1995
This Grant, dated as of the date of grant first stated above
(the "Date of Grant") is delivered by Todd Shipyards Corporation,
a Delaware corporation ("Todd") to _______________ (the
"Grantee") who is an employee or officer of Todd or one of its
subsidiaries (the Grantee's employer is sometimes referred to
herein as the "Employer").
WHEREAS, the Board of Directors of Todd (the "Board") on
June 2, 1993, adopted, with subsequent shareholder approval, the
Todd Incentive Stock Compensation Plan (the "Plan"); and
WHEREAS, the Plan provides, inter alia, for the granting of
incentive stock options by a committee to be appointed by the
Board (the "Committee") to directors, officers and key employees
of Todd or any subsidiary of Todd (excluding directors and
officers who are not employees) to purchase, or to exercise
certain rights with respect to, shares of the Class A Common
Stock of Todd, par value $.01 per share (the "Stock"), in
accordance with the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person
who is eligible for a grant of incentive stock options under the
Plan, and has determined that it would be in the best interest of
Todd to grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth,
Todd, with the approval and at the direction of the Committee,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to _______ shares of Stock at a price of $_____
per share, the fair market value. Such option is hereinafter
referred to as the "Option" and the shares of stock purchasable
upon exercise of the Option are hereinafter sometimes referred to
as the "Option Shares". The Option is intended by the parties
hereto to be, and shall be treated as an incentive stock option
(as such term is defined under section 422 of the Internal
Revenue Code of 1986).
2. Exercise.
Subject to such further limitations as are provided herein,
the Options shall become exercisable as follows:
_______________________________________________
3. Termination of Option.
(a) The Option and all rights hereunder with respect
thereto, to the extent such rights shall not have been exercised,
shall terminate and become null and void after the expiration of
five (5) years from the Date of Grant (the "Option Term").
(b) Upon the occurrence of the Grantee's ceasing for any
reason to be employed by the Employer (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void immediately upon such termination of the Grantee's
employment, except in a case where the termination of the
Grantee's employment is by reason of retirement, disability or
death.
Upon a termination of the Grantee's employment by reason of
retirement, disability or death, the Option may be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantee's
employment in the case of disability (within the meaning of
Section 22(e)(3) of the Code), (ii) the six-month period
following the date of issuance of letters testamentary or letters
of administration to the executor or administrator of a deceased
Grantee, in the case of Grantee's death during his employment by
the Employer, but not later than one year after the Grantee's
death, and (iii) the three-month period following the date of
such termination in the case of retirement on or after the
attainment of age 65, or in the case of disability other than as
described in (i) above. In no event, however, shall any such
period extend beyond the Option Term.
(c) In the event of the death of the Grantee, the Option
may be exercised by the Grantee's legal representative(s), but
only to the extent that the Option would otherwise have been
exercisable by the Grantee.
(d) A transfer of the Grantee's employment between Todd and
any subsidiary of Todd, or between any subsidiaries of Todd,
shall not be deemed as a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth herein
or in the Plan, if the Grantee shall (i) commit any act of
malfeasance or wrongdoing affecting Todd or any subsidiary of
Todd, (ii) breach any covenant not to compete or employment
contract with Todd or any subsidiary of Todd, or (iii) engage in
conduct that would warrant the Grantee's discharge for cause
(excluding general dissatisfaction with the performance of the
Grantee's duties, but including any act of disloyalty or any
conduct clearly tending to bring discredit upon Todd or any
subsidiary of Todd), any unexercised portion of the Option shall
immediately terminate and be void.
4. Exercise of Options.
(a) The Grantee may exercise the Option with respect to all
or any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of Todd written notice of
intent to exercise. The notice of exercise shall specify the
number of Option shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five days after the giving of such notice unless an earlier time
shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the
option price for the Option Shares purchased shall be made on or
before the exercise date specified in the notice of exercise in
cash, or, with the prior written consent of the Committee, in
whole or in part through the surrender of previously acquired
shares of Stock at their fair market value on the exercise date,
provided, however, that the shares to be so surrendered have been
held and fully paid for by Grantee for (i) not less than six
months or (ii), if such shares were acquired pursuant to the
exercise of an incentive stock option as defined in the Code, not
less than one year.
On the exercise date specified in the Grantee's notice or as
soon thereafter as is practicable, Todd shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as Todd may elect) upon full payment
for such Option shares. The obligation of Todd to deliver Stock
shall, however, be subject to the condition that if at any time
the Committee shall determine in its discretion that the listing,
registration or qualification of the Option or the Option Shares
upon any securities exchange or under any state or federal law,
or the consent or approval of any governmental regulatory body,
is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Stock thereunder,
the Option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not
acceptable to the Committee.
(c) If the Grantee fails to pay for any of the Option
Shares specified in such notice or fails to accept delivery
thereof, the Grantee's right to purchase such Option Shares may
be terminated by Todd.
(d) The date specified in the Grantee's notice as the date
of exercise shall be deemed the date of exercise of the Option,
provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date. Notwithstanding the foregoing, for purposes of Section
3(b) above, the exercise date shall be the date of Grantee's
notice to Todd so long as payment for the shares to be acquired
upon exercise is made in full within five business days
thereafter.
5. Adjustment of and Changes in Stock of Todd.
In the event of a reorganization, recapitalization, change
of shares, stock split, spin-off, stock dividend,
reclassification, subdivision or combination of shares, merger,
consolidation, rights offering or any other change in the
corporate structure or shares of capital stock of Todd, the
Committee shall make such adjustment as it deems appropriate in
the number and kind of shares of Stock subject to the Option
and/or in the option price; provided, however, that no such
adjustment shall give the Grantee any additional benefits under
the Option.
6. Fair Market Value.
As used herein, the "fair market value" of a share of Stock
shall be the average of the high and low sale prices per share of
Stock on the New York Stock Exchange, as determined by the
Committee, on the applicable date or reference hereunder, or if
there is no sale on such date, then the average of such high and
low sale prices on the last previous day on which a sale is
reported.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall
be, or shall have any of the rights and privileges of, a
stockholder of Todd with respect to any shares of Stock
purchasable or issuable upon the exercise of the Option, in whole
or in part, prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder
shall be exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except in the case of the death of the Grantee, by
will or the laws of descent and distribution, nor shall the
Option be subject to attachment, execution or other similar
process. In no event of (a) any attempt by the Grantee to
alienate, assign, pledge, hypothecate or otherwise dispose of the
Option, except as provided for herein, or (b) the levy of any
attachment, execution or similar process upon the rights or
interest hereby conferred, Todd may terminate the Option by
notice to the Grantee and it shall thereupon become null and
void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall be
construed as granting to the Grantee any right with respect to
continuance of employment with the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantee's employment with it at any time (whether by
dismissal, discharge, retirement or otherwise) is specifically
reserved by Todd, as the Employer or on behalf of the Employer
(whichever the case may be), and acknowledged by Grantee.
10. Amendment of Option.
The Option may be amended by the Board or the Committee at
any time (i) if the Board or the Committee determines, in its
sole discretion, that amendment is necessary or advisable in the
light of any addition to or change in the Internal Revenue Code
of 1986 or in the regulations issued thereunder, or any federal
or state securities law or other law or regulation, which change
occurs after the date of Grant and by its terms applies to the
Option; or (ii) other than in the circumstances described in
clause (i), with the consent of the Grantee.
11. Notice.
Any notice to Todd provided for in this instrument shall be
addressed to it in care of its Secretary at its offices at 1801-
16th Avenue SW, Seattle, WA 98134, and any notice to the Grantee
shall be addressed to the Grantee at the current address shown on
the payroll records of the Employer. Any notice shall be deemed
to be duly given if and when properly addressed and posted by
registered or certified mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Committee shall interpret and construe the Plan
and this instrument, and its interpretations and determinations
shall be conclusive and binding on the parties hereto and any
other person claiming an interest hereunder, with respect to any
issue arising hereunder or thereunder.
13. Notice of Disposition.
The Grantee agrees to give Todd immediate notice of any
sale, transfer, assignment or disposition of the shares acquired
upon exercise if such event occurs within one year from the date
of exercise.
14. Governing Law.
The validity, construction, interpretation and effect of
this instrument shall exclusively be governed by and determined
in accordance with the laws of the State of Washington, except to
the extent preempted by federal law, which shall to the extent
govern.
IN WITNESS WHEREOF, Todd has caused its duly authorized
officer to execute and attest this Grant of Incentive Stock
Option, and to apply the corporate seal hereto, and the Grantee
has placed his or her signature hereon, effective as of the Date
of Grant.
TODD SHIPYARDS CORPORATION ACCEPTED AND AGREED TO:
____________________________ _____________________________
Exhibit 22-1
Subsidiaries of Todd Shipyards Corporation
==========================================
Todd Pacific Shipyards Corporation
Montana Valley Land Company
TSI Management, Inc.
Elettra Broadcasting, Inc.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000098537
<NAME> TODD SHIPYARDS CORP.
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 10098
<SECURITIES> 33036
<RECEIVABLES> 9541
<ALLOWANCES> 511
<INVENTORY> 16542
<CURRENT-ASSETS> 68706
<PP&E> 65607
<DEPRECIATION> 39108
<TOTAL-ASSETS> 117380
<CURRENT-LIABILITIES> 19826
<BONDS> 0
0
0
<COMMON> 120
<OTHER-SE> 76877
<TOTAL-LIABILITY-AND-EQUITY> 117380
<SALES> 101687
<TOTAL-REVENUES> 101687
<CGS> 71674
<TOTAL-COSTS> 100670
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4132
<INCOME-TAX> 0
<INCOME-CONTINUING> 4132
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4132
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
</TABLE>
