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(d) Evidence that the reactor manufacturer has designed and participated in the construction and operation of at least one central station nuclear power plant, and that there is a strong management commitment (evidenced by corporate expenditures and actions) to become an established supplier of LMFBR plants.

(e) Evidence that the reactor manufacturer is associated with a utility or group of utilities for participation under the Project Definition Phase contract with a view towards a firm commitment for a definitive cooperative arrangement.

(f) Evidence the capability of the proposing team to arrive at a sufficiently well identified and realistically assessed basis for a definitive cooperative arrangement within a reasonable period of time.

(g) Supply the information required by the Invitation for Proposals, as it may be amended.

6. POSSIBLE ERDA PARTICIPATION

The ERDA desires to secure accomplishment of the demonstration plant program at minimum cost consistent with its other program objectives. Meaningful industrial and utility participation is desired. The ERDA will consider participating, as part of a definitive cooperative arrangement, in one or more of the following areas:

(a) Research and development, including testing, development and applications of codes and standards, quality control programs, components and instrumentation, testing and operational expenses required for commercial operation, and the conduct of such activities in ERDA's facilities when appropriate;

(b) Engineering, procurement, installation and prooftesting of components, equipment (including maintenance equipment) and special instrumentation, and construction of buildings and related facilities;

(c) Design and related work (Titles I, II and III and other engineering serv. ices including but not limited to vendor engineering, expediting, quality assurance, and system check-out and testing) ;

(d) Fuel fabrication ; (e) Training;

(f) Start-up and related work, including R&D necessary to place the plant in condition ready for full scale operation, operation and maintenance, and periodic tests and inspection during the period of the definitive arrangement; and

(g) Furnishing special nuclear materials or an entire core(s), for stated periods, under an arrangement whereby ERDA assumes part or all of the costs; and

(h) Integration of ERDA, Contractor, and utility personnel into a single Project staff, as deemed appropriate in the best interests of the Project, with supervision on a disciplinary basis without regard to the organizational affiliation of particular individuals or supervisors.

7. ERDA ACTION ON PROPOSALS

The ERDA reserves the right without qualification, to select any proposal(s) as the basis for negotiation, to reject all proposals, and to exercise its discretion and apply its judgment with respect to any aspect of any proposal.

(Enclosure 4]

REVISED PROGRAM JUSTIFICATION DATA ARRANGEMENT No. 77-106 (FEB., 1975)

A. NAMES OF PARTICIPATING PARTIES

1. PRIME CONTRACTING PARTIES
Energy Research and Development Administration (ERDA),
Tennessee Valley Authority (TVA),
Commonwealth Edison Company (CE),
Project Management Corporation (PMC), and
Breeder Reactor Corporation (BRC).

2. PRIME CONTRACTUAL RELATIONSHIP

(a) (1) BRC and PMC will enter into a contract under which BRC will agree (i) to use its best efforts, working in cooperation with Edison Electric Institute, the American Public Power Association, and the Nationai Rural Electric Cooperative Association, to collect contributions to the project from various electric utilties and remit the collected funds (less BRC's costs) to PMC; (ii) that BRC will be reasonably available. through its directors, officers, and committees, for senior counsel in the interest of the success of the project; (iii) that BRC will keep ERDA generally in on m d or BRC's activities and give ERDA the opportunity to attend its Directors' meetings as an observer. PMC will agree to keep BRC informed regarding project activities and to make regular reports to BRC concerning the project.

(2) PMC, ERDA, CE and TVA will enter into a contract which generally will provide as follows:

PMC will be authorized to manage the project, subject to assignment of management responsibility to ERDA as deemed appropriate by it (ERDA) commensurate with the degree of ERDA's financial participation and risk, and PMC's role will thereupon change from project manager to utility liaison and general project overview. Project agreements and PMC articles of incorporation and bylaws will be revised as necessary to recognize any such agreement. PSC, with its present representational makeup, will be reconstituted as a management review mechanism and will be responsible for keeping the PMC Board fully and currently informed. The PMC Board will no longer establish general policies for the project. The Board and ERDA will constitute and support the Project Steering Committee (PSC) (composed of one PMC Director acceptable to TVA, one PMC Director acceptable to (E, and one member designated by and representing ERDA) so that PSC can effectively implement its responsibilities. Disagreement by PSC or the PMC Board with major project decisions may be appealed to the heads of ERDA, CE and TVA for final resolution pursuant to procedures set forth in the Contract.

Among other things PMC will maintain general project oversight and liaison with the utility industry, enter into project contract commitments as appropriate, with one or more Project Definition Phase reactor manufacturers, and with architect-engineers, constructors and others and assist in the application for the permits and licenses necessary for the project.

CE will undertake upon request to make available for the project individuals qualified to serve in managerial, administrative and technical capacities; to provide purchase and expediting services to the project, and possibly additional assistance. CE will also make its senior management reasonably available for assistance in program guidance. CE's costs for the project (except the time of its senior management) will be reimbursed, subject to the credit referred to in 4.g. below.

TVA will undertake upon request to make available for the project individuals qualified to serve in managerial, administrative and technical capacities to provide services and procedures necessary to keep the project books of account and financial records, and to provide certain other services to the project, and possibly additional assistance. TVA will also provide the site for the demonstration plant and certain transmission facilities; apply or assist in applications for the permits or licenses necessary for the project; conduct or assist in conducting the operational testing, conduct the demonstration-oneration of the demonsration plant and maintain the plant; reimburse ERDA for the energy produced by the plant; and make its senior management reasonably available for assistance in program guidance. TVA's costs for the project (except the time of its senior management) will be reimbursed, subject to the monetary credit referred to in 4.g. below and subject to the reimbursement TVA will make for the value of the energy produced by the demonstration plant, which value will be computed on a specified basis.

ERDA will agree :

(i) to participate in the project as contemplated by Sec. 106 of Public Law 91-273, as amended ;

(ii) to endeavor to obtain additional authorization (not necessarily limited to presently authorized nartirination) and funds if it reasonably anpears that the resources then available for the project are or will soon be insufficient to enable the continued effective conduct of the project. Any such additional authorization and funds over and above that authorized by Section 106 of Public Law 91–273, as amended (as herein referred to) will be controlled and expended by ERDA either through the PMC contract or through direct contracts with others as deemed appropriate by ERDA;

(iii) to provide technical supervision of the reactor manufacturer(s) and architect-engineer(s) regarding the nuclear steam supply system of the plant ; and

(iv) to own the demonstration plant subject to possible purchase by TVA as hereinafter provided in 4. (h).

3, PRINCIPAL SUBCONTRACTUAL RELATIONSHIP

The commitments with one or more of the Project Definition Phase reactor manufacturer contractors for the design, engineering and furnishing of the nuclear steam supply system and related services for the demonstration plant, and major commitments for architect-engineering, construction and other services and equipment (including the turbine-generator) for the project, will constitute the principal project subcontracts.

4. OTHER GENERAL FEATURES OF THE PRIME CONTRACTURAL RELATIONSHIP (a) Construction of the demonstration plant will not begin unless :

(i) ERDA first agrees that during or at the end of the term of the cooperative arrangement, or in the event of an earlier termination, it will at its own expense be prepared to take custody of and uitle to the demonstration plant and site for decommissioning or disposal or other use mentioned below;

(ii) ERDA provides indemnification to PMC, CE and TVA, referred to below;

(iii) ERDA, PMC, CE and TVA agree (or in the event of disagreement it is determined as provided for in definitive contracts) that the available and expected resources are sufficient to enable the successful completion of the project ;

(iv) ERDA, TVA, CE, PMC and BRC shall have agreed in writing that the LMFBR can be built and operated consistent with the provisions and policies of applicable law in respect to the protection of the environment; and

(v) PMC has supplied TVA with a PMC Board resolution specifying the portions of the site required for the project.

(b) ERDA will have the flexibility, when cash flow considerations so require to utilize the funds provided by PMC and o: her participants without regard to the proportion of such use in relation to the other financial contributions to the project.

(c) The term of the cooperative arrangement will end after a 5-year demonstration-operation period commencing on the day next following the successful conclusion of a program of operational testing.

(d) The additional legislative authorization which ERDA will endeavor to obtain prior to the start of construction of the demonstration plant will include authorization for ERDA to agree, subject to availability of appropriations, to indemnify and hold harmless PMC against claims, expenses and liabilities arising out of project activities, including liabilities, claims or expenses incurred by PMC under indemnities similarly extended to CE and TVA; and ERDA will also so indemnify CE and TVA.

(e) The effective date of the PMC, ERDA, CE, TVA contract will permit PMC's costs and certain early costs of TVA and CE to be recognized as allowable costs.

(f) ERDA's policy with respect to inventions, discoveries, patents, and data and information will apply.

(g) The respective obligations of the utility contributors will be limited to the amounts provided for in their utility contribution agreements, provided, that upon termination prior to completion of the project, their liability at any given time shall be limited to the total amount of contributed cash on hand plus accrued interest if any (plus pledges due but unpaid), less PMC close-out (settlement) costs. The respective contributions of TVA and CE, aside from their commitments under their utility contribution agreements, will be limited to a monetary credit against reimbursable costs for services, over a 10-year period, of $2 million less its expenses in preparing for the project.

(h) Approximately six months prior to the end of the term of the arrangement referred to in c. above, or at such earlier time as the parties may agree to, TVA will determine whether or not it will offer to take ownership of the demonstration plant. If the determination is in the affirmative TV'A will be prepared to pay for the facility on the basis of certain agreed criteria, and the payment will be applied to project costs unless the parties otherwise agree. If (after consulting with PMC and BRC) ERDA disagrees with TV'A's conclusion respecting the monetary value of the facility, it will notify TVA accordingly, and the parties will confer on the situation. In the event the disagreement is not resolved, or in the event TVA does not decide to take ownership of the facility, ERDA will retain title to and custody of the demonstration plant. If and when TVA takes title to the facility, TVA shall have the obligation of dismantling or decommissioning or removal of the facility, provided, however, that until such event occurs, ERDA shall have the right to use and dispose of said property as it deems advisable from the standpoint of its programs, and further, shall have the right to require TVA to complete or to operate the plant at ERDA's expense and upon ternis and conditions provided for in the definitive contracts or otherwise to arrange for such completion or operation at ERDA's expense and upon terms and conditions satisfactory to TVA.

NOTE: Dr. Seamans' letter of January 16, 1976 to Chairman Pastore (see p. 100) forwarded the following revised version of the foregoing paragraph (h):

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(h) Approximately six months prior to the end of the term of the

arrangement referred to in c. above, or at such earlier time as the

parties may agree to, TVA will determine whether or not it will

offer to take ownership of the demonstration plant.

If the

determination is in the affirmative TVA will be prepared to pay for

the facility on the basis of certain agreed criteria, and the

payment will be applied to project costs unless the parties otherwise

agree.

If (after consulting with PMC and BRC) ERDA disagrees

with TVA's conclusion respecting the monetary value of the facility,

1t will notify TVA accordingly, and the parties will confer on the

situation.

In the event the disagreement is not resolved, or in the

event TVA does not decide to take ownership of the facility, ERDA will

retain title to and custody of the demonstration plant.

If and when

TVA takes title to the facility, TVA shall have the obligation of

dismantling or decommissioning or removal of the facility, provided,

however, that until such event occurs, ERDA shall have the right to use

and dispose of said property as it deems advisable from the standpoint

of its programs, and further, shall have the right to require TVA to

operate the plant at ERDA's expense and upon terms and conditions provided for in the definitive contracts or otherwise to arrange for operation at

ERDA's expense and upon terms and conditions satisfactory to TVA.

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