(a) Initiation of Litigation and Claims. The University may, with the prior written authorization of the Contracting Officer, and may, upon the request of the Government, initiate litigation against third parties, including proceedings before administrative agencies, in connection with this contract. If the University declines a government request to initiate litigation, it shall assign its rights and interests in the matter to permit the government to undertake the action. The cost and expense of litigation and claims incurred pursuant to this paragraph (a) shall be allowable costs under this contract. The University shall proceed with the litigation it undertakes, in good faith and as directed from to time by the Contracting Officer; provided, however, the University has the right to decline the directions of the Contracting Officer and may proceed with the litigation under its sole discretion and for its sole benefit, if the University assumes full responsibility for its litigation costs, including judgments.
(b) Defense and Settlement of Litigation and Claims.
(2) Upon the Government's written acceptance and assurance of full responsibility for all University litigation or claim costs and expenses, including judgments, for such an action or claim, the University shall (i) effect, at the Contracting Officer's request, an assignment and subrogation in favor of the Government of all of the University's rights and claims (except those against the Government) arising out of such action or claim against the University and (ii) if requested by the Contracting Officer, shall authorize representatives of the Government to settle or defend such action or claim and to represent the University in, or take charge of such action; provided, however, the University has the right to decline any such Contracting Officer request under (i) or (ii) above and may proceed with the litigation under its sole direction in any action in which The Regents determine that a substantial institutional interest of the University is involved or in which equitable relief against the University is sought if the University assumes full responsibility for the litigation costs, including judgments.
(3) If the settlement or defense of any action or claim against the University is undertaken by the Government, the University (i) may, at its option, participate therein as an allowable cost without affecting its rights under this clause and (ii) shall furnish all reasonable assistance in effecting a settlement or asserting a defense. Where an action or claim against the University is not covered by a policy of insurance, the University shall, with the approval of the Contracting Officer, proceed with the defense of the action in good faith and in such event the defense of the action or claim shall be at the expense of the Government; provided, however, that the Government shall not be liable for such expense to the extent that it would have been compensated for by insurance which was required by law or by the written direction of the Contracting Officer, but which the University failed to secure or maintain through its own fault or negligence.
(c) Litigation and claims commenced by the United States against the University, or commenced by a State for violation of federal or state statute or regulation. The University shall give the Contracting Officer immediate notice in writing of any action, including any proceeding before an administrative agency, commenced against the University by the United States, or commenced by a State for violation of or failure to comply with a federal or state statute or regulation, arising from, or relating to, the University's performance of this contract. Except as precluded by (1) Article VII, Clause 1 (e)(16) and (33), (2) the Major Fraud Act (41 U.S.C. [[section]] 256) when a State or the United States is a party, and (3) the Equal Access to Justice Act (28 U.S.C. [[section]] 2412 and 5 U.S.C. [[section]] 504) when the United States is a party, the costs and expenses of litigation and claims, including judgments, incurred pursuant to this paragraph (c) shall be allowable costs under this contract. The University shall proceed with its defense against such action or claim and shall provide copies of all pleadings to the Contracting Officer. The University may, with the Contracting Officer's approval, settle any such action or claim.
(d) Defense and Indemnification of Employees.
(2) The University shall immediately furnish the Contracting Officer written notice of any such claim or civil action filed against any employee of the University arising out of the work under this contract together with copies of all pleadings filed. The University shall also furnish a written determination by an appropriate official to the University that (i) the defense or indemnity of the employee is required by the provisions of the California Government Code, (ii) the employee was acting in the scope of his employment at the time of the actions which gave rise to the civil action or indemnity, and (iii) the exclusion set forth under California law for fraud, corruption, or malice on the part of the employee does not apply. A copy of any reservation of rights letter which the University may assert under California law with respect to the defense or indemnity of such employee shall also be provided to the Contracting Officer. The costs associated with the settlement of any such civil action or claims, shall not be treated as an allowable cost under this contract without the prior written approval of the Contracting Officer.
(e) Costs and Expenses of Litigation. "Costs and expenses of litigation and claims" as used herein include, but are not limited to, administrative and clerical expenses; the cost of legal services, whether performed by in-house or private counsel; the costs of the services of accountants, consultants, or others retained by the contractor to assist it; all elements of compensation, related costs, and expenses of employees, officers, and directors; and any similar costs incurred before, during, and after commencement of a judicial or administrative proceeding which bear a direct and substantial relationship to the proceedings.
(a) Authority. This clause is incorporated into this contract pursuant to the authority contained in subsection 170(d) of the Atomic Energy Act of 1954, as amended (hereinafter called the Act.)
(b) Definitions. The definitions set out in the Act shall apply to this clause.
(c) Financial protection. Except as hereafter permitted or required in writing by DOE, the University will not be required to provide or maintain, and will not provide or maintain at Government expense, any form of financial protection to cover public liability, as described in paragraph (d)(2) below. DOE, however, may at any time require in writing that the University provide and maintain financial protection of such a type and in such amount as DOE shall determine to be appropriate to cover public liability, provided that the costs of such financial protection will be reimbursed to the University by DOE.
(d)(1) Indemnification. To the extent that the University and other persons indemnified are not compensated by any financial protection, permitted or required by DOE, DOE will indemnify the University and other persons indemnified against (i) claims for public liability as described in subparagraph (d)(2) of this clause; and (ii) such legal costs of the University and other persons indemnified as are approved by DOE, provided that DOE's liability, including such legal costs, shall not exceed the amount set forth in section 170e(1)(B) of the Act in the aggregate for each nuclear incident or precautionary evacuation occurring within the United States or $100 million in the aggregate for each nuclear incident occurring outside the United States, irrespective of the number of persons indemnified in connection with this contract.
(e)(1) Waiver of Defenses. In the event of a nuclear incident, as defined in the Act, arising out of nuclear waste activities, as defined in the Act, the University, on behalf of itself and other persons indemnified, agrees to waive any issue or defense as to charitable or governmental immunity.
(ii) Arises out of or results from or occurs in the course of transportation of source material, by-product material, or special nuclear material to or from a production or utilization facility, or
(iii) Arises out of or results from the possession, operation, or use by the University or a subcontractor of a device utilizing special nuclear material or by-product material, during the course of the contract activity; or
(iv) Arises out of, results from, or occurs in the course of nuclear waste activities, the University, on behalf of itself and other persons indemnified, agrees to waive:
1. -- Negligence;
2. -- Contributory negligence;
3. -- Assumption of the risk; or
4. -- Unforseeable intervening causes, whether involving the conduct of a third person or an act of God.
(B) Any issue or defense as to charitable or governmental immunity; and
(C) Any issue or defense based on any statute of limitations, if suit is instituted within 3 years from the date on which the claimant first knew, or reasonably could have known, of his injury or change and the cause thereof. The waiver of any such issue or defense shall be effective regardless of whether such issue or defense may otherwise be deemed jurisdictional or relating to an element in the cause of action. The waiver shall be judicially enforceable in accordance with its terms by the claimant against the person indemnified.
(v) The term extraordinary nuclear occurrence means an event which DOE has determined to be an extraordinary nuclear occurrence as defined in the Act. A determination of whether or not there has been an extraordinary nuclear occurrence will be made in accordance with the procedures in 10 CFR Part 840.
(vi) For the purposes of that determination "off-site" as that term is used in 10 CFR part 840 means away from "the contract location" which phrase means any DOE facility, installation, or site at which contractual activity under this contract is being carried on, and any University-owned or controlled facility, installation, or site at which the University is engaged in the performance of contractual activity under this contract.
(3) The waivers set forth above:
(ii) Shall be judicially enforceable in accordance with its terms by the claimant against the person indemnified;
(iii) Shall not preclude a defense based upon a failure to take reasonable steps to mitigate damages;
(iv) Shall not apply to injury or damage to a claimant or to a claimant's property which is intentionally sustained by the claimant or which results from a nuclear incident intentionally and wrongfully caused by the claimant;
(v) Shall not apply to injury to a claimant who is employed at the site of and in connection with the activity where the extraordinary nuclear occurrence takes place, if benefits therefor are either payable or required to be provided under any workers' compensation or occupational disease law;
(vi) Shall not apply to any claim resulting from a nuclear incident occurring outside the United States;
(vii) Shall be effective only with respect to those obligations set forth in this agreement and in insurance policies, contracts or other proof of financial protection; and
(viii) Shall not apply to, or prejudice the prosecution or defense of, any claim or portion of claim which is not within the protection afforded under (A) the limit of liability provisions under subsection 170e of the Act of 1954, as amended, and (B) the terms of this agreement and the terms of insurance policies, contracts, or other proof of financial protection.
(f) Notification and litigation of claims. The University shall give immediate written notice to DOE of any known action or claim filed or made against the University or other person indemnified for public liability as defined in paragraph (d)(2). Except as otherwise directed by DOE, the University shall furnish promptly to DOE, copies of all pertinent papers received by the University or filed with respect to such actions or claims. DOE shall have the right to, and may collaborate with the University and any other person indemnified in the settlement or defense of any action or claim and shall have the right (1) to require the prior approval of DOE for the payment of any claim that DOE may be required to indemnify hereunder, and (2) to appear through the Attorney General on behalf of the University or other person indemnified in any action brought upon any claim that DOE may be required to indemnify hereunder, take charge of such action, and settle or defend any such action. If the settlement or defense of any such action or claim is undertaken by DOE, the University or other person indemnified shall furnish all reasonable assistance in effecting a settlement or asserting a defense.
(g) Continuity of DOE obligations. The obligations of DOE under this clause shall not be affected by any failure on the part of the University to fulfill its obligation under this contract and shall be unaffected by the death, disability, or termination of existence of the University, or by the completion, termination or expiration of this contract.
(h) Effect of other clauses. The provisions of this clause shall not be limited in any way by, and shall be interpreted without reference to, any other clause of this contract, including Article XVI, Clause 3, "Disputes," provided, however, that this clause shall be subject to the clauses entitled Covenant Against Contingent Fees, Officials Not to Benefit, and Examination of Records by Comptroller General, and any provisions later added to this contract as required by applicable Federal law, including statutes, executive orders and regulations, to be included in Nuclear Hazards Indemnity Agreements.
(i) Civil penalties. Reserved
(j) Criminal penalties. Any individual director, officer, or employee of the University or of its subcontractors and suppliers who are indemnified under the provisions of this clause are subject to criminal penalties, pursuant to 223(c) of the Act, for knowing and willful violation of the Atomic Energy Act of 1954, as amended, and applicable DOE nuclear safety-related rules, regulations or orders which violation results in, or, if undetected, would have resulted in a nuclear incident.
(k) Inclusion in subcontracts. The University shall insert this clause in any subcontract which may involve the risk of public liability, as that term is defined in the Act and further described in paragraph (d)(2) above. However, this clause shall not be included in subcontracts in which the subcontractor is subject to Nuclear Regulatory Commission (NRC) financial protection requirements under section 170b. of the Act or NRC agreements of indemnification under section 170c. or k. of the Act for the activities under the subcontract.
Should it be necessary for the Laboratory to supplement or provide a guard force, either through contract or with Laboratory employees, the University shall, subject in each instance to approval in writing by the DOE, provide legal counsel and pay all reasonable and incidental costs (including the premium for bail bond) which may be necessary to defend adequately any member of the guard force against whom a criminal action is brought, where such action is based upon an act or acts of the guard, undertaken by him in good faith, for the purpose of accomplishing and fulfilling the official duties of his employment. The costs incurred under this clause must, in any subcontract, be expressly limited to the availability of appropriated funds which may be legally applied to such costs by DOE.
(a) DOE deems the performance of the work hereunder by the University to be essential in the interest of the common defense and security of the United States. DOE and the University recognize that, in part, this work involves unusual, unpredictable and abnormal risks.
(b) In view of these circumstances, it is agreed that all work under this contract is to be performed at the expense of the Government and that the University shall not be liable for and the Government shall indemnify and hold the University harmless against any delay, failure, loss or damage, judgment or liability (including personal injuries and deaths of persons and damage to property) and any expenses in connection therewith (including costs of damages, costs and expense of litigation and claims) arising out of or connected with the work, including any loss or damage and incidental expense for any alleged liability for patent infringement or any alleged liability of any kind, and for any cause whatsoever arising out of or connected with the work. It is understood that the Government is obligated under this paragraph (b), whether or not any employee of the University is responsible therefor, unless any such delay, failure, loss, expense or damage (1) should be determined to have been caused directly by bad faith or willful misconduct on the part of some Corporate Officer or Officers of the University of California or of any person acting as Laboratory Director, (2) would ultimately be an unallowable cost under the provisions of this contract or (3) results from a contractual commitment which when incurred exceed the funds then obligated to the contract.
(c) The Government shall pay directly and discharge completely all final judgments, including assessed costs and all costs and expenses of litigation and claims, including attorney fees, entered against the University and, when requested by the University, all claims which may be settled by agreement and approved by the Contracting Officer.
(d) The obligations of DOE under this clause, Article XVII, Clause 1, "Litigation and Claims," and Article X, Clause 6, "Special Hazards," shall survive completion or termination of this agreement and shall be subject to the availability of funds appropriated from time to time by Congress. To the extent that funds are not available for payments under this clause, Article XVII, Clause 1, "Litigation and Claims," and Article X, Clause 6, "Special Hazards," DOE will use its best effort to obtain such funds.
(e) In the event that circumstances arise in the course of the work under this contract which could expose the University to financial liability arising from unusually hazardous or nuclear risks for which adequate protection is not provided under the terms of this contract, DOE agrees to consider in good faith a request from the University for indemnification against such risks under Public Law 85-804, in accordance with the procedures prescribed in Subpart 50.4 of the FAR and the no gain/no loss principle set forth in Article VI, Clause 2, of this contract.
Go to Article XVIII
Return to Contract 98 Table of Contents