APPENDIX A

Advance Understanding on Human Resources

TABLE OF CONTENTS

I.  **INTRODUCTION**

#### DEFINITIONS

II. **PAY POLICIES**

III. **ANCILLARY PAY COMPONENTS**

IV. **RETIREMENT, INSURANCE, AND OTHER BENEFITS**

V.  **LABOR RELATIONS**

VI. **LEAVES WITH PAY**

VII. **LEAVES WITHOUT PAY**

VIII. **MILITARY LEAVE**

IX. **SECURITY LEAVE**

X.  **TRAINING AND EDUCATION**

XI. **EMPLOYEE PROGRAMS**

XII. **TRAVEL AND RELOCATION**

XIII. **RECRUITING**

XIV. **CONSULTANTS**

APPENDIX A

Advance Understanding on Human Resources

I.  INTRODUCTION

This Advance Understanding sets forth those Contractor Human Resource
Management policies and related expenses, which have cost implications
under the contract, and identifies those costs deemed reasonable and
allowable for reimbursement when incurred in the performance of Contract
work. Only those items of personnel costs and related expenses that are
set forth herein, or specifically referenced in this Advance
Understanding, are allowable costs by advance understanding under this
Contract. The Contractor shall submit all written procedures and
practices that implement the various sections of this Advance
Understanding for approval by the Contracting Officer. Modifications to
these procedures and practices shall also be submitted to the
Contracting Officer for approval and shall not be binding for
reimbursement purposes until approved by the Contracting Officer.

The Contractor shall select, manage, and direct the work force. The
Contractor shall use effective management review procedures and internal
controls to assure that the allowable costs set forth herein are not
exceeded, that expenditures are reasonable in accordance with prudent
business practice, and that areas which require prior approval of the
Department of Energy (DOE) Contracting Officer or designated
representative are reviewed and approved prior to the incurrence of
costs.

Either party may request that this Advance Understanding be revised and
the parties agree to give consideration in good faith to any such
request. Revisions to this Advance Understanding shall be accomplished
by executing a Reimbursement Authorization or a contract modification
approved by the Contracting Officer or designated representative.

This Advance Understanding is adopted for the exclusive benefit and
convenience of the parties hereto, and nothing contained herein shall be
construed as conferring any right or benefit upon past, present, or
future employees of the Contractor, or upon any other third party.

The Contractor shall promptly furnish all reports and information
required or otherwise indicated in this Advance Understanding to the
Contracting Officer.

II. DEFINITIONS

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1.  [Adjustment]{.underline}. A change in salary required to establish
    either internal or external equity for a given position.

2.  [Alternate Workday]{.underline}. A workday of 9 hours that is part
    of an approved alternate work schedule.

3.  [Alternate Work Schedule]{.underline}. A work-schedule configuration
    that allows eligible employees to have every other Friday off in a
    two week work period.

4.  [Average Rate]{.underline}. The rate determined by dividing the
    weekly straight-time pay by the number of hours worked during the
    payroll week when an employee works at more than one basic rate or
    more than one shift differential rate during a payroll week.

5.  [Basic Earnings]{.underline}. The amount obtained by multiplying the
    number of hours worked by the basic rate.

6.  [Basic Rate, Job Rate, or Basic Salary]{.underline}. Rate of pay per
    hour, per week, or per month, exclusive of any premium, established
    for each job classification in accordance with the approved wage and
    salary schedules.

7.  [Basic Workday]{.underline}. An 8-hour day.

8.  [Basic Workweek]{.underline}. A 40-hour workweek.

9.  [Call-In]{.underline}. An employee is considered called in if
    he/she: (1) is contacted after leaving the parking lot and before
    the start of his/her next regular shift; (2) is requested to report
    at a time when previously scheduled to be off; and (3) is requested
    to and does report for work in less than 4 hours after the call.

10. [Change of Classification]{.underline}. The placement of an employee
    in a new classification due to reassignment without change in salary
    range.

11. [Contracting Officer]{.underline}. A person with the authority to
    enter into, administer, and/or terminate contracts and make related
    determinations and findings. The term includes certain authorized
    representatives of the Contracting Officer acting within the limits
    of their authority as delegated by the Contracting Officer.

12. [Contractor/Company]{.underline}. DynMcDermott Petroleum Operations
    Company.

13. [Corporation]{.underline}. DynMcDermott Petroleum Operations
    Company.

14. [Demotion]{.underline}. The permanent placement of an employee in a
    lower-rated job classification.

15. [Employee]{.underline}. A person hired by and working for the
    Contractor.

16. [Exempt Employees]{.underline}. Executive, Administrative and
    Professional employees who are exempt from certain provisions of the
    Fair Labor Standards Act.

17. [Floating Holiday]{.underline}. An 8-hour holiday chosen by each
    individual employee with the concurrence of his/her supervisor.

18. [Full-Time Service Employee]{.underline}. A permanent employee
    working on a regular schedule entitled to company benefits.

19. [Holiday]{.underline}. A day on which an employee may be scheduled
    off because the Contractor recognizes such day as a holiday.

20. [Immediate Family]{.underline}. Employee\'s spouse; father, mother,
    step-father, or step-mother of the employee or the employee\'s
    spouse; brother or sister of the employee or the employee\'s spouse;
    children or step-children of the employee or the employee\'s spouse;
    grandparents and grandchildren of the employee or the employee\'s
    spouse; and any other relative living in the employee\'s household.

21. [Merit Increase]{.underline}. An increase in the salary of an
    employee within the established rate range for his/her job
    classification, which is given for satisfactory, above expectations,
    or excellent performance.

22. [Non-Exempt Employees]{.underline}. Employees subject to the
    provisions of the Fair Labor Standards Act.

23. [Nonregular Work Schedule]{.underline}. A work schedule that can
    change from week to week in order to provide 24-hour coverage.

24. [Overtime Pay]{.underline}. A payment in addition to straight-time
    pay for all hours worked in excess of 40 hours within a payroll
    week.

25. [Overtime Premium]{.underline}. The difference between a nonexempt
    employee's regular rate of pay for the shift involved and the higher
    rate paid for overtime. It does not include shift premium.

26. [Payroll Day]{.underline}. The 24-hour workday extending from
    midnight to midnight. Exception: Payroll day may vary from midnight
    to the 24-hour period beginning with the regularly assigned starting
    time of an employee\'s work shift.

27. [Payroll Week]{.underline}. Seven consecutive days (168 hours)
    extending from 12:01 a.m. Monday to midnight the following Sunday.
    Exception: Payroll week may vary from 12:01 a.m. Monday to the
    beginning and ending time of an approved shift cycle.

28. [Predecessor Contractor]{.underline}. DynMcDermott Petroleum
    Operations Company (DM).

29. [Promotion]{.underline}. The permanent placement of an employee in a
    higher rated job classification due to an increase in the character
    or scope of his/her job assignment.

30. [Red Circle Rate]{.underline}. A wage or salary being paid in excess
    of the rate range for the job.

31. [Reclassification]{.underline}. A change of job level, up or down,
    through formal evaluation of an existing job.

32. [Regular Rate]{.underline}. Basic rate plus any applicable shift
    differential.

33. [Regular Work Schedule]{.underline}. A work schedule of Monday
    through Friday, 8-hour days in New Orleans, Monday through Thursday,
    10-hour days at the sites, 12-hour rotating shifts for site
    operation personnel.

34. [Regularly Scheduled Shift]{.underline}. The normal hours of working
    time in each payroll day established for each employee by the
    employee's supervisor/manager.

35. [Straight-time Pay or Straight-time Earnings]{.underline}. Amount
    obtained by multiplying the number of units of time worked by the
    straight-time rate per unit of time.

36. [Straight-time Rate]{.underline}. The rate of pay per hour, or per
    annum obtained by adding the applicable shift differential rate to
    the basic rate for the job classification assigned at the time the
    work is performed.

37. [Termination]{.underline}. Voluntary separation, discharge, layoff,
    retirement, death, verified entry into the United States Armed
    Service, and/or removal from the payroll because of disability (as
    distinguished from disability absence where the employee is not
    removed from the payroll.)

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III. PAY POLICIES

     A.  GENERAL PROVISIONS

> The objective of the compensation administration program is to provide
> a level of compensation, which, within available funds, attracts,
> motivates, and retains a competent work force, maintains a competitive
> position to the market in which the organization competes, reflects
> the work of each position to the organization, and relates salary/wage
> increases to individual performance.
>
> In establishing or modifying compensation levels, the Contractor will
> be guided by the following considerations:

1.  The Contractor is a competitor in the local labor market area for
    non-exempt personnel, and will adopt and maintain equitable
    compensation levels and benefit policies and practices commensurate
    with other comparable employers in the area within applicable
    Federal laws and regulations.

2.  The Contractor recruits its exempt personnel from regional and
    national labor markets. Accordingly, compensation and benefit levels
    will be commensurate, equitable, and competitive with comparable
    positions in the industries and employment markets in which the SPR
    operates and competes.

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B.  JOB EVALUATION PROCESS

> All positions administered under the Contractor\'s Salary
> Administration Program will be evaluated and classified into multiple
> job grades, which reflect relatively the level of difficulty of the
> position and the skill, knowledge, and responsibility needed to
> fulfill the functions of the position. All jobs shall be described,
> evaluated and fitted into a performance evaluation system acceptable
> to the Contracting Officer. Job descriptions and the basis for
> evaluations shall be made available for Contracting Officer review
> upon request.

C.  SALARY ADMINISTRATION

> The Contractor shall submit all written compensation procedures and
> practices that implement the organization\'s compensation
> administration program for approval by the Contracting Officer.
> Modifications to these compensation procedures and practices shall
> also be submitted to the Contracting Officer for approval and shall
> not be binding for reimbursement purposes until approved by the
> Contracting Officer.

1.  **Range Minimum and Maximum Rates**. A wage or salary range with a
    minimum and a maximum for each job grade has been established.
    Except as provided in subsequent sections, wage or salary payments
    will fall between the approved minimum and maximum of the rate
    ranges for each job grade. Salary ranges are based on \"prevailing\"
    rates gathered from surveys of comparable jobs in the appropriate
    market area and internal equity considerations. Salary grade ranges
    are adjusted periodically to reflect the movement of salaries for
    comparable positions at other organizations in the public and
    private sector.

2.  **Salaries Above the Salary Range**. An employee\'s rate may be
    established in excess of the maximum of the range (Red Circled) for
    the applicable job classification when his/her job classification
    has been moved from a higher rate range and placed in a lower rate
    range. In such case, the employee\'s rate of pay will be managed to
    bring the pay within the range over a reasonable time.

3.  **Hiring Rates**. Individuals are employed at wage or salary rates
    commensurate with the assigned job classification taking into
    consideration previous training, experience, and other factors such
    as market requirements, where applicable.

4.  **Performance Appraisals**. Although other factors may be
    considered, performance must be the principle basis for recommending
    an increase in pay for an employee in a particular job grade. The
    Contractor will establish and maintain an appropriate pay for
    performance system with increases based on performance level and
    salary range position.

5.  **Salary Increases.** Within the limits of fiscal resources
    available each year, the Contractor will strive to maintain employee
    compensation at reasonable levels, as required to attract and retain
    a competent work force. Pay adjustments will reflect performance
    measurements, including proficiency, effectiveness, and
    productivity. Employee performance appraisals will be made at
    periodic intervals; however, no salary increases should be implied
    or assumed to be paid to all employees on an annual basis.

6.  **General Wage Increase.** The Contractor will provide
    across-the-board general wage increases when the wage structure is
    revised in response to market conditions or regulatory compliance
    issues. Typically such increases are provided on a common date
    annually for all nonexempt craft (hourly) positions and approved by
    the Contracting Officer in the Salary Increase Fund (SIF) request.

7.  **Step Increases**. The Contractor shall administer a step-rate
    system for nonexempt craft (hourly) positions. Nonexempt craft
    employees receive a step increase or progression increase every 6
    months until they reach the maximum, provided the employee has been
    in the job for a minimum of 20 weeks.

8.  **Promotions.** The Contractor shall promote employees from one
    level to another as warranted and may grant a salary increase to
    accompany the promotion. The salary increase accompanying a
    promotion shall be based upon merit and internal alignment. Annual
    promotional funding shall be included in the Salary Increase Fund
    (SIF) request as a discrete line item. The request for promotional
    funding will be based upon actual use for the prior year and
    anticipated future use, such as classification restructuring.

9.  **Demotions.** An employee, who has been placed in a lower-rated job
    classification and his or salary exceeds the maximum of the lower
    rate range, may be retained at his or her existing wage or salary
    for up to 2 years provided that the employee's work performance has
    been satisfactory or above. However, the employee will not be
    eligible for further wage or salary increases until the applicable
    rate range maximum exceeds his or her wage or salary.

10. **Salary Approvals**. Consistent with Acquisition Letter 2000-12
    entitled Executive Compensation, the approval of the Head of the
    Contracting Activity (HCA) is required for contractor compensation
    of senior executives earning up to \$250,000. The term "senior
    executive" means (1) the contractor's Chief Executive Officer, or an
    individual acting in a similar capacity, and (2) the contractor's
    four most highly compensated employees in management positions other
    than the chief executive officer.

> Consistent with the allowable cost provisions of the prime contract,
> approval of the Contracting Officer is required for contractor
> compensation of all key personnel (see Section J, Appendix G) and
> compensation of any individual contractor employee in excess of
> \$95,000 if a total of 50 percent or more of such compensation is
> reimbursed under this contract. The personnel in this paragraph
> exclude the five senior executives identified above which must be
> approved by the HCA.
>
> The contractor shall propose and provide supporting documentation, per
> DOE Form 3220.5, on the base salary portion of total compensation 30
> days in advance of the effective date, and 45 days in advance for base
> salary actions (including allowable variable pay) of the senior
> executives. The incentive portion of total compensation to be paid to
> an employee under an approved incentive plan and to be incurred as an
> allowable cost under the contract will be provided to the Contracting
> Officer within 30 days from the date of payment.

11. **Time and Attendance.** Time and attendance records are recognized
    as the basis of non-exempt pay and leave computations in accordance
    with the Fair Labor Standards Act (FLSA). Attendance records will be
    maintained for exempt employees through time recording to
    accommodate paid leave recording.

12. **Temporary Upgrades**. Eligible nonexempt employees who temporarily
    perform work in a job of higher-rated classification then their
    normal job must be compensated at the applicable Area Wage
    Determination (AWD) rate for the higher classification. If the
    employee's current rate of pay is at or above the AWD rate for the
    higher classification, then the employee is not eligible for a
    temporary upgrade. However, in instances where an employee is placed
    in a job of higher-rated classification due to the absence of
    another employee for a full workweek or longer, the employee may be
    temporarily upgraded and compensated accordingly. These temporary
    upgrades will occur according to the Contractor's written and
    approved procedure.

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D.  SALARY INCREASE AUTHORIZATION

> Each fiscal year, the Contractor shall develop a Salary Increase Fund
> (SIF) Plan based upon such factors as national and local surveys, area
> rates, and such other criteria as may be pertinent to the
> establishment of competitive salaries for the Contracting Officer\'s
> review and approval.

1.  **Components and Process**

    a.  During the first quarter of each calendar year, the Contractor
        will develop and submit the SIF for the Department of Energy
        (DOE) review and approval for the fund year of April 1 through
        March 31.

    b.  The SIF will be stated as a percentage of the March 31 projected
        eligible base payrolls.

    c.  Adjustments to the general office salary ranges will be
        submitted for approval concurrent with the above.

    d.  Hourly target adjustments will be submitted at the same time as
        the SIF with the percent approved for the General Wage Increase
        (GWI) effective the first full pay period in October.

    e.  All changes in salary schedules will be submitted to DOE as soon
        as possible.

    f.  The fund consists of a percentage of payroll at the end of the
        prior salary year (expressed as an annualized amount) and shall
        be the maximum allowed for granting increases for employees
        based on the components of merit, adjustments and
        reclassifications, step increases, and promotions. All such
        increases are charged to the fund on an annualized basis, the
        total of which shall not exceed the approved overall fund.
        However, no component shall exceed the planned amount without
        prior notification to DOE.

    g.  Once an individual\'s salary increase is charged to the fund,
        reuse of that amount, (i.e., recovery), for any other purpose
        during the salary year is unallowable.

    h.  If an individual terminates before receiving an increase, the
        amount of money allocated for that individual may remain in the
        fund.

    i.  Each component of the fund, i.e., adjustments and
        reclassification, merit, promotion, and step increases, shall be
        broken out as subtotals.

    j.  The Contractor shall also provide a copy of the annually
        developed salary guidelines prepared for supervisory use,
        indicating the parameters for granting various increases based
        on employee performance and current salary position as part of
        the SIF plan.

    k.  The dollar amount of the fund shall be subject to review and
        adjustment by the Contracting Officer upon a significant
        reduction in Contractor employment levels, as in a reduction in
        force.

    l.  A report of the expenditures under each approved SIF for the
        preceding fund year will be provided to DOE by July1.

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IV. ANCILLARY PAY COMPONENTS

    A.  WORK SCHEDULE ASSIGNMENTS

> Employees will be assigned to one of the following work schedules:

1.  **Default Schedule.** 5 workdays of 8 hours each Monday through
    Friday.

2.  **Alternate Work Schedule (AWS).** 8 days of 9 hours each Monday
    through Thursday, 8 hours first Friday, second Friday off (applies
    to New Orleans only).

3.  **4-10 Schedule.** 4 workdays of 10 hours each Monday through
    Thursday (applies to sites only).

4.  **Operations Schedule.** 12-hour workdays with rotating shifts for
    24-hour coverage (applies to sites only).

##### **OVERTIME** 

##### Computation of Overtime 

> a\) Exempt Employees will not be eligible for overtime pay.
>
> b\) Nonexempt Employees:

1.  Overtime will be paid to non-exempt Contractor employees in
    compliance with the provisions of the Fair Labor Standards Act,
    Title 29, Part 778 of the Code of Federal Regulations. The
    Contractor will submit for the Contracting Officer's approval
    policies and procedures for the payment of overtime. These
    procedures will establish a structured, approving authority and
    accountability assignments.

2.  For time worked in a full-pay status in excess of 40 hours in a
    workweek, an employee will be paid one and one-half times the
    regular hourly rate.

3.  For time worked on a seventh consecutive day in the workweek, an
    employee will be paid two times the regular hourly rate if the
    employee was in full-pay status in each of the first six consecutive
    days and accumulated a total of 44 hours or greater during that
    period.

##### Full-pay status includes work; holidays; jury duty; witness service; and bereavement.

4.  Part-time employees will be paid one and one-half times their
    regular hourly rate for hours worked in excess of 40 hours in a
    workweek.

##### Overtime Assignment for Non-exempt Employees

a.  Every employee is expected to work overtime at management direction
    whenever work requirements or emergencies necessitate the
    employee\'s services.

b.  Overtime should be distributed equitably among employees who
    regularly perform the type of work required and, to the extent
    possible, it should be assigned to workers who volunteer. Employees
    required to work overtime will be given as much advance notice as
    possible under the circumstances.

c.  Overtime assignments normally will be limited to employees who have
    worked, or were available to work all assigned shifts in that
    workweek. Exceptions may be made only in those instances when:

    1.  The employee\'s absence is properly excused (such as for
        vacation, holiday, or for a compelling reason beyond the
        employee\'s control)

    2.  The workload requires that the employee be called for overtime
        work without regard to previous attendance, and then only when
        specifically approved by a supervisor at least two supervisory
        levels above the employee performing the work.

##### **SHIFT DIFFERENTIAL**

The appropriate shift premium will be paid only to hourly employees
regularly scheduled to work day and night shifts.

##### **SHIFT TIE-INS, EARLY ARRIVAL, LATE DEPARTURE**

##### Employees should not be allowed to commence work before the start of their shift or continue work after the end of their shift unless authorized to perform such work. Site operations personnel required providing shift tie-ins will be paid .5 hour. {#employees-should-not-be-allowed-to-commence-work-before-the-start-of-their-shift-or-continue-work-after-the-end-of-their-shift-unless-authorized-to-perform-such-work.-site-operations-personnel-required-providing-shift-tie-ins-will-be-paid-.5-hour. .unnumbered}

##### **TRAVEL PAY** 

##### Exempt employees are only compensated for time spent in actual work-related travel that occurs during their normal working hours. 

##### All time spent in actual work-related travel by non-exempt employees is classified as time worked and, as such, is subject to the normal overtime provisions. 

##### Pay for travel time to offsite training will normally be based on the following schedule:

3.  When the travel is on a regularly scheduled day of work, the basic
    or alternate workday hours are paid at the employee's base rate.

4.  When travel is on a regularly scheduled day of rest, the employee
    will receive pay for the actual hours.

##### The Director, Human Resources and Development must approve any overtime compensation for combined work and travel on a regularly scheduled day of work or for travel in excess of 8 hours on a day of rest.

#####  {#section .unnumbered}

##### **HOLIDAY WORKED** 

1.  Compensation for non-exempt employees required to work on a holiday
    will be as follows:

##### An eligible, full-time employee receives 8 hours pay for each holiday, and in addition, will receive pay at not less than the employee\'s regular rate for the number of hours worked on the day the holiday occurs. 

a.  Eligible, part-time scheduled employees receive holiday pay for the
    number of hours they normally would have worked if the holiday falls
    on one of their scheduled workdays, and in addition, will receive
    pay at not less than the employee's regular rate for the number of
    hours worked on the day the holiday occurs.

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2.  Exempt employees who are required by their schedule to work on a
    holiday shall schedule a day off in lieu of the holiday during the
    two-week pay period in which the holiday is observed with
    supervisor/manager approval.

##### **REPORT PAY** 

##### Full-time non-exempt employees who work their assigned shifts, are called in, and work according to the following conditions will receive a minimum of 4 hours pay at their regular hourly rate for each such work period.

a.  For one or more additional, separate work periods on the same day.

b.  On a day of rest or a holiday.

c.  Prior to shift start (beginning pre-shift and working into the
    normally scheduled shift).

##### Employees who leave work of their own volition or because of incapacity (other than industrial injury) or are discharged or suspended after beginning work will be paid only for the number of hours actually worked during that day.

##### **EXEMPT EMERGENCY PAY**

Exempt employees who are required to remain onsite in supervision of
hourly employees due to a declared site emergency, such as hurricane
evacuation, will be given a duty pay allowance of \$300 per day.
Compensation will begin on the initial day that they are required to
remain onsite and continue for each 24-hour period that they do not
leave the site, until they are released. The contractor will provide the
Contracting Officer with a semi annual report that delineates all Exempt
Emergency Pay issued during the preceding 6-month period.

##### **MINIMUM REQUIREMENTS FOR OVERTIME MEAL AND REST PERIODS** 

##### Non-exempt employees will be allowed a minimum unpaid meal period of 30 minutes and a maximum of 60 minutes commencing no less than 2 hours nor more than 5½ hours from the beginning of the shift. No employee will be required to work more than 5½ consecutive hours without a meal period.

##### Employees working 3 or more hours longer than a normal shift will be allowed a 30-minute unpaid meal period prior to or during the overtime period.

##### **EMERGENCY RESPONSE TEAM (ERT) HAZARDOUS DUTY PAY** 

##### Fully qualified ERT members will be paid a lump sum hazardous duty pay at the end of each fiscal year. The hazardous duty pay will be based upon a percentage of the average ERT member's base pay.

##### Each ERT member will be assigned a specific designation level that will determine the hazardous duty pay. The ERT designated levels and percentages are as follows:

d.  Level 1: Fully qualified ERT member, receives 0.75% of average base
    pay.

e.  Level 2: Fully qualified, higher proficiency ERT member or Confined
    Space Rescue Team member, receives 1.00% of average base pay.

f.  Level 3: Fully qualified ERT Shift Captain, receives 1.25% of
    average base pay.

g.  Level 4: ERT Chief or Assistant ERT Chief, receives 1.5% of average
    base pay.

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1.  Limits on the total number of ERT members will be in conformance
    with the total authorized by DOE.

##### **SEVERENCE PAY**

##### If approved by the Contracting Officer, the Contractor may make severance payments equal to two weeks pay per year of service (not to exceed \$25,000) when necessary to accomplish a reduction in force. In addition, the Contractor may provide 3 months of continued coverage under the health plan provided the employee continues to pay their portion of the premium. At the end of the 3 months, the employee may continue their health coverage in accordance with federal law. {#if-approved-by-the-contracting-officer-the-contractor-may-make-severance-payments-equal-to-two-weeks-pay-per-year-of-service-not-to-exceed-25000-when-necessary-to-accomplish-a-reduction-in-force.-in-addition-the-contractor-may-provide-3-months-of-continued-coverage-under-the-health-plan-provided-the-employee-continues-to-pay-their-portion-of-the-premium.-at-the-end-of-the-3-months-the-employee-may-continue-their-health-coverage-in-accordance-with-federal-law. .unnumbered}

#####  {#section-1 .unnumbered}

##### Receipt of severance pay will be predicated upon the receipt of a duly executed release, approved by DM General Counsel, from each respective employee. {#receipt-of-severance-pay-will-be-predicated-upon-the-receipt-of-a-duly-executed-release-approved-by-dm-general-counsel-from-each-respective-employee. .unnumbered}

V.  RETIREMENT, INSURANCE, AND OTHER BENEFITS

> The Contractor shall submit all written summary plan descriptions that
> implement the organization\'s retirement and insurance programs for
> approval by the Contracting Officer. Modifications to these programs
> shall also be submitted to the Contracting Officer for approval and
> shall not be binding for reimbursement purposes until approved by the
> Contracting Officer.

##### **SERVICE CREDITS**

##### \"Service Credits\" is the term used to describe, for each employee at any time, the continuous period, or the total of those periods for which, under the Contractor\'s Service Credit Rules, employment credit in one or more divisions, subsidiaries, or departments is allowable. In addition, all employees of the predecessor Contractor who became employees of the Contractor within 10 days after the transfer date are credited with their past services with the predecessor Contractor for all benefit plans of the Contractor, in computing total allowable \"Service Credits.\"

##### Contractor employees transferring directly from parent companies will retain their parent company hire-in or seniority date for purpose of vacation eligibility.

##### **RETIREMENT** 

##### The Contractor will be reimbursed for all costs paid from operating funds, involved in implementing, administering, and funding the approved Contractor Retirement and Savings Plan, exclusive of asset expense fees which shall be paid by plan participants. Plan participants will also pay all loan fees charged by the Plan Administrator. Administrative costs associated with the effective administration of the plan include such items as publicizing, enrolling, maintaining records, and providing employees with assistance in understanding and collecting their benefits. The Contractor will obtain approval from the Contracting Officer prior to making any change to the Contractor Retirement and Savings Plan. 

a.  All Contractor employees, assigned to work under this contract, are
    covered automatically by the Contractor\'s retirement and savings
    plan. The plan is a defined contribution plan offering participants
    a variety of investment vehicles compliant with Section 404(c) of
    ERISA.

b.  The plan will be administered in accordance with CIGNA Retirement
    and Investment Services, Contract Number 63168, effective January 1,
    1996.

c.  The Contractor will contribute an amount equal to 3.6 percent of
    participants base compensation each month. This amount will be
    placed into a separate retirement account and is vested immediately.

d.  Participants will be given the opportunity to contribute from 1 to
    15 percent of their base compensation to a 401(k)-income deferral
    plan each month. This amount will be payroll deducted and deposited
    into a separate elective account in the plan.

##### The Contractor will contribute an additional 50 cents to the 401(k) plan for each dollar of the first 8 percent of base compensation that the participants contribute to the 401(k) plan. This amount is deposited into a separate company matching account each month. Company matching contributions are vested at 20 percent per year of employment so that a participant who has completed 5 years of service is completely vested. However, participants are also completely vested if they:

e.  Retire or terminate on or after age 65.

f.  Go on active duty with the U.S. Armed Forces for more than 99 days.

g.  Terminate because of total disability.

h.  Are placed on layoff for more than 30 days.

i.  Death, in which case the beneficiary receives the benefits.

##### The Contractor shall use non-vested contributions for those applicants who withdraw from the plan to reduce future contributions to the plan.

##### The Contractor reserves the right to change or discontinue the retirement and savings plan, subject to such written agreements as may be made by the Contractor and subject to the Contracting Officer's approval. However, any change in this plan or the discontinuance of the plan will not in any way adversely affect the pension benefits of employees who have retired under this plan prior to the effective date of such change or discontinuance.

##### Any dividends or other credit attributable to payments made to the retirement and savings plan will be used to reduce the costs of the plan.

##### All accounting for DOE funds shall be at market value on an accrual basis.

##### **HEALTH AND WELFARE BENEFITS** 

##### The employee benefits plans, and related costs, will be approved by the Contracting Officer for application to employees working on this contract and are reimbursable. {#the-employee-benefits-plans-and-related-costs-will-be-approved-by-the-contracting-officer-for-application-to-employees-working-on-this-contract-and-are-reimbursable. .unnumbered}

##### The Contractor will continue the program in place, with no reduction in benefit value. The plan management can be changed, with the Contracting Officer's approval, if the existing plans can be matched feature-by-feature and if long-term costs are less. {#the-contractor-will-continue-the-program-in-place-with-no-reduction-in-benefit-value.-the-plan-management-can-be-changed-with-the-contracting-officers-approval-if-the-existing-plans-can-be-matched-feature-by-feature-and-if-long-term-costs-are-less. .unnumbered}

##### Typically, the plans may be continued from year to year without further DOE approval. However, any change in benefits, funding provisions, or costs shared by employees must be submitted to the Contracting Officer for approval 60 days prior to proposed implementation {#typically-the-plans-may-be-continued-from-year-to-year-without-further-doe-approval.-however-any-change-in-benefits-funding-provisions-or-costs-shared-by-employees-must-be-submitted-to-the-contracting-officer-for-approval-60-days-prior-to-proposed-implementation .unnumbered}

##### **Group Insurance**

> Allowable costs are those incurred for Contractor employees under the
> plans named below which have been approved by the Contracting Officer,
> including carriers\' charges for administration, claims, taxes, and
> risk charges. DOE will reimburse the Contractor for 100 percent of the
> company\'s group insurance program. The Contractor agrees to promptly
> provide data requested by the Contracting Officer to justify costs
> incurred. Any amendments to the plans, which impact benefit levels or
> employer costs, will require Contracting Officer approval.

##### **Life Insurance**

##### Hourly Employees

Provides benefits to an employee\'s beneficiary in the event of the
hourly employee\'s death in the amount of \$50,000.

##### Salaried Employees

Provides benefits to an employee\'s beneficiary in the event of the
salaried employee\'s death in the amount equal to two (2) times his/her
annual salary.

##### **Accidental Death and Dismemberment Plan**

##### Hourly Employees

Provides benefits in the amount of \$50,000 to hourly employee\'s
beneficiary in the event of his/her death or to the employee in the
event of the loss of limbs or eyesight caused by an accident.

##### Salaried Employees

Provides benefits in the amount equal to one (1) times his/her base
annual salary to a maximum of \$100,000 to salaried employee\'s
beneficiary in the event of his/her death or to the employee in the
event of the loss of limbs or eyesight caused by an accident.

##### **Business Travel Accident Plan**

1.  Provides benefits in the amount equal to 2¼ times his/her base
    annual salary, to an employee\'s beneficiary in the event of his/her
    death or to the employee in the event of the loss of limbs or
    eyesight caused by an accident while on a business trip.

##### **Section 125 Cafeteria Plan**

2.  The Contractor will provide employees a benefits program that meets
    the requirements under Section 125 of the Internal Revenue Code.

3.  The Contractor will offer a group medical program to all employees.
    The program will provide employees a choice of at least 2 different
    medical plans with varying cost features such as deductibles,
    co-insurances, co-pays, and stop losses. Covered expenses will be
    the same for all plans.

4.  The Contractor will offer a group prescription drug program to all
    employees. The program will provide employees a choice of at least 2
    different prescription plans with varying co-pays. Covered expenses
    will be the same for all plans. An employee must be covered by the
    DM medical plan in order to elect prescription drug coverage.

5.  The Contractor will offer a group dental program to all employees.
    The program will provide employees a choice of at least 2 different
    dental plans with varying cost features such as payment schedules.

6.  The Contractor will offer a vision plan to all employees.

7.  The Contractor will establish the maximum amount of company
    contribution available to each employee for purchasing benefits
    under the cafeteria plan prior to the annual open enrollment period
    each year. The company contribution will be calculated using
    medical, prescription drug, dental and vision coverage. The company
    contribution amount available to the employee will be based on the
    medical plan and coverage type (employee, employee plus one, or
    family) selected by the employee. All employees will be eligible for
    the company contribution amount set forth by the lowest cost plan at
    the single rate. Company contribution rates for FY2003 are: Option A
    Medical Plan -- 85%; Option B Medical Plan -- 75%; Option C Medical
    Plan -- 60%.

8.  The Contractor may offer additional supplemental insurance
    selections under the cafeteria plan to employees such as GAP
    insurance and Cancer Care policies.

9.  The employee will be responsible to contribute through pre-tax
    payroll deduction any costs that exceed the company contribution
    amount for their coverage selections.

10. Under no circumstance will the employee be refunded any unspent
    company contribution amount.

11. The Contractor will offer both a Flexible Medical Spending Account
    and Dependent Care Account under the cafeteria plan to employees.
    The contractor will provide the administration cost of the plan,
    however the employee completely funds their account(s) and any money
    remaining at the end of the plan year is forfeited to the contractor
    and will be used to offset the administration costs.

##### **Weekly Disability Plan** 

12. Provides a weekly benefit if employee is unable to work as a result
    of a non-occupational injury or illness or for illness or injury
    covered by a worker\'s compensation plan as required by statute.

13. Benefits begin on the first day of disability in the event of an
    accident or on the fourth day of disability for salaried employees
    and the eighth day of disability for hourly employees in the event
    of an illness. Benefits are paid for a maximum of 26 weeks.

14. The employee pays the entire cost of this coverage.

##### **Long-Term Disability** 

15. Provides a monthly benefit in the event of disability after 26
    weeks. The amount of replacement income is 60% of pre-disability
    base wage up to a maximum of \$5,000 per month. Income replacement
    ends at age 65 or when the person is no longer disabled whichever
    comes first.

16. The Contractor will pay 50 percent of the cost of this coverage and
    the employee will pay the other 50 percent.

17. Definition of Disability

> You are disabled if you meet one of the following definitions during
> the period it applies:

a.  Own Occupation Definition of Disability;

> During the benefit waiting period and the Own Occupation Period you
> are required to be disabled only from you own occupation. You are
> disabled from your own occupation if, as a result of sickness, injury
> or pregnancy, you are unable to perform with reasonable continuity the
> material duties of your own occupation.

b.  Any Occupation Definition of Disability;

> During the Any Occupation Period you are required to be disabled from
> all occupations. You are disabled from all occupations if, as a result
> of sickness, injury or pregnancy, you are unable to perform with
> reasonable continuity the material duties of any gainful occupation
> for which you are reasonably fitted by education, training and
> experience.

c.  Partial Disability Definition.

> During the benefit waiting period and the Own Occupation Period, you
> are Partially Disabled when you work in your own occupation but, as a
> result of sickness, injury or pregnancy, you are unable to earn more
> than the Own Occupation Income Level. During the Any Occupation
> Period, you are Partially Disabled when you work in an occupation but,
> as a result of sickness, injury or pregnancy, you are unable to earn
> more than the Any Occupation Income Level in that occupation and in
> all other occupations for which you are reasonably fitted under the
> Any Occupation Definition of Disability.

##### **Benefits on Leave of Absence**

18. Employee benefits during leaves of absence are handled as follows:

    a.  If the employee is on a medical leave of absence, insurance
        coverage stays in effect. The amounts for such coverage go into
        the suspended balance and are repaid when the employee returns
        to work (except in the case of weekly disability).

    b.  If the employee is on a personal leave of absence, the insurance
        coverage must be self paid through Consolidated Omnibus Business
        Reformation Act (COBRA).

##### **Voluntary Personal Accident Insurance** 

19. Provides benefits in the event of death or the loss of limbs,
    eyesight, speech, or hearing as a result of an accident.

20. The employee pays the entire cost of the insurance.

21. The level of coverage is chosen from a schedule. Employee may elect
    to cover his/her spouse at a level equal to 50 percent of
    employee\'s coverage and employee\'s dependent children at a level
    equal to 20 percent of his/her coverage.

##### **Voluntary Life Insurance**

22. Employees will be given the option to purchase additional life for
    themselves, spouse or children at group rates.

23. The employee pays the entire cost of the insurance.

24. The level of coverage is chosen from a schedule provided by the
    insurance carrier.

25. Availability of this benefit depends on the number of employees that
    choose to participate.

##### **UNEMPLOYMENT INSURANCE** 

##### Coverage for eligible employees shall be in accordance with the States of Louisiana and Texas Unemployment Insurance Code. 

##### Costs of Contractor payments for eligible employees plus related administrative expenses shall be paid as a direct contract expense. 

##### **FICA AND MEDICARE INSURANCE** 

##### Coverage for eligible employees shall be in accordance with the Federal Social Security and Medicare Code. 

##### Costs of Contractor payments for eligible employees plus related administrative expenses shall be paid as a direct contract expense. 

##### **WORKER'S COMPENSATION**

##### Coverage for eligible employees shall be in accordance with the States of Louisiana and Texas Workers' Compensation Code. 

##### Costs of Contractor payments for eligible employees plus related administrative expenses shall be paid as a direct contract expense. 

VI. LABOR RELATIONS

##### **COLLECTIVE BARGAINING** 

##### The Contractor shall respect the right of employees to organize, form, join or assist labor organizations, bargain collectively through representatives of the employees\' own choosing, and to engage in other concerted activities for the purpose of collective bargaining and also the right to refrain from such activities. 

##### The terms and conditions set forth in collective bargaining agreements and modifications thereto between the Contractor and recognized bargaining agents for its employees assigned to work under this contract (which involve expenditure of funds) constitute a basis for reimbursement by DOE.

##### Upon receipt of any union proposal, or to any preliminary negotiation concerning any collective bargaining unit agreement or amendment thereto, affecting the employees engaged in work under this contract, the Contractor will meet with the Contracting Officer or his designee(s) for the purpose of developing mutually agreed-upon bargaining objectives with respect to any significant change in existing labor agreements which can be reasonably expected to affect allowable costs under this appendix or to involve other items of special interest to the Government.

##### The Contractor shall keep the Contracting Officer advised of significant developments during any negotiations.

##### The Contractor shall promptly advise the Contracting Officer of labor relations developments which involve or appear likely to involve:

a.  Possible strike situations affecting the facility.

b.  Referral to the Energy Labor-Management Relations Panel.

c.  The National Labor Relations Board at any level.

d.  Recourse to procedures under the Labor Management Act of 1947 as
    amended or any other Federal or State labor law.

##### Any grievance, which may reasonably be assumed, will be arbitrated under a collective bargaining unit agreement.

##### Upon execution of any new and/or revised collective bargaining agreement(s), the Contractor will honor all terms and conditions, wage rates, and fringe benefits.

##### When new or modified collective bargaining agreement(s) are concluded by the Contractor and any union, the Contractor will provide copies of such agreement(s) to DOE.

##### The Contractor will be allowed reasonable costs not covered in other sections of this Appendix which arise from its administration or pursuant to its collective bargaining (e.g., time off granted to union representatives for conduct of union business or negotiations, or costs of negotiations). Contracting Officer approval will be obtained in the case of unusual items.

##### Payments to Employees in Event of Strike

> In the event of a strike by employees in a facility, the Contractor
> may continue to pay the basic salaries or wages of nonstriking
> employees, limited to employees actually needed and for whom there is
> work to be performed, including those delayed or prevented from
> reporting to work as a direct result of temporary road blocks or mass
> picketing. In such instances, the employee must provide proof
> satisfactory to the Contractor that they were denied access or
> believed there to be imminent danger to their person in attempting to
> gain entrance to the work location.

a)  Nonstriking employees performing struck work during a strike will be
    authorized salary adjustments to provide pay equal to the applicable
    rate for the struck job or the non-striking employee\'s present pay,
    whichever is greater.

b)  Exempt employees doing more than 20 percent non-exempt work will be
    paid time and a half for all hours worked over 40 in a week.

c)  No employee will receive pay for \"sleeping time\" or being \"on
    call,\" if employee is not required to be on company premises.
    Furthermore, employees required to remain on company premises do not
    have to be paid for off duty time during which they are free to
    sleep, watch TV, etc.

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VII. LEAVES WITH PAY

The Contractor may grant all employees leave with pay as provided in
this section of the Advance Understanding. Such leaves with pay will be
made in accordance with the Contractor\'s procedures approved by the
Contracting Officer.

##### **HOLIDAYS** 

> This section applies to all employees except as noted.

##### Each employee may be granted time off on each of the following holidays and paid therefore at the rate of 8 hours pay at the basic hourly equivalent rate:

a.  New Years Day

b.  Martin Luther King Day

c.  Memorial Day

d.  Independence Day

e.  Labor Day

f.  Thanksgiving Day

g.  Christmas Day

h.  \(3\) Floating Holidays - employee-by-employee basis with manager
    approval.

##### Annually, by November 1st, the Contractor will provide the Contracting Officer a list of specific days designated as the holidays for the coming year.

##### For any of the designated holidays, the Contractor may substitute and observe an alternate day as the holiday for any particular year provided there is not significant additional premium cost or additional pay for time not worked. Such planned substitution will be submitted to the Contracting Officer for approval of the holiday affected by April 1 of each year.

##### A full time employee who is on the active payroll on the day of the holiday will receive pay if:

i.  The employee works the last scheduled day before and after the
    holiday.

j.  The employee is absent from both the last scheduled day before and
    the first schedule day after the holiday, and the employee uses
    available vacation or sick leave credits equal to a full day, or
    otherwise receives full pay for at least one of these days; or

k.  The employee is absent from both the last scheduled day before and
    first scheduled day after the holiday, and furnishes proof
    satisfactory to the Contractor that because of illness or injury
    (including physical incapacity because of pregnancy), the employee
    was unable to work on either of such days and, [excluding
    days]{.underline} for which full pay was received or were charged to
    available sick leave credits, the absence previous to the holiday by
    reason of the illness or injury [has not exceeded 30 calendar
    days]{.underline}.

l.  An employee on the inactive payroll (leave of absence) on the day of
    the holiday is eligible for holiday pay if the employee uses
    available vacation credits covering a full day for each regular
    workday of the period between the last day worked and the holiday,
    or the employee is on a medical or pregnancy leave of absence (not
    receiving Extended Disability Leave Plan benefits) and, excluding
    full days charged to available vacation or sick leave credits, the
    period of absence previous to the holiday be reason of illness or
    injury [has not exceeded 30 calendar days]{.underline}.

m.  An employee whose termination (other than layoff) is effective at
    the end of the day preceding, or who is hired to report on the day
    following the holiday, is not eligible for holiday pay. Employees
    placed on layoff [or]{.underline} who enter military service with
    reporting requirements that preclude working on the first workday
    following a holiday, and whose last day of work is the last workday
    preceding a holiday, are paid for such holiday and any consecutive
    holidays.

n.  Employees on assignment away from their home locations observe the
    holidays designated.

o.  Employees on assignment away from their home locations on a day
    observed as a holiday at the away location, but not designated as a
    holiday for their home locations are given time off with pay if they
    are prevented from performing their work assignment because of the
    closure of the facility for holiday observance.

##### A holiday is not counted as a day of military pay differential, suspension, vacation, or sick leave, when the holiday occurs during such period of absence.

##### Employees under disciplinary suspension on the workday immediately before and/or after a holiday are eligible for holiday pay provided they qualify under the preceding provisions. The scheduled days immediately before and/or after the suspension period are used in lieu of scheduled days immediately before and/or after the holiday in determining holiday pay eligibility.

##### **VACATION**

#####  {#section-2 .unnumbered}

##### The Contractor will furnish the Contracting Officer for approval the company\'s procedure defining the Contractor\'s policy relating to the eligibility, accrual, and use of vacation credits.

##### The vacation eligibility date of an employee is the anniversary date of the employee\'s latest hire-in date, except that former employees who are rehired with reinstatement rights retain their previous vacation eligibility dates.

##### Vacation will be accrued at the maximum rate listed in the applicable U.S. Department of Labor Area Wage Determination for all key Contractor positions identified in Section J, Appendix H.

##### All full-time employees of the Contractor are awarded annual vacation credits in accordance with the schedule listed in the applicable U.S. Department of Labor Area Wage Determination for each work location. The Area Wage Determinations will be reviewed annually for compliance. If the Area Wage Determinations for the site locations differ from each other in the amount of vacation award, then the Contractor will award using the highest award schedule.

##### Previously awarded annual vacation credits which remain unused on any eligibility date will be carried to the following year up to a maximum equal to a full annual credit award based on the accrual rate applicable on the employee\'s last eligibility date.

##### Any unused credits in excess of this maximum carry over will be lost except where it is clearly established that the use of the credits was precluded by reason of urgent Company business requirements and authorized by the Director, Human Resources and Development.

##### Vacations are to be taken as time off, and there will be no pay in lieu of time off. Holiday occurring while on vacation are not deducted from the employee\'s vacation credits.

##### Upon termination, regardless of the reason, an employee will be paid for all awarded but unused credits then in the employee\'s annual vacation account, including any credits carried over from the previous year.

##### **MEDICAL LEAVE** 

> Medical leave payments will be made to employees under the
> Contractor\'s procedure approved by the Contracting Officer and shall
> include, but not be limited to, the following:

##### The Contractor will provide its employees medical leave for absences, which are when the employee\'s ability to work is adversely affected by illness or injury.

##### Accumulation of medical leave credit:

p.  Full-time employees will be awarded 80 hours of medical leave
    credits annually. Employees will accrue medical leave credits
    biweekly corresponding to their respective pay periods. Employees
    who have been employed less than a full year will accrue medical
    leave credits proportional to the number of pay periods remaining in
    the pay calendar year.

q.  Limited-term employees who are scheduled to work at least 1,000
    hours per year and part-time employees who are scheduled to work at
    least 20 hours per week will accrue medical leave credits in
    proportion to the average number of hours they work. They will
    accrue credits biweekly corresponding to their respective pay
    periods.

r.  Medical leave credit, which is unused, will be accumulated from year
    to year up to a maximum of 1,000 hours.

s.  There will be no payoff of unused medical leave credit upon
    termination.

##### Use of medical leave:

t.  An employee becomes eligible to use medical leave credit as soon as
    credits have been awarded.

u.  Use of medical leave is authorized only in the event of absence due
    to:

    1.  Illness or injury causing incapacity of the employee, including
        the period of authorized medical or pregnancy leaves of absence
        or medical/dental appointments for treatment.

    2.  Routine medical or dental examination of the employee when such
        can only be arranged during working hours.

    3.  Caring for a spouse, son, daughter, or parent who is ill or
        injured or has a medical necessity that can only be attended to
        during working hours.

##### Use of medical leave is subject to approval by the employee\'s supervisor.

##### **OTHER LEAVES WITH PAY**

##### **Leave of Absence with Pay**

v.  Employees may be excused from work for extenuating personal
    circumstances which, in the opinion of the Contractor, warrants an
    excused absence and will not interfere with the Contractor\'s
    operations. The Contractor will present for the Contracting
    Officer's approval a procedure addressing leaves of absence.

w.  The following guidelines govern granting time off with pay:

    1.  All employees are granted time off with pay in the following
        situations when appropriately approved by the Director, Human
        Resources and Development:

        a.  Disaster and rescue work.

        b.  Government service.

        c.  Temporary military duty - Employees on annual military leave
            will be paid their normal base pay, which will not be
            reduced by the amount of their military check, for a maximum
            of 10 days in any calendar year.

        d.  Preinduction physical.

        e.  Industrial illness or accident - Only applicable for the
            initial day of the injury.

        f.  Disciplinary suspension.

##### Leave of absence with pay is at the employee\'s basic salary.

##### **Bereavement Leave**

##### In the event of a death in the immediate family, leave of up to 3 days with pay will be granted, not to exceed 24 hours. These 3 days are to be taken consecutively within a reasonable time of the day of the death or day of the funeral, and may not be split, combined with regular scheduled days off, or postponed. {#in-the-event-of-a-death-in-the-immediate-family-leave-of-up-to-3-days-with-pay-will-be-granted-not-to-exceed-24-hours.-these-3-days-are-to-be-taken-consecutively-within-a-reasonable-time-of-the-day-of-the-death-or-day-of-the-funeral-and-may-not-be-split-combined-with-regular-scheduled-days-off-or-postponed. .unnumbered}

##### **Professional License Examination**

> Salaried employees may be granted time off with pay to take a
> professional license examination that is directly related to the
> employee\'s job responsibilities or beneficial to both the Contractor
> and the employee.

##### **Jury Duty** 

x.  An employee who is called for jury duty may be protected against
    loss of pay for the period of time needed to fulfill the obligation.

y.  Employees who have been called to be selected or to serve on a jury
    impaneled by a civil authority are authorized time off with pay.

z.  An employee will not be granted time off with pay for absence from
    work due to witness service, if the employee (1) is called as a
    witness against the company or its interest, (2) is called as a
    witness on his or her own behalf in an action in which he or she is
    a party, and the company is not a party, (3) voluntarily seeks to
    testify as a witness, or (4) is a witness in a case arising from or
    related to the employee\'s outside employment or business
    activities.

##### **Civic Leave**

a.  An employee elected or appointed to a nonpaying governmental
    position may be granted reasonable amounts of time off with pay when
    the employee\'s service requires intermittent absence from work. The
    Project Manager or his designee, with prior review and comment by
    Director, Human Resources and Development, must approve time off
    with pay for Government service. A reasonable amount of time is
    defined as between 1 day and 1 week per month.

b.  Contractor employees may be paid civic leave to give reimbursed
    assistance to generally recognized community service organizations
    provided such leave does not hinder the contract work and is:

    1.  Limited to eight or fewer employees during any calendar year,
        and

    2.  Limited to 10 or fewer days per employee during any calendar
        year, unless approved by the Contracting Officer.

    3.  Hours paid for under this provision do not count as hours worked
        in the calculation of overtime and premium pay.

##### **Blood Donors**

##### Employees who are requested by the Contractor to donate blood for which employees receive no outside compensation will be protected against loss of pay up to a maximum of the employee\'s assigned shift for the day involved. 

c.  Employees who donate blood during an on-site, contractor-sponsored
    blood drive are eligible to take up to 4 hours off with pay on the
    same day in which the employee donates blood with the
    supervisor/manager approval.

d.  Hours paid for under this provision do not count as hours worked in
    the calculation of overtime and/or premium pay.

##### **Witness Service**

e.  An employee who appears as a witness in court or other hearing, or
    gives a deposition for one of the following will be paid in
    accordance with a Contractor procedure approved by the Contracting
    Officer:

    1.  In response to a request from the Contractor or at the request
        of its attorneys.

    2.  In response to a request from the DOE or at the request of its
        attorneys.

    3.  In response to a request from the Government or its agencies
        when requested or approved by DOE.

    4.  In response to a subpoena, as limited by the Contractor\'s
        procedure.

f.  Travel costs are paid as travel on Contractor business and may
    include out of state travel.

g.  Hours paid for under this policy may count as time worked by
    employees in the calculation of overtime and/or premium pay.

h.  Any fees paid to the employee should be returned to the Contractor
    if the employee is in a pay status.

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VIII. LEAVES WITHOUT PAY

The Contractor may grant all employees leave without pay provided the
absence will not interfere with the Contractor\'s operations. Such leave
of absence without pay will be made in accordance with a Contractor\'s
procedure approved by the Contracting Officer.

Leave of absence may be granted for illness, injury, pregnancy,
temporary military duty, or for the employee to hold public office, and
for other purposes deemed to be the best interest of the company, and
provided the employee\'s record is satisfactory or above. The Contractor
must accept the employee upon his/her return to work provided the
employee returns to work within the approved time limit.

IX. MILITARY LEAVE

The Contractor shall comply with federal and state laws, rules, and
regulations in protecting employees who are members of the U.S. Armed
Forces. Temporary or extended military leave shall be authorized for
employees. Such leave of absence will be made in accordance with a
Contractor\'s procedure approved by the Contracting Officer.

##### **Temporary Military Leave for Training:** 

> The Contractor shall grant annual military leave to any employee who
> is a member of the National Guard or a reserve unit of the U.S. Armed
> Forces. Employees may receive this pay for a maximum of ten (10) days
> in any calendar year. Pay for such leave shall not exceed the
> employee\'s straight-time hourly rate for nonexempt employees or basic
> salary for exempt employees for the period of leave.

##### **Extended Military Leave:** 

##### An employee, who enters into active duty with the U.S. Armed Forces directly from the Contractor, shall be granted extended military leave. Employment rights will be extended up to ninety (90) days after the employee\'s date of honorable discharge or separation from such service. The Contractor shall also grant military leaves of absence to employees who are members of the National Guard or a reserve unit of the U.S. Armed Forces when they have been ordered, either verbally or in writing, to report for duty.  {#an-employee-who-enters-into-active-duty-with-the-u.s.-armed-forces-directly-from-the-contractor-shall-be-granted-extended-military-leave.-employment-rights-will-be-extended-up-to-ninety-90-days-after-the-employees-date-of-honorable-discharge-or-separation-from-such-service.-the-contractor-shall-also-grant-military-leaves-of-absence-to-employees-who-are-members-of-the-national-guard-or-a-reserve-unit-of-the-u.s.-armed-forces-when-they-have-been-ordered-either-verbally-or-in-writing-to-report-for-duty. .unnumbered}

X.  SECURITY LEAVE

If the access authorization of an employee is suspended by DOE, the
provisions of DOE Order 350.1 \"Payment of Wages or Salaries to
Cost-Type Contractor Employee When Access Authorization Is Suspended\"
will be followed.

##### **TRAINING AND EDUCATION**

##### **GENERAL PROVISIONS** 

##### The purpose of training and education programs shall be to increase employee skills and efficiency, develop techniques for the solution of operating problems, to prepare participants for additional responsibilities and to enhance opportunities for career advancement. 

##### The objective of training shall be to enhance employee development within a reasonable period of time. Training must be relevant to the goals of the SPR, and shall be provided only when there is a reasonable expectation that the employee shall remain in the employ of the SPR performing DOE related work for a sufficient period of time to provide a fair return for the training costs.

##### The Contractor shall establish written procedures outlining the goals and objectives of the training program. 

##### **TRAINING** 

##### The Contractor may conduct or permit employees to attend special training programs and courses, other than on-the-job training courses, which are directly related to the employee\'s work and from which the Contractor may derive potential benefits.

##### A list of employees assigned for such training in excess of 120 hours per employee in the past fiscal year will be supplied to DOE during the first quarter of each fiscal year. The list will include the employee\'s name, location and title of training, and number of hours of training.

##### Training courses, which are considered necessary to develop and maintain an effective work force and approved by DOE, will be an allowable cost.

##### **EDUCATION** 

##### All regular full-time service employees with a minimum of one (1) year\'s service are eligible for reimbursement of tuition, fees, and books for course of study following successful completion thereof.

##### Courses must be approved in advance and are expected to be taken outside of working hours. They must be related to present or probable future work assignments or a job-related course of an approved degree program in an educational discipline-related to the occupation, in which the employee is working or can reasonably be expected to work.

##### Refunds may be made to employees for the successful completion of recognized correspondence courses which relate directly to their job assignments and for which prior company approval was granted.

##### If the expenses eligible for reimbursement, are covered by a scholarship, fellowship, or a governmental assistance program of any kind, including Veterans Administration payments, the employees\' reimbursements are offset by the amounts of other such assistance.

XI. EMPLOYEE PROGRAMS

##### **MORALE AND MOTIVATION PROGRAMS** 

> The Contractor may initiate morale and motivation programs to promote
> goodwill among its employees when appropriate. DOE reimbursement of
> the costs of these programs will be limited to 0.31 percent of the
> total straight-time labor budget. All meals will be offset by
> deducting meal per diem for any employee on travel status.

##### Approved Morale/Motivation Program Awards and Incentives

a.  The following programs have been authorized:

    1.  [Employee Recreation Program]{.underline} -- Provides financial
        support for employee recreation activities, i.e. sports league
        fees, equipment, and tournament fees. (Reimbursement for food
        and beverages is not allowed under this program.)

    2.  [Savings Bond Drive]{.underline} -- Provides reimbursement for
        program costs associated with conducting a successful annual
        U.S. Savings Bond Campaign for Contractor employees. This
        program defrays costs of campaign material and departmental
        material and departmental incentives earned by those that meet
        annual goals of participation.

    3.  [Recognizing Excellence Award Progra]{.underline}m (REAP) -- The
        objectives of this program are to encourage and reward
        Contractor employees who demonstrate performance and
        contributions beyond the normal scope or performance levels of
        their position.

    4.  [Performance Improvement Recognition Program and
        Conference]{.underline} -- The objectives of this program are to
        stimulate awareness and participation in PI initiatives and to
        recognize significant achievements, which benefit the SPR
        through the PI program. Cash and non-cash awards are made for
        levels of accomplishment based on project impact on business and
        safety practices as well as savings to the SPR's operations. The
        conference costs, such as meals for speakers, presentation
        awards, handouts as incentives, etc. are considered part of this
        program.

    5.  [Employee Service and Performance Recognition
        Program]{.underline} -- Provides for the distribution of
        non-cash tokens of recognition for continuous service with the
        Contractor and the SPR. Service awards such as plaques, pins,
        desk accessories, shields, etc. are presented to employees who
        have completed continuous service at the SPR in five year
        increments with the first award being given on the completion of
        the first five years.

    6.  [Environmental, Safety, and Health Awareness Awards and
        Incentives]{.underline} --

-   [Safety Program]{.underline} is designed to recognize New Orleans
    based employees for meeting or exceeding programmatic goals
    associated with corporate Safety.

-   [Pollution Prevention Program]{.underline} is designed to recognize
    all Contractor employees who have demonstrated success in
    achievement of the pollution prevention goals.

-   Fire Prevention Week awareness items are to reinforce fire safe
    practices at work and at home.

-   [Behavioral Safety Management Incentive Program]{.underline} is to
    purchase motivational items to enhance employee awareness and the
    recognition of unsafe behavior.

    1.  [Voluntary Protection Program]{.underline} incentive is to
        improve employee motivation to work safely and understand the
        SPR Safety Management System.

    2.  [Environmental Advisory Committee (EAC)]{.underline} quarterly
        meetings with other companies where pastries and coffee are
        typically provided as a industry standard.

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    1.  [Drawdown Readiness Competition Award Program]{.underline} --
        Provides a quarterly recognition for the site that achieves the
        top rating for overall performance as well as an annual award
        for the site that has out performed all other sites for the year
        in overall performance and drawdown readiness.

    2.  [Safety Incentive Award Program]{.underline} -- Provides for
        monthly cash award to one employee per site, excluding New
        Orleans, who is nominated by the Site Safety Council and
        approved by the Site Manager for outstanding contributions to
        site safety and/or promotion of safety culture on the site.

    3.  [The ERT Award Incentive Program]{.underline} -- Provides for
        recognition of participation and excellence in maintaining and
        improving ERT Team members' communications and dedication to the
        mission of the Emergency Management Department.

    4.  [Emergency Management --]{.underline} meals during meetings for
        mutual aid coordination and exercises.

    5.  [United Way -]{.underline} Provides reimbursement for program
        costs associated with conducting a successful annual campaign
        for Contractor employees. This program defrays costs of campaign
        material and departmental material and departmental incentives
        earned by those that meet annual goals of participation.

    6.  [Security Recognition and Awareness]{.underline} - Provides for
        the distribution of non-cash tokens to increase employee
        awareness of security on the SPR through OPSEC.

    7.  [Security Exercises]{.underline} -- meals for Local Law
        Enforcement Association meetings and meals for FTX exercises.

    8.  [Procurement Diversity Award]{.underline} - Provides for the
        distribution of cash awards to recognize individual employee
        effort and commitment in assisting DM in meeting its diversity
        subcontracting goals.

    9.  [Women's Business Council --]{.underline} Meetings and
        luncheons.

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    a.  The allocation of monies for these programs will be at the
        discretion of the Contractor. The Contractor will submit to the
        Contracting Officer for approval its criteria for eligibility to
        receive the above awards, a brief description, which outlines
        the nature and extent of each program.

    b.  Costs of conducting recreational and athletic programs for
        employees and their immediate families and providing and
        maintaining facilities for these purposes will be provided in a
        Contractor procedure approved by the Contracting Officer.

    c.  The proposed annual budget will be submitted to and approved by
        the Contracting Officer on a fiscal year basis.

##### The Contractor will submit to the Contracting Officer quarterly reports itemizing expenditures for each of the above employee programs. 

##### Both monetary awards and non-monetary awards will be administered in accordance with a Contractor procedure approved by the Contracting Officer.

##### Other Morale/Motivation Program Awards, Incentives, and Items

##### Non-monetary awards, incentives, and/or promotional items such as, but not limited to, T-shirts, mugs, mousepads, food, post-it cubes, pins, pens, ribbons, safety tire gage kits, caps, polo shirts, patches, pads, calendars, bags, windbreakers, long sleeve shirts, flashlights, jackets, cups, gift certificates, etc., that are acquired for distribution under this contract must, as a minimum meet the following:

1.  be necessary and appropriate to achieve contract requirements;

2.  be allowable and reasonable in accordance with the allowable cost
    clause of the contract; and,

3.  be approved by the director noted in the authorized signature
    document.

##### The Contractor will submit to the Contracting Officer quarterly reports itemizing expenditures for the above.

##### Annual Internal Audits shall be conducted of all non-monetary awards, incentives, and/or promotional items.

##### **PATENT AWARDS**

> Except for an invention for which no equipment, supplies, facility, or
> trade secret information of the employer was used and which was
> developed entirely on the employee\'s own time, all inventions which
> are conceived, developed, or first actually reduced to practice,
> either alone or with others during the term of employment and for 6
> months thereafter shall be the exclusive property of the employer.
>
> Patent awards will be administered in accordance with the
> Contractor\'s DOE-approved employee performance improvement program.

##### **PROTECTIVE CLOTHING**

##### Employees who are required to wear special clothing, shoes, and protective equipment for various reasons such as safety, housekeeping, protection from harmful chemicals, etc. will be furnished such items at no cost to the employees.

##### Laundering of such special clothing may be done at no cost to the employees.

##### Safety glasses or goggles will be provided to those employees who are required to wear them to satisfy job safety requirements.

##### Employees may be reimbursed for clothing and personal effects damaged or destroyed on premises as a result of fire, explosion, or other similar incidents. 

##### **COMMUNICATIONS**

##### The Contractor recognizes the need to keep its employees regularly informed of its general activities. One method used to accomplish this is through regular or periodic employee publications. Other media to be used include, but are not limited to, hotlines, workplace meetings, the SPR Intranet, and general mailings to employees and their families at their homes.

##### The primary source of information is through the supervisor who will be kept fully advised of changes in advance.

##### Bulletin boards are used as a medium for informing employees promptly as to changes in policy, procedures, and matters of general interest. The Contractor provides uniform bulletin boards for posting such notices. Control of the material displayed thereon is the responsibility of Human Resources.

##### An employee handbook may be developed and used to describe responsibilities, rights, and benefits applicable to all employees at the SPR.

##### The cost of providing the communications listed above is allowable.

##### **MEMBERSHIPS, REGISTRATIONS, AND LICENSES**

##### The reasonable cost of one (1) annual membership in trade, business, technical, and professional organizations per employee is allowable, as approved by the Contractor's Directorate level managers. Independent of any one employee, the Contractor's membership in the local Chamber of Commerce(s) is allowed to promote small business bidders for subcontract work. Provisions for multiple membership must be approved by the Contractor's Project Manager.

##### Fees for professional and technical licensing or registration, and examination fees for professional and technical licensing provided the license or registration is relevant to an employee\'s function at the Contractor, are allowable. For those employees whose work requires a commercial driver\'s license, the difference between a regular and commercial license will be an allowable cost.

##### A list of Contractor memberships, registrations, and licenses will be submitted to the Contracting Officer for review and approval annually by July31 for the upcoming fiscal year.

##### **EMPLOYEE ASSISTANCE PROGRAMS** 

> Costs of an Employee Assistance Program providing counseling and
> referral for outside assistance will be allowable as approved by the
> Contracting Officer.

##### **PHYSICAL EXAMINATIONS** 

##### The Contractor will prepare a procedure that applies to the Occupational Safety and Health Administration examinations for all candidates for employment, all current employees, and eligible DOE employees. The following services will be performed:

d.  Protecting employees against health hazards in the work environment
    and assisting management in placing employees and candidates for
    employment in work that does not cause undue hazard to themselves,
    other workers, site facilities, site environments, and general
    environment or the public.

##### Providing continuing medical surveillance of employees and their job tasks and work environments and ensuring the early detection, treatment, and rehabilitation of ill or injured employees.

##### Applying preventive medical measures to maintain employees\' good physical and mental health and encouraging employees to maintain their physical and mental health.

##### The Contractor, in a procedure approved by the Contacting Officer, will identify their employees in a craft or group requiring a physical examination, the frequency of examination, and extent of examination.

##### All employees will be provided a health examination assessment as directed by DOE O 440.1A Worker Protection Management for DOE Federal and Contractor Employees. 

##### The cost of health examinations and physicals required of prospective employees, active employees, and terminating employees will be allowable expense.

XII. TRAVEL AND RELOCATION

##### The contractor may pay transportation, lodging, meals, incidental, relocation, and other expenses for employees or other persons required to travel or to move in conjunction with the performance of work under this contract. Allowable costs for travel and relocation include actual and reasonable costs according to Public Law 103-355 (Federal Acquisition Streamlining Act of 1994), applicable provisions of the FAR and DEAR, the Federal Travel Regulations for per diem rate allowance guidance, the Internal Revenue Service auto allowance, and standard industry practice. Reimbursement of travel and relocation expenses will be made in accordance with the Contractor's procedures developed from the pertinent regulations and standard industry practice as approved by the Contracting Officer. The Contractor may deviate in specific instances where it is determined to be economically advantageous to the DOE and to the extent such deviations conform to pertinent regulations and law. The Contractor will maintain records based on its determinations to deviate in specific instances sufficient for audit review.

##### When the Contractor requires employees to work at domestic locations of significant distance from their regular assignment location or in a foreign country, on a temporary or permanent basis, compensation may include allowances to address the incremental increase in the cost of living. The intent is to keep employee\'s compensation and standards of living reasonably whole so that they suffer neither a significant financial loss nor gain because of the assignment.

##### Relocation costs are those incident to (1) the permanent change of duty station of an existing employee and (2) the recruitment of a new employee.

##### Reasonable and necessary expenses incurred in the recruitment of personnel consistent with applicable provisions of the DEAR and FAR and standard industry practice are reimbursable.

XIII. RECRUITING

##### The Contractor may incur reasonable costs for recruitment of personnel.

##### Expenses of recruiting personnel shall include, but not be limited to, items such as: 

1.  Costs of advertising, search firms, agency and consultant fees.

2.  Travel and subsistence for interviewee, interviewer, and recruiting
    contact paid in accordance with the Travel Section of this Appendix.

3.  Costs associated with pre-employment screening.

##### New employees, or transferees, shall be paid for costs of travel and shipment of household goods in accordance with the Travel and Relocation section of this Appendix. 

XIV. CONSULTANTS

##### Consultant services will be authorized in accordance with the Contractor\'s procedure approved by the Contracting Officer.

##### Consultant agreements with individuals for the performance of services connected with work under this contract may be entered into by the Contractor provided the Contracting Officer approval has been obtained on the following:

1.  The forms used by the Contractor in contracting for consultant
    services.

2.  Consultant fees in excess of \$500 per day.

3.  Travel expenses in excess of those allowed employees traveling on
    contract work.

4.  Consultation time is over 60 days per year.