Exhibit 10.04
                             Kloberville Agreement

                                      245
<PAGE>


                               COMMONWEALTH OF THE NORTHERN MARIANA ISLANDS
                                        DEPARTMENT OF PUBLIC WORKS
                                             Saipan, MP 96950
                                       CONTRACT NO. NMHC KEP-9907-001

                                          AGREEMENT and CONTRACT

                                             for CONSTRUCTION

              This   Agreement   and   Contract  is  entered  into  between  the
      Commonwealth  of  the  Northern  Mariana  Islands  (the   "Commonwealth"),
      represented by the Contracting  Officer,  and TELESOURCE  CNMI, INC., P.0.
      Box PPP 402,  Box  10000,  Saipan.  MP 96950  (the  "Contractor")  for the
      construction of the KOBLERVILLE  EXPANSION  PROJECT (the  "Project").  The
      Commonwealth  and  the  contractor  agree  as  follows--  ARTICLE  1.  THE
      CONTRACTOR  SHALL  furnish  all  materials,  labor,  equipment,  tools and
      services  necessary to perform in a  workmanlike  manner all work required
      for the  completion of the Project,  as described in the Scope of Work and
      in strict compliance with the Contract Documents, for the firm fixed price
      of Six Million Three Hundred Ten US Dollars ($6,310,000.00).
               (a)Payments to Contractor.  The Commonwealth  shall make progress
      payments to the Contractor in accordance with the General  Conditions.  No
      other payments will be made.
               (b)Contract  Time. The Contractor shall commence work on the date
      stated in the written Notice to Proceed issued by the Contracting Officer,
      and shall  complete the Project  ready for use within four  hundred  fifty
      (450)  calendar  days of  commencement,  exclusive  of any review  time or
      suspension  time  imposed  by  the  government  that  delays  the  orderly
      prosecution of the work.
               (c)Subcontractors.   The   Contractor   agrees   to  bind   every
      subcontractor  by  the  terms  of the  Contract  Documents.  The  Contract
      Documents  shall not be  construed as creating  any  contractual  relation
      between  any  subcontractor  and the  Government.  ARTICLE  2.  LIQUIDATED
      DAMAGES.  The  Contractor  shall  pay to the  Commonwealth  the sum of One
      Thousand U.S. Dollars ($1000.00) Daily, not as a penalty but as reasonable
      liquidated  damages for breach of this Contract by the Contractor,  by his
      failing,  neglecting  or  refusing  to  complete  the work within the time
      herein  specified,  and said  sums  shall  be paid  for  each  consecutive
      calendar  day that the  Contractor  shall be in  default  beyond  the time
      stipulated in the Contract for  completing  the work.  ARTICLE 3. RECORDS.
      The Contractor and  subcontractors  at all levels shall provide the Public
      Auditor of the  Commonwealth  of the Northern  Mariana  Islands  access to
      examine and copy any  records,  data,  or papers  relevant to the Contract
      until  three (3) years  have  passed  since  the final  payment  under the
      Contract.  (Reference 1 CMC ss.7845.) ARTICLE 4. DEBARMENT AND SUSPENSION.
      In addition to other causes set forth in the CNMI Procurement  Regulations
      ss.6-212(2),  a breach of  ethical  standards  under any of the  following
      sections  of the  CNMI  Procurement  Regulations  can  be  cause  for  (i)
      debarment or suspension of the Contractor  and/or (ii)  termination of the
      Contractor for default.
           Section 6-205 Gratuities and Kickbacks.
          (I)  Gratuities.  It shall be a breach of  ethical  standards  for any
          person  to  offer,  give or  agree  to give  any  employee  or  former
          employee,  or for any employee or former employee to solicit,  demand,
          accept, or agree to accept from another person, a gratuity



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                                      246
<PAGE>

      or an offer of  employment  in  connection  with any  decision,  approval,
      disapproval,  recommendation,   preparation  of  any  part  of  a  program
      requirement  or  a  purchase  request,  influencing  the  content  of  any
      specification or procurement standard, rendering of advice, investigation,
      auditing  or  in  any  other  advisory   capacity  in  any  proceeding  or
      application,  request for ruling, determination,  claim or controversy, or
      other  particular  matter,  pertaining  to any  program  requirement  or a
      contract or subcontract or to any solicitation or proposal  therefor.  (2)
      Kickbacks.  It shall be a breach of  ethical  standards  for any  payment,
      gratuity  or  offer  of  employment  to  be  made  by or  on  behalf  of a
      subcontractor  under a contract  to the prime  contractor  or higher  tier
      subcontractor or any person associated  therewith as an inducement for the
      award of a subcontract or order.

      Section 6-206 Prohibition Against Contingent Fees.

      (1)  Contingent  fees.  It shall be a breach of  ethical  standards  for a
      person  to be  retained,  or to  retain a  person,  to  solicit  or secure
      government  contracts upon an agreement or understanding for a commission,
      percentage, brokerage or contingent fee, except for retention of bona fide
      employees or bona fide  established  commercial  selling  agencies for the
      purpose of securing  business.  (2)  Representation  of contractor.  Every
      person,  before being awarded a government contract,  shall represent,  in
      writing  that such person has not  retained  anyone in  violation  of this
      section. Failure to do so constitutes a breach of ethical standards.
ARTICLE 5. CONTRACT DOCUMENTS.  The following  instruments (if checked)
      constitute the Contract Documents, and  collectively  evidence  and
      constitute  the  Contract.  ("Future  Documents"  will  become  Contract
      Documents by operation of the Contract at a later date.)

----------------------------------- --------------------------------------------
Existing Documents                  Future Documents
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Agreement and Contract         X     Notice to Proceed
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Scope of Work                  Performance and Payment Bonds
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     General Conditions
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Technical Specifications
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Contractor's Proposal
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Labor Standards Provisions
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Special Provisions
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
X     Request for Proposals REP 98-07
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
      Invitation for Bids
----------------------------------- --------------------------------------------
----------------------------------- --------------------------------------------
      Minutes of Pre-award meetings  X Contract management documents issued by
                                     the Contracting Officer
----------------------------------- --------------------------------------------

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                                      247
<PAGE>

ARTICLE 6. SIGNATURE REQUIREMENTS. No contract can be formed prior to the
approval of all required Government officials, as evidenced by the signature
affixed hereto, of each of them. The signature of the  Contractor  shall be the
last in time to be affixed  hereto.  The  Contract shall become effective upon
the execution by all required signatories.
--------------------------------------------------------------------------------

Contracting Officer for the Commonwealth

 /s/ MaryLou S. Ada                            Date:               July 27, 1999
 -----------------------------                     -----------------------------
 -----------------------------                     -----------------------------
        MaryLou S. Ada
         Executive Director, Northern Marianas Housing
         Corporation
------------------------------------------------------------------------------

Expenditure Authority
I declare that I have  complied  with the  construction  procedures  of the CNMI
Procurement  Regulations in the procurement of this contract, that this contract
is for a public  purpose,  and that the contract  docs not waste or abuse public
funds.  I  declare  that I,  personally,  have the  authority  to  obligate  the
expenditure of funds for this contract.  I declare under penalty of perjury that
the  foregoing is true and correct and that this  declaration  was executed this
day on Saipan, Commonwealth of the Northern Marianas Islands.

 /s/ Juan S. Tenorio                           Date:               July 27, 1999
------------------------------                     -----------------------------
------------------------------                     -----------------------------
        Juan S. Tenorio
         Chairman of the Board, Northern Marianas Housing
         Corporation
--------------------------------------------------------------------------------

Procurement and Supply

I hereby certify that to the best of my information  and belief this contract is
in compliance with the CNMI  Procurement  Regulations,  is for a public purpose,
and docs not waste or abuse public funds.

/s/ Herman S. Sablan                           Date:               July 27, 1999
------------------------------                     -----------------------------
------------------------------                     -----------------------------
        Herman S. Sablan
         Director of Procurement and Supply

Northern Marianas Housing Corporation           Total $6,310,000.00

I hereby  certify that there are  sufficient  funds  available in Account Number
NMHC General  Funds in the amount of  ____________________  for the execution of
this contract.

 s/ Jean Y. Aldan                              Date:               July 29, 1999
 -----------------------------                     -----------------------------
 -----------------------------                     -----------------------------
        Jean Y. Aldan
         Chief Accountant, NMHC

                                 A/C#11101        $1,220,000.00
                                    #21600        $1,100,000.00
                                    #11114          $315,000.00
                                    #22200        $3,675,000.00





---------------------------------------------------------------------------
 DPW ver 07.28.98          CONTRACT AND AGREEMENT                 PAGE 3 OF 5


                                      248
<PAGE>

Attorney General
I hereby certify that this contract has been numbered,  reviewed and approved as
to form and legal capacity.

        /s/ Maya Kara                Date:               July 30, 1999 at 3:45PM
        --------------------------                 -----------------------------
        --------------------------                 -----------------------------
        Maya Kara
         Attorney General (Acting)
--------------------------------------------------------------------------------


Governor

        /s/ Jesus R. Sablan                   Date:               August 3, 1999
        ---------------------------                -----------------------------
        ---------------------------                -----------------------------
        Jesus R. Sablan, Acting
         Govenor
--------------------------------------------------------------------------------
         Commonwealth of the Northern Mariana Islands

Contractor: Contractor's Name

On  behalf of the  Contractor,  I  represent  that I am  authorized  to bind the
Contractor  to the terms of this  Contract,  and by my  signature I do so hereby
accept  for the  Contractor,  and  bind the  Contractor  to,  the  terms of this
Contract.  I further represent for the Contractor that no person associated with
the Contractor has retained any person in violation of Section 6-205 of the CNMI
Procurement Regulations.

        /s/ K. J. Semikian                   Date:               August 13, 1999
        ---------------------------                -----------------------------
        ---------------------------                -----------------------------
        K. J. Semikian
         Title:  President
--------------------------------------------------------------------------------
         Affiliation:  Telesource CNMI, Inc.
         Other Contractor Information:  Telephone number: 322-4501


                                   CERTIFICATION OF CONTRACT COMPLETION

I hereby  certify  that this  contract  bears all  signatures  and is  therefore
complete.

        /s/ Herman S. Sablan                 Date:               August 13, 1999
        ---------------------------                -----------------------------
        ---------------------------                -----------------------------
        Herman S. Sablan
         Director of Procurement and Supply


--------------------------------------------------------------------------------
                                           END OF CONTRACT and AGGREMENT
--------------------------------------------------------------------------------

------------------------------------------------------------------------------
DPW ver 07.28.98               CONTRACT AND AGREEMENT               PAGE 4 OF 5


                                      249
<PAGE>

                                         PROCUREMENT INFORMATION
                                         For Government Use Only



        Method of Procurement (Check one only)
               Competitive Sealed Bids
      X        Competitive Sealed Proposals  7-27-99
               Small Purchase
               Sole Source
               Emergency
               Expedited


        Type of Procurement (Check one only)
      X        Initial Procurement   7-27-99
               Subsequent Procurement
                        Following Bid Protest
                        Government's Option
                        Replacement for Defaulted Contractor

        Government contract numbers of all related contracts with the Vendor:
      "NONE"






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                                      250
<PAGE>

STATE OF   )
                                   )
ILLINOIS   ) S.S.
                                   )



                                       - SPECIAL POWER OF ATTORNEY

                   Know all men by these presents,  that I, KHAJADOUR  SEMIKIAN,
the undersigned; of PPP 184 Box 10000, Garapan, Saipan MP 96950, do hereby make,
constitute,  and  appoint  VICTOR  BALIAN,whose  address  is PPP 184 Box  10000,
Garapan,  Saipan MP 96950,  my true and lawful attorney in fact for me and in my
name, place and stead and on my behalf, and for my use and benefit:

                   1. To enter into, execute and deliver any contract, proposal,
offer, agreement,  loan document, lease, conveyance or any other instrument that
may be  deemed to be  necessary  and  proper  for the  conduct  of  business  of
Telesource CNMI, Inc.

          2. To make, receive, sign, indorse, execute, acknowledge, deliver, and
possess all checks, drafts, withdrawal receipts and deposit instruments relating
to accounts or deposits in, or  certificates  of deposit of, savings and loan or
other  institutions or  associations,  and such other  instruments in writing of
whatever kind and nature as may be necessary or proper to carry out the business
of Telesource CNMI, Inc

          3. I grant to said  attorney in fact full power and  authority  to do,
take and perform all and every act and thing whatsoever  requisite,  proper,  or
necessary  to be  done,  in  the  exercise  of  any of  the  rights  and  powers
hereingranted,  as fully to all intents  and  purposes as I might or could do if
personally  present,  with full  power of  substitution  or  revocation,  hereby
ratifying and  confirming  all that said attorney in fact, or his  substitute or
substitutes,  shall  lawfully  do or cause to be done by virtue of this power of
attorney and the rights and powers herein granted.

          AND I HEREBY  DECLARE that any act or thing lawfully done hereunder by
my said  attorney  shall  be  binding  on  myself  and my  heirs,  and  personal
representatives, and assigns.

          FURTHER, this Special Power of Attorney shall remain in full force and
effect for three years from the date of its execution  unless earlier  rescinded
by me.

          IN  WITNESS  WHEREOF,  I have  hereunto  set my hand on the 4th day of
August 1999.

                                   /s/ Khajadour Semikian
                                  -------------------------------------
                                  -------------------------------------
                                               KHAJADOUR SEMIKIAN
SPECIMEN SIGNATURE
                                                    "OFFICAL SEAL"
/s/ Victor Balian                                Christina L. Xydis
---------------------------------------
---------------------------------------
VICTOR BALIAN                                Notary Public, State of Illinois
                                               My Commission Expires 2-5-00
                                                 /s/ Christina L. Xydis
                                            ---------------------------------
                                            ---------------------------------
                                                     August 4, 1999


                                      251
<PAGE>

                               General Conditions -- Construction Contract

                                                 Contents
--------------------------------------------------------------------------------
     Clause                                                                Page
          1.   ENTIRE AGREEMENT                                              3
          2.   CONTRACT NOT ASSIGNABLE                                       3
          3.   INDEPENDENT CONTRACTOR                                        3
          4.   NO WAIVER BY COMMONWEALTH                                     3
          5.   INTERPRETATION AMD VALIDITY                                   3
          6.   DEFINITIONS                                                   4
          7.   AUTHORITIES AND LIMITATIONS                                   4
          8.   PAYMENT TO CONTRACTOR                                         5
          9.   ASSIGNMENT OF CLAIMS                                          6
         10.   STATUS OF ARCHITECTURAL/ENGINEERING DESIGNS AND DATA          6
         11.   ADDITIONAL REQUIREMENTS FOR "DESIGN-BUILD" PROJECTS           7
         12.   CONTRACT AND BONDS                                            8
         13.   CONSTRUCTION PROGRESS CHART                                   8
         14.   FEES AND CHARGES                                              8
         15.   CONTRACT TIME                                                 8
         16.   LIQUIDATED DAMAGES                                            9
         17.   DISPUTES AND REMEDIES                                         9
         18.   SUSPENSION OF WORK                                           12
         19.   CHANGES                                                      12
         20.   EQUITABLE ADJUSTMENT                                         14
         21.   TERMINATION FOR DEFAULT                                      16
         22.   TERMINATION FOR THE CONVENIENCE OF THE COMMONWEALTH          15
         23.   LIABILITY TO THIRD PERSONS; INDEMNIFICATION; INSURANCE       16
         24.   SUPERINTENDENCE BY CONTRACTOR                                17
         25.   RIGHTS-OF-WAY                                                17
         26.   APPROPRIATENESS OF EQUIPMENT                                 18
         27.   LAWS TO BE OBSERVED                                          18
         28.   PERFORMANCE OF WORK BY CONTRACTOR                            19
         29.   CONDITIONS AFFECTING THE WORK                                19
         30.   SITE INVESTIGATION                                           20
         31.   DIFFERING SITE CONDITIONS                                    19


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                                      252
<PAGE>

32.  AS-BUILT DRAWINGS                                                      20
33.  SHOP DRAWINGS, COORDINATION DRAWINGS, AND SCHEDULES                    20
34.  SAMPLES                                                                21
35.  INSPECTION AND ACCEPTANCE                                              22
36.  MATERIAL AND WORKMANSHIP                                               23
37.  OTHER CONTRACTS                                                        23
38.  SUBCONTRACTS                                                           24
39.  COMMONWEALTH OCCUPANCY                                                 24
40.  GUARANTEES                                                             24
41.  MAINTENANCE OF TRAFFIC                                                 25
42.  PERMITS AND RESPONSIBILITIES                                           24
43.  PROJECT SIGNS                                                          24
44.  SPECIFICATIONS AND DRAWINGS                                            24
45.  STANDARD REFERENCES                                                    25
46.  STANDARD DETAILS                                                       25
47.  MEASUREMENTS                                                           25
48.  SURVEY MONUMENTS AND BENCH MARKS                                       26
49.  PATENT INDEMNITY                                                       26
50.  CONVICT LABOR                                                          26
51.  EQUAL OPPORTUNITY                                                      26
52.  UTILIZATION OF SMALL BUSINESS CONCERNS                                 27
53.  WORKING HOURS                                                          27
54.  SOCIAL SECURITY                                                        27
55.  ACCIDENT PREVENTION - PUBLIC SAFETY                                    28
56.  DEBRIS AND CLEANING                                                    28
57.  SANITATION                                                             28
58.  PROTECTION OF EXISTING VEGETATION, STRUCTURES, UTILITIES, AND
     IMPROVEMENTS                                                           28
59.  STORM PROTECTION                                                       29
60.  FAILURE TO FURNISH INFORMATION AND RECORDS                             29
61.  PERMISSION TO ENTER THE COMMONWEALTH OF THE NORTHERN
     MARIANA ISLANDS                                                        29
62.  TRANSPORTATION AND LODGING EXPENSE                                     29
63.  OFFICIALS NOT TO BENEFIT                                               30


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                                      253
<PAGE>

                               General Conditions -- Construction Contract

 1.   ENTIRE AGREEMENT
      (a) With respect to the subject matter of the Contract,  the Contract,  as
      expressed  in the  Contract  Documents,  represents  the entire  agreement
      between the  Commonwealth  and the  Contractor,  and  supersedes all prior
      agreements  and  understandings.  No revision to the express  terms of the
      contract shall be implied, except as required by law.

 2.   CONTRACT NOT ASSIGNABLE
      (a) The  Contract and all of its  covenants  shall inure to the benefit of
      and be binding  respectively  upon the Commonwealth and the Contractor and
      its  partners,   successors,   assigns  and  legal  representatives.   The
      Contractor may not assign,  transfer,  encumber, or sublet its interest or
      obligations   under  the   Contract   without   written   consent  of  the
      Commonwealth. No mechanic, subcontractor,  supplier, or other person shall
      be  permitted  to contract  for or in any other manner have or acquire any
      lien upon the services  covered by the Contract,  or the  construction  to
      which the services  pertain,  or the land upon which the  construction  is
      situated.

 3.   INDEPENDENT CONTRACTOR
      (a) For  purposes  of the  application  of  Article  6,  "Ethics in Public
      Contracting" of the CNMI Procurement  Regulations,  the Contractor and its
      employees, agents, subcontractors, and representatives shall be considered
      employees of the Commonwealth  government,  as provided by ss. 1-201(8) of
      the CNMI Procurement Regulations.

      (b) Except as stated in the CNMI Procurement  Regulations or authorized in
      writing by the  Contracting  Officer and only under the terms so stated or
      authorized,  neither the  Contractor  nor its employees or  subcontractors
      shall act for,  represent,  or bind the  Commonwealth  in any  capacity or
      manner  whatsoever,  or be deemed or  considered  an employee,  agent,  or
      representative of the Commonwealth,  or be deemed to have any relationship
      with the Commonwealth other than that of independent contractor.

 4.   NO WAIVER BY COMMONWEALTH
      (a) The failure of the Commonwealth in any one or more instances to insist
      upon  strict  performance  of any  of the  items  of the  Contract,  or to
      exercise any option herein  conferred,  shall not be construed as a waiver
      or relinquishment,  to any extent, of the right to assert or rely upon any
      such terms or options on any future occasion.

 5.   INTERPRETATION AND VALIDITY
      (a) This contract shall be interpreted  under the laws of the Commonwealth
      of the  Northern  Mariana  Islands.  Where no local  law is  available  to
      resolve  a  particular  issue,  reference  shall  be had to  U.S.  federal
      procurement law and cases similar to the matter in dispute,  including the
      Federal Acquisition  Regulation and decisions  interpreting it, as well as
      scholarly treatises on U.S. federal procurement law.

(b)        All provisions of this Contract  shall, to the extent  practical,  be
           interpreted to be consistent with the CNMI  Procurement  Regulations.
           In the event of an unresolvable conflict between any provision of the
           contract and the CNMI Procurement  Regulations,  the CNMI Procurement
           Regulations shall govern the Contract.



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                                      254
<PAGE>

      (c) In the event of a conflict  between any  provision of the Contract and
      Agreement  document  and  these  General  Conditions,   the  Contract  and
      Agreement document shall govern the Contract.

      (d) If the contract  documents  include a "Special  Conditions"  document,
      that document shall be interpreted to supplement these General  Conditions
      and shall prevail in the event of a conflict.

      (e) In the event the contract or the procurement  action  resulting in the
      contract is found to be in violation of the CNMI Procurement  Regulations,
      then the Contract will not be valid under the laws of the  Commonwealth of
      the Northern Mariana Islands, and may be found to be legally voidable. The
      Commonwealth  will seek to have any  liability  asserted  against  it by a
      contractor  which  directly  results  from  improper  acts of a government
      employee to be determined judicially to be the individual liability of the
      employee who  committed the wrongful  acts.  (Reference  CNMI  Procurement
      Regulations ss. ss. 1-107, 1-108.)

 6.   DEFINITIONS
      (a) The term  "Commonwealth" as used in all Contract  Documents shall mean
      the government of the Commonwealth of the Northern Mariana Islands.

      (b) The term "Contracting Officer" as used in all Contract Documents shall
      mean the person executing the Contract as Contracting Officer and includes
      a duly appointed successor or authorized representative.  If the Secretary
      of  Public  Works  executes  the  contract  as  Contracting  Officer,  the
      Secretary may, from time to time, in writing, designate another individual
      to be Contracting Officer.

 7.   AUTHORITIES AND LIMITATIONS
      (a) All work  under the  Contract  shall be  performed  under the  general
      direction of the  Contracting  Officer,  who alone shall have the power to
      bind  the  Commonwealth  and to  exercise  the  rights,  responsibilities,
      authorities and functions vested in him by the contract documents,  except
      that he shall have the right to designate  authorized  representatives  to
      act for him. The authorized  representatives  are  responsible for guiding
      the technical  aspects of the project and for general  surveillance of the
      work  performed.  The  authorized   representatives  shall  not  make  any
      commitments or authorize any changes which  constitute work not within the
      general scope of the Contract,  change the expressed  terms and conditions
      hereof or specifications incorporated or included herein, or by any act or
      omission authorize expressly or otherwise, a basis for any increase in the
      contract  price or time for  performance.  Whenever any  provisions in the
      Contract specify an individual (such as, but not limited to,  Construction
      Engineer,  Inspector, or Custodian) or an organization (whether government
      or  private)  to perform  any act on behalf of, or in the  interest of the
      Commonwealth,  that individual or  organization  shall be deemed to be the
      Contracting  Officer's  authorized  representative  under the Contract but
      only to the extent so specified. A copy of each document vesting authority
      in an authorized  representative  or designating an additional  authorized
      representative shall be furnished to the Contractor.

      (b) The Contractor shall perform the Contract in accordance with any order
      (including but not limited to instruction,  direction,  interpretation  or
      determination  issued by an authorized  representative  in accordance with
      his  authority  to act for the  Contracting  Officer;  but the  Contractor
      assumes  all the risks and  consequences  of  performing  the  contract in
      accordance  with any order  (including  but not limited  to,  instruction,
      direction,  interpretation,  or determination) of anyone not authorized to
      issue such order.

      (c) The work of the  Contractor  is subject to inspection to insure strict
      compliance  with the terms of the Contract.  No inspector is authorized to
      change any provision of the  specifications  without the written authority
      of the  Contracting  Officer,  nor shall the  presence  or  absence  of an
      inspector relieve the Contractor from any requirements of the work.


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                                      255
<PAGE>

      8.   PAYMENTS TO THE CONTRACTOR


<PAGE>




      (a) The  Commonwealth  will pay the  contract  price as  provided  in this
      clause.

      (b) The  Commonwealth  will make  progress  payments  monthly  as the work
      proceeds or at more frequent  intervals as  determined by the  Contracting
      Officer, on estimates approved by the Contracting Officer.

      (c) Before the first progress  payment under the Contract becomes due, the
      Contractor  shall prepare a breakdown of the contract price  acceptable to
      the  Contracting  Officer  showing  the amount  included  therein for each
      principal category of the work, in such detail as requested. The values in
      the  breakdown  will be used to provide a basis for  determining  progress
      payments.  The  Contractor's  overhead,  profit and cost of bonds shall be
      prorated throughout the life of the contract.

      (d) Except as may be  otherwise  provided in the  Contract,  the  contract
      price shall include all applicable  Federal,  Commonwealth of the Northern
      Mariana Islands, and local taxes and duties.

      (e) Estimates on which progress payments are based shall include the value
      (as determined by the  Contracting  Officer) of satisfactory in place work
      performed pursuant to change orders.

      (f)  Preparatory  work  done  will  not be  taken  into  consideration  in
      preparing estimates upon which progress payments are based.

      (g) The Contracting Officer, at his discretion, may authorize payments for
      materials  delivered and stored on the work site.  The Contractor is fully
      responsible for the materials delivered and stored by him.

      (h) The  Contractor,  prior to receiving a progress or final payment under
      the Contract, shall submit to the Contracting Officer a certification that
      the Contractor has made payments from the proceeds of prior  payments,  or
      that he will  make  timely  payment  from  the  proceeds  of the  progress
      payments or final  payment due him, to his  workers,  subcontractors,  and
      suppliers in accordance with the Contractor's  contractual  agreement with
      them.

      (i) In making each progress  payment,  there shall be retained ten percent
      (10%) of the estimated amount until final completion and acceptance of the
      contract work.  However,  if the  Contracting  Officer,  at any time after
      fifty  percent  (50%)  of  the  work  has  been   completed,   finds  that
      satisfactory progress is being made, the Contracting Officer may authorize
      any of the remaining progress payments be made in full with not retainage.
      Also,  whenever  the  work  is  substantially  complete,  the  Contracting
      Officer, if he considers the amount retained to be in excess of the amount
      adequate for the protection of the  Commonwealth,  at his discretion,  may
      release  to the  Contractor  all  or a  portion  of  such  excess  amount.
      Furthermore,  upon  completion and  acceptance of each separate  building,
      public  work,  or other  division  of the  contract  on which the price is
      stated  separately in the contract,  payment may be made therefore without
      retention of a percentage.

      (j) All  material  and  work  covered  by  progress  payments  made  shall
      thereupon become the sole property of the Commonwealth, but this provision
      shall  not  be  construed  as  relieving  the  Contractor  from  the  sole
      responsibility for all material and work upon which the payments have been
      made or the  restoration  of any damaged  work, or as waiving the right of
      the  Commonwealth  to require the  fulfillment  of all of the terms of the
      contract.

      (k) Upon  completion  and  acceptance  of all  work,  the  amount  due the
      Contractor  under the Contract  shall be paid upon the  presentation  of a
      properly  executed  voucher and after the Contractor  shall have furnished
      the  Commonwealth  with a  written  release  of  all  claims  against  the
      Commonwealth  arising by virtue of the Contract,  other than claims stated
      in amounts as may be  specifically  excepted  by the  Contractor  from the
      operation of the release.  If the  Contractor's  claim to amounts  payable
      under the  Contract has been  assigned  under the  "Assignment  of Claims"
      clause, a release may also be required of the assignee.

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      (a) If the Contract provides for payments aggregating One Thousand Dollars
      (US$1,000.00)  or  more,  claims  for  monies  due or to  become  due  the
      Contractor from the  Commonwealth  under the Contract may be assigned to a
      bank,  trust company or other  financing  institution,  including any U.S.
      federal  lending  agency,  and  may  thereafter  be  further  assigned  or
      reassigned to any such  institution.  Any such  assignment or reassignment
      shall cover all amounts  payable  under the Contract and not already paid,
      and  shall  not be made to more  than  one  party,  except  that  any such
      assignment  or  reassignment  may be made to one party as agent or trustee
      for two or more parties participating in such financing.

      (b) In no event shall copies of the Contract Documents or of any drawings,
      specifications,  or other  similar  documents  relating  to work under the
      Contract, if marked "Secret", "Top Secret" or "Confidential", be furnished
      to any  assignee,  nor may  any  part of all the  Contract  so  marked  be
      disclosed to such assignee without the prior written  authorization of the
      Contracting Officer.

 10.  STATUS OF ARCHITECTURAL/ENGINEERING DESIGNS AND DATA

      (a)   Confidential   Information.   All   information   contained  in  any
      architectural/engineering  design studies,  reports,  and drawings and all
      parts thereof, submitted to the Commonwealth pursuant to the Contract, are
      to be  treated  as  strictly  confidential  and  for  official  use of the
      Commonwealth  only.  The  Contractor  shall take all  reasonable  steps to
      unsure  that no member  of its staff or  organization  shall  divulge  any
      information concerning the studies,  reports and drawings except to a duly
      authorized  representative  of the  Commonwealth,  without  prior  written
      permission of the Commonwealth.  This confidential restriction shall apply
      for five (5) years after completion of the work under the Contract.

      The  foregoing does not apply to any  information  falling into any of the
           following categories: (i) Information which at the time of disclosure
           is or  thereafter  becomes  within  the public  domain  other than by
           reason of Contractor's breach of the Contract. (ii) Information which
           prior  to  disclosure  hereunder  was  already  in  the  Contractor's
           possession  without  violation  of  any  secrecy  obligation  to  the
           Commonwealth  either directly or indirectly.  (iii) Information which
           subsequent to disclosure hereunder is obtained by the Contractor from
           a third party who is lawfully in possession of such  information  and
           which  information  is not subject to the secrecy  obligation  to the
           Commonwealth or to others. (iv) Information which is developed by the
           Contractor independently of its work under the Contract.

      (b) Commonwealth Rights. The Commonwealth shall have unlimited rights, for
      the benefit of the  Commonwealth,  to the  architectural/engineering  work
      product of the Contractor created pursuant to the Contract,  including all
      drawings,  specifications,  architectural/engineering  designs, notes, and
      other  architectural/engineering  work developed in the performance of the
      Contract,   including   the   right   to   use   some   or   all   of  the
      architectural/engineering  work  product  on any other  Commonwealth  work
      without  additional cost to the Commonwealth.  The Commonwealth shall have
      and enjoy a  royalty-free  license to all  architectural/engineering  work
      product which the Contractor may cover by copyright and to all engineering
      and architectural designs as to which the Contractor may assert any rights
      to or establish any claim under the design patent or copyright  laws.  The
      Contractor  shall  submit  to the  Commonwealth  all  original  copies  of
      reports,  completed drawings,  notes, and other documents developed in the
      performance of the Contract after completion and acceptance of the work.


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 11. ADDITIONAL REQUIREMENTS FOR "DESIGN-BUILD" PROJECTS.
      (a)Applicability  of Provisions.  This clause shall apply in  design-build
      projects to the extent the provisions  herein are not expressly covered or
      contradicted by the Contract and Agreement or Scope of Work documents.

      (b) Site Visits and Conference.  The Contractor shall, if necessary, visit
      the project site and shall hold  conferences with  representatives  of the
      Commonwealth  and take such other action as may be necessary to obtain the
      data required to accomplish the Project.

      (c)  Preliminary  Sketches.  Preliminary  sketches shall include  studies,
      reports,  and plans,  elevations  and sections  developed to the extent as
      will clearly indicate the proposed  planning and a reasonable  estimate of
      the cost. Preliminary sketches,  along with an estimate of the cost of the
      project shown on the sketches,  shall be submitted for the approval of the
      Contracting  Officer. The Contractor shall change the preliminary sketches
      or  reports  for  the  Project  to  the  extent   necessary  to  meet  the
      requirements  of the  Commonwealth,  and after  review and approval by the
      Contracting  Officer, the Contractor shall furnish necessary prints of the
      approved preliminary sketches and reports to the Contracting Officer.

      (d) Final  Drawings and  Specifications.  After  preliminary  sketches and
      estimates  have been  approved,  the  Contractor  shall  proceed  with the
      preparation of reports,  drawings,  and  specifications as required by the
      Contracting  Officer in connection  with the Project.  Reports,  drawings,
      specifications,  and  estimates  shall  be  delivered  to the  Contracting
      Officer in such sequence and at such times as required by the  Contracting
      Officer. Following review by the Contracting Officer, the Contractor shall
      make such corrections as are required to obtain the Contracting  Officer's
      approval,  and shall submit  prints of the final  reports,  drawings,  and
      specifications.

      (e)  Deficiencies in the Work. The Contractor shall be responsible for the
      professional quality,  technical accuracy and coordination of all services
      furnished by the  Contractor  under the Contract.  The  Contractor  shall,
      without  additional   compensation,   correct  or  revise  any  errors  or
      deficiencies in the work,  including both the design and the  construction
      of the Project.

      (f) Work to be Continuous.  Unless  directed  otherwise by the Contracting
      Officer,  work on the Project  shall not be  suspended  during  periods of
      design review by the Contracting Officer.

12.   CONTRACT AND BONDS
      (a) If the Contractor fails to  satisfactorily  execute the required forms
      of  contract,   performance  bond,  and  payment  bond,  within  the  time
      established in the Instruction To Bidders, the Commonwealth may proceed to
      have the  required  work  performed  by  contract  or  otherwise,  and the
      Contractor shall be liable for any excess cost to the Commonwealth and the
      Contractor's  bid guarantee  shall be available  toward  off-setting  such
      excess cost.

 13.  CONSTRUCTION PROGRESS CHART
      (a)  Within ten (10) days after  receipt  of the  Notice to  Proceed,  the
      Contractor  shall  prepare  and  submit  to the  Contracting  Officer  for
      approval six (6) copies of a practicable  progress chart.  The chart shall
      show the principal categories of work corresponding with those used in the
      breakdown on which  progress  payments  are based,  the order in which the
      Contractor  proposes to carry on the work, the date on which it will start
      each of the categories of work, and the  contemplated  date for completing
      the  same.  If  the  Project  includes  a  design  component  that  is the
      responsibility  of  the  Contractor,  the  progress  chart  shall  include
      provisions  for the design and review  elements  specified in the Scope of
      Work  document  and  in  the  "Additional  Requirements  for  Design-Build
      Projects"

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      clause.  The chart shall be in suitable scale to indicate  graphically the
      total  percentage of work scheduled to be in place at any time. At the end
      of each progress  payment period,  or at such intervals as directed by the
      Contracting Officer, the Contractor shall: (1) adjust the chart to reflect
      any changes in the contract work, completion time, or both, as approved by
      the Contracting  Officer;  (2) enter on the chart the total  percentage of
      work actually in place;  and (3) submit three copies of the adjusted chart
      to the Contracting Officer.

      (b) If, in the opinion of the Contracting Officer,  work actually in place
      falls  behind that  scheduled,  the  Contractor  shall take such action as
      necessary to improve his progress.  In addition,  the Contracting  Officer
      may require the  Contractor  to submit a revised chart  demonstrating  his
      program and  proposed  plan to make up a lag in schedule  progress  and to
      ensure  completion of work within the contract  time.  If the  Contracting
      Officer  finds  the  proposed  plan not  acceptable,  he may  require  the
      Contractor to increase the work force, the construction plan or equipment,
      or the number of work shifts without additional cost to the Commonwealth.

      (c) Failure of the Contractor to comply with these  requirements  shall be
      considered  grounds for determination by the Contracting  Officer that the
      Contractor  is failing to prosecute  the work with such  diligence as will
      ensure its completion within the time specified.

 14.  FEES AND CHARGES
      (a) The Contractor shall pay all fees and charges  pertaining to temporary
      connection to utilities for  construction.  The Contractor  will apply for
      permanent utility connections with the assistance of the Commonwealth. The
      Commonwealth  will pay all fees and charges  regarding  permanent  utility
      connections.  The Contractor shall pay all charges for the use of property
      outside of the work site.

15.  CONTRACT TIME (a) The Contractor  shall perform fully,  entirely,  and in a
     satisfactory and acceptable  manner the work contracted,  within the number
     of  calendar  days  set  forth  in the  contract  documents,  which  number
     (adjusted by the  exclusions  and extensions  described  below,  and by any
     applicable  amendments,  addenda, or change order to the Contract) shall be
     the "contract time". Time will be assessed against the Contractor beginning
     with the date of the Notice to  Proceed.  All  strikes,  lockouts,  unusual
     delays in transportation, or any condition over which the Contractor has no
     control,  and also any suspensions  ordered by the Contracting  Officer for
     causes  not the  fault  of the  Contractor,  shall  be  excluded  from  the
     computation  of the  contract  time.  If  the  satisfactory  execution  and
     completion  of the  contract  shall  require  work or  materials in greater
     amounts or quantities than those set forth in the original  contract,  then
     the contract  time shall be extended in the same  proportion as the cost of
     the  additional  work  bears  to  the  original  work  contracted  for.  No
     allowances will be made for delays or suspensions of the prosecution of the
     work due to the fault of the Contractor. In order to secure an extension of
     time for delays beyond his control,  the  Contractor  shall within ten (10)
     days from the beginning of any such delay,  notify the Contracting  Officer
     in writing of the causes of delay,  whereupon the Contracting  Officer will
     ascertain  the facts and the extent of the delay and  extend  the  contract
     time  when,  in his  judgement,  the  findings  of  fact  justify  such  an
     extension, and his findings of fact thereon shall be final and conclusive.

      (b) In  design-build  projects that require periods of time for government
      review of design  elements  submitted by the  Contractor,  the  government
      review  time will not be added to the total time for  contract  completion
      unless such review so disrupts the orderly  prosecution of the work by the
      Contractor that normal progress is materially  impeded, or the Contracting
      Officer orders the work suspended pending review. The Contracting  Officer
      shall, by written order,  adjust the contract time in an equitable fashion
      to account, if necessary, for delay resulting from government review time.

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 16.  LIQUIDATED DAMAGES
      (a) The amount per day of  liquidated  damages,  as  referred  to in these
      General  Conditions,  is the sum  stated as  "Liquidated  Damages"  in the
      Contract  and  Agreement  document,  or,  if no  amount  is  stated in the
      Contract and Agreement, then in any document in the bid package, or, if no
      amount is stated in these documents,  then in the Proposal, if any. In the
      event  no  amount  for  liquidated  damages  may be  determined  from  the
      application of the first sentence of this paragraph, then the daily amount
      of  liquidated  damages  shall be the greater of (i) one  hundred  dollars
      ($100),  or (ii) two percent  (2%) of the  contract  price  divided by the
      number of  calendar  days of the  contract  time,  the  contract  time and
      contract  price  being  determined  at  the  time  of  the  assessment  of
      liquidated damages.  This amount is considered to be liquidated damages to
      reimburse  the   Commonwealth   for  loss  and  damages  suffered  by  the
      Commonwealth and is in no case a penalty.  (b) In the event the Contractor
      shall fail fully to perform and complete the work in  conformity  with the
      Contract  within  the  contract  time,  the  Contractor  shall  pay to the
      Commonwealth  for each and every day of the  additional  time in excess of
      the contract time liquidated damages as specified in paragraph (a) of this
      clause. (c) Liquidated damages may also be assessed against the Contractor
      under  other  provisions  of the  Contract,  and  shall be  determined  in
      accordance  with paragraph (a) of this clause.  (d) The  Commonwealth  may
      recover the amount of liquidated  damages by deducting the amount  thereof
      out of any monies which may be due or become due the Contractor  under the
      Contract  or under  any other  existing  or future  contract  between  the
      Commonwealth  and the  Contractor,  or by an  action  at law  against  the
      Contractor or his surety, or by any or all of these methods.

 17.  DISPUTES AND REMEDIES
      (a)  Notwithstanding  any other  provision  of the  Contract,  before  the
      contractor  may  bring any  action  law  equity  relating  to any  dispute
      relating to the Contract, including but not limited to claims for wrongful
      termination  or breach,  the  Contractor  must first submit the dispute to
      administrative resolution and appeal as provided by this clause.

      (b) Any dispute between the  Commonwealth  and the Contractor  relating to
      the  performance,   interpretation  of,  or  compensation  due  under  the
      Contract,  must be filed in writing with the Director of  Procurement  and
      Supply and with the  Secretary of Public  Works  within ten calendar  days
      after  the  Contractor  obtains  knowledge  of the facts  surrounding  the
      dispute.

      (c) The  Secretary  of Public Works will attempt to resolve the dispute by
      mutual agreement.  If the dispute cannot be settled, either the Contractor
      or the Contracting  Officer may request a decision on the dispute from the
      Director of  Procurement  & Supply.  The  Director  shall review the facts
      pertinent to the dispute,  secure necessary legal assistance and prepare a
      decision that shall include:
           (i)    Description of the dispute;
           (ii)   Reference to pertinent contract terms;
           (iii)  Statement of the factual areas of disagreement or agreement;
                  and
           (iv)   Statement  of  the  decision  as  to  the  factual   areas  of
           disagreement  and  conclusion  of the  dispute  with  any  supporting
           rationale.

      (d) The Director of  Procurement  and Supply may require a hearing or that
      information be submitted on the record, in his discretion.

      (e) Whenever the Contractor has a dispute  pending before the Secretary of
      Public Works or the Director of  Procurement  and Supply,  the  Contractor
      must continue to perform according to the


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      terms of the contract,  and failure to so continue shall be deemed to be a
      material breach of the contract unless the Contractor  obtains a waiver of
      this provision by the Secretary of Public Works.

      (f)  Paragraphs  (b) through (e) are  derived  from  ss.5-20 1 of the CNMI
      Procurement  Regulations,  and  shall  be  interpreted  so as not to be in
      conflict  with the CNMI  Procurement  Regulations.  If an  officer  of the
      Commonwealth  other  than the  Secretary  of  Public  Works  executes  the
      Contract and Agreement as "expenditure authority", then that officer shall
      be  substituted  for "Secretary of Public Works" in paragraphs (b) through
      (e).

      (g)  Disputes  arising  out of the  Labor  Standards  Provisions  of  this
      Contract (if any) shall be subject to this clause,  except,  to the extent
      such disputes involve  classifications or wage rates contained in the CNMI
      Title and Pay Plan,  which  questions shall be referred to the Contracting
      Officer.  (h) Nothing in this clause  shall serve to limit any remedies at
      law or equity available to the Commonwealth.

 18.  SUSPENSION OF WORK
      (a) The  Contracting  Officer  may  order the  Contractor  in  writing  to
      suspend,  delay,  or interrupt all or any part of the work for such period
      of time as he may determine to be appropriate  for the  convenience of the
      Commonwealth,  including,  but not limited to suspensions  for unfavorable
      weather  or  other  essential  conditions,  failure  on  the  part  of the
      Contractor to prosecute properly the work in accordance with the contract,
      or failure of the  Contractor  to carry out orders or to remove  defective
      materials or work.

      (b) In the event of a suspension of work by the Contracting  Officer under
      paragraph  (a),  for any reason  over which the  Contractor  has or had no
      control, the contractor may be reimbursed for actual money expended on the
      job  during  the  period  of  suspension.  No  allowance  will be made for
      anticipated  profits.  The period of suspension shall be computed from the
      date set out in  written  order  for work to cease  until  the date of the
      order for work to resume. Claims for such compensation shall be filed with
      the  Contracting  Officer  within  10 days  after the date of the order to
      resume work, or such claim will not be considered.  The  Contractor  shall
      submit with its claim  substantiating  papers  covering the entire  amount
      shown on the claim.  The  Contracting  Officer  shall take the claim under
      consideration,  and may make such  investigations as are deemed necessary,
      and shall be the sole judge as to the  equitability of such claim and such
      decision shall be final.

      (c) If the performance of all or any part of the work, for an unreasonable
      period of time, is suspended,  delayed,  or  interrupted  by an act of the
      Contracting  Officer  in the  administration  of the  Contract,  or by his
      failure to act within the time specified in the Contract (or if no time is
      specified,  within a reasonable time), an adjustment shall be made for any
      increase in the cost of performance of the Contract (excluding anticipated
      profit)  necessarily  caused by such  unreasonable  suspension,  delay, or
      interruption,  and the contract shall be modified in writing  accordingly.
      However, no adjustment shall be made under this clause for any suspension,
      delay, or interruption to the extent: (1) that performance would have been
      so suspended,  delayed,  or interrupted by any other cause,  including the
      fault or  negligence  of the  Contractor;  or (2) for  which an  equitable
      adjustment  is provided for or excluded  under any other  provision of the
      Contract.

      (d) No claim  under  paragraph  (c)  shall be  allowed:  (1) for any costs
      incurred  more than  twenty  (20) days  before the  Contractor  shall have
      notified the  Contracting  Officer in writing of the act or failure to act
      involved  (but this  requirement  shall not apply as to a claim  resulting
      from a suspension  order);  and (2) unless the claim, in an amount stated,
      is asserted in writing as soon as  practicable  after the  termination  of
      such suspension,  delay, or  interruption,  but not later than the date of
      final payment under the contract.



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     (e) The Contractor  shall not suspend the work without written  approval by
      the  Contracting  Officer,  and  prior to  resuming  work  shall  give the
      Contracting Officer forty-eight (48) hours notice to afford opportunity to
      re-establish  inspection.  (f)  No  provision  of  this  clause  shall  be
      construed as entitling the  Contractor to  compensation  for delays due to
      inclement weather,  delays due to failure for surety, for suspensions made
      at the request of the  Contractor,  or for any other delay provided for in
      the contract  documents,  including all  amendments,  addenda,  and change
      orders.

 19.  CHANGES
      (a) The  Contracting  Officer  may, at any time and without  notice to the
      sureties,  by written order  designated or indicated to be a change order,
      make any change in the work  within  the  general  scope of the  contract,
      including but not limited to changes in:
          (i) The  specifications  (including  drawings and  designs);  (ii) The
         method or manner of performance of the work;
        (iii)  The  Commonwealth-furnished facilities, equipment, materials,
               services,  or site; or
         (iv) The directing of acceleration in performance of the work.

      (b) Any  other  written  order  or an order  (which  terms as used in this
      paragraph  shall  include  direction,   instruction,   interpretation,  or
      determination) from the Contracting Officer, which causes any such change,
      shall be treated as a change  order under this clause,  provided  that the
      Contractor gives the Contracting  Officer written notice stating the date,
      circumstances, and source of the order and that the Contractor regards the
      order as a change order.

      (c)  Except as herein  provided,  no order,  statement,  or conduct of the
      Contracting  Officer  shall be  treated as a change  under this  clause or
      entitle the Contractor to an equitable adjustment hereunder.

      (d) If any change under this clause  causes an increase or decrease in the
      Contractor's  cost of, or the time  required for, the  performance  of any
      part of the work under the Contract,  whether or not changed by any order,
      an equitable adjustment shall be made and the contract modified in writing
      accordingly;  provided, however, that except for claims based on defective
      specifications,  no claim for any change  under (b) above shall be allowed
      for any costs  incurred  more than twenty (20) days before the  Contractor
      gives written notice as therein required:  and provided  further,  that in
      the  case of  defective  specifications  for  which  the  Commonwealth  is
      responsible,  the equitable  adjustment  shall include any increased  cost
      reasonably  incurred by the  Contractor  in attempting to comply with such
      defective specifications.

      (e)  If the  Contractor  intends  to  assert  a  claim  for  an  equitable
      adjustment  under this  clause,  he must,  within  thirty  (30) days after
      receipt of a written change order under  paragraph (a) of this clause,  or
      the  furnishing  of a written  notice under  paragraph (b) of this clause,
      submit to the Contracting  Officer a written  statement  setting forth the
      general  nature and monetary  extent of such claim,  unless this period is
      extended by the Contracting  Officer. The statement of claim hereunder may
      be included in the notice under paragraph (b) of this clause.

      (f) No claim by the  Contractor  for an  equitable  adjustment  under this
      clause  shall be  allowed  if  asserted  after  final  payment  under this
      contract.

      (g) Additional  performance and payment bond protection shall be furnished
      by the  Contractor  in  connection  with  any  modification  affecting  an
      increase in the price under the Contract if:
           (i)    The  modification  is for new or  additional  work  which  is
                  beyond  the  scope of the existing contract; or



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(ii)       The modification is pursuant to an existing provision of the Contract
           and  increases  the  contract  price by $5000 or twenty five  percent
           (25%) of the basic contract price whichever is less.

 20.  EQUITABLE ADJUSTMENT
      (a) The Contractor's  written  statement of the monetary extent of a claim
      for  equitable  adjustment  shall be  submitted  in the form of a lump sum
      proposal (unless otherwise  requested by the Contracting  Officer) with an
      itemized  breakdown  of all  increases  or  decreases  in the  cost of the
      Contractor's  and all  subcontractors'  work,  in at least  the  following
      detail:
           (i)    Material quantities and unit costs,
           (ii) Labor costs  (identified  with  specific  item of material to be
           placed or operation to be performed),  (iii)  Workmen's  Compensation
           and Public Liability Insurance overhead,  and - (iv) Employment taxes
           under FICA, FUTA, and CNMI Social Security System.

   -  (b)  The  percentage  for  overhead,   profit,  and  commission  shall  be
      negotiated and may vary according to the nature, extent, and complexity of
      the work involved,  but in no case shall exceed  fifteen  percent (15%) of
      the estimated cost of the work, and shall be considered to include, but is
      not limited to, insurance other than that mentioned in this clause, bonds,
      use of small tools, incidental job burdens, and general office expense. No
      percentages  for  overhead,  profit  or  commission,  will be  allowed  on
      employment taxes under FICA, FUTA, and CNMI Social Security System.

      (c) The  Contractor  shall submit with the proposal,  any request for time
      extension related to the claim for equitable adjustment.

      (d) In  considering a proposal,  the  Contracting  Officer will make check
      estimates in detail, utilizing unit prices where specified or agreed upon,
      with a view to arriving at an equitable adjustment.

      (e) After receipt of a proposal with a detailed breakdown, the Contracting
      Officer  shall act  promptly  thereon.  Provided,  however,  that when the
      necessity  to  proceed  with a change  does not allow  sufficient  time to
      properly  check a  proposal,  or in the  event  of  failure  to  reach  an
      agreement on a proposal,  the Contracting Officer may order the Contractor
      to  proceed  on the  basis  of  price  to be  determined  at the  earliest
      practicable  date but not to be more  than the  increase  or less than the
      decrease proposed.

      (f)  Except  in  unusual  cases  where  neither  the  Contractor  nor  the
      Commonwealth  can  ascertain  the full  extent of the work  which  will be
      required  pursuant to a change  until the work  involved  therein has been
      substantially  completed,  final agreement on a proposal shall be effected
      no later  than  the  time  when the  work  involved  is  estimated  by the
      Contracting  Officer  to be 50%  complete;  in the event  final  agreement
      cannot be reached by that time,  the  Contracting  Officer  shall  issue a
      unilateral  determination  as to the equitable  adjustment of the contract
      price and the time required for performance.

 21.  TERMINATION FOR DEFAULT
      (a) If the  Contractor  refuses  or fails to  prosecute  the work,  or any
      separable part thereof,  with such diligence as will ensure its completion
      within  the  contract  time,  or fails to  complete  said work  within the
      contract time, the  Commonwealth  may, by written notice to the Contractor
      from the Contracting Officer,  terminate the Contractor's right to proceed
      with the work or such part of the work as to which  there has been  delay,
      after  providing  ten  day's  written  notice  and an  opportunity  to the
      Contractor to show cause why such action should not be taken. In the event
      of a termination


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      for default under this clause, the Commonwealth may take over the work and
      prosecute the same to completion,  by contract or otherwise,  and may take
      possession  of  and  utilize  in  completing  the  work  such   materials,
      appliances,  and  plans as may be on the  site of the  work and  necessary
      therefor.  Whether or not the Contractor's  right to proceed with the work
      is  terminated,  the  Contractor  and his sureties shall be liable for any
      damage to the  Commonwealth  resulting  from the  Contractor's  refusal or
      failure  to  complete  the  work  within  the  contract   time.   (b)  The
      Contractor's  right  to  proceed  shall  not  be  so  terminated  nor  the
      Contractor charged with resulting damage if:
           (i) The delay in the completion of the work arises from unforeseeable
           causes  beyond the control and without the fault or negligence of the
           Contractor,  including but not restricted to acts of nature,  acts of
           the public enemy, acts of the Commonwealth in either its sovereign or
           contractual  capacity,  acts of another contractor in the performance
           of a  contract  with  the  Commonwealth,  fires,  floods,  epidemics,
           quarantine restrictions, strikes, freight embargoes, unusually severe
           weather, or delays of subcontractors or suppliers of any tier arising
           from unforeseeable causes beyond the control and without the fault or
           negligence  of  both  the  Contractor  and  such   subcontractors  or
           suppliers;  and (ii) The  Contractor,  within  ten (10) days from the
           beginning of any such delay (unless the Contracting  Officer grants a
           further  period of time  before the date of final  payment  under the
           contract),  notify the Contracting Officer in writing of the cause of
           delay.  The  Contracting  Officer  shall  ascertain the facts and the
           extent of the delay and extend the time for completing the work when,
           in his judgement,  the findings of fact justify such an extension and
           his  findings  shall be final,  subject only to appeal as provided in
           the "Disputes and Remedies" clause.

      (c) If the Commonwealth terminates the Contractor's right to proceed under
      paragraph  (a), the resulting  damage will consist of  liquidated  damages
      until such reasonable time as may be required for final  completion of the
      work,  together with any increased  costs  occasioned the  Commonwealth in
      completing the work.

      (d)  If  the  Contractor  is in  default  under  paragraph  (a),  but  the
      Commonwealth  does not terminate the  Contractor's  right to proceed,  the
      resulting damage will consist of applicable  liquidated  damages until the
      work is completed or accepted.

      (e)  The  Contractor  shall  be  in  default  of  the  Contract,  and  the
      Contracting  Officer may immediately  and without other notice,  terminate
      the Contractor's right to proceed with the Contract through written notice
      to the  Contractor of default  termination,  upon a  determination  by the
      Contracting Officer that, related to this particular contract,  any of the
      following has occurred--

           (i) The Contractor  has committed any breach of ethical  standards as
           defined in the Contract Documents,  the CNMI Procurement Regulations,
           or other  applicable law. (ii) The Contractor has participated in any
           violation  of  the  rules  or  regulations  in the  CNMI  Procurement
           Regulations  to the  disadvantage  of  the  Commonwealth.  (iii)  The
           Contractor has colluded with other potential awardees of the Contract
           or with government employees to the disadvantage of the Commonwealth.
           (iv) The Contractor  knowingly  requests and/or  receives  payment to
           which it is not entitled  under the specific  terms of the  Contract.
           (v) The Contractor  accepts  payment with  knowledge that  government
           employees or officials authorizing the payment have not complied with
           the terms of the Contract or applicable law.

      (f) If, after notice of termination of the  contractor's  right to proceed
      under any-of the provisions of this clause, it is subsequently  determined
      by the Contracting  Officer (or, upon review of the Contracting  Officer's
      decision,  by an  authorized  administrative  or  judicial  body) that the
      Contractor
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      was not in default under the provisions of this clause,  or that the delay
      was excusable  under the  provisions  of this clause,  then the rights and
      obligations  of  the  parties  shall  be the  same  as if  the  notice  of
      termination  had  been  issued  pursuant  to  the   "Termination  for  the
      Convenience of the Commonwealth"  clause. This paragraph shall provide the
      exclusive remedy for a wrongful termination for default.

      (g)  Any  disagreement  of the  Contractor  to  any  action  taken  by the
      Commonwealth  under this clause  shall be a dispute  within the meaning of
      the "Disputes and Remedies" clause.

      (h) The rights and  remedies of the  Commonwealth  provided in this clause
      are in addition to any other rights and remedies  provided by law or under
      the Contract.

 22.  TERMINATION FOR THE CONVENIENCE OF THE COMMONWEALTH
      (a)  Termination.  The Contracting  Officer may, when the interests of the
      Commonwealth so require,  terminate this contract in whole or in part, for
      the convenience of the  Commonwealth.  The Contracting  Officer shall give
      written notice of the termination to the Contractor specifying the part of
      the contract terminated and when the termination becomes effective.

      (b)  Contractor's  Obligations.  The  Contractor  shall  incur no  further
      obligations in connection with the terminated work and, on the date set in
      the notice of  termination,  the  Contractor  will stop work to the extent
      specified.  The  Contractor  shall also terminate  outstanding  orders and
      subcontracts as they relate to the terminated  work. The Contractor  shall
      settle  the  liabilities  and claims  arising  out of the  termination  of
      subcontracts   and  orders   connected  with  the  terminated   work.  The
      Contracting  Officer may direct the Contractor to assign the  Contractor's
      right,  title, and interest under terminated orders or subcontracts to the
      Commonwealth.  The Contractor  must still complete the work not terminated
      by the notice of termination and incur  obligations as are necessary to do
      so.

      (c) Right to Supplies.  The Contracting Officer may require the Contractor
      to transfer title and deliver to the Commonwealth in the manner and to the
      extent directed by the Director of Procurement and Supply:

           (i)    Any completed supplies; and
           (ii) Such partially  completed supplies and materials,  parts, tools,
           dies, jigs,  fixtures,  plans,  drawings,  information,  and contract
           rights   (hereinafter   called   "manufacturing   material")  as  the
           Contractor has  specifically  produced or specially  acquired for the
           performance of the terminated part of the Contract.

      (d) The  Contractor  shall,  upon  direction of the  Contracting  Officer,
      protect and preserve property in the possession of the Contractor in which
      the  Commonwealth  has an interest.  If the  Contracting  Officer does not
      exercise the right  specified in paragraph (c) , the Contractor  shall use
      his best  efforts to sell such  supplies  and  manufacturing  materials in
      accordance  with  the  standards  of the  Uniform  Commercial  Code of the
      Northern Mariana Islands, 5 CMC ss. 2706. Utilization of this procedure in
      no way implies that the Commonwealth has breached the contract by exercise
      of the "Termination For Convenience of the Commonwealth" clause.

      (e) Compensation. The Contractor shall submit to the Contracting Officer a
      termination claim specifying the amount due because of the Termination For
      Convenience together with cost and pricing data to the extent required. If
      the Contractor fails to file a termination  claim within one (1) year from
      the effective date of the termination, the Contracting Officer may pay the
      Contractor, if at all, an amount set in accordance with paragraph (g).

      (f) The  Contracting  Officer and the Contractor may agree to a settlement
      provided  the  Contractor  has  filed a  termination  claim  and  that the
      settlement does not exceed the total contract price plus settlement  costs
      reduced by payments  previously made by the Commonwealth,  the proceeds of
      any
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      sales and supplies and  manufacturing  materials  under paragraph (d), and
      the contract price of the work not terminated.

      (g) Absent complete agreement under paragraph (f), the Contracting Officer
      shall pay the Contractor the following  amounts,  provided payments agreed
      to under paragraph (f) shall not duplicate payments under this paragraph:

           (i)  contract  prices for  supplies  or services  accepted  under the
           contract.  (ii) costs incurred in preparing to perform and performing
           the terminated  portion of the work plus a fair and reasonable profit
           on  such   portion  of  the  work  (such  profit  shall  not  include
           anticipatory profit or consequential damages) less amounts paid or to
           be paid for accepted supplies or services; provided, however, that if
           it  appears  that  the  Contractor  would  have  sustained  a loss if
           completed,  no profit  shall be allowed or included and the amount of
           compensation  shall be  reduced to reflect  the  anticipated  rate of
           loss.  (iii)  cost of  settling  and  paying  claims  arising  out of
           termination  of  subcontracts  or orders  pursuant to paragraph  (b).
           These  costs  must  not  include   cost  paid  in   accordance   with
           subparagraph  (g)(ii).  (iv) the reasonable  settlement  costs of the
           Contractor including accounting,  legal, clerical, and other expenses
           reasonably  necessary for the  preparation  of settlement  claims and
           supporting  data  with  respect  to  the  terminated  portion  of the
           contract  for  the   termination  and  settlement  of  the  contracts
           thereunder,  together with reasonable  storage,  transportation,  and
           other costs incurred in connection with the protection or disposition
           of property allocable to the terminated portion of the Contract.  The
           total sum to be paid the Contractor under this subparagraph shall not
           exceed the total contract price plus reasonable  settlement  costs of
           the Contractor  reduced by the amount of payments otherwise made from
           the  proceeds of any sales of supplies  and  manufacturing  materials
           under paragraph (d), and the contract price of work not terminated.

 23.  LIABILITY TO THIRD PERSONS; INDEMNIFICATION; INSURANCE
      (a) The Contractor  shall be liable for the torts and wrongful acts of its
      employees and staff members,  and shall carry insurance  necessary for the
      protection  of its  employees  and staff  members  during  the life of the
      Contract,  and shall indemnify and hold harmless the Commonwealth from any
      and all claims,  demands, suits, and causes of action whatsoever involving
      third parties  arising out of or connected with the negligent  performance
      of the Contract.

      (b) The  Contractor  and his  subcontractors  shall procure and thereafter
      maintain workmen s compensation,  general  liability,  builder's risk, and
      comprehensive automobile liability (bodily damage) insurance, with respect
      to performance under the Contract; provided, that the Contractor may, with
      approval of the Contracting  Officer,  maintain a self-insurance  program.
      All insurance  required pursuant to the provisions of this paragraph shall
      be in such form,  in such  amounts,  and for such periods of time,  as the
      Contracting  Officer may, from time to time, require or approve,  and with
      insurers approved by the Contracting Officer.

      (c) Workmen's Compensation  Insurance:  The Contractor's employees engaged
      in any work under the Contract shall be afforded the same coverage as that
      which is extended to the employees of the Commonwealth of the Commonwealth
      of the Northern Mariana Islands.

      (d)  Comprehensive  General Liability  Insurance:  Coverage shall have the
      following minimum amounts:  Personal injury,  $100,000.00 each person, and
      $300,000.00 each occurrence;  Property damage, $50,000.00 each occurrence,
      and $100,000.00 aggregate.

      (e) Builder's  Risk (fire and extended  coverage):  The  Contractor  shall
      carry Builder's Risk (fire and extended coverage) Insurance on all work in
      place and materials stored at the work site, including
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     foundations and building  equipment.  The Builder's Risk Insurance shall be
     for the benefit of the  Contractor  and the  Commonwealth  of the  Northern
     Mariana  Islands as their  interests  may appear and each shall be named in
     the policy or policies as an assured.  Builder's Risk insurance need not be
     carried on excavations,  piers, footings, or foundations until such time as
     work on the  super  structure  is  started  and it need not be  carried  on
     landscape work.  Policies shall be in effect at all times for the full cash
     value of all completed construction work, as well as materials in place and
     stored at the site,  whether or not  partial  payment  has been made by the
     Commonwealth of the Northern Mariana Islands.  The Contractor may terminate
     this insurance on building(s)  taken over for occupancy by the Commonwealth
     of  the  Northern  Mariana  Islands  as of the  date  said  building(s)  is
     accepted.

      (f)  Comprehensive  Automobile  Liability  Insurance:   Coverage  of  this
      insurance  for all  owned,  non-owned  and hired  vehicles  shall have the
      following minimum amounts:  Personal injury,  $100,000.00 each person, and
      $300,000.00 each occurrence; Property damage, $50,000.00.

      (g) The  comprehensive  general and  automobile  liability  policies shall
      contain a provision worded as follows:

           "The insurance  company  waives any right of subrogation  against the
           Government of the  Commonwealth of the Northern Mariana Islands which
           may arise by reason of any payment under this policy".

      (h) Prior to commencement of work under the Contract, the Contractor shall
      furnish to the Contracting  Officer a certificate or written  statement of
      the above required  insurance.  The policies evidencing required insurance
      shall  contain an  endorsement  to the  effect  that  cancellation  or any
      material change in the policies  adversely  affecting the interests of the
      Commonwealth  in such insurance shall not be effective until 30 days after
      the Contracting  Officer has received written notice from the insurer,  as
      evidenced by return receipt of registered or certified letter.

 24.  SUPERINTENDENCE BY CONTRACTOR
      (a) The Contractor shall give his personal  superintendence to the work or
      have  a  competent   foreman  or   superintendent,   satisfactory  to  the
      Contracting  Officer,  on the  work at all  times  during  progress,  with
      authority  to  act  for  him.  (b)  The   Contractor   shall  employ  such
      superintendent,  foreman and workmen as are careful and competent, and the
      Contracting Officer may demand the dismissal of any person employed by the
      Contractor  in, about,  or upon the work who shall engage in misconduct or
      be  incompetent  or  negligent  in the proper  performance  of duties,  or
      neglects or refuses to comply with the directions  given,  and such person
      shall not be employed  again  thereon  without the written  consent of the
      Contracting  Officer.  Should the Contractor  continue to employ, or again
      employ any person for whom the Contracting  Officer has demanded dismissal
      under this clause,  the  Contracting  Officer may  withhold all  payments,
      which are or may become  due, or the  Contracting  Officer may suspend the
      work until such orders are complied with.

 25.  RIGHTS-OF-WAY
      (a) The Commonwealth will furnish all lands, easements,  and rights-of-way
      required  for   completion  of  the  work.   In  acquiring   easements  or
      rights-of-way  the Government will proceed as  expeditiously  as possible,
      but in the event all  rights-of-way or easements are not acquired prior to
      the beginning of  construction,  the  Contractor  shall begin work on such
      lands and rights-of-way as have been acquired. No claim for damage will be
      allowed  by  reason  of  the  Commonwealth's  delay  in  obtaining  lands,
      easements, or rights-of-way. In the event of litigation or other delays in



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      acquiring  rights-of-way,  the time allowed  herein for  completion of the
      work will be extended to compensate  the Contractor for time actually lost
      by such delay.

 26.  APPROPRIATENESS OF EQUIPMENT
      (a) The Contractor shall furnish such equipment as is considered necessary
      for  the  prosecution  of  the  work  in an  acceptable  manner  and  at a
      satisfactory  rate of progress.  All equipment,  tools, and machinery used
      for handling materials and executing any part of the work shall be subject
      to the approval of the  Contracting  Officer and shall be  maintained in a
      satisfactory working condition.  Equipment used on any portion of the work
      shall be such that no injury to the work, roadways,  adjacent property, or
      other  objects will result from its use. The contract may be terminated if
      the  Contractor  fails to provide  adequate and proper  equipment  for the
      work.

 27.  LAWS TO BE OBSERVED
      (a) The  Contractor  is assumed to be familiar  with all federal and local
      laws,  codes,  ordinances,  and regulations  which, in any manner,  affect
      those engaged or employed in the work or the material or equipment used in
      or upon the site,  or in any way affect the conduct of the work.  No pleas
      of  misunderstanding  or ignorance on the part of the Contractor  will, in
      any way, serve to modify the provisions of the contract.

      (b) The  Contractor,  at all times,  shall  observe  and  comply  with all
      Federal and local laws, codes,  ordinances,  and regulations in any manner
      affecting the conduct of the work, and the Contractor and his surety shall
      indemnify and save harmless the Commonwealth and all its officers,  agents
      and servants any claim or liability arising from or based on the violation
      of any such law, code, ordinance, regulation, order, or decree, whether by
      himself or his employees.

      (c) The Contractor  shall be responsible for reporting to the Commonwealth
      Historical  Preservation  Office for  verification and  determination  any
      discovery   encountered   during   execution  of  this  contract   bearing
      archaeological, cultural, or historical content.

 28.  PERFORMANCE OF WORK BY CONTRACTOR
      (a)  The   Contractor   shall  perform  on  the  site  and  with  his  own
      organization,  work  equivalent  to at least twelve  percent  (12%) of the
      total amount of work to be performed  under the  contract.  If, during the
      progress of the work  hereunder,  the  Contractor  requests a reduction in
      such percentage and the Contracting Officer determines that it would be to
      the advantage of the Commonwealth,  the percentage of the work required to
      be performed by the Contractor may be reduced with the written approval of
      the Contracting Officer.

 29.  CONDITIONS AFFECTING THE WORK
      (a) The Contractor  shall be responsible for having taken steps reasonably
      necessary  to  ascertain  the nature  and  location  of the work,  and the
      general  and  local  conditions  which  can  affect  the  work or the cost
      thereof.  Any failure by the Contractor to do so will not relieve him from
      responsibility  for  successfully  performing the work without  additional
      expense to the  Commonwealth.  The Commonwealth  assumes no responsibility
      for any understanding or presentations  concerning  conditions made by any
      of its officers or agents prior to the execution of the  Contract,  unless
      so stated in the contract.

      (b) The Contractor shall request assistance from appropriate  Commonwealth
      authorities  to indicate  the actual  locations  of existing  utilities to
      preclude damage during construction.

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      (c) The Contractor shall inquire about construction  requirements from the
      Technical Services Division, Department of Public Works prior to beginning
      work on the project.

 30.  SITE INVESTIGATION
      (a) The Contractor  acknowledges  that he has  investigated  and satisfied
      himself  as to the  conditions  affecting  the  work,  including  but  not
      restricted to those bearing upon  transportation,  disposal,  handling and
      storage of materials,  availability of labor, water, electric power, roads
      and  uncertainties  of weather,  river stages,  tides, or similar physical
      conditions at the site,  the  conformations  and conditions of the ground,
      the character of equipment and facilities needed preliminary to and during
      prosecution of the work. The Contractor  further  acknowledges that he has
      satisfied himself as to the character, quality and quantity of surface and
      subsurface  materials  or  obstacles  to be  encountered  insofar  as this
      information  is reasonably  ascertainable  from an inspection of the site,
      including all exploratory work done by the  Commonwealth,  as well as from
      information  presented by the drawings and specifications  made as part of
      this contract.  Any failure by the Contractor to acquaint himself with the
      available  information  will  not  relieve  him  from  responsibility  for
      estimating properly the difficulty or cost of successfully  performing the
      work. The Commonwealth  assumes no  responsibility  for any conclusions or
      interpretations  made by the  Contractor  on the basis of the  information
      made available by the Commonwealth.

 31.  DIFFERING SITE CONDITIONS
      (a)  The  Contractor  shall  promptly,  and  before  such  conditions  are
      disturbed, notify the Contracting Officer in writing of:

           (i)  Subsurface or latent  physical  conditions at the site differing
           materially  from those  indicated in the  Contract,  or; (ii) Unknown
           physical  conditions  at the site,  of an unusual  nature,  differing
           materially   from  those   ordinarily   encountered,   and  generally
           recognized  as hindering  work of the  character  provided for in the
           Contract.

      (b) The Contracting Officer shall promptly investigate the conditions, and
      if he finds  that such  conditions  do  materially  so differ and cause an
      increase or decrease in the Contractor's cost of, or the time required for
      performance  of, any part of the work under the  Contract,  whether or not
      changed as a result of such conditions,  an equitable  adjustment shall be
      made and the contract modified in writing accordingly.

      (c) No claim by the  Contractor  under this clause shall be allowed unless
      the Contractor has given notice required in (a) above; provided,  however,
      the time prescribed therefore may be extended by the Commonwealth.

      (d) No claim by the Contractor for an equitable adjustment hereunder shall
      be allowed if asserted after final payment under this contract.

      (e) The  contractor  shall submit all claims for  equitable  adjustment in
      accordance  with, and subject to the  requirements and limitations set out
      in paragraph (a) of the "Equitable Adjustment" clause.

      (f) Upon written request by the Contracting  Officer, the Contractor shall
      submit a proposal, in accordance with the requirements and limitations set
      out in  paragraph  (a) of the  "Equitable  Adjustment"  clause,  for  work
      involving  contemplated  changes  covered by the request,  within the time
      limit  indicated  in the request or any  extension of such limit as may be
      subsequently granted. If, within a reasonable time after receipt of such a
      proposal,  the  Contracting  Officer orders the Contractor to proceed with
      the performance of the work contemplated, the proposal submitted prior

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      to the order shall constitute the  Contractor's  statement of the monetary
      extent of claim for equitable adjustment.

 32.  AS-BUILT DRAWINGS
      (a) Upon  completion of the work to be performed  under the Contract,  and
      before  final  payment  is  made,   the   Contractor   shall  furnish  the
      Commonwealth  with two complete  sets of "as-built"  drawings.  These sets
      shall  include  "marked  up"  prints  of the  contract  drawings  and such
      additional drawings as may be necessary to reflect the complete "as-built"
      work  accomplished  under the Contract.  The "as-built"  drawings shall be
      initiated at the  beginning of the work and shall be  maintained  and kept
      current by the Contractor on the job site as the work progresses and until
      final  completion  and acceptance by the  Commonwealth.  Markings shall be
      accomplished  in red and shall be complete  and legible to assure that the
      information presented is readily usable. The "as-built" drawings submitted
      by  the  Contractor  will  be  subject  to  review  and  approval  of  the
      Contracting Officer.

 33.  SHOP DRAWINGS, COORDINATION DRAWINGS, AND SCHEDULES
      (a) The Contractor shall submit shop drawings,  coordination drawings, and
      schedules for approval as required by the  specifications  or requested by
      the Contracting Officer as follows:

           (i) Shop  drawings  shall include  fabrication,  erection and setting
           drawings,  schedule drawings,  manufacturer's scale drawings,  wiring
           and control diagrams, cuts or entire catalogs, pamphlets, descriptive
           literature,   and  performance  and  test  data.  (ii)  Drawings  and
           schedules,  other  than  catalogs,   pamphlets  and  similar  printed
           material,  shall be  submitted in  reproducible  form with two prints
           made by a process approved by the Contracting Officer. Upon approval,
           the reproducible  form will be returned to the Contractor,  who shall
           then  furnish  the  number of  additional  prints,  not to exceed 10,
           required by the Contracting Officer.

      (b) The  Contractor  shall submit shop  drawings in catalog,  pamphlet and
      similar  printed form in a minimum of four copies plus as many  additional
      copies  as the  Contractor  may  desire  or need for his use or use by his
      subcontractors.

      (c) Before submitting shop drawings on the mechanical and electrical work,
      the Contractor shall submit and obtain the Contracting  Officer's approval
      of such lists of mechanical and electrical  equipment and materials as may
      be required by the specifications.

      (d)  The  Contractor  shall  check  the  drawings  and  schedules,   shall
      coordinate them (by means of coordination  drawings  wherever  required by
      the  Contracting  Officer)  with the work of all  trades  involved  before
      submission and shall indicate thereon his approval. Drawings and schedules
      submitted  without evidence of the  Contractor's  approval may be returned
      for resubmission.

      (e) Each shop drawing or coordination drawing shall have a blank area 5" x
      5", located adjacent to the title block. The title block shall display the
      following:
(i)      Number and title of drawing,
(ii)     Date of drawing or revision,
(iii)    Name of project building or facility,
(iv) Name of Contractor and (if appropriate)  name of  subcontractor  submitting
the  drawing,  (v) Clear  identity of contents  and  location of work,  and (vi)
Project title and contract number.


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      (f) Unless  otherwise  provided in this contract or otherwise  directed by
      the  Contracting  Officer,  shop  drawings,   coordination  drawings,  and
      schedules  shall be submitted to the Contracting  Officer  sufficiently in
      advance  of  construction  requirements  to permit no less than 10 working
      days for checking and appropriate action.

      (g) Except as otherwise  provided in paragraph  (h),  approval of drawings
      and schedules will be general and shall not be construed as:

           (i)  Permitting any departure  from the contract  requirements;  (ii)
           Relieving  the  Contractor  of  the  responsibility  for  any  errors
           including details,  dimensions,  materials,  etc.; or (iii) Approving
           departures  from  full-size  details  furnished  by  the  Contracting
           Officer.

      (h)  If  drawings  or  schedules   show   variations   from  the  contract
      requirements  because of standard shop practice or for other reasons,  the
      Contractor shall describe such variations in his letter of transmittal. If
      acceptable, the Contracting Officer may approve any or all such variations
      and issue an appropriate change order. If the Contractor fails to describe
      such  variations,  he shall  not be  relieved  of the  responsibility  for
      executing  the work in  accordance  with the  contract,  even  though such
      drawings or schedules may have been approved.

 34.  SAMPLES
      (a) After award of the contract,  the Contractor  shall  furnish,  for the
      approval   of  the   Contracting   Officer,   samples   required   by  the
      specifications or by the Contracting  Officer.  Samples shall be delivered
      to the Contracting  Officer or to the  Architect/Engineer  as specified or
      directed by the  Contracting  Officer.  The  Contractor  shall  prepay all
      shipping charges on samples.  Materials or equipment for which samples are
      required  shall not be used in the work unless  approved in writing by the
      Contracting Officer.

      (b) Each sample shall have a label indicating the following:

           (i)    Name of project building or facility,
           (ii)   Project title and contract number,
           (iii)  Name  of  Contractor  and  (if  appropriate)  the  name of the
           subcontractor,  (iv)  Identification  of material or  equipment  with
           specification  requirement,  (v) Place of origin, (vi) Name of sample
           producer and brand (if any), and (vii) Samples of finished  materials
           shall be identified with the finished schedule requirements.

      (c) The Contractor  shall mail (under separate cover) a letter  submitting
      each sample shipment and the label information  required in paragraph (b).
      He shall enclose a copy of the letter with the sample  shipment and send a
      copy of the letter to the Commonwealth representative on the project site.
      Approval of the sample shall be only for the  characteristics of use named
      in such  approval  and shall  not be  construed  to  change or modify  any
      contract requirement.  Substitutions will not be permitted unless they are
      approved in writing by the Contracting Officer.

      (d)  Approved  samples  not  destroyed  in  testing  will  be  sent to the
      Commonwealth  representative  at the  project  site.  Approved  samples of
      hardware in good  condition will be marked for  identification  and may be
      used in the work.  Materials and equipment  incorporated in the work shall
      match the approved samples.  Other samples not destroyed in testing or not
      approved will be returned to the Contractor at his expense if so requested
      at the time of submission.

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      (e) Failure of any material to pass the specified  test will be sufficient
      cause for refusal to consider,  under the Contract, any further samples of
      the same brand or make of the  material.  The  Commonwealth  reserves  the
      right to disapprove any material or equipment which  previously has proven
      unsatisfactory in service.

      (f) Samples of various materials or equipment  delivered on the site or in
      place may be taken by the Commonwealth representative for testing. Samples
      failing to meet contract  requirements  will  automatically  void previous
      approvals of the item tested.  The Contractor shall replace such materials
      or equipment found not to have met contract  requirements,  or there shall
      be  adjustment  of the contract  price as  determined  by the  Contracting
      Officer.

      (g) Unless otherwise specified,  when tests are required, only one test of
      each  sample  proposed  for  use  will  be  made  at  the  expense  of the
      Commonwealth. Samples which do not meet specification requirements will be
      rejected.  Testing of additional  samples will be made by the Commonwealth
      at the expense of the Contractor.

 35.  INSPECTION AND ACCEPTANCE
      (a) Except as otherwise  provided in the Contract,  inspection and test by
      the  Commonwealth  of material  and  workmanship  required by the Contract
      shall be made at reasonable times and at the site of the work,  unless the
      Contracting  Officer  determines  that such inspection or test of material
      which  is to be  incorporated  in the work  shall be made at the  place of
      production,  manufacture,  or  shipment  of such  material.  To the extent
      specified by the Contracting  Officer,  at the time of determining to make
      off-site  inspection or test,  such inspection or test shall be conclusive
      as to whether the material involved conforms to the contract requirements.
      Such  off-site  inspection  or test shall not  relieve the  Contractor  of
      responsibility  for damage to or loss of the material prior to acceptance,
      nor in any way  affect the  continuing  rights of the  Commonwealth  after
      acceptance of the completed  work under the terms of paragraph (f) of this
      clause, except as provided in this paragraph.

      (b) The Contractor shall, without charge, replace any materials or correct
      any workmanship  found by the  Commonwealth not to conform to the contract
      requirements unless, in the public interest,  the Commonwealth consents to
      accept such  material or  workmanship  with an  appropriate  adjustment in
      contract  price.  The  Contractor  shall  promptly  segregate  and  remove
      rejected material from the premises.

      (c) If the Contractor  does not promptly  replace such material or correct
      such  workmanship,  the  Commonwealth  may: (1) by contract or  otherwise,
      replace  such  material or correct  such  workmanship  and charge the cost
      thereof to the  Contractor;  or (2)  terminate the  Contractor's  right to
      proceed in accordance with the "Disputes and Remedies" clause.

      (d) The Contractor shall furnish promptly,  without additional charge, all
      facilities,  labor and material  reasonably needed for performing the safe
      and convenient  inspection and test as may be required by the  Contracting
      Officer. All inspection and testing by the Commonwealth shall be performed
      in such manner so as to not delay the work  unnecessarily.  Special,  full
      size,  and  performance  tests  shall be  performed  as  described  in the
      Contract.  The  Contractor  shall be charged with any  additional  cost of
      inspection  when  material  and  workmanship  are not  ready  at the  time
      specified by the Contractor for its inspection.

      (e) Should it be considered necessary or advisable by the Commonwealth, at
      any time before  acceptance of the entire work, to make an  examination of
      work already  completed,  by removing or tearing out same,  the Contractor
      shall, on request,  promptly furnish all necessary facilities,  labor, and
      material.  If such work is found to be defective or  nonconforming  in any
      material   respect,   due  to  the   fault  of  the   Contractor   or  his
      subcontractors,  he shall defray all the expenses of such  examination and
      of satisfactory  reconstruction.  If, however,  such work is found to meet
      the requirements

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      of the  contract,  an equitable  adjustment  shall be made in the contract
      price to compensate the Contractor for the additional services involved in
      such  examination  and  reconstruction  and, if completion of the work has
      been  delayed  thereby,  he shall,  in  addition,  be  granted a  suitable
      extension of time.

      (f)  Unless  otherwise  provided  in  the  Contract,   acceptance  by  the
      Commonwealth shall be made as promptly as practicable after completion and
      inspection of all work required by the Contract. Acceptance shall be final
      and conclusive  except as regards  latent  defects,  fraud,  or such gross
      mistakes as may amount to fraud,  or as regards the  Commonwealth's  right
      under any warranty or guarantee.

      (g) The  Contractor  shall give the  Contracting  Officer at least 10 days
      advance  written  notice of the date the work will be fully  complete  and
      ready for final  inspection  and tests will be started within 10 days from
      the date specified in the aforesaid notice unless the Contracting  Officer
      determines that the work is not ready for final  inspection and so informs
      the Contractor.

      (h) The Contractor shall submit to the Contracting  Officer, in writing, a
      letter  request for a prefinal  inspection not less than 72 hours (3 days)
      prior to the  date of the  requested  inspection.  The  Contractor  should
      provide  a copy  of  this  letter  to  the  Director,  Technical  Services
      Division,  with a date stamp mark  affixed  by the  Contracting  Officer's
      office.

 36.  MATERIAL AND WORKMANSHIP
      (a) Unless otherwise specifically provided in the Contract, all equipment,
      material,  and articles  incorporated  in the work covered by the Contract
      are to be new and of the most  suitable  grade for the  purpose  intended.
      Unless  otherwise  specially  provided in the  Contract,  reference to any
      equipment,  material, article, or patented process, by trade name, make or
      catalog number,  shall not be construed as limiting  competition,  and the
      Contractor  may, at his option,  use any equipment,  material,  article or
      process which,  in the judgment of the  Contracting  Officer,  is equal to
      that named.  The Contractor  shall furnish to the Contracting  Officer for
      his approval the name of the  manufacturer,  the model  number,  and other
      identifying  data and information  respecting the  performance,  capacity,
      nature,  and rating of the machinery and  mechanical  and other  equipment
      which the  Contractor  contemplates  incorporating  in the  work.  When so
      directed,  samples  shall be submitted  for  approval at the  Contractor's
      expense,  with  all  shipping  charges  prepaid.   Machinery,   equipment,
      material,  and articles  installed or used without required approval shall
      be at the risk of subsequent rejection.

      (b) All work under the  Contract  shall be  performed  in a  skillful  and
      workmanlike manner. The Contracting  Officer may, in writing,  require the
      Contractor  to remove from the work any employee the  Contracting  Officer
      deems incompetent, careless, or otherwise objectionable.

 37.  OTHER CONTRACTS
      (a) The Commonwealth may undertake or award other contracts for additional
      work, and the Contractor shall fully cooperate with such other contractors
      and  Commonwealth  employees  and  carefully  fit  his  own  work  to such
      additional  work  as  may be  directed  by the  Contracting  Officer.  The
      Contractor  shall not commit or permit any act which will  interfere  with
      the performance of work by any other  Contractor,  or with the performance
      of work by any Commonwealth employee.

 38.  SUBCONTRACTS
      (a) Nothing  contained in this contract shall be construed as creating any
      contractual relationship between any subcontractor and the Commonwealth.
      The divisions or sections of the specifications

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      are not  intended  to direct the  Contractor  in  dividing  the work among
      subcontractors, or to limit the work performed by any trade.

      (b)  Within  ten (10) days after  award of any  subcontract  by either the
      Contractor or any of his  subcontractors,  the Contractor shall deliver to
      the Contracting  Officer a statement setting forth the name and address of
      the subcontractor and a summary description of the work subcontracted.

      (c) The Contractor  shall be responsible to the  Commonwealth for acts and
      omissions of his own employees and of subcontractors  and their employees.
      He  shall  also be  responsible  for the  coordination  of the work of the
      trades, subcontractors, and suppliers.

      (d) The Commonwealth will not undertake to settle any differences  between
      or among the contractor, subcontractors, and suppliers.

 39.  COMMONWEALTH OCCUPANCY
      (a) The Contracting Officer reserves the right of partial occupancy or use
      of facilities, services, and utilities, prior to final acceptance, without
      implying  compliance  or  acceptance  of any  part of the  project  by the
      Commonwealth.  Prior to such  occupancy  or use, the  Contracting  Officer
      shall furnish the Contractor with an itemized list of work remaining to be
      performed or corrected.

      (b)  Costs  incurred  as a  result  of such  partial  occupancy  or use of
      facilities,  services and  utilities  are subject to equitable  adjustment
      under the  provisions  of the  "Changes"  and the  "Equitable  Adjustment"
      clauses.

      (c)  Necessary  restoration  and repair of damage  resulting  from partial
      occupancy or use shall not be at the expense of the Contractor.

 40.  GUARANTEES
      (a)  Unless  otherwise  provided  in the  specifications,  the  Contractor
      guarantees all mechanical and electrical work to be in accordance with the
      contract  requirements  and free from  defective  and inferior  materials,
      equipment,  and workmanship  for one year after the final  acceptance date
      the equipment or work was placed in use by the Commonwealth.

      (b) If, within any guarantee  period,  the Contracting  Officer finds that
      guarantee  work  needs to be  repaired  or  changed  because of the use of
      materials,  equipment, or workmanship which, in his opinion, are inferior,
      defective,  or not in accordance with the terms of the contract,  he shall
      so inform the Contractor in writing and the Contractor  shall promptly and
      without additional expense to the Commonwealth:

           (i) Place in satisfactory condition all of such guaranteed work; (ii)
           Satisfactorily  correct  all  damage  to  equipment,  the  site,  the
           building or contents  therein,  which is the result of unsatisfactory
           guaranteed work; and (iii) Satisfactorily correct any work, material,
           or equipment that is disturbed in fulfilling the guarantee, including
           any  disturbed  work,  materials  and  equipment  that may have  been
           guaranteed under another contract.

      c) Should the Contractor  fail to proceed  promptly in accordance with the
      guarantee, the Commonwealth may have such work performed at the expense of
      the Contractor.

      (d) Any special  guarantees  that may be required under the contract shall
      be subject to the  stipulations  set forth  above,  insofar as they do not
      conflict with the provisions of such special guarantees.

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     (e) The Contractor shall obtain each transferable  guarantee or warranty of
      equipment,  material,  and installation  thereof which is furnished by any
      manufacturer,  supplier  or  installer  in  the  ordinary  course  of  the
      manufacturer's, supplier's, or installer's business or trade. In addition,
      the  Contractor   shall  obtain  and  furnish  to  the   Commonwealth  all
      information  which is  required  in order  to make any such  guarantee  or
      warranty to the Commonwealth in sufficient time to permit the Commonwealth
      to meet any time limit requirement  specified in the guarantee or warranty
      or, if no time limit is specified,  prior to completion  and acceptance of
      all work under the Contract.

      (f) This clause is not intended to limit any rights that the  Commonwealth
      may have as provided elsewhere in the Contract, or by law.


 41.  MAINTENANCE OF TRAFFIC
      (a) Unless the contract specifically provides for the closing of any local
      road or highway to traffic while construction is in progress, all roads or
      highways  shall  be  kept  open  to all  traffic  by the  Contractor.  The
      Contractor shall also provide and maintain in a safe condition,  temporary
      approaches,  crossings,  and  intersections  with roads and highways.  The
      Contractor  shall  bear all  expenses  for  maintaining  traffic  over the
      section of road  affected by work to be done under the  Contract,  and for
      constructing and maintaining such approaches, crossings, intersections and
      any  accessory  features  without  additional   compensation,   except  as
      otherwise provided in the Contract.


 42.  PERMITS AND RESPONSIBILITIES
      (a) Unless otherwise  agreed,  the Contractor  shall,  without  additional
      expense to the  Commonwealth,  be responsible  for obtaining all necessary
      licenses  and  permits  and for  complying  with all  applicable  Federal,
      Commonwealth  of the Northern  Mariana  Islands,  and municipal  codes and
      regulations  in connection  with  prosecution  of the work. The Contractor
      shall take proper safety and health  precautions  to protect the work, the
      workers,  the public,  and the property of others. The Contractor shall be
      responsible   for  all  materials   delivered  and  work  performed  until
      completion and acceptance of the entire  construction work, except for any
      completed unit of construction thereof which therefore has been accepted.


 43.  PROJECT SIGNS
      (a) The Contractor  shall provide,  place,  and maintain a project sign at
      each site where construction  operations are underway.  Each sign shall be
      placed as directed by the Contracting Officer. Each sign shall be 4'-0" by
      8'-0" in size,  be made of 3/4" marine  plywood (or approved  equal).  The
      signs shall state  thereon the name of the owner,  job number,  job title,
      Contractor,  Contracting  Agency, and Design  Consultant.  All wording and
      type, and size of lettering shall be approved by the Contracting  Officer.
      Upon  completion  of the work the signs shall  become the  property of the
      Contractor and shall be removed from the sites.


 44.  SPECIFICATIONS AND DRAWINGS
      (a) The Contractor  shall keep on the work site a copy of the drawings and
      specifications and shall at all times give the Contracting  Officer access
      thereto.  Anything  mentioned in the  specifications  and not shown on the
      drawings, or shown on the drawings and not mentioned in the specifications
      shall  be of like  effect  as if shown or  mentioned  in both.  In case of
      difference between drawings and specifications,  the specifications  shall
      govern. In case of discrepancy either in the figures, on the drawings,  or
      in the  specifications,  the matter  shall be  promptly  submitted  to the
      Contracting  Officer,  who shall promptly make a determination in writing.
      Any adjustment by the Contractor  without such  determination  shall be at
      his own risk and expense. The Contracting Officer shall furnish from


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     time to time such detail drawings and other  information as he may consider
      necessary, unless otherwise provided.

      (b) In case of  difference  between  small and large scale  drawings,  the
      large scale drawings shall govern. Schedules on any contract drawing shall
      take precedence over conflicting information on that or any other contract
      drawing. On any of the drawings where a portion of the work is detailed or
      drawn out and the  remainder  is shown in outline,  the parts  detailed or
      drawn out shall apply also to all other like portions of the work.

      (c)  Where the word  "similar"  occurs on the  drawings,  it shall  have a
      general meaning and not be interpreted as being identical, and all details
      shall be worked out in relation  to their  location  and their  connection
      with other parts of the work.


 45.  STANDARD REFERENCES
      (a)  All  documents  and  publications  (such  as,  but  not  limited  to,
      handbooks,  codes,  standards,  and specifications) which are cited in the
      Contract  for the  purpose  of  establishing  requirements  applicable  to
      equipment,  materials, or workmanship under the Contract,  shall be deemed
      to be  incorporated  herein  as fully as if  printed  and  bound  with the
      specifications of the Contract, in accordance with the following:

      (b) Wherever reference is made to Interim Federal Specifications,  Interim
      Amendments  to Federal  Specifications,  Interim  Federal  Standards,  the
      Contractor  shall  comply  with the  requirement  set out in the  issue or
      edition  identified  in the  Contract  except as modified or as  otherwise
      provided in the specifications of the Contract.  (c) Wherever reference is
      made to any document other than those  specified in paragraph 45(b) above,
      the Contractor  shall comply with the  requirements set out in the edition
      specified in the Contract,  or, if not  specified,  the latest  edition or
      revision thereof,  as well as the latest amendment or supplement  thereto,
      in effect on the date of the Invitation  for Bids on this project,  except
      as modified by, as otherwise  provided in, or as limited to type, class or
      grade by the specifications of the Contract.

      (d) Federal  Specifications and Federal Standards may be obtained from the
      Commonwealth Printing Office, Washington,  D.C. 20420. Inquiries regarding
      "Commercial  Standards",  "Products  Standards",  and "Simplified Practice
      Recommendations"  should be addressed to the Office of Product  Standards,
      National  Bureau of Standards,  Washington,  D.C.  20234.  Publications of
      associations  referred to in the  specifications  may be obtained directly
      from the associations.

      (e) Upon  request,  the  Contractor  shall make  available at the job site
      within a reasonable  time, a copy of each trade manual and standard  which
      is incorporated by reference in the Contract and which governs quality and
      workmanship.


 46.  STANDARD DETAILS
      (a)  Standard   Details  are  applicable  when  listed,   bound  with  the
      specifications,  noted on the  drawings  or  referenced  elsewhere  in the
      specifications.  Where the notes on the drawings  indicate  modifications,
      such modifications shall govern.


 47.  MEASUREMENTS
      (a) All dimensions shown on existing work and all dimensions  required for
      work that is to connect  with work now in place  shall be  verified by the
      Contractor by actual  measurement of the existing work. Any  discrepancies
      between the contract  requirements  and the existing  conditions  shall be
      referred to the Contracting  Officer before any work affected  thereby has
      been performed.


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48.  SURVEY MONUMENTS AND BENCH MARKS
      (a) The  Commonwealth  has  established,  or will establish,  such general
      reference  points as will enable the Contractor to proceed with work under
      the Contract.  The Contractor  will provide new monuments,  where shown or
      specified.  If  the  Contractor  finds  that  any  previously  established
      reference points have been destroyed or displaced,  or that none have been
      established, he shall promptly notify the Contracting Officer.

      (b) The Contractor shall protect and preserve  established bench marks and
      monuments and shall make no changes in locations  without written approval
      of the  Contracting  Officer.  Established  reference  points which may be
      lost, covered, destroyed, or disturbed in the course of performance of the
      work under the  Contract or which  require  shifting  because of necessary
      changes in grades or  locations  shall,  subject to prior  approval of the
      Contracting  Officer,  be replaced and accurately located (as appropriate)
      at the Contractor's expense by a CNIVII licensed land surveyor.

      (c) The  Contractor  shall verify the figures shown on the survey and site
      plan before undertaking any construction work and shall be responsible for
      the accuracy of the finished work.


 49.  PATENT INDEMNITY
      (a) Except as otherwise  provided,  the Contractor agrees to indemnify the
      Commonwealth and its offices,  agents,  and employees  against  liability,
      including costs and expenses,  for infringement upon any Letters Patent of
      the United States and /or foreign  country  (except  Letters Patent issued
      upon an  application  which is now or may  hereinafter  be, for reasons of
      national  security,  ordered  by the  Commonwealth  to be kept  secret  or
      otherwise  withheld  from  issue)  arising out of the  performance  of the
      Contract  or out of the  use or  disposal  by or for  the  account  of the
      Commonwealth  of  supplies   furnished  or  construction   work  performed
      hereunder.


 50.  CONVICT LABOR

      (a) In connection  with the  performance  of work under the Contract,  the
      Contractor  agrees  not  to  employ  any  person  undergoing  sentence  of
      imprisonment at hard labor.


 51.  EQUAL OPPORTUNITY
      (a)  During the performance of the Contract-

           (i) The  Contractor  will not  discriminate  against any  employee or
           applicant for employment  because of race,  color,  religion,  sex or
           national  origin.  The  Contractor  will take  affirmative  action to
           ensure that  applicants are employed,  and that employees are treated
           during employment without regard to their race, color,  religion, sex
           or national origin. Such action shall include,  but not be limited to
           the following  layoff or termination;  rates of pay or other forms of
           compensation;  and selection for training,  including apprenticeship.
           The  Contractor  agrees to post in conspicuous  places,  available to
           employees and applicants for  employment,  notices  setting forth the
           provisions of this nondiscrimination clause.

           (ii) The Contractor will in all solicitations or  advertisements  for
           employees  placed by or on behalf of the  Contractor,  state that all
           qualified  applicants  will  receive   consideration  for  employment
           without regard to race, color, religion, sex, or national origin.

           (iii) The Contractor will send to each labor union or  representative
           of workers with which he has a collective  bargaining  agreement  for
           the Contract,  a notice,  to be provided by the Contracting  Officer,
           advising   the  labor  union  or  worker's   representative   of  the
           Contractor's  commitments under this clause, and shall post copies of
           the  notice  in  conspicuous   places   available  to  employees  and
           applicants for employment.

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           (iv) The  Contractor  will comply with all  provisions  of  Executive
           Order No. 11246 of September 28, 1965, as amended,  and of the rules,
           regulations,  and  relevant  orders of the  President's  Committee on
           Equal Employment Opportunity created thereby.

           (v) The Contractor will furnish all information and reports  required
           by Executive  Order No. 11246 of September 28, 1965, as amended,  and
           by  the  rules,  regulations  and  orders  of  the  said  President's
           Committee,  or pursuant thereto, and will permit access to his books,
           records,  and accounts by the  Contracting  Officer and the Committee
           for  purposes of  investigation  to  ascertain  compliance  with such
           rules, regulations, and orders.

      (b) In the event of the Contractor's noncompliance with paragraph (a), the
      Contract  may  be  summarily   cancelled,   terminated  for  default,   or
      indefinitely  suspended  in whole or in part,  and the  Contractor  may be
      declared ineligible for further Commonwealth contracts, in accordance with
      the  applicable  procedures  in the  Contract  and  the  CNMI  Procurement
      Regulations

      (c) The  Contractor  will include the provisions of paragraph (a) in every
      subcontract or purchase order unless  exempted by rules,  regulations,  or
      orders of the President's Committee on Equal Employment Opportunity issued
      pursuant to Section 303 of  Executive  Order No.  11246 of  September  28,
      1965,  as amended,  so that such action with respect to any  subcontractor
      purchase  order  as the  contracting  agency  may  direct  as a  means  of
      enforcing such provisions including sanctions for noncompliance. Provided,
      however,  that in the  event the  Contractor  becomes  involved  in, or is
      threatened with,  litigation with a subcontractor or vendor as a result of
      such direction by the contracting  agency,  the Contractor may request the
      Commonwealth to enter into such litigation to protect the interests of the
      Commonwealth.


 52.  UTILIZATION OF SMALL BUSINESS CONCERNS

      (a) It is the policy of the Commonwealth as declared by the U.S.  Congress
      that a fair  proportion  of the  purchase and  contracts  for supplies and
      services for the Commonwealth be placed with small business concerns.

      (b) The Contractor shall  accomplish the maximum amount of  subcontracting
      to small business concerns that the Contractor finds to be consistent with
      the efficient performance of the Contract.


 53.  WORKING HOURS
      (a) It is contemplated  that all work will be performed during the regular
      working hours of the trades  involved  unless  otherwise  specified in the
      Contract.  "Regular working hours" shall mean from 7:30 a.m. to 4:30 p.m.,
      Monday through Friday, except holidays.

      (b) If the  Contractor  desires to carry on work outside  regular  working
      hours,  he shall submit an application  to the  Contracting  Officer,  and
      shall allow ample time to enable  satisfactory  arrangements to be made by
      the Contracting  Officer for inspecting the work in progress.  The cost of
      inspection  outside  of  regular  working  hours  shall  be  borne  by the
      Contractor.  Work performed by the Contractor at his own volition  outside
      of  regular  working  hours  shall  be at no  additional  expense  to  the
      Commonwealth.  (c) If the Contractor  chooses and the Contracting  Officer
      approves work at night,  the Contractor shall light the different parts of
      the work in an approved manner.


 54.  SOCIAL SECURITY
      (a) All employees of the Contractor or his subcontractors shall be covered
      under the  Commonwealth  of the Northern  Mariana  Islands Social Security
      System. The employee withholding is 7.65% of the first $62,700.00 of wages
      earned. The employer contribution is a like


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      amount.  Additional  information  can be obtained from the Social Security
      Office,  Commonwealth of the Northern Mariana Islands, Saipan.


 55.  ACCIDENT PREVENTION - PUBLIC SAFETY
      (a) In the performance of the contract,  the Contractor  shall comply with
      the applicable  provisions of the  "Commonwealth  of the Northern  Mariana
      Islands Safety Manual", and the provisions of the U.S. Occupational Safety
      and Health Act (OSHA), and shall take all precautions necessary to protect
      persons and property; including, but not limited to, providing,  erecting,
      and  maintaining  all necessary  barricades,  suitable and  sufficient red
      lights,  danger signals,  and signs.  Roads subject to interference by the
      work  shall  be kept  open or  suitable  detours  shall  be  provided  and
      maintained by the Contractor. If directed, the Contractor shall erect such
      additional  warning and  directional  signs in connection with the work as
      may be furnished  by the  Commonwealth.  Roads closed to traffic  shall be
      protected  by  effective  barricades  on which shall be placed  acceptable
      warning  and  detour  signs.  All  barricades  and  obstructions  shall be
      illuminated  at night,  and all lights  shall be kept  burning from sunset
      until sunrise.  The cost of compliance  with this clause shall be borne by
      the Contractor.


 56.  DEBRIS AND CLEANING
      (a) The  Contractor  shall,  during the  progress of the work,  remove and
      dispose of the resultant dirt and debris and keep the job site clean.

      (b) Upon  completion  of the work,  the  Contractor  shall remove from the
      vicinity  of the work all plant,  buildings,  rubbish,  unused  materials,
      concrete  forms  and  other  like  material  and  construction   equipment
      belonging to him or used under his direction during  construction,  except
      as  otherwise  directed,  and in the event of his  failure to do so to the
      satisfaction  of  the  Commonwealth,  the  same  may  be  removed  by  the
      Commonwealth  or  otherwise,  at the  expense of the  Contractor,  and his
      surety or sureties shall be liable therefore.


 57.  SANITATION

      (a)  Adequate  sanitary  conveniences  of an approved  type for the use of
      persons   employed  on  the  work,  and  properly   secluded  from  public
      observation,  shall be provided and maintained by the Contractor in such a
      manner  and at such  points  as  shall  be  required  or  approved  by the
      Contracting  Officer.  These conveniences shall be maintained at all times
      without nuisance, and this shall be strictly enforced.  Upon completion of
      the work,  they shall be removed from the  premises,  leaving the premises
      clean and free from nuisance.

 58.  PROTECTION OF EXISTING VEGETATION, STRUCTURES, UTILITIES, AND IMPROVEMENTS
      (a) The Contractor shall preserve and protect all existing vegetation such
      as trees,  shrubs and grass on, or adjacent  to, the site of work which is
      not to be  removed  and  which  does  not  reasonably  interfere  with the
      construction  work.  Care shall be taken in removing trees  authorized for
      removal to avoid damage to vegetation  deemed to be in place. Any limbs or
      branches  of  trees  broken  during  such  operations  or by the  careless
      operation of equipment,  or by workmen,  shall be trimmed with a clean cut
      and painted  with an  approved  tree  pruning  compound as directed by the
      Contracting Officer.

      (b) The Contractor shall protect from damage all existing improvements and
      utilities  at or near the site of the work,  the location of which is made
      known to him,  and will  repair or restore  any damage to such  facilities
      resulting from failure to comply with  requirements of the Contract or the
      failure to


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      exercise reasonable care in the performance of the work. If the Contractor
      fails or refuses  to repair  any such  damage  promptly,  the  Contracting
      Officer may have the necessary  work performed and charge the cost thereof
      to the Contractor.

 59.  STORM PROTECTION

      (a) The Contractor,  at no additional cost to the  Commonwealth,  shall be
      responsible for the security and safety of the  construction  work and the
      site, including the Contractor's camp site, when warnings of winds of gale
      force are issued. Gale winds are defined as having a sustained velocity of
      34 knots (39 MPH) or greater  and  include  winds of  tropical  storms and
      typhoon intensity.

      (b)  Satisfactory  job site  clean-up is the  initial,  basic,  day-to-day
      minimal  preparation  the  Contractor  can make for  winds of  destructive
      force.  When  warnings of winds of gale force are issued,  the  Contractor
      shall carry out, without delay, all directives  concerning securing action
      to be taken which may be issued to him by the  Contracting  Officer or his
      designated  representative.  This  preparation  is in accordance  with the
      contract terms and every practicable precaution shall be taken to minimize
      the  danger to  persons;  to prevent  damage to work in place,  materials,
      supplies,  equipment,  adjacent structures, and property of others; and in
      the public interest.

 60.  FAILURE TO FURNISH INFORMATION AND RECORDS

      (a) If the  Contractor or any  subcontractor  or the officers or agents of
      the Contractor or any subcontractor  shall refuse or have refused,  expect
      as  provided   otherwise  by  the  terms  Contract,   to  furnish  to  any
      Commonwealth  agency,  or any establishment in the legislative or judicial
      branch of the Commonwealth, information or records reasonably pertinent to
      the Contract or any other  Commonwealth  contract in connection with which
      the Contractor or any such subcontractors has or shall have performed work
      or furnished  materials or supplies or  undertaken so to do, the following
      action may be taken:

      (b) In the case of a refusal by the  Contractor,  its  officers or agents,
      the Commonwealth may, after affording an opportunity to explain or justify
      such refusal,  terminate the  Contractor's  right to proceed with the work
      under the Contract and thereupon the  Commonwealth may avail itself of the
      rights and remedies  provided in the "Termination for Default" clause,  in
      addition  to any other  rights and  remedies  provided by law or under the
      Contract.

      (c) In the case of a refusal by a  subcontractor,  its officers or agents,
      the Commonwealth may, after affording an opportunity to explain or justify
      such refusal,  require the Contractor to terminate the subcontract without
      cost to the Commonwealth,  or if the Contractor fails or refuses to effect
      such termination, the Commonwealth may terminate the Contractor's right to
      proceed with the work under the Contract and  thereupon  the  Commonwealth
      may  avail  itself  of  the  rights  and  remedies   referred  to  in  the
      "Termination for Default" clause.


 61.  PERMISSION TO ENTER THE  COMMONWEALTH OF THE NORTHERN  MARIANA ISLANDS (a)
      Permission to enter the  Commonwealth of the Northern Mariana Islands must
      be secured from the CNMI Department of Commerce and the CNMI Department of
      Labor and Immigration, by filling out the requisite CNMI standard forms.


 62.  TRANSPORTATION AND LODGING EXPENSE
      (a) If the Contractor utilized nonresident labor as defined in Title 49 of
      the  CMI  Code,  and if the  Contractor  provides  either  transportation,
      lodging  or  lodging  expense,  or  room or  board  expenses  to any  such
      employee, then such Contractor shall provide the same benefits to resident
      employees, as defined in
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      Title 49; provided,  however,  that  transportation,  lodging,  or lodging
      expenses;  or room or board  expenses need not be provided when a resident
      employee   maintains  his  principal  place  of  residence  within  normal
      commuting distance, as defined by regulations  implementing Public Law No.
      4C-49, from his place of employment with such Contractor.


 63.  OFFICIALS NOT TO BENEFIT

(a)        No  member  of  Congress  of  the  United   States,   member  of  the
           Commonwealth  of the  Northern  Mariana  Islands  Legislature  or the
           Governor of the Commonwealth of the Northern Mariana Islands shall be
           admitted to any share of the  Contract,  or to any  benefit  that may
           arise therefrom;  but this provision shall not be construed to extend
           to the Contract if made with a corporation for its general benefit.


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