Document 2NBNV81pQanwaG9d8orDv9Zwg
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TELEPHONE 592-6416
ARTHUR BROTHERS
INCORPORATED
HIWAY 77 8YPASS KINGSVILLE. TEXAS 78363
November 21, 1988
PLAINTIFF'S EXHIBIT CEL-1405
AFS-73
Hoechet Celanese Chemical Group 1250 W. Mockingbird Lane P.O. Box 569320 Dallas, Texas 75356-9320
Attention: Mr. T. E. Shandley
Re:
Maintenance and Construction Service Agreement December 30, 1985 Through April 30, 1989
Dear Rogers:
In response to our meeting of November 14, 1988 and our best
effort to remain competitive in the fulfillment of the referenced
agreement,
we resubmit our letter of September 26, 1988,
concerning an amendment to Article 10 of the referenced contract
to cover increased tax and insurance costs.
We propose to forego the 2.2% fee increase, requested for September 5, 1988, if we can remove the rates from our fee for both State and Federal Unemployment taxes and bill you quarterly*, in 1989, at cost. We feel this is important to both of us in light of the uncertainties we face for 1989 and the difficulties in establishing a percentage rate that is equitable in covering these costs.
Attached is the proposed amendment to Article 10 of the referenced contract. We request this amendment be effective December 26, 1988. Please indicate your acceptance of this amendment by signing the attached document. Return the executed copy to Arthur Brothers, Incorporated and keep the original for your files.
Thank you for your understanding in this matter
Very truly yours,
ARTHUR BROT^
INCORPORATED
Aaron F. Starks Vice-President
16783
r
AFS-73 Page 2
cc: Bay City:
C. R. Pennington; A. C. Enlow; R. E . Allen S. R. Starks
Bishop:
D. G. Pausky D. L. Yancey; D. D Siemonsma; R. C. Seawright; J. J. Starks
Corpus Christi:
R,. R. Graham; L. W. Hartman; W.. E. Clark
. W. Eason;
Pampa: R. G. Guard; L. E. Moore; L. T. Johnston; C. R. Jones; P. D. Ley
16784 t
1989 CONTRACT AMENDMENT.
Effective December 26, 1988
ARTICLE 10.
CONTRACTOR'S FEE.
(a) For providing Labor and
supervision therefore Contractor shall be paid m addition to the amount
provided in Article 9 hereof, a Fee. which consists of three components, of
30.0% of the direct wage cost attributable to (i)actual straight-time hours
worked- (ii) the straight-time portion of any overtime hours worked. '
The Fee consists of three components (i) 2?-spayroll.caste-, (excluding all State and Federal Unemployment Taxes),employees bene__f_its and small tools (ii) 2.0% for profit and overhead. and (ill),1.0% for UUmmb brella Liability Insurance Coverage, as per the following schedule:
Total Annual Direct Wage Cost (Exclusive of Premium Portion of
Overtime)
212,564.00 or lese
Payroll costs.(excluding all state and federal unemployment taxes).employee benefits, and small tools
Umbrella Liabilitty Insurance Coverage (September 5, 19888. t_h_r__o_u__g__h S__eptember 3v, 1989) (Renegotiated each like perio thereafter).
Overhead and Profit
27.0%
1.0%
2.0%
Total Fee:
30.0%
8,212,564.00 or more (including other all 5mm coverage)-
Payroll costs,(excluding all state and federal umemployemnt taxes),employee benefits, and small tools
clients
requiring 27.0%
Umbrella Liability Insurance Coverage
0.0%
Overhead and Profit
2.0%
Total Fee:
29.0%
Contractor 6hall be paid a markup equal to 8.5 percent of that portion of Contractor's total direct wage cost attributable to the premium portion of wages paid for overtime hours worked by its authorised employees on authorized work hereunder.
At the end of each quarter, beginning December 26 . 1988, -Contractorshall bill Company at cost for all State and Federal Unemployment taxes applicable.to authorized work hereunder.
It is understood that Company may, in the future, wish Contractor to perform similar work at other Company plants. Such other plants may be added to this Agreement using the same conditions and percentage Fee and markups described herein. The annual period for the work performed at such other plant shall be deemed to have the same commencement date as the
annual period hereunder.
Hoechst Celanese By:____________
Title:____________
Arthu Brothefc-SA,
By: iJZ Jim
Title: l)\n,-Pj'thrhA
ncorporated
Date: ___________
Date: //-
16785
1989 CONTRACT AMENDMENT
Effective December 26, 1988
ARTICLE
10.
CONTRACTOR'S FEE. , (a) For providing Labor and
supervision therefore Contractor shall be paid in addition to the amount
provided in Article 9 hereof, a Fee, which consists of three.components, of
30.0% of the direct wage cost attributable to (i)actual straight-time iiours
worked (ii) the straight-time portion of any overtime hours worked. ^
The Fee consists of three components (i) 27.0% for all payroll costs, (excluding all State and Federal Unemployment Taxes) .employees benefits and small tools (ii) 2.0% for profit and overhead, and (ill) 1.0% for Umbrella Liability Insurance Coverage, as per the following schedule:
Total Annual Direct Wage Cost (Exclusive of Premium Portion of Overtime) $8,212,564.00 or less
Payroll costs.(excluding all state and federal unemployment taxes) .employee benefits, and small tools
Umbrella Liability Insurance Coverage
_____
1 (September 5, 1988 through September 3, 1989) (Renegotiated each like period thereafter)
Overhead and Profit
27.0%
1.0%
2.0%
Total Fee:
30.0%
8,212,564.00 or more (including other all
5mm coverage) Payroll costs,(excluding all state and federal umemployemnt taxes), employee benefits, and small tools
clients
requiring 27.0%
Umbrella Liability Insurance Coverage
0.0%
Overhead and Profit
2.0%
Total Fee:
29.0%
Contractor shall be paid a markup equal to 8.5 percent of that portion of Contractor's total direct wage co6t attributable to the premium portion of wages paid for overtime hours worked by its authorised employees on
authorised work hereunder.
At the end of each quarter, beginning December 26, 1988, Contractor shall bill Company at cost for all State and Federal Unemployment taxes applicable to authorized work hereunder.
It is understood that Company may, in the future, wish Contractor to
perform similar work at other Company plants. Such other plants may be added to this Agreement using the same conditions and percentage Fee and markups described Herein. The annual period for the work performed at such
other plant shall be deemed to have the same commencement date as the annual period hereunder.
Hoechst Ce
fry ,By: A
alul
Title:
Arthup~\Broth0rg^ ncorporated By: (jlMwd.
Title: Olei- ftiudtA
Date: _
________________
" Date:
16786
MAINTENANCE CONTRACTOR FEE ANALYSIS
1
FEES IN X
!
CONTRACT ABI: 10MMS OR LESS
OIRECT
OUERHAEAD
COSTS INSURANCE h PROFIT TOTAL
*
OVERTIME! PREMIUM !
1. ORI6INAL 12/30/85 25.5
0.0
2.0 27.5
10.8 !
2. AMENDMENT 9/15/8G 25.0
3.5
2.0 30.5
10.8 1
3. AMENDMENT 3/7/87 29.0
3.5
2.0 34.5
12.5 !
4. PROPOSAL 9/26/88 33.7
1.0
2.0 36.7
13.0 !
ABI: 10MM$ OR MORE
1. 0RI6INAL 12/30/85 25.5
0.0
2.0 27.5
10.8 !
2. AMENOMENT 9/15/86 25.0
0.5
2.0 27.5
10.8 :
3. AMENDMENT 9/7/87 29.0
0.5
2.0 31 .5
12.5 !
4. PROPOSAL 9/26/88 33.7
0.0
2.0 35.7
13.0 !
MUNDY: CLEAR LAKE
` 17.019.25 +
3SX OF SAL.
4.2
4.5 25.727.9 +
3SX OF SAL.
7.2 1.
y
16787
MAINTENANCE CONTRACTOR FEE ANALYSIS IN MS
1986
1/6/369/8/86
DIRECT COSTS INSURANCE PROFIT OVERTIME PREMIUM TOTAL
870.5 0.0
68.3 11.1 949.9
9/1S/8612/29/86
TOTAL COST ACTUAL CONTRACT
380.2 53.2 30.4 5.5
469.4
1250.7 S3.2 98.7 16.6
1419.2
1258.3 0.0
98.7 16.6 1373.6
g3- COST
MS X
(7.6) 53.2
0.0 0.0
(0.6) INF 0.0 0.0 3.3
CONTRACTOR'COST LIABILITY INCREASES IN MS 1986
-
STRAI6HT TIME
OVERTIME TOTAL
FEE INCREASE
W&CQS1
INCREMENT TOTAL INCREMENT TOTAL
FICA SUT 8, FUT WORKMENS COMP SEN LIABILITY UMBRELLA TOTAL
0.0 0.0 22.0 S.S 42.5 70.0
0.0 0.0 t
0.0
0.0 >
<7.6 ) (7.6)
0.0 22.0 _ tI
0.0 5.5 \
0.0 42.5 / 53.2 53.2
0.0 45.6
/
29.6 29.5
<5.2 > <5.2 > 24.4
So'A
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16788
MAINTENANCE CONTRACTOR FEE ANALYSIS IN MS
1987
i F(Z. TW&fcefrSg-
TOTAL COST
1/5/87- C9/14/87- --------------
9/7/87
12/48/8?""" ACTUAL CONTRACT
*Eg$;.cesi MS z
DIRECT COSTS INSURANCE PROFIT OVERTIME PREMIUM TOTAL
677.2 94.8 54.2 9.3
835.4
351.2 42.4 24.2 5.4
423.2
1028.4 137.2 78.4 14.7
1258.8
999.5 0.0
78.4 13.9 1091.9
28.8 137.2
0.0 0.7
WM
2.9 INF 0.0 5.3 15.3
CONTRACTOR COST LIA8ILITY INCREASES IN MS 1987
i 1FICA 1SUT & FUT !WORKMENS COMP !6EN LIABILITY 'UMBRELLA !TOTAL
STRAIGHT TIME
3.9 43.1 25.8 12.0 60.4 14Sr0
OVERTIME
0.1 1.4 0.0 0.0 0.0 1.5
FEE INCREASE
iMES&SSiP*
-cwgr-ivm--
}." o/e7'tye7)TOTAL INCREMENT . aTOeTiA-Lrp.INCREMENT TOTAL
, ,
4.0 !
f0rj
44.5 > 25.8 m f1
49.2
35.6
25.0 56.1
12.0 \
60.4 /
0.0 137.2
72.3 (26.7)
feKS* 172.8
29.3
&0L+-P C~*A
16789
MAINTENANCE CONTRACTOR FEE ANALYSIS IN MS
1988
1/4/8810/17/88
DIRECT COSTS INSURANCE PROFIT OVERTIME PREMIUM (TOTAL
1281.6 131.5 87.0 30.6
1510.8
TOTAL COST
ACTUAL CONTRACT
1261.6 131.5 87.0 30.6
1510.8
1109.4 0.0
87.0 26.4 1222.8
-COST'
MS X
152.3 131.5
0.0 4.2 287.9
13.7 INF
0.0 15.7 23.5
CONTRACTOR COST LIABILITY INCREASES IN MS 1986
FICA SUT & FUT WORKMENS COMP SEN LIABILITY UMBRELLA TOTAL
STRAIGHT TIME
is.7 4.4 54.4 8.7 < 10.5) 72.7
OVERTIME
0.9 0.2 0.0 0.0 0.0 1.1
FEE INCREASE
TOTAL INCREMENT TOTAL INCREMENT
CkX'AiC ) /(ZBL TO /
16.5
'
t
1
1 icJ^Aer)
4.6 >
0.0 156.4
75.5
54.4
._
1 1
8.7 \
(10.5) / (20.8) 107.3
19.0
<1*8 > 263.7
TOTAL
0/&
22.1
13.6 35.7
/
***%<.
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-v
16790
MAINTENANCE CONTRACTOR FEE ANALYSIS IN MS
CUMULATIVE 1/6/86 - 10/17/88
11 t1
i \DIRECT COSTS 1 INSURANCE !PROFIT 1 OVERTIME PREMIUM [TOTAL
TOTAL COST
ACTUAL CONTRACT
MS
3540.7
321.9 264.1
61.9 4188.6
3367.2 0.0
264.1 57.0
3688.3
173.5 321.9
0.0
*. 3 ) -H---^
X
5.2 INF 0.0 8.6 13.6
CONTRACTOR COST LIABILITY INCREASES 1986 - 1988
FEE INCREASE
FICA
!\
SUT & FUT
> 184.5
WORKMENS COMP!/
6EN LIABILITY 1\
UMBRELLA
1/ 297.7
TOTAL
(^482.2)
ADDED COST
107.8
(18.4) 89.4
16791
MAINTENANCE CONTRACTOR FEE ANALYSIS IN M$
FEE PROPOSAL 9/26/88
BASIS:AVERAGE ANNUAL WAGE 85-88 TOTAL COST
ADDED COST
ACTUAL CONTRACT MS
X
DIRECT COSTS INSURANCE PROFIT OVERTIME PREMIUM TOTAL
1520.0 48.1 96.1 2B.0
1790.3
1225.8 0.0
95.1 21.5 1343.5
394.2 48.1 0.0 4.4
446.7
32.2 INF 0.0
20.4 33.2
MAINTENANCE CONTRACTOR FEE COMPARISON IN MS
198G - 1988 PROPOSAL 9/88 TOTAL
TOTAL COST
ABI
4,188.5 1,790.3 5,978.9
MUNOY VARIANCE < AB-MUN>
3,855.5 333.0 1 ,402.8 387.5 5,258.3 720.5