Document Kzx9BQeJQaYd4Vo1oEJYODBm0

P. O. BOX 792 ARTHUR BROTHERS INCORPORATED HIWAY 77 BYPASS KINGSVILLE. TEXAS 78363 September 23, 1987 telephone sez Celanese Chemical Company, Inc. P.0. Box 47320 Dallas, Texas 75247 ATS:26 Attention: Mr. T. R. Shandley Purchasing Manager Plant Maintenance and Construction Services Agreement Dear Rogers, As we near completion of the second year of the referenced agreement, continually increasing payroll taxes and the high cost of insurance, over which' we have no control, continues to drive our cost of supplying labor services in excess of the fees for which we .are currently contracted. Attached as enclosure (I) is a chart outlining our tax and insurance cost (as per cent of straight time wages) from 7-85 (date bid submitted) to 1-88 (date of next tax increase). This chart indicates that for eight (8) months (12-30-85 to 9-8-86) we experienced increased Insurance cost of 1.419Z, for which no fee increase was requested. From 9-8-86 to 9-6-87 we experienced both tax and insurance cost increases totaling 5.118Z for which we received the 3Z fee increase of 9-8-86. Now, for the period 9-7-87 to 9-4-88 (with the tax increases of 1-88) we will experience a tax and in surance cost increase totaling 6.788Z over the percentages used in our bid preparation of 7-85. Attached as enclosure (2) is a chart outlining our tax cost (as per cent of premium portion of overtime wages) from 7-85 (date bid submitted) to 1-88 (date of next tax increase). This chart indicates that we will experience, in this portion of our payroll, a tax increase of 1.66Z over the percentages used in our bid preparation of 7-85. Therefore; and regrecfully, we must ask for a fee increase of 4Z in the straight time portion of our payroll and a fee Increase of 1.70Z in the premium portion of overtime wages. Attached as enclosure (3) is the proposed amendment to Article 10 of the referenced agreement. We respectfully ask that this amendment be made retroactive to 9-7-87. Thank you for your understanding in this matter. Very Truly Yours, 16883 AFS/vlc Enclosures (1) (2) (3) Aaron F. Starks Vice-President Tax and Insurance Cose Comparison As Percenc of Straight Time Wages . *7-85 F.X.C.A.. 7.05 S.U.T. 3.08 F.U.T. .40 .**9-85 7.05 3.08 .40 Cost Increase . 7-85 - 9-85 . 9-86 7.15 4.18 .40 Cost Increase . 9-85 - 9-86 .10 1.10 1-88 7.51 4.28 .40 Cost Increase 7-85 - 1-88. .46 1.20 Work.Comp. 1.57 2.016 Gen.Lia. # f Umbrella .492 -.604 .240 ' 1.101 TOTALS - Total Cost Increase 12.832 14.251 .446 .112 .861 1.419 2.67 .909 2.641 17.95 1.10 .417 2.401 5.118 3.92 .1.11 2.4 19.62 2.35 .618 2.16 6.788 * July 1985 - Date current agreement proposed. ** September - Date for notification of annual insurance premium. Enclosure (1) 16884 I ' Tax Cose Comparison As Percent of Premium Portion of Overtime Wages Cost Increase * Date current agreement proposed. Enclosure (2) 16885 ARTICLE 10. CONTRACTOR'S FEE, (a) For providing labor and supervision therefore Concraccor shall be paid in addition to the amount provided in Article 9 hereof, a Fee, which consists of three components, of 34.52 of the direct wage cost actribucable to (i) actual straight-time hours worked (ii) the straight-time portion of any overtime hours worked. The Fee consists of three components (i) 292 for all payroll costs, employees benefits and small tools (ii) 2.02 for profit and overhead, and (iii) 3.52 for General and Umbrella Liability Insurance Coverage, as per the following schedule: SEPTEMBER 7, 1987 THRU SEPTEMBER 4, 1988 Total Annual Direct Vage Cost (Exclusive of Premium Portion of Overtime) $10,000,000 or less Payroll costs, employee benefits, and small tools 29.02 General and Umbrella Liability Insurance Coverage (Renegotiated each like period thereafter) 3.52 Overhead and Profit Total Fee: 2.02 34.52 $10,000,000 or more ,5 i Payroll costs, employee benefits, and small tools 29.02 General and Umbrella Liability Insurance Coverage .52 Overhead and Profit Total Fee: 2.02 31.52 Contractor shall be paid a markup equal to 12.5 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 authorized employees on authorized work hereunder. It is understood that Company may, in the future, wish Contractor to perform similar work at other Company plants. Such ocher 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. Enclosure (3) 16886