Document ga0Qp3YabrEQXw01gw3N4Xb0q

it*"--- PLAINTIFF'S EXHIBIT v- 4 AMENDMENT OF MAINTENANCE CONTRACT / FOR BROWNSVILLE AND SEADRIFTTEXAS PLANTS ____ UNION CARBIDE CHEMICALS COMPANY TO APPROPRIATIONS COMMITTEE: Appropriations Committee approval is requested to enter into an amendment modifying the existing cost plus percentage fee contract with Brown & Root, Inc. covering maintenance labor requirements at the Brownsville and Seadrift, Texas plants. The present contract commenced on January 2, 1963 and expires on January 1( 1964, and was approved by the Committee on December 11, 1962 based on our letter of December 7, 1962. .' The modifications to the contract were proposed by Brown & Root, and are as follows: 1.. Change the contract period from one year to open-end, which will extend the contract for an indefinite period. 2. Change the provision for ninety-day notice of termination by either ; party to 120-day notice. 3. Change the schedule of fee percentages retroactive to January 2, 1963 as follows: Annual Direct Labor Cost Present Z Fee Proposed Z Fee Less than $1,300,000 From $1,300,000 but less than $1,400,000 . It 1.400.000 ti " 1,500,000 9t 1.500.000 n 1,600,000 1.600.000 N 1.700.000 1.700.000 fl ft n 1.800.000 1,900,000 2,000,000 ft II VI ft 1.800.000 .1.900.000 2,000,000 2 100.000 $2,100,000 and over 31.1 30.5 29.5 28.5 27.5 26.5 25.5 24.0 24.0 24.0 ss. The adjustment in fee schedule would result in a reduction of about $22,000 fir the year 1963 based on the estimated direct labor expenditure of .about $1,100,000 indicated in our December 7, 1962 letter. On the basis of project ing actual direct labor expenditures for the first quarter of 1963 to an in dicated annual basis of nearly$1,900,000, the reduction may be nil. If total annual direct labor expenditures should exceed $2,100,000, a reduction of $40,000 or more could accrue. Brown & Root's proposal to change the contract period to open-end is apparently :based on eliminating the traditional annual or bi-annual evaluating and nego tiating of a new contract. This open-end concept will provide a more atabiliz- ing influence within Brown & Root regarding continuity of the work, even con sidering the termination privilege which will remain in the contract. . (R) -1BRF 0122 fJ7rM 111 nrntni 11 'i m--... ^ai I wht** --- - - BBPgl B> , To date Central Purchasing has not developed open-shop competition to Broun & Root for this work which is acceptable to the Chemicals Company. This is because of the satisfactory and proven open-shop working controls exhibited by Brown & Root to date. As Brown & Root's performance under the present contract Is still satisfactory and effective, and no acceptable alternative has been developed, the Central Purchasing Department concurs with the recommendation of the Union Carbide Chemicals Company for acceptance of tjie above-outlined contract modifications proposed by Brown & Root. We trust that this recommendation will receive favorable consideration by the Appropriations Committee. REQUEST PREPARED BY H. R. MITCHELL FOR CENTRAL PURCHASING DEPARTMENT ' , . APPROVED BY THE - - APPROPRIATIONS COMMITTEE REVIEWED BY THE LAW DEPARTMENT ' V'db~ -2BRF 0123 June 3, 1963 TO APPROPRIATIONS COMMITTEE: Mr. D. B. Benedict Mr. A. L. Foscue Mr. W. M. Haile Mr. K. H. Hannan Mr. A. S. Johnson Mr. H. D. Kinsey Mr. B, Mason. Jr. Mr. K. Rush Mr. 3. HeImer, Secretary (2 cc: Mr. H. S. Bunn Mr, John Shacter Mr. J. F. Shanklln Mr, W, S, Sneath Mr. J. A. Willis J? *5 e I am attaching a copy of a request for the Appropriations Committee's approval of an amendment to the existing cost plus a percentage fee contract between Onion Carbide Chemicals Company. Division of Union Carbide Corporation and Brown & Root, Inc. covering maintenance labor requirements at the Brownsville and Seadrift, Texas plants. If the Cocnittee gives its formal approval for this amendment, we shall appreciate it if Mr. Borden Helmer will sign one copy and return it to us. BRF 0121