EXECUTION COPY
TARGET PRICE
CONTRACT
between
ImClone Systems Incorporated
And
Kvaerner Process,
ARCHITECTURAL, ENGINEERING, PROCUREMENT ASSISTANCE
CONSTRUCTION MANAGEMENT, AND VALIDATION
of a
COMMERCIAL MANUFACTURING PROJECT
Branchburg, NJ
KVAERNER PROCESS,
a division of Kvaerner U.S. Inc.
Project No: ___________________
TARGET PRICE CONTRACT
EXHIBIT LIST
A. Kvaerner Process Scope of Work (Rev. E dated November 26, 2001) - Articles
1.1, 1.2 and 1.8
B. Layout Design prepared by Kvaerner - Articles 1.1 and 1.8
C. Definitive Estimate (Rev. 2 with Rev. 2A Supplement) - Article 1.3
D. Kvaerner Process Rate Schedule - Article 2.1(a)(1)
E. Kvaerner Process Travel and Living Adjustment Schedule - Article 2.1(a)(2)
F. Mechanical Completion - Article 2.1(c)(1)
G. Kvaerner Documentation required for monthly reimbursable expenses -
Articles 3.1 and 3.2
H. Project Schedule -Identifying critical milestone dates - Articles 5.1 and
4.3
THIS TARGET PRICE CONTRACT (this "CONTRACT") is made as of the 15th day
of July, 2002 (the "Effective Date"), by and between ImClone Systems
Incorporated, a company incorporated under the laws of the State of Delaware
hereinafter referred to as "OWNER", and KVAERNER PROCESS, a division of Kvaerner
U.S. Inc., ("KVAERNER PROCESS") a company incorporated under the laws of the
State of Delaware.
W I T N E S S E T H:
In consideration of the mutual promises and agreements of the parties
herein expressed, the parties hereto agree as follows:
ARTICLE 1. SCOPE OF WORK
1.1 KVAERNER PROCESS shall furnish certain engineering and design
services; procurement services; field supervision; home office
construction support services; construction management services, and
validation services as expressly stated in EXHIBIT A which is
attached hereto and incorporated by reference herein (hereinafter
collectively and severally referred to as the "KVAERNER WORK") for
OWNER's C225 Commercial Manufacturing Project to be constructed at
Branchburg NJ (the "PROJECT"), in accordance with the layout design
prepared by KVAERNER PROCESS (EXHIBIT B).
1.2 EXHIBIT A, and the attachments thereto, provide a detailed scope of
work for labor, equipment, materials and construction of the PROJECT
(the "PROJECT WORK"). The PROJECT WORK shall be performed by certain
contractors, vendors, suppliers, manufacturers and others (the
"CONTRACTORS"). The OWNER or KVAERNER PROCESS acting on OWNER's
behalf shall enter into contracts with the CONTRACTORS (which
contracts shall be referred to as the "CONTRACTOR AGREEMENTS").
1.3 KVAERNER PROCESS has provided OWNER with an estimate for the
completion of the KVAERNER WORK and the PROJECT WORK in the amount
of $225,205,648 (the "TARGET PRICE"), in accordance with a detailed
summary of all costs and expenses included in the TARGET PRICE which
is contained in the definitive estimate which is attached here to as
EXHIBIT C and incorporated by reference herein.
1.4 The KVAERNER WORK and the PROJECT WORK shall be based on the soils
investigation, data and conclusions contained in the report entitled
"Soil and Foundation Investigation" dated January 17, 2001, prepared
by Melick/Tully and Associates, P.C., an independent soils
consultant. In the event that any subsurface conditions not revealed
in said soils consultant's reports, or any other unusual, unexpected
or unforeseen physical conditions encountered at the PROJECT site
results in additional work by KVAERNER PROCESS, KVAERNER PROCESS
shall have the right to submit a Change Order Request to the OWNER
consistent with ARTICLE 4, herein.
1.5 KVAERNER PROCESS shall comply with all applicable laws and
regulations, dealing with employer/employee relations, and shall
obtain all licenses and permits required for the performance of the
KVAERNER WORK that are to be taken out in KVAERNER PROCESS' name. If
KVAERNER PROCESS incurs additional expense in the prosecution of the
KVAERNER WORK as the result of a change or modification of any
existing law or regulation or as the result of any law or regulation
not applicable to the KVAERNER WORK or the PROJECT WORK as of the
date of this CONTRACT, such matter shall be handled as a change in
accordance with ARTICLE 4.
1.6 KVAERNER PROCESS shall at all times keep the PROJECT site and other
parts of OWNER's premises free from accumulations of waste and
rubbish caused by KVAERNER PROCESS employees or the KVAERNER WORK.
At the completion of the KVAERNER WORK, KVAERNER PROCESS shall
remove from the PROJECT site and other parts of
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OWNER's premises all of KVAERNER PROCESS' equipment, tools,
scaffolding, surplus materials and other personal property and shall
leave the PROJECT site "broom clean."
KVAERNER PROCESS shall also direct and require each CONTRACTOR to
clean up the PROJECT site daily and otherwise to keep the PROJECT
site and other parts of the OWNER's premises free from accumulations
of waste and rubbish caused by CONTRACTORS' employees, suppliers and
subcontractors on the PROJECT. At the completion of the PROJECT
WORK, KVAERNER PROCESS shall direct and require each CONTRACTOR to
remove from the PROJECT site, and other parts of the OWNER's
premises, all of the CONTRACTORS' equipment, tools, scaffolding,
surplus material and personal property (as well as the equipment,
tools, scaffolding, surplus material and personal property of each
CONTRACTOR's subcontractors and suppliers), and shall leave the
PROJECT site "broom clean." OWNER may require additional cleaning by
KVAERNER PROCESS or any CONTRACTOR as warranted to maintain a safe
PROJECT site.
1.7 KVAERNER PROCESS shall not have responsibility for handling,
transport, treatment or disposal of hazardous, toxic, noxious or
otherwise regulated compounds, it being expressly agreed that such
activities are not within EXHIBIT A and that no Change Order may be
written requiring KVAERNER PROCESS to perform these duties unless
that Change Order expressly refers to this ARTICLE 1.7 and states
that it supercedes this clause.
1.8 OWNER shall cooperate fully with KVAERNER PROCESS in the performance
of the KVAERNER WORK, granting KVAERNER PROCESS free and complete
access to the site as described in EXHIBIT B, and providing such
other assistance as KVAERNER PROCESS may reasonably request. Without
limiting the generality of the foregoing, but subject to KVAERNER
PROCESS' obligations as set forth in ARCTICLE 1.1 herein, OWNER
shall provide, or cause to be provided, all work, facilities,
materials and other items required for the KVAERNER WORK, other than
those items expressly stated in EXHIBIT A to be provided by KVAERNER
PROCESS, all without cost to KVAERNER PROCESS and in a timely
manner.
1.9 OWNER shall have the right to accept or reject all PROJECT personnel
assigned by KVAERNER PROCESS to the PROJECT. Without limiting the
foregoing, this right shall include the right to cause the prompt
removal of personnel from the PROJECT. In addition, key PROJECT
personnel may not be removed from or reassigned with respect to the
PROJECT by KVAERNER PROCESS without the prior approval of OWNER. For
purposes of the foregoing sentence, key PROJECT personnel are: the
Project Director, Project Manager, Project Engineers, Lead
Discipline Engineers/Architects, Resident Construction Manager,
Sub-Contracts Manager, Construction Scheduler, Project Controls
Manager and Construction Superintendents.
ARTICLE 2. CONTRACT PRICE
2.1 As compensation for the KVAERNER WORK, OWNER shall pay to KVAERNER
PROCESS, in the manner and at the times set forth in ARTICLE 3
below, the "KVAERNER CONTRACT PRICE" comprised of (1) REIMBURSABLE
COSTS, (2) FIXED FEE, and (3) EARNED FEE, if any.
2.1(a) REIMBURSABLE COSTS:
1. Amounts for each man-hour expended by KVAERNER PROCESS
in performance of the KVAERNER WORK in accordance with
rates and multipliers established in EXHIBIT D and other
costs established herein.
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2. Travel and Living Adjustments at actual costs and at
rates and levels in accordance with KVAERNER PROCESS'
standard policies and procedures, which are attached as
EXHIBIT E.
3. Other costs and expenses reasonably incurred by KVAERNER
PROCESS in the performance of the KVAERNER WORK as
agreed between the OWNER and KVAERNER PROCESS as ordered
by written contract change order in accordance with
ARTICLE 4 herein.
2.1(b) FIXED FEE:
A fixed fee of $1,200,000 shall be paid to KVAERNER PROCESS in two
installments. A first installment amount of $600,000 shall be paid
within thirty (30) days after the EFFECTIVE DATE. A second
installment of $600,000 shall be paid on or before December 31,
2002.
2.1 (c) EARNED FEE:
KVAERNER PROCESS shall be entitled to earn fees in addition to the
fixed fee stated above, such earned fees not to exceed $3,300,000,
for schedule or cost achievements in accordance with the following
subsections. The sum of the fees, if any, earned under these
subsections 2.1 (c)(1) and 2.1 (c)(2) shall be the "EARNED FEE".
2.1(c)(1) Earned Fee for Schedule.
The target date for MECHANICAL COMPLETION, as that term is defined
in EXHIBIT F, is June 18, 2004 (the "TARGET DATE"). The actual date
of mechanical completion shall be "MECHANICAL COMPLETION DATE". In
the event MECHANICAL COMPLETION occurs within 28 days before or
after the TARGET DATE (the "DEADBAND"), KVAERNER PROCESS shall earn
a fee of $1,350,000, payable within 30 days after the determination
that MECHANICAL COMPLETION has been achieved. For each week or
partial week that MECHANICAL COMPLETION is earlier than May 21,
2004, the fee shall be increased in accordance with the following
schedule:
MECHANICAL COMPLETION DATE Additional Fee Total Earned Fee For Schedule
-------------------------- -------------- -----------------------------
May 14 to May 20, 2004 $ 500,000 $1,850,000
Before or on May 13, 2004 $1,000,000 $2,350,000
For each week or partial week that MECHANICAL COMPLETION occurs
after July 16, 2004, the earned fee shall be reduced in accordance
with the following schedule:
MECHANICAL COMPLETION DATE Fee Deduction Total Earned Fee For Schedule
-------------------------- ------------- -----------------------------
July 17 to July 23, 2004 $ 350,000 $1,000,000
July 24 to July 30, 2004 $ 700,000 $ 650,000
July 31 to August 6, 2004 $1,000,000 $ 350,000
On or after August 7, 2004 $1,350,000 $ -0-
2.1(c)(2) Earned Fee for Cost
KVAERNER PROCESS shall be entitled to payment of additional fees if
(a) the OWNER'S MECHANICAL COMPLETION COST is less than 106% of the
ADJUSTED TARGET PRICE and (b) the MECHANICAL COMPLETION DATE occurs
within or prior to the DEADBAND. As used in the previous sentence:
"OWNER'S MECHANICAL COMPLETION COST," also referred to as
"OMCC," means the sum of (i) the amount paid by OWNER as the
KVAERNER CONTRACT PRICE (excluding any costs expended by OWNER
to compensate KVAERNER
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PROCESS for validation services) and (ii) other amounts paid
by OWNER for the PROJECT WORK.
"ADJUSTED TARGET PRICE," also referred to as "ATP," means the
TARGET PRICE as adjusted to subtract KVAERNER PROCESS'
estimated costs for validation services, which are estimated
in EXHIBIT C.
In such event, KVAERNER PROCESS shall earn a fee in accordance with
the following schedule:
OMCC relative to ATP Total Earned Fee For Cost
-------------------- -------------------------
OMCC (less than or equal to) 90% of ATP $950,000
90% of ATP (less than) OMCC (less than or equal to) 92.5% of ATP $800,000
92.5% of ATP (less than) OMCC (less than or equal to) 96% of ATP $700,000
96% of ATP (less than) OMCC (less than) 104% of ATP $450,000
104% of ATP (less than or equal to) OMCC (less than) 105% of ATP $100,000
105% of ATP (less than or equal to) OMCC (less than) 106% of ATP $ 50,000
OMCC (greater than or equal to) 106% of ATP $ -0-
The "Total Earned Fee for Cost" from the preceding schedule shall be
payable as follows:
(A) A provisional payment shall be made within thirty (30) days
after the date of the first cost report issued after
MECHANICAL COMPLETION, provided that the sum of the actual
costs and forecasted costs in said report demonstrate that the
OMCC is less than 106% of ATP. The provisional payment shall
be equal to fifty percent (50%) of the Total Earned Fee for
Cost as determined in accordance with the above schedule.
(B) The balance of the Total Earned Fee for Cost shall be paid
within thirty (30) days after closure of all contracts and
purchase orders for the PROJECT, subject, however, to
adjustment if, following such closure, the final tabulation of
OMCC demonstrates that a different amount of Total Earned Fee
for Cost is due or that no Earned Fee for Cost is due. Should
an amount be due OWNER on account of such adjustment, it shall
be paid by KVAERNER PROCESS within thirty (30) days of receipt
of OWNER'S written notice thereof.
2.1(c)(3) Adjustments to Price
The TARGET PRICE and the ADJUSTED TARGET PRICE shall be increased by
(1) the additional amount paid to any CONTRACTOR resulting from any
OWNER approved written change orders resulting from causes other
than KVAERNER PROCESS' DEFECTIVE WORK (as defined in ARTICLE 6
herein) in excess of the CONTRACTOR's agreed upon CONTRACT PRICE, by
(2) the additional amount paid to KVAERNER PROCESS resulting from
any OWNER approved written change orders in excess of the estimated
KVAERNER CONTRACT PRICE, (3) any additional costs to the PROJECT
relating to comments of FDA officials (as communicated by OWNER) or
OWNER or OWNER's consultants to the design, described in EXHIBIT B,
currently the basis of the PROJECT, which are received after the
execution of this CONTRACT and (4) the positive difference between
(X) the bid amount of the BIDDER recommended by KVAERNER PROCESS for
any separate scope of the PROJECT WORK, and (Y) the bid amount of
the BIDDER selected by the OWNER, if other than the BIDDER
recommended by KVAERNER PROCESS, pursuant to ARTICLE 2.3 PROCUREMENT
of the Scope of Work attached hereto as EXHIBIT A. Only bidders from
the PRE APPROVED BIDDER LIST may bid elements of PROJECT WORK and
OWNER is limited to selecting bids from these PRE APPROVED BIDDER
LIST bids.
2.1(d) For purposes of clarity, the FIXED FEE is included, but
EARNED FEE (if any) is not included in the TARGET PRICE, nor are
they to be considered when calculating the EARNED FEE (if any).
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2.2 The KVAERNER CONTRACT PRICE and TARGET PRICE excludes all applicable
import duties, sales, use, gross receipts, property and all other
taxes, together with any local, state and federal taxes or duties
assessed on this transaction, and OWNER shall reimburse KVAERNER
PROCESS for all such taxes paid by KVAERNER PROCESS, in addition to
the KVAERNER CONTRACT PRICE, excluding only taxes measured on
KVAERNER PROCESS' net income and taxes which KVAERNER PROCESS is
obligated to pay directly with respect to its own employees, such as
social security taxes, unemployment taxes, and workmen's
compensation benefit taxes or premiums. Further, if KVAERNER PROCESS
is required by federal, state or local law to pay any increased or
additional taxes, (including without limitation, social security
taxes, unemployment or workmen's compensation benefit taxes or
premiums, and excluding only taxes measured by KVAERNER PROCESS' net
income), not applicable as of the date of this CONTRACT, the
KVAERNER CONTRACT PRICE and TARGET PRICE shall be increased by the
total amount of such duties, tax increases or additions which shall
be reimbursed by Owner
2.3 The TARGET PRICE and the KVAERNER CONTRACT PRICE forming a part
thereof include an allowance for overtime necessary to attract craft
labor to the PROJECT. Said allowance is included within EXHIBIT C as
premiums in excess of a forty (40) hour field force work week,
consisting of eight (8) straight-time hours per day, Monday through
Friday, inclusive, said premiums resulting from overtime work or for
work on Saturdays, Sundays or holidays (herein cumulatively referred
to as "overtime"). If, after exhaustion of all overtime allowances
in EXHIBIT C, OWNER requests overtime and KVAERNER PROCESS performs
the requested overtime, the KVAERNER CONTRACT PRICE and TARGET PRICE
shall be increased to include the premium rate portion of overtime
wages and related payroll burden provided the requested overtime is
not due to delays or deficiencies in the KVAERNER WORK. In the event
OWNER requests overtime on the part of CONTRACTORS which is not due
to delays or deficiencies in the PROJECT WORK caused by CONTRACTORS
or by the KVAERNER WORK, the TARGET PRICE will be increased by the
amount of the CHANGE ORDER granted to the CONTRACTOR to address the
cost impacts of such overtime.
2.4 EXHIBIT C hereto establishes the estimated basis for the KVAERNER
CONTRACT PRICE and the TARGET PRICE. While KVAERNER PROCESS makes no
guaranty and shall have no liability (including that for negligence)
in the event that cost of the KVAERNER WORK and/or the PROJECT WORK
exceeds the amounts contained in EXHIBIT C, KVAERNER PROCESS shall
use its best efforts to perform its KVAERNER WORK within the
estimated man-hours in EXHIBIT C and shall periodically report to
the OWNER (at least monthly) any projected overruns and/or
under-runs in KVAERNER PROCESS' man-hours and costs expended to
complete KVAERNER WORK and any projected overruns or under-runs in
the TARGET PRICE.
2.5 KVAERNER PROCESS' entitlement to compensation in accordance with
ARTICLE 2.1(a) and 2.1(b) shall not be affected or reduced in any
way due to KVAERNER PROCESS' inability to maintain the cost
estimates contained in EXHIBIT C for the KVAERNER WORK and/or the
PROJECT WORK.
ARTICLE 3. PAYMENT TERMS
3.1 KVAERNER PROCESS shall submit a monthly statement to the OWNER on or
about the 10th calendar day of the month the amount of REIMBURSABLE
COSTS, FIXED FEE and EARNED FEE, if any, that will be due KVAERNER
PROCESS for KVAERNER WORK performed during that month, and deduct an
amount or add an amount as required to reconcile the difference (if
any) between the amount that KVAERNER PROCESS invoiced OWNER for in
the previous month against the REIMBURSABLE EXPENSES, FIXED FEE or
EARNED FEE paid to KVAERNER PROCESS for the proceeding month's
KVAERNER WORK. KVAERNER PROCESS shall include with each monthly
statement for
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REIMBURSABLE EXPENSES all documentation required by EXHIBIT G to
support and verify KVAERNER PROCESS' request for payment. Owner may
request reasonable additional information and documentation to
support and verify such costs, and KVAERNER PROCESS shall use
reasonable efforts to provide such information to OWNER, but,
subject to ARTICLE 3.2, no payments to KVAERNER PROCESS shall be
withheld or delayed pending the receipt of such additional
information and documentation. Owner shall pay all undisputed
amounts of each KVAERNER PROCESS request for payment within thirty
(30) days after receipt of said request for payment.
3.2 In the event of a question over the amount of any invoice, OWNER
shall pay timely that portion of the invoice that is not in
question, and KVAERNER PROCESS and OWNER shall make every effort to
resolve the amount in question within thirty (30) days. If any
amount is not paid within the thirty (30) day time period set forth
in this CONTRACT, and if KVAERNER PROCESS shall have submitted all
documentation required by EXHIBIT G herein, in support of such
invoice, the unpaid amount shall bear interest at the rate of two
percent (2%) above the prime rate offered by Chase Manhattan Bank
N.A., New York, New York. OWNER's agreement to pay such interest and
KVAERNER PROCESS' acceptance thereof shall not constitute a waiver
by KVAERNER PROCESS of the requirement for prompt payment in
accordance with this CONTRACT, or any remedies KVAERNER PROCESS may
have.
However, the OWNER shall not be obligated to pay interest at the
above rate, provided that it timely pays KVAERNER PROCESS the amount
of the invoice which is not in question and, further, provided that
it raises a bona fide and good faith dispute to payment of the
amount then unpaid and demanded by KVAERNER PROCESS.
3.3 KVAERNER PROCESS shall indemnify and save OWNER harmless from any
and all liens for labor, equipment, materials and services furnished
to or by KVAERNER PROCESS, its subcontractors, vendors and
suppliers, or otherwise arising out of the performance by KVAERNER
PROCESS of this CONTRACT provided such liens therefor result from
KVAERNER PROCESS' failure to pay amounts due from KVAERNER PROCESS
for such labor, equipment, materials or services for which OWNER has
paid KVAERNER PROCESS, and further that OWNER has notified KVAERNER
PROCESS in writing that such a lien has been filed. KVAERNER PROCESS
shall take any and all necessary measures to remove and/or bond any
such lien, within thirty (30) days after such notification from the
OWNER.
3.4 KVAERNER PROCESS shall continue to provide the services required of
this CONTRACT and shall continue to use reasonable efforts to
maintain the PROJECT SCHEDULE (as hereinafter defined in ARTICLE
5.1), pending the resolution of any bona fide and good faith dispute
regarding any KVAERNER PROCESS' payment request (unless the CONTRACT
has been terminated in accordance with the terms hereof). If
KVAERNER PROCESS continues to perform, the OWNER shall continue to
make payments of undisputed amounts in accordance with and subject
to the terms of this CONTRACT.
ARTICLE 4. EXTRA WORK: CHANGES IN THE WORK
4.1 OWNER may request extra work or make changes, related to the scope
of the KVAERNER WORK and/or the PROJECT WORK, by altering, adding
to, or deducting from the KVAERNER WORK and/or the PROJECT WORK. In
such event, KVAERNER PROCESS shall provide the OWNER with a Change
Order Request or Requests setting forth in detail all KVAERNER WORK
and all PROJECT WORK which has been altered, added or deleted and
the corresponding additional cost or the reduction in cost of the
KVAERNER WORK and the PROJECT WORK, as well as the impact, if any,
on the TARGET PRICE and/or the TARGET DATE. KVAERNER PROCESS shall
provide the OWNER with any and all documentation and information
reasonably required by the OWNER to support the Change Order
Requests.
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4.2 KVAERNER PROCESS reserves the right to object to any change or extra
work request made by the OWNER that would adversely affect the
workmanship and materials warranties or any of KVAERNER PROCESS'
obligations under this CONTRACT. In such event, KVAERNER PROCESS
reserves the right to request a Change Order from OWNER to waive or
appropriately modify any of the guarantees, warranties or
obligations contained in this CONTRACT.
4.3. KVAERNER PROCESS shall proceed with any such extra or OWNER modified
work upon receiving from OWNER a Contract Change Order signed by and
mutually acceptable to, both OWNER and KVAERNER PROCESS, specifying
the scope of the extra work or change, the adjustments in the TARGET
PRICE and the KVAERNER CONTRACT PRICE and the TARGET DATE, if any,
and other related matters. All such work shall be performed under
the provisions of this CONTRACT as amended by the Contract Change
Orders.
4.4 If OWNER requests extra work or a change and KVAERNER PROCESS
undertakes to estimate the adjustments attributable thereto, and if
OWNER then abandons the extra work or change, KVAERNER PROCESS shall
be paid for its work in estimating the adjustments attributable to
the proposed extra work or change in accordance with ARTICLE 2
herein, and the KVAERNER CONTRACT PRICE and TARGET PRICE shall be
increased according. Nothing in this ARTICLE 4 or elsewhere in this
CONTRACT shall limit KVAERNER PROCESS' right to additional
compensation for extra work performed or expenses incurred as a
result of inaccuracies or omissions in information furnished by or
through OWNER or from other causes that are beyond KVAERNER PROCESS'
reasonable control, and the KVAERNER CONTRACT PRICE, the TARGET
PRICE and TARGET DATE shall be equitably adjusted to reflect such
additional performance and expenses.
4.5 KVAERNER PROCESS may also inform OWNER in writing of other events
which represent or result in a change to the KVAERNER WORK or to the
PROJECT WORK and KVAERNER PROCESS shall be entitled to make a Change
Order Request to revise the KVAERNER CONTRACT PRICE, TARGET PRICE
and/or the TARGET DATE and/or other modifications to the
obligations/liabilities of KVAERNER PROCESS as are appropriate.
4.6 Within five (5) business days of receipt of such a Change Order
Request, OWNER shall respond to the request of KVAERNER PROCESS
either by accepting the Change Order Request or identifying in
writing all items which are not acceptable. No Change Order shall be
effective until both OWNER and KVAERNER PROCESS shall have executed
it.
4.7 In the event that KVAERNER PROCESS and the OWNER are unable to agree
upon the amount or terms of any Change Order Request made by
KVAERNER PROCESS, under ARTICLE 4.5 above, KVAERNER PROCESS shall
continue to perform its KVAERNER WORK , as unchanged pending
resolution of the dispute and OWNER shall continue to make payments
of all undisputed amounts in accordance with and subject to the
terms of this CONTRACT.
ARTICLE 5 SCHEDULING TIME OF PERFORMANCE: COMPLETION
5.1 EXHIBIT H, which is attached hereto and made a part hereof,
identifies and defines critical milestone dates (other than the
TARGET DATE and MECHANICAL COMPLETION DATE) for the PROJECT. Within
fourteen (14) days from the date of the execution of this CONTRACT,
KVAERNER PROCESS shall prepare and submit to the OWNER for its
approval a construction schedule (the "PROJECT SCHEDULE") which
shall be in the format of Bar Chart schedule or Critical Path Method
(CPM) schedule or other format satisfactory to the OWNER and
KVAERNER PROCESS which shall (1) provide a graphic representation of
all activities and events that will occur during performance of the
PROJECT WORK; (2) identify each phase of construction and occupancy;
and (3) identify certain milestone dates
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that are critical in ensuring the timely and orderly completion of
the PROJECT WORK. KVAERNER PROCESS shall monitor the progress of the
PROJECT WORK, shall promptly advise the OWNER of any material delays
in the PROJECT SCHEDULE and shall propose an affirmative plan to
remediate or mitigate any delays in the PROJECT SCHEDULE. Material
delays are those that the parties would reasonably anticipate are
likely to have an impact on the MECHANICAL COMPLETION DATE.
5 2. KVAERNER PROCESS shall use its best efforts to achieve the
milestone dates contained in EXHIBIT H and the TARGET DATE;
provided, however, that the above dates shall be extended and
changed to allow for any delays excused under ARTICLE 13.2 and extra
work and changes in the KVAERNER WORK and/or CONTRACTOR WORK under
ARTICLE 4. Upon achieving MECHANICAL COMPLETION, OWNER shall assume
and have accepted responsibility and liability for the care, custody
and maintenance of the PROJECT WORK and all risk of loss and damage
to the PROJECT WORK.
ARTICLE 6. WARRANTIES AND GUARANTEES
6.1 KVAERNER PROCESS warrants that it shall perform all Construction
Management services required of it under this CONTRACT, in
accordance with the professional standards and standards of care
normally practiced by reputable, professional construction
management firms performing services of a similar nature at the time
and in the general location that the KVAERNER PROCESS services are
performed.
6.2 KVAERNER PROCESS warrants that it shall perform all Architectural
and Engineering services required of it under this CONTRACT, in
accordance with the relevant mutually agreed design basis (including
the corresponding design intent evidenced thereby), and the
professional standards and standards of care normally practiced by
reputable Engineering firms which are also authorized to perform
Architectural services performing services of a similar nature at
the time and in the general location that the KVAERNER PROCESS'
services are performed.
6.3 In addition to the warranties set forth in ARTICLES 6.1 and 6.2
above, KVAERNER PROCESS shall perform all of the KVAERNER WORK in
accordance with generally accepted Pharmaceutical/Biotechnology
Industry standards.
6.4 In the event that the KVAERNER WORK (including any error or omission
of KVAERNER PROCESS) fails to meet the standards set forth in
ARTICLES 6.1, 6.2 and 6.3 ("DEFECTIVE WORK"), KVAERNER PROCESS shall
reperform the DEFECTIVE WORK without adjustment of the TARGET PRICE,
ADJUSTED TARGET PRICE or FIXED FEE as defined in ARTICLE 2, to the
degree and extent required to allow the DEFECTIVE WORK to comply
with the foregoing standards, both prior to the MECHANICAL
COMPLETION DATE or earlier termination of the CONTRACT, and for a
period of twelve (12) months thereafter, provided that OWNER
notifies KVAERNER PROCESS in writing within the aforementioned
period, describing the alleged defects with particularity, and
granting KVAERNER PROCESS all reasonable access to such KVAERNER
WORK and the PROJECT so as not to delay KVAERNER PROCESS in the
required correction of any such DEFECTIVE WORK and subject to all
other conditions stated in this ARTICLE 6. In the event that the
OWNER provides KVAERNER PROCESS with the written notice required by
this ARTICLE 6.4 prior to the MECHANICAL COMPLETION DATE, KVAERNER
PROCESS shall be compensated its REIMBURSABLE COSTS for reperforming
any DEFECTIVE WORK but without adjustment to the TARGET PRICE. In
the event that the OWNER provides KVAERNER PROCESS with the written
notice required by this ARTICLE 6 prior to the expiration of twelve
(12) months after the MECHANICAL COMPLETION DATE or earlier
termination of the CONTRACT, KVAERNER PROCESS shall reperform the
DEFECTIVE WORK without compensation for REIMBURSABLE COSTS and
without adjustment to the TARGET PRICE.
10
6.5 Subject to the limitations stated in ARTICLE 9.1 herein, KVAERNER
PROCESS shall reimburse the OWNER all reasonable amounts paid to
third party contractors for construction labor and material costs,
required to remanufacture, field retrofit, remove or replace the
PROJECT WORK which are caused by any DEFECTIVE WORK in KVAERNER
PROCESS' engineering or architectural services that are contained or
incorporated into any of the "Approved for Construction" drawings
issued by KVAERNER PROCESS due to KVAERNER PROCESS' failure to
comply with the standards contained in ARTICLE 6.2 and ARTICLE 6.3
above; provided the OWNER has given KVAERNER PROCESS written notice
of such deficiencies in the PROJECT WORK prior to performing rework
and prior to the expiration of twelve (12) months after the
MECHANICAL COMPLETION DATE or earlier termination of the CONTRACT.
KVAERNER PROCESS' liability to the OWNER for the above costs shall
be limited to those amounts paid by the OWNER to third party
contractors for construction labor and material costs, required to
remanufacture, field retrofit, remove and replace the PROJECT WORK
which exceeded and are above two and one-half percent (2.5%) of the
amount of the TARGET PRICE. However, in no event shall KVAERNER
PROCESS' liability for said costs exceed the amount of ten percent
(10%) of the KVAERNER CONTRACT PRICE. For example, assume that the
final TARGET PRICE, with all adjustments required by this CONTRACT,
is computed to be the sum of $225 million. Further assume that the
final KVAERNER CONTRACT PRICE, with all adjustments required of this
CONTRACT, is computed to be the sum of $50 million. In that event,
KVAERNER PROCESS' liability to the OWNER pursuant to this ARTICLE
6.5 for the cost of remediation of the PROJECT WORK, caused by
DEFECTIVE WORK performed by KVAERNER PROCESS shall commence once the
OWNER pays to third party contractors for such costs of remediation
the sum of $5,625,000 (i.e., two and one-half percent (2.5%) of the
$225 million TARGET PRICE). However, KVAERNER PROCESS' liability to
the OWNER shall not exceed the sum of $5 million (i.e., ten (10%)
percent of the KVAERNER CONTRACT PRICE), above the $5,625,000
threshold. KVAERNER PROCESS shall be entitled to a reasonable audit
of any amounts paid by the OWNER for correction or remediation of
the PROJECT WORK caused by KVAERNER PROCESS' DEFECTIVE WORK.
6.6 KVAERNER PROCESS assumes no responsibility or liability for any
materials or equipment, whether new or used, furnished by OWNER for
use in the PROJECT WORK. As part of KVAERNER PROCESS' procurement
services, KVAERNER PROCESS shall secure, for the benefit of OWNER,
available warranties of third party vendors and contractors running
directly to OWNER or assignable by KVAERNER PROCESS to OWNER, with
respect to the materials, equipment and work performed or furnished
by such vendors and contractors, warranting against defects in
workmanship, design and material, and non-infringement of patents
and other industrial property rights. KVAERNER PROCESS' liability
regarding such materials, equipment and work shall be limited to
using reasonable efforts, short of litigation, to enforce third
party warranties on behalf of OWNER.
6.7 This ARTICLE 6 states the only warranties made by KVAERNER PROCESS
there being no other express or implied warranty. KVAERNER PROCESS
EXPRESSLY DISCLAIMS IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR PURPOSE.
6.8 The provisions of this ARTICLE 6 shall survive the performance or
earlier termination of this CONTRACT.
ARTICLE 7. INDEMNIFICATION
7.1 Each party shall indemnify the other party against any costs
(including without limitation amounts paid pursuant to judgments or
settlements and attorneys' fees and disbursements) incurred by such
other party as a result of any claim by a third party (including,
without limitation, any claim by an employee of either party, or by
another contractor, a
11
subcontractor, or vendor or their employees) based on actual or
alleged damage to or destruction of property or bodily injury to
persons (including death) to the extent caused by the willful or
negligent acts or omissions of the indemnifying party, its agents or
employees.
7.2 Each party shall promptly notify the other of the assertion of any
claim against which such party is indemnified pursuant to this
ARTICLE 7, shall give such other party the opportunity to defend any
such claim, at the expense of the indemnifying party, in which
event, the indemnified party shall have the right to participate in
such defense at its own expense and to approve or reject any
settlement. In the event that the indemnifying party chooses not to
assume the defense of such claim, the indemnified party shall not
settle any such claim without the approval of the indemnifying
party.
7.3 KVAERNER PROCESS shall indemnify OWNER from damage or loss to its
existing real property and all existing improvements thereon, to the
extent such damage or loss is caused by the negligence or willful
misconduct of KVAERNER PROCESS in the performance of the CONTRACT.
7.4 This ARTICLE 7 is for the protection of OWNER and KVAERNER PROCESS
only and shall not affect or establish, in and of itself, any
liability to or by third parties.
7.5 The provisions of this ARTICLE 7 shall survive the performance or
earlier termination of this CONTRACT.
ARTICLE 8. INSURANCE
8.1 OWNER shall insure, or cause to be insured, at no expense to
KVAERNER PROCESS and for the full replacement cost, all KVAERNER
WORK and PROJECT WORK, and related work, completed and in the course
of construction at the PROJECT site and all equipment and materials
delivered and stored at the site and in transit which are to be used
in the PROJECT WORK or incorporated into the PROJECT, against the
risks normally insured under a Builders All Risk Insurance Policy
(Broad Form) with coverage commercially available and reasonably
acceptable to KVAERNER PROCESS, but OWNER shall not be responsible
for providing insurance to protect tools, construction equipment,
scaffolding, surplus materials and other personal property used by
KVAERNER PROCESS or its direct subcontractors (meaning contractors
executing subcontracts to perform the KVAERNER WORK, not CONTRACTORS
executing contracts with OWNER or with KVAERNER PROCESS acting as
agent for OWNER) in the prosecution of the PROJECT WORK. KVAERNER
PROCESS and each CONTRACTOR of every tier shall be named as Loss
Payees and additional insureds under this policy as their interest
may appear, and OWNER shall have liability to pay all applicable
deductible amounts. This policy shall include startup, hot testing
and commissioning coverage. This insurance shall be primary as to
any insurance KVAERNER PROCESS may carry. OWNER and KVAERNER PROCESS
waive all rights against each other, including but not limited to a
right of subrogation, except for such rights as they may have to the
proceeds of the Builders All Risk Insurance described in this
Article 8.1, in connection with or arising from losses or damages to
the PROJECT or PROJECT WORK and related work, including KVAERNER
WORK, completed in the course of construction at the PROJECT site,
and all equipment and materials delivered and stored at the site or
in transit which are to be incorporated into the PROJECT.
8.2 KVAERNER PROCESS shall provide, and shall ensure that each
CONTRACTOR provides, the following insurance and shall obtain and
file with OWNER certificates thereof:
8.2.1 Worker's Compensation Insurance in compliance with the Worker's
Compensation Act of the state or states wherein the KVAERNER WORK is
to be performed;
12
8.2.2 Employer's Liability Insurance with a limit of $1,000,000 for one or
more claims arising from each accident;
8.2.3 Comprehensive General Liability Insurance, including Contractual
Liability Coverage, with a limit of $1,000,000 each occurrence
combined single limit for bodily injury (including death) and
property damage;
8.2.4 Comprehensive Automobile and Truck Liability Insurance with a
combined single limit of liability of $1,000,000 for each accident
for bodily injury (including death) and property damage, insuring
all motor vehicles used by KVAERNER PROCESS in the performance of
this CONTRACT.
8.2.5 With respect to KVAERNER PROCESS only, Contractor's Equipment
Floater Insurance, subject to an aggregate limit of $2,000,000 and a
deductible of $15,000 each occurrence.
8.2.6 Umbrella Insurance coverage in the amount of at least $10,000,000
per occurrence/aggregate, in the case of KVAERNER PROCESS, or at
least $5,000,000 per occurrence/aggregate, in the case of each
CONTRACTOR.
8.3 Each of the above insurance policies carried by KVAERNER PROCESS and
each subcontract with a CONTRACTOR shall provide for thirty (30)
days advance written notice in the event of cancellation or a
material change in the terms thereof, which shall be provided to
OWNER.
8.4 KVAERNER PROCESS shall name, and shall ensure that each CONTRACTOR
names, OWNER as additional insured under the coverages expressly
required under ARTICLES 8.2.3. 8.2.4, 8.2.5 and 8.2.6 above.
8.5 Notwithstanding anything provided elsewhere in this CONTRACT to the
contrary, KVAERNER PROCESS' maximum aggregate liability (including
that for negligence) for and arising out of or in connection with
any property loss, damage or bodily injury giving rise to KVAERNER
PROCESS' liability, under all provisions of this CONTRACT (including
but not limited to ARTICLES 7.1 and 7.3) in anyway arising in
connection with KVAERNER WORK shall not exceed the recovered
proceeds of the insurance expressly specified in this ARTICLE 8 to
be provided by KVAERNER PROCESS. The provisions of this ARTICLE 8.5
shall only apply to property loss, damage or bodily injury, and
shall not apply to the remedies and limitations contained in
ARTICLES 6 and 9 herein.
ARTICLE 9. LIMITATION OF LIABILITY
9.1 This CONTRACT states the parties exclusive rights and remedies, and
OWNER and KVAERNER PROCESS make no representations, guarantees or
warranties of any kind, either express or implied, including, but
not limited to, implied warranties of merchantability, and fitness
for purpose, except as expressly stated herein. Notwithstanding
anything stated to the contrary herein, KVAERNER PROCESS shall not
be liable under any circumstances for any indirect, incidental, or
consequential damages, including, but not limited to, business
interruption, downtime, loss of use, loss of profit, loss of
product, loss of use of capital, or interest on capital. KVAERNER
PROCESS shall have no liability for damages resulting from delays to
the MECHANICAL COMPLETION DATE or commissioning and validation
services. KVAERNER PROCESS' maximum aggregate liability under all
provisions of this CONTRACT and in any way arising in connection
with KVAERNER WORK, other than liabilities assumed in ARTICLES 7 and
8, but including the liability assumed by KVAERNER PROCESS in
ARTICLE 6.5, shall not exceed the amount of ten percent (10%) of the
KVAERNER CONTRACT PRICE. The provisions of this ARTICLE 9.1 shall
apply irrespective of the basis of the claim, whether in equity or
at law, in contract or in tort (including negligence), strict
liability or otherwise.
13
9.2 KVAERNER PROCESS hereby releases OWNER from all liability for any
indirect, incidental, or consequential damages, including, but not
limited to, business interruption, down time, loss of use, loss of
profit, loss of product, loss of use of capital, or interest of
capital.
KVAERNER PROCESS shall also release OWNER from any damages resulting
from delays to the MECHANICAL COMPLETION DATE or commissioning and
validation services. The provisions of this ARTICLE 9.2 shall apply
irrespective of the basis of the claim, whether in equity or at law,
in contract or in tort (including negligence) strict liability or
otherwise. However, nothing stated herein shall prevent or diminish
KVAERNER PROCESS' right to payment for all amounts due KVAERNER
PROCESS under this CONTRACT or KVAERNER PROCESS' right to request a
CHANGE ORDER in accordance with ARTICLE 4 herein.
9.3 The provisions of this ARTICLE 9 shall survive the performance or
earlier termination of this CONTRACT.
ARTICLE 10. PATENTS: PROPRIETARY INFORMATION
10.1 KVAERNER PROCESS shall use reasonable efforts to avoid including in
the PROJECT designs, processes, equipment and materials infringing
patents or other industrial property rights of third parties.
KVAERNER PROCESS' liability for infringement or any claim therefor
shall be limited to providing technical assistance to OWNER in
defending or otherwise dealing with the matter.
10.2 KVAERNER PROCESS shall use the same reasonable precautions that
KVAERNER PROCESS uses for its own confidential information to
maintain in confidence, avoid unauthorized disclosure to any third
party, and not use except in the performance of this CONTRACT, any
and all confidential and proprietary information disclosed to
KVAERNER PROCESS by OWNER during or with respect to the performance
of this CONTRACT (including prior to the execution hereof);
provided, however, that KVAERNER PROCESS is not required to keep
such information confidential and avoid such unauthorized use or
disclosure to the extent that it can be established by KVAERNER
PROCESS by competent proof that such information: (i) was already
known to KVAERNER PROCESS, other than under an obligation of
confidentiality, at the time of disclosure by OWNER; (ii) was
generally available to the public or otherwise part of the public
domain at the time of its disclosure to KVAERNER PROCESS; (iii)
became generally available to the public or was otherwise part of
the public domain after its disclosure and other than through any
act or omission of KVAERNER PROCESS in breach of this Agreement; or
(iv) was disclosed to the KVAERNER PROCESS, other than under an
obligation of confidentiality, by a third party who had no
obligation to OWNER not to disclose such information to others.
These obligations shall survive the performance or earlier
termination of this CONTRACT for a period of ten (10) years after
the Effective Date of this CONTRACT.
10.3 For the same time period and subject to the same exceptions
mentioned in ARTICLE 10.2, OWNER shall use the same reasonable
precautions that OWNER uses for its own confidential information to
avoid unauthorized disclosure to any third party and shall not use
except in the performance of this CONTRACT and operation and
maintenance of the PROJECT, any and all confidential and proprietary
information disclosed to OWNER by KVAERNER PROCESS during or with
respect to the performance of this CONTRACT (including prior to the
execution hereof).
14
10.4 Any and all designs, descriptions, drawings, plans, specifications,
flow sheets, instructions, operating data and other documents that
are specifically developed for the PROJECT as part of KVAERNER WORK
and which are supplied to the OWNER ("DOCUMENTS"), whether directly
or indirectly by KVAERNER PROCESS, shall be the property of the
OWNER whether the PROJECT is completed or not and shall be delivered
to the OWNER at the earlier of (a) final completion of the KVAERNER
WORK or (b) the termination date of this CONTRACT for any reason
prior to final completion of the KVAERNER WORK on the PROJECT unless
KVAERNER PROCESS has terminated this CONTRACT in accordance with
ARTICLE 11. In the event that this CONTRACT is terminated for any
reason prior to final completion of the KVAERNER WORK on the PROJECT
and if under such circumstances the OWNER uses, or engages in
services of, another party to use such DOCUMENTS to complete the
Project, OWNER agrees to release, hold harmless and indemnify
KVAERNER PROCESS from liability and responsibility for the
conformance of the uncompleted portions of the PROJECT to such
DOCUMENTS. OWNER shall not sell such DOCUMENTS to an unaffiliated
company for the design, engineering or construction of any other
PROJECT or facility, except with the prior written consent of
KVAERNER PROCESS. However, nothing herein shall restrict the use of
such DOCUMENTS by the OWNER and its affiliates for their own
respective business purposes. In the event OWNER uses the DOCUMENTS
for any purpose other than the construction and maintenance of the
PROJECT, OWNER shall hold harmless and fully defend and indemnify
KVAERNER PROCESS from all liability arising out of such use, with
OWNER accepting all risks in connection with such use.
10.5 The provisions of this ARTICLE 10 shall survive the performance or
earlier termination of this CONTRACT.
ARTICLE 11. TERMINATION
11.1 Either party may terminate this CONTRACT for cause upon ten (10)
days advance written notice to the other party in the event that:
11.1.1 The other party materially breaches the obligations or
provisions of this CONTRACT and fails to initiate reasonable
measures toward remedying such breach within ten (10) days
after receipt of notice thereof, which notice must state the
notifying party's intent to invoke the provisions of this
ARTICLE 11.1; or
11.1.2 The other party makes a general assignment for the benefit of
creditors, or a receiver is appointed on account of its
insolvency, or it becomes the subject of any proceeding
commenced under the Federal Bankruptcy Act or under any state
insolvency statute or law for the relief of debtors, and the
assignment is not discharged or the proceeding is not
dismissed within sixty (60) days.
11.2 If OWNER invokes its right to terminate this CONTRACT pursuant to
ARTICLE 11.1.1 or 11.1.2 the OWNER may, after ten (10) days written
notice, during which period KVAERNER PROCESS either fails to perform
its obligations under this CONTRACT or fails to commence and
continue reasonable remedial measures, undertake to perform KVAERNER
PROCESS' obligations under this CONTRACT utilizing any reasonable
means. In such event, KVAERNER PROCESS shall be liable to OWNER for
all reasonable costs paid to a third party contractor to perform the
remaining elements of the KVAERNER WORK to the extent that such
costs exceed the amounts which would have been otherwise due
KVAERNER PROCESS in accordance with ARTICLE 2 to perform the
remaining elements of the KVAERNER WORK and all outstanding Change
Order Requests that KVAERNER PROCESS may be entitled to. The
foregoing shall be in addition to, and not in lieu of, other rights
and remedies available to the OWNER hereunder, at law and/or in
equity. KVAERNER PROCESS shall cooperate in turning over the needed
completed documents and information required by OWNER's replacement
contractor who will perform the remaining
15
KVAERNER WORK, provided OWNER is not in default of any of its
payment obligations to KVAERNER PROCESS up to the date upon which
KVAERNER PROCESS is notified of the breach.
11.3 If KVAERNER PROCESS invokes its right to terminate this CONTRACT
pursuant to ARTICLE 11.1.1 or 11.1.2, OWNER shall be liable to
KVAERNER PROCESS for the entire FIXED FEE, any portion of the EARNED
FEE earned by KVAERNER PROCESS prior to such termination, and all
REIMBURSABLE COSTS in connection with KVAERNER WORK performed, plus
the reasonable costs incurred by KVAERNER PROCESS in closing out the
KVAERNER WORK, including the costs of commitments which cannot be
cancelled.
11.4 OWNER shall have the right to terminate this CONTRACT for its
convenience upon thirty (30) day's advance written notice to
KVAERNER PROCESS. In the event of such termination, KVAERNER PROCESS
shall be paid, within thirty (30) days of written demand, the
amounts specified in Section 11.3 above.
ARTICLE 12 - DISPUTE RESOLUTION
12.1 INITIAL DISPUTE RESOLUTION. If a dispute arises out of or relates to
this CONTRACT or its breach, the parties shall endeavor to settle
the dispute first through direct discussions. If the dispute cannot
be settled through direct discussions, with the consent of both
parties, the parties shall endeavor to settle the dispute by
mediation under the Construction Industry Mediation Rules of the
American Arbitration Association ("AAA"). The parties agree to
conclude such mediation within sixty (60) days of the filing of a
request for mediation with the AAA.
12.2 LITIGATION; JURISDICTION; WAIVER OF TRIAL BY JURY. If the parties do
not elect to mediate a dispute arising hereunder then either party
may seek recourse before the Superior Court of the State of New
Jersey, County of Hunterdon, to which exclusive jurisdiction the
parties hereto hereby agree to submit. BOTH PARTIES HERETO HEREBY
KNOWINGLY INTENTIONALLY AND EXPRESSLY AGREE TO WAIVE THE RIGHT TO A
TRIAL BY JURY OF ANY DISPUTES ARISING HEREUNDER.
12.3 MULTIPARTY PROCEEDING. The parties agree that all parties necessary
to resolve a claim shall be the parties to the same proceeding.
KVAERNER PROCESS shall include appropriate provisions in all other
contracts, including, but not limited to all agreements with
CONTRACTORS relating to the PROJECT to provide for the consolidation
of disputes.
ARTICLE 13. MISCELLANEOUS
13.1 Any notice provided for herein shall be in writing and shall be
deemed to have been properly given by either party to the other if
such notice shall have been delivered by hand, five (5) days after
being mailed by certified mail, postage prepaid, return receipt
requested, or one (1) business day after being sent by nationally
recognized overnight courier, shipping prepaid addressed to OWNER as
follows:
ImClone Systems Incorporated
180 Varick Street, Sixth Floor
New York, NY 10014
Attention: John B. Landes, Esq.
or addressed to KVAERNER PROCESS as follows:
Kvaerner Process
a division of Kvaerner US Inc.
16
440 Route 22 East
Bridgewater, NJ 08807-0884
Attention: John Petchonka, Managing Director
The parties shall have the right to change such addresses or
addressees from time to time by notice in writing directed to the
other party.
13.2 A reasonable delay in performance of this contract shall be excused
if such delay results from fire, explosions, labor disputes,
strikes, casualties or accidents, lack or failure of transportation
facilities, floods, earthquakes or weather conditions beyond that
anticipated in KVAERNER PROCESS' PROJECT SCHEDULE or other acts of
God, or is caused by reason of wars, resolution, civil commotion,
blockade or embargo or is caused by reason of any change of law,
proclamation, regulations, ordinance, authority or representative or
any government or is caused by any other reason beyond the
reasonable control of KVAERNER PROCESS or the OWNER, but such events
shall not excuse a failure to perform.
13.3 The failure of either party to insist upon the other party's
compliance with its obligations under this CONTRACT in any one or
more instances shall not operate to relieve such other party from
its duty to comply with such obligations or any other obligations in
all other instances.
13.4 Neither party shall assign its interest in this CONTRACT without the
prior written consent of the other party hereto, except that either
may assign its interest without such consent to its successor by
merger or consolidation or to a person, firm or corporation
acquiring all or substantially all its business and assets or
acquiring a controlling ownership interest in such party.
Notwithstanding the foregoing, the OWNER may collaterally assign
this CONTRACT to the PROJECT lender, if any. KVAERNER PROCESS shall
timely execute and deliver such commercially reasonable
certifications with respect to the KVAERNER WORK and/or the PROJECT
WORK as the PROJECT lender, if any, shall require from time to time.
Commercially reasonable certifications shall be those certifications
which institutional lenders customarily require of project
architects or engineers, and which project architects or engineers
customarily give, in connection with the construction and/or
mortgage financing of commercial real estate projects in the New
York/New Jersey metropolitan area. No assignment of this CONTRACT
shall be valid until and unless this CONTRACT shall have been
assumed by the assignee. Notwithstanding the foregoing, KVAERNER
PROCESS may sublet or subcontract parts of the KVAERNER WORK to be
performed under this CONTRACT only with prior written consent of
OWNER, provided, however, that in such event KVAERNER PROCESS shall
not be relieved or released from any of its obligations and
responsibilities to OWNER except as provided in this CONTRACT.
Notwithstanding the above, KVAERNER PROCESS shall be allowed,
without the advance authorization of OWNER to supplement its staff
with personnel supplied by a third party agency ("AGENCY PERSONNEL")
during the course of the PROJECT. KVAERNER PROCESS shall inform
OWNER of the number and job classifications of AGENCY PERSONNEL
being used, upon OWNER'S request.
13.5 All questions relating to the validity, interpretation, performance
or enforcement of this CONTRACT shall be determined in accordance
with the laws of the State of New Jersey, excluding its conflict of
law principles.
13.6 To the extent that there is any conflict between the ARTICLES of
this CONTRACT and any EXHIBITS hereto, the ARTICLES shall have
precedence and shall govern.
13.7 This CONTRACT, together with EXHIBITS A through H, constitutes the
entire agreement between the parties pertaining to the subject
matter hereof and may not be modified orally or otherwise than by
written instrument executed on behalf of each party by its duly
authorized representative.
17
13.8 The parties hereto expressly agree that this CONTRACT was jointly
drafted, and that they each had an opportunity to negotiate its
terms and to obtain the assistance of counsel in reviewing its terms
prior to execution. Therefore, in interpreting this CONTRACT neither
party shall be deemed the drafter.
IN WITNESS WHEREOF, the parties hereto have caused their corporate names to be
hereunto subscribed by their officers thereunto duly authorized as of the
EFFECTIVE DATE.
KVAERNER PROCESS IMCLONE SYSTEMS INCORPORATED
a division of Kvaerner US Inc.
By: /s/ John Petchonka By: /s/ John B. Landes
-------------------------------- ----------------------------------
Title: Managing Director Title: Senior Vice President, Legal_
18
Exhibit A
[KVAERNER(TM) LOGO] SCOPE OF WORK
COMMERCIAL FACILITY DATE: NOVEMBER 26, 2001
IMCLONE SYSTEMS INCORPORATED REV.: E
BRANCHBURG, NJ PAGE: 1 OF 29
- --------------------------------------------------------------------------------
SCOPE OF WORK
1.0 INTRODUCTION
1.1 PROJECT DESCRIPTION
KVAERNER PROJECT NO.: N00129.00-20-30-40
CONTRACT TYPE: Reimbursable Cost
SCOPE OF WORK: Engineering, Purchasing, Construction,
Commissioning Assistance and Validation
LOCATION: Branchburg, New Jersey
DESCRIPTION:
The new Commercial Facility is approximately 248,000 ft(2), within
three levels above grade and a sub-grade basement. The facility and
its site shall be engineered and designed to accommodate the "two
(2)" processing modules, with shell space available for a future
processing module.
Each of the two (2) processing module trains consists of
self-contained fermentation and purification modules, designed
around the capacity embodied in six (6) 11K liter bioreactors plus
all support and amenity functional areas.
In each of the two (2) processing module trains, the fermentation
module resides on the main floor and is comprised of a single
inoculum prep laboratory with a small media prep staging area,
scale-up bioreactors, six (6) 11K liter bioreactors and harvest
area.
In each of the two (2) processing module train, the purification
module resides on the main floor and is consists of two separate
purification areas (to differentiate between potential virus and
virus-free processing steps), plus bulk product staging and fill
areas.
The fermentation module for each processing train is supported by
media prep and media storage areas, which are located above on the
upper floor. Similarly, the purification module for each processing
train is supported by buffer prep and buffer storage areas, which
are also on the upper floor.
The fermentation and media prep module for each train is served by a
central upstream decontamination and wash area, which is located on
the main floor. Likewise, the purification and buffer prep module
for each train is also served by a central downstream
decontamination and wash area, which is also located on the main
floor.
Amenities, laboratories and administrative functions are located on
both the main, mezzanine and upper floors along the Northern and
Western perimeter of the Facility and form a transition to the
production GMP areas. A Boiler/Utility Room is located in the
sub-grade basement. Additionally, a GMP Central Weigh Area,
Materials Receiving & Shipping Areas and multiple storage areas are
also located in the sub-grade basement adjacent and separate from
the Boiler/Utility Room in support of the GMP production and
non-production areas above. The areas outside the GMP production
areas on the upper floor, are dedicated to the Facility's mechanical
systems.
[KVAERNER(TM) LOGO] SCOPE OF WORK
COMMERCIAL FACILITY DATE: NOVEMBER 26, 2001
IMCLONE SYSTEMS INCORPORATED REV.: E
BRANCHBURG, NJ PAGE: 2 OF 29
- --------------------------------------------------------------------------------
1.2 PROJECT ORGANIZATION
ImClone Project Team:
Corporate Sponsor: Dr. Harlan Waksal
VP Marketing & Sales: Ron Martell
SVP Manufacturing Operations &
Product Development: Joseph Tarnowski
VP Financial Operations: Paul Goldstein
VP Manufacturing: Rick Crowley
VP of Facilities: Gary Paulter
Project Manager Bankim Patel
Project Engineer Brendan Mooney
Process Manager: Joe D'Amore
Project Engineer Facilities Wayne McFarland
Project Engineer Rich Appezzato
Quality Assurance Manager: Carole Beer
Validation Manager: Loretta Harrison
Project Controls Manager Ron Greig
Kvaerner Project Team Leads:
Corporate Sponsor: Ron Friedman
Project Director Joe Cozza
Project Engineer Manager.
(Engineering Design): Arthur D. Coles
Project Engineer (Process Equip.) Alex Ferdman
Project Engineer (Utilities Equip.): Haren Master
Lead Process Manager: Al Patterson
Process Managers: Peter Terras & Rick Caruso
Project Controls Manager: Joseph Timlin
Process Controls/Instr./Automation: Jack Sripathy
Process Architect Ted Jablonski
Design Architect: Sungman Paik/Gary Jeng
Civil/Structural: Jun Bausa
Electrical: Don Fenyus
HVAC/Utilities: Jim Mulligan
Piping: Mike Banach
Plumbing: Steve Silverstein
Piping Specs/MTO/Supports Tony Colaizzi
Fire Protection: Arkady Okun
CIE Administrator/Coordinator: Ian Piggott
Purchasing Lead: Tom Petrusko
Project Subcontracts Manager Ed Carlson
Validation Lead: Dave Beroll
Resident Construction Manager: Mark Witlam
Project Secretary: Kimberly Ridgway
[KVAERNER(TM) LOGO] SCOPE OF WORK
COMMERCIAL FACILITY DATE: NOVEMBER 26, 2001
IMCLONE SYSTEMS INCORPORATED REV.: E
BRANCHBURG, NJ PAGE: 3 OF 29
- --------------------------------------------------------------------------------
2.0 PROJECT EXECUTION PLAN
2.1 PRELIMINARY ENGINEERING DESIGN AND ESTIMATE
The Preliminary Engineering Design and Control Estimate will be
performed in the Kvaerner offices in Bridgewater, NJ. The team
members will operate on a full-time and part-time basis as dictated
by work load and schedule requirements. Specialist engineers will be
called upon from the Kvaerner organization to serve the needs of the
project as they develop. Third Party consulting services may be
obtained to augment the design team, as appropriate.
The objective of the Preliminary Engineering Design Phase is to
define the Project Scope and Procedures, and to further define the
Project in an engineering sense by developing a basis of design for
each discipline, preparing P&ID's of sufficient quality to convey
the process and utility requirements for detailed engineering design
initiation, the preparation of long lead equipment specifications
and requisitions and the confirmation of room and area space
allocation and arrangement to support both personnel and equipment
requirements.
Documentation and drawings necessary for obtaining the Air and
Wastewater Permits, as well as necessary for submittal to the
Township Planning Board, will be developed simultaneously during
Preliminary Engineering.
During the Preliminary Design Phase, the Estimating Dept. will
develop a Control Cost Estimate (+/-10% accuracy) utilizing the
engineering drawings, specifications and sketches developed by the
design disciplines.
2.2 DETAIL ENGINEERING/DESIGN
Detail Engineering/Design will be performed in the Kvaerner offices
in Bridgewater, NJ and will utilize various computer, and CAD design
modeling and drafting systems (PDMS, Triforma). Led by the Project
Engineering Manager, the team members will operate on a full-time
and part-time basis as dictated by work load and schedule
requirements. Specialist engineers may be called upon from the
Kvaerner organization to service the needs of the project as it
develops. The core team members and their staff will be located
together in a designated task force area.
The objective of the Detail Engineering Design Phase is to perform
the detailed engineering and design of the facility and all of its
systems in sufficient detail to facilitate and support the
construction and validation of the Facility, as identified in the
specific engineering design deliverables produced by Kvaerner
Engineering.
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Hard copies of all specifications, and related engineering,
procurement and validation documentation will be issued to ImClone
throughout the course of the Project for ImClone to review and
approve.
At the completion of Detail Engineering Design, Kvaerner will issue
to ImClone Systems an electronic 3D Cad Model and supporting
databases. Electronic copies of all drawing files, including
associated x refs, will be issued to ImClone in AutoCAD on disk
(CD).
Hard-copy, formal Job Books will also be prepared, assembled and
issued to ImClone by Kvaerner at the completion of the entire
Project. The Job Books are to contain the current revision of all
specifications, equipment documentation, submittals, test results,
RFIs and As-Built drawings (scope definition pending) and be
organized by individual discipline and subcontract.
2.3 PROCUREMENT AND SUBCONTRACTS
Led by the Kvaerner Project Manager, procurement activities will be
fully integrated into the overall project. Kvaerner will prepare
equipment , instrument, electrical, etc requisitions for purchase
utilizing ImClone Purchase Orders. ImClone will purchase all such
items, with Kvaerner acting as their Agent. A similar approach will
apply to subcontracted services. All procurement documentation will
be issued as hard copy and included in the final turnover documents
issued to ImClone by Kvaerner at the completion of the entire
Project.
2.4 CONSTRUCTION MANAGEMENT
Under the direction of the Kvaerner Project Manager, the facility
will be constructed by appropriate Subcontractors hired by ImClone
and managed by Kvaerner Construction Management (CM) personnel. A
representative of the Kvaerner Construction Group will be integrated
into the Project Staff during Preliminary Engineering Design to
review the design development for constructability.
In addition, the Kvaerner Resident Construction Manager and the
discipline-specific Construction Supervisors from the Launch
Facility Project will also be integrated into the Project Staff
during the Detail Engineering Design Phase to further review and
confirm the Facility's constructability and incorporate
"lessons-learned" criteria resulting from the construction of the
Launch Facility Project.
The Resident Construction Manager and the discipline-specific
Construction Supervisors, will transition to the Site as required to
support the Subcontract Plan. The CM staff will closely coordinate
with ImClone and will copy all correspondence to ImClone.
Procurement and construction will be performed simultaneously during
Detail Engineering Design to facilitate and expedite the "Mechanical
Completion" of the Project as required by the approved schedule.
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The "Mechanical Completion" of the project is defined in Exhibit F
to the CONTRACT.
Turnover Systems will be defined by Kvaerner and approved by ImClone
during Preliminary Engineering for all validated and non-validated
mechanical systems; building systems and spaces; and
site/infrastructure areas. Kvaerner will prepare a "Turnover System"
book for each system, sub-system or room, which defines the limits
of such and documents the completion, testing, etc. of the system.
Upon each system's mechanical completion, Kvaerner will present to
ImClone it's "Turnover System" book for audit and signature,
indicating ImClone's acceptance of the system for care, control and
custody. Each system's turnover to ImClone initiates the ImClone
subcontractor's and Kvaerner's Warranty Period for each accepted
system.
ImClone's acceptance of the last, planned Turnover System achieves
the targeted project "Mechanical Completion" and is the basis for
the evaluation of the Earned Fee.
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Execution of qualification protocols (IQ/OQ by Kvaerner) may proceed
in parallel with the activities above (see following section).
All Subcontractor submittals and RFIs (requests for information) are
to be received, recorded, maintained and resolved by the Kvaerner
Resident Construction Manager, Construction Engineer and the
discipline-specific Construction Supervisors separately. All
Submittal Log Books and RFI Log Books are to be retained for
turnover to ImClone within three (3) weeks after "Mechanical
Completion".
Marked-up "as-built" drawings (scope definition pending) will be
prepared by the selected Subcontractors, as coordinated by the
Kvaerner Resident Construction Manager and the discipline-specific
Construction Supervisors. After their CAD update by the Home Office,
the original mark-ups will be turned over to ImClone for record.
2.5 FIELD SUPPORT
Kvaerner will provide engineering, procurement and vendor
documentation support of the field activities being executed
through-out the project lifecycle. Led by the Project Engineering
Manager, this multi-discipline team will assist the construction,
commissioning and validation personnel in problem solving or
documentation needs, as appropriate. The Project Engineering Manager
and some others will be located at the Project site while the
majority of the team will be located primarily in Kvaerner's
Bridgewater office.
The team will respond to Request For Information (RFI),
subcontractor submittals, commissioning problems, validation
documentation/issues and the providing of 2D and 3D CAD updates per
the subcontractor provided "As-Built" mark-ups. Target turnaround of
RFI's is three (3) working days.
This team will also assist in the Kvaerner walk down of completed
systems, as required.
The composition of this team will be "dynamic" over time; that is,
the team will be consistent with the needs of the field activities
active at the site at the time.
2.6 COMMISSIONING ASSISTANCE
ImClone will lead, manage and execute the commissioning of systems
within the facility. Working as a part of the greater team, Kvaerner
will support this effort.
Commissioning is defined as initial operation of the "mechanically
completed" system, sub-system or equipment component. This is the
period when the completed system is fully integrated with its
utilities and auxiliary equipment; is energized and operated for the
first time, "debugged", and is initially balanced/fine tuned.
ImClone intends to utilize the draft IQ as a checklist for qualified
systems and function specs for non-qualified systems.
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As also indicated previously, commissioning of a system is an
essential element in the overall completion of the facility, its
validation and turnover to ImClone. Qualification activities can
proceed in parallel to commissioning.
Kvaerner will be responsible for ensuring a seamless flow of
activities from engineering design, procurement of equipment and
subcontractors, construction, mechanical completion, commissioning,
and validation.
A Commissioning Master Plan will be written and submitted to ImClone
for approval which outlines the roles and responsibilities for the
joint Kvaerner/Subcontractor/Vendor/ImClone Commissioning Team. The
plan is designed to outline all of the requirements/activities to
properly commission the facility, and documents ultimately required
to support subsequent validation activities.
2.7 VALIDATION
As with engineering, procurement, construction and commissioning,
validation services will be fully integrated into the overall
project schedule. Assigned administratively to the task force under
the direction of the Kvaerner Project Manager, the Validation
Manager/ Design Lead will be named early in Preliminary Engineering.
The Validation Lead will oversee the preparation of the draft
Validation Master Plan and will issue it to ImClone for approval.
The Design "Lead" will also conduct regular reviews of
specifications and designs during the Basic Design Phase.
The Kvaerner Team will prepare and plan the IQ and OQ Protocols and
will execute IQ and OQ. ImClone will provide the resources for OQ.
Kvaerner will manage the effort. Upon completion of the protocol
executions, two final reports by protocol will be written
summarizing the findings of the IQ and OQ phases. The Launch
documentation will form the template for the Commercial facility.
ImClone will prepare the SOP's for the project as well as the PQ
protocols and PQ executions.
The Kvaerner Validation Team will participate in the Detail
Engineering/Design Phase in conjunction with the Project
Engineer(s), to assist in the Quality Assurance of the project and
validatability of the facility.
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3.0 DESIGN DISCIPLINES
3.1 PROCESS
3.1.1 PRELIMINARY ENGINEERING
During the Preliminary Engineering Design Phase the Process
Group will further develop and update the Process Flow
Diagrams (PFD's), the Equipment List and the Utility Summary
included in the Conceptual Estimate dated November 2, 2000.
From this basis they will also develop the Process and Utility
Piping and Instrumentation Diagrams (P&ID's), the Piping
Service Index, the Piping Line List, and the Piping Specialty
Item List and issue them as a "Basis of Estimate and Issue for
Design". In addition the Equipment List will also be updated
and re-issued as a "Basis of Estimate and Issue for Design"
and the Equipment and Instrument Process Data Sheets will also
be prepared by the Process Group
The Process Group will also be responsible for obtaining Air
and Wastewater Permits.
All activities are to be performed concurrently as much as is
practical.
3.1.2 DETAIL ENGINEERING/DESIGN
The Process Group will be responsible for updating the
Process/Utility Piping and Instrumentation diagrams (P&ID's),
Equipment Data Sheets and List developed during the Basic
Design Phase and further develop them to a final Issue for
Construction. They will prepare the final Process data sheets
necessary for all process and utility equipment,
instrumentation, the Piping Line List, and the Piping Service
Index. They will also prepare the Piping Specialty Item List
and finalize the Material Balance Sheets. Additionally, the
Process Group shall review the finalized design of all
Hygienic Piping Systems for conformity to design intent and
calculations.
All activities are to be performed concurrently as much as is
practical.
3.1.3 PROCUREMENT ASSISTANCE
The Process Group will incorporate the appropriate vendor
details/drawings into the P&ID's as they become available.
They will review and comment on all vendor drawings and assist
in the Technical Bid Analysis.
All activities are to be performed concurrently as much as is
practical.
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3.1.4 CONSTRUCTION SUPPORT
The Process Group will be available to answer any technical
questions which might arise during construction, provide field
support as necessary and perform the CADD drafting of the
final As-Built P&ID's per the As-Built Mark-Ups provided by
the selected subcontractor(s) and Construction Management.
Members of the Process Group will also be integrated into the
Commissioning Team.
3.1.5 DELIVERABLES
- Process Basis of Design
- Material Balance Sheets
- Air Emissions Calculations
- Wastewater Calculations
- Preparation of DEP/EDP Submittal Documentation
- Preparation of SRVSA Submittal Documentation
- Process Flow Diagrams (PFD's)
- Process and Instrument Diagrams (P&ID's)
- Equipment List
- Specialty Item List (Initially, then turnover to Plant
Engineering Group)
- Piping Service Index (Initially, then turnover to Plant
Engineering Group)
- Process and Utilities Equipment Data Sheets
- Instrument Data Sheets
- Safety Review of the P&ID's
- CADD Drafting of As-Built P&ID's
- Design Review of Finalized Design of Hygienic Piping
Systems
3.2 PROCESS CONTROLS/INSTRUMENTATION
3.2.1 PRELIMINARY ENGINEERING DESIGN
The Process Controls Group will develop the Process Controls
Design Basis for the new ImClone facility. They will review
the P&ID's to ensure compliance and accordance with the design
basis. They will prepare the Instrument Index, prepare
specifications and assist in obtaining instrument pricing for
the estimate.
The Process Controls Group will develop the required in-line
and offline specifications to support the project scope and
form a basis of the cost estimate.
In addition, they will also provide the necessary input of the
in-line and off-line instrument data into the electronic 3D
Cad Model database and validate that the instruments database
is complete, correct and current over the life of the Project.
All activities are to be performed concurrently as much as is
practical.
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3.2.2 DETAIL ENGINEERING DESIGN
During Detail Engineering Design, Process Controls will tag
and number the instrumentation on the P&ID's and finalize the
Instrument Index using an Access database. Process Controls
shall initialize the production and review the Instrument
Location Drawings and ensure number and the correct location
of instrument connections and in-line instruments. The Process
Control Group will also prepare and issue Instrument
Installation details and the design of any required System
Control Panels.
In addition, they will also provide the necessary input of the
in-line and off-line instrument data into the electronic 3D
Cad Model database and validate that the instruments database
is complete, correct and current over the life of the Project.
The Process Controls Group will also model and locate all
field-mounted off-line instruments and control panels in the
electronic 3D Cad Model.
All Instrument MTOs required from the electronic 3D Cad Model
will be extracted, tabulated, and managed by the Process
Controls Group.
A review will be done of the mechanical packages for
compliance with the instrumentation and control requirements
as described in the functional requirements.
All activities are to be performed concurrently as much as is
practical.
3.2.3 PROCUREMENT ASSISTANCE
Process Controls will develop instrument specifications for
engineering issue, perform technical bid analysis, revise
instrument specifications for purchase and review vendor
drawings. An instrument bidders list will be reviewed and
established. Instrument Subcontract requirements will be
developed and the Process Controls Group will participate in
the selection process of Subcontractors. Process Controls will
develop a software requirement and testing specification to be
used by PLC controlled equipment vendors.
All activities are to be performed concurrently as much as is
practical.
3.2.4 CONSTRUCTION SUPPORT
The Process Controls group will be available to answer any
technical questions which might arise during construction.
Field support will be provided as necessary. The group will
review as-built conditions versus Detail Engineering Design
specifications, and will participate in the preparation of the
punch list(s). Members of this group will also be assigned to
the Commissioning Team.
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3.2.5 DELIVERABLES
Design Phase
- Instrument Index
- Process Controls Design Basis - Requirements
Specification
- Instrument Specification / Requisitions
- Instrument Installation Details
- Instrument Location Drawings (initially)
- Prepare Instrument Subcontract Scope of Work
- Control Panel Layout
- Software Requirement and Testing Specification
- Sequence of Operations for Control Panels document
Construction Phase:
- Field Resolution of process control related contractor
questions
- Check compliance of instrumentation to Kvaerner/ImClone
specifications and FDA, cGMP regulations
- Participation in the preparation of Instrumentation
Punch List(s)
- AutoCAD Disks of Construction Issued Documents
3.3 MECHANICAL
3.3.1 PRELIMINARY ENGINEERING DESIGN
The Mechanical Group will be responsible for preparing
preliminary specifications for all process and utility
equipment. The group will assist purchasing in obtaining
vendor quotes. They will be responsible for tabulating all
equipment costs for the project cost estimate.
All activities are to be performed concurrently as much as is
practical.
3.3.2 DETAIL ENGINEERING DESIGN
The Mechanical Group will be responsible for further
developing the preliminary equipment specifications for
inquiry and for purchase. They will co-ordinate, along with
the Project Engineer, all activities between each design
discipline with equipment vendors, such as utility
requirements. They will co-ordinate and assist Document
Control in the inter-squad checks of all vendor submittal
drawings.
All activities are to be performed concurrently as much as is
practical.
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3.3.3 PROCUREMENT ASSISTANCE
The Mechanical Group will assist the procurement effort by
obtaining competitive bids for process and utility equipment
during the basic and detail engineering phase. They will
prepare the Technical Bid Analysis for all equipment, and
assist purchasing in answering all vendor questions and
issues.
All activities are to be performed concurrently as much as is
practical.
3.3.4 CONSTRUCTION SUPPORT
The Mechanical Group will co-ordinate any contract/field
questions on process and utility equipment, with the
appropriate equipment vendors. They will check vendor supplied
equipment against specifications, and will participate in the
preparation of punch list(s). Members from this Group will
also be assigned to the Commissioning Team.
3.3.5 DELIVERABLES
Design Phase
- Mechanical Basis of Design
- Long Lead Equipment Specifications
- Preliminary Equipment Specifications
- Equipment Specifications (Issued for Purchase)
Construction Phase:
- Field Resolution of equipment related contractor
questions
- AutoCAD Disks of Construction Issued Documents
3.4 ARCHITECTURAL
3.4.1 PRELIMINARY ENGINEERING DESIGN
The Architectural Group will prepare a basis of design,
including all site development studies, drawings and
renderings required for planning board submittal. They will
issue the building floor plans, elevations, and section
drawings, the site plan and details, and the architectural
cover sheet drawing, for planning board submittal and
approval. Architectural finishes, and door frame hardware will
also be initially specified and issued for ImClone's approval
and as a "Basis of Estimate". The group will also prepare
people, equipment and material flow diagrams. They will
co-ordinate the landscape planning and drawings for the
inclusion in the Planning Board Submittal Package.
All activities are to be performed concurrently as much as is
practical.
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3.4.2 DETAIL ENGINEERING DESIGN
The Architectural Group will further develop and finalize the
drawings and specifications developed during the Preliminary
Engineering Design within the electronic 3D Cad Model. Upon
design completion, all architectural systems' designs within
the electronic 3D Cad Model will be checked and confirmed.
Upon completion of the electronic 3D Cad Model checking phase,
they will extract most of the detailed engineering design
drawings and documents from the 3D Model sufficient for
construction. 2D Cad generated drawings will also be created
for specific designs as necessary to support the 3D design
deliverables and complete the identification of scope. They
will also prepare specifications and a layout for laboratory
furniture.
All activities are to be performed concurrently as much as is
practical.
3.4.3 PROCUREMENT ASSISTANCE
The Architectural Group will prepare the scope of work for the
building subcontract package and assist in the bid evaluation.
They will prepare specifications for the laboratory furniture,
elevators, pass-thrus, and fume and bio hoods for bid inquiry
packages and prepare the technical bid analysis.
All activities are to be performed concurrently as much as is
practical.
3.4.4 CONSTRUCTION SUPPORT
The Architectural Group will be available to field any
questions during the Construction Management Phase of the
project. The group will review as-built conditions against
design drawings and will participate in the preparation of
punch list(s).
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3.4.5 DELIVERABLES
Design Phase
- Building Color Rendering
- Project Cover Sheet and Index Drawing
- Building Floor Plan Drawings
- Building Elevations
- Landscaping Plan Drawing
- Sign Detail Drawing
- Site Plan - Design Drawing
- Architectural Basis of Design (BOD)
- Architectural Finishes Schedule
- Doors, Frames, hardware Schedule
- Reflected Ceiling Plan
- Lab Furniture (Specification and Plan Drawings)
- People, Equipment and Material Flow
- Building Wall Sections
- Construction Specifications
- Elevators, Pass Throughs, and Fume and Bio Hoods
Specifications
Construction Phase:
- Field Resolution of architectural related contractor
questions
- Check compliance of the Building to Kvaerner/ImClone
specifications and FDA, cGMP regulations
- Participation in the preparation of Punch List(s)
- DISKS (CDS) of Construction Issued Documents
3.5 CIVIL/STRUCTURAL
3.5.1 PRELIMINARY ENGINEERING DESIGN
The Civil/Structural Group will prepare a Basis of Design. The
Basis of Design will include structural and foundation
specifications and sketches to be used for the definitive
estimate. The structural drawings will include steel framing
sketches for roofs and floors. They will also prepare sketches
for misc. platform steel framing for production areas and
misc. steel framing for pipe racks and pipe supports.
Included in the foundation specifications and sketches will be
slab on grade plans, elevated floor slab details, and
retaining wall plans and details.
The group will also prepare for submittal to and approval by
the Planning Board, a Site Grading Plan, a Site Horizontal
Control Plan, and a Soil Erosion and Sedimentation Control
Plan. Site and storm water profiles, and details will also be
provided, as part of the Planning Board Submittal Package.
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The Soil Erosion Control Plan and calculations will also be
submitted to the County. P.E. stamped drawings and site plans
will be submitted to the Planning Board.
All activities are to be performed concurrently as much as is
practical.
3.5.2 DETAIL ENGINEERING DESIGN
The Civil/Structural group will further develop and finalize
the preliminary sketches, drawings and specifications,
developed during Preliminary Engineering Design within the
electronic 3D Cad Model. Upon design completion, all civil
(concrete) and structural steel (including platforms) systems'
designs within the electronic 3D Cad Model will be checked and
confirmed. Upon completion of the electronic 3D Cad Model
checking phase, they will extract detailed engineering design
drawings and documents from the 3D Model sufficient for
construction. 2D Cad generated drawings will also be created
for specific designs as necessary to support the 3D design
deliverables and complete the identification of scope.
All activities are to be performed concurrently as much as is
practical.
3.5.3 PROCUREMENT ASSISTANCE
The Civil/Structural Group will check the vendor
drawings/documentation submittals for compliance to Kvaerner
specifications and comments. They will prepare the Scope of
Work for the Civil/Structural Subcontract Package.
All activities are to be performed concurrently as much as is
practical.
3.5.4 CONSTRUCTION SUPPORT
The Civil/Structural Group will provide field resolution of
contractor questions, check compliance of materials of
construction to Kvaerner/ImClone specifications, FDA, cGMP and
local codes. They will also participate in the preparation of
punch list(s).
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3.5.5 DELIVERABLES
Design Phase:
- Steel Framing drawings for roofs and floors
- Steel Bent elevation drawings
- Misc. Platform steel framing plans for production areas
- Misc. Steel framing drawing for pipe racks and pipe
supports
- Misc. Steel framing details
- Foundation plans and details
- Retaining wall plans and details
- Slab on grade plans and details
- Elevated floor slabs and details
- Site Grading Plan
- Site Horizontal Control Plan
- Soil Erosion and Sedimentation Control Plan
- Site and Storm water Profiles and Details
- Material and Installation specifications for site work,
Steel and Concrete.
- Cut and fill calculations
Construction Support:
- Field Resolution of Civil/structural related contractor
questions
- Check compliance of structural/site work to
Kvaerner/ImClone specifications.
- Participation in the preparation of structural/site work
Punch List(s)
- AutoCAD Disks of Construction Issued Documents
3.6 ELECTRICAL
3.6.1 PRELIMINARY ENGINEERING DESIGN
The Electrical Group will prepare a Basis of Design to include
specifications and sketches for lighting, site lighting,
power, telephone instrumentation, lightning protection,
security, motor control centers, grounding, emergency power
and Fire Alarm System. They will prepare material and
construction specifications to assist the Estimating Group in
development of the definitive cost estimate. Design Basis
DB-11 will provide an outline for the overall design practice,
details, and pertinent information for project installation.
All activities are to be performed concurrently as much as is
practical.
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3.6.2 DETAIL ENGINEERING DESIGN
The preliminary power, lighting, grounding, site lighting,
instrumentation and one line diagram drawings developed during
Preliminary Engineering Design will be further developed and
finalized by the Electrical Group within the electronic 3D Cad
Model. Upon design completion, all electrical systems' designs
within the electronic 3D Cad Model will be checked and
confirmed. Upon completion of the electronic 3D Cad Model
checking phase, they will extract detailed engineering design
drawings and documents from the 3D Model sufficient for
construction. 2D Cad generated drawings will also be created
for specific designs as necessary to support the 3D design
deliverables and complete the identification of scope.
Fire alarm system design drawings with riser, new paging
system design drawings and riser, and personnel card access
security system design drawings with riser, will all be
developed as individual packages from vendors.
The telephone drawing layout will indicate empty conduits and
boxes for the installation of telephone company's cabling and
hook up. Roof lightning protection systems layout drawings
will be developed. Wiring schematic diagrams will be generated
for all necessary non-package equipment, i.e.: pumps, motors,
exhaust fans etc. Instrument loop diagram drawings and
instrument location drawings will be generated as required.
Specifications will be developed for Electrical Testing and
Installation. Legend, general notes, and bill of materials
list will be incorporated within miscellaneous design
drawings.
All activities are to be performed concurrently as much as is
practical.
3.6.3 PROCUREMENT ASSISTANCE
The Electrical Group will prepare requisitions for Substation,
Motor Control Centers, UPS system and Lighting inverter
system. They will prepare the Scope of Work for the Electrical
Subcontract Package and assist in the bid evaluations.
All activities are to be performed concurrently as much as is
practical.
3.6.4 CONSTRUCTION SUPPORT
The Electrical Group will provide field resolution of
electrical related questions. They will also check compliance
work to Kvaerner specifications and assist in the development
of Punch List(s).
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3.6.5 DELIVERABLES
Design Phase
- Lighting layout plans for each of 3 floors, roof and
exterior area
- General purpose receptacle layout for each of 3 floors,
roof and exterior area
- Substation Main One Line diagram
- Motor Control Center One Line diagrams for normal and
emergency power requirements including UPS and/or
Lighting inverter systems
- Fire alarm signal system layout plans for each of 3
floors
- Telephone layout plans for each of 3 floors (to be
included with power dwgs.)
- Lightning protection roof layout plan
- Exterior underground power and grounding layout plan
- Building and/or room security layout plans for each of 3
floors
- Voice paging system layout plan for each of 3 floors.
- Panel schedules.
- Design Basis DB-11
- Misc. detail and/or legend plans
- Motor control wiring diagrams.
- Testing specifications
- Short circuit co-ordination and load study calculations
and evaluation documents
- Electrical room equipment arrangement plan
- Instrumentation location plans for each of 3 floors
- Installation specifications
- Drawing index
- Grounding layout plans for each of 3 floors.
- Emergency generator layout and detail plan
- Requisitions for Primary substation equipment, Motor
Control Centers, Uninterrupted Power Supply (UPS),
emergency lighting inverter system, and emergency
generator set
- Site Lighting Plan and Details
Construction Support:
- Field Resolution of electrical related contractor
questions
- Check compliance of electrical work to Kvaerner/ImClone
specifications and FDA, cGMP regulations
- Participation in the preparation of electrical work
Punch List(s)
- AutoCAD Disks of Construction Issued Documents
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3.7 HVAC/FIRE PROTECTION
3.7.1 PRELIMINARY ENGINEERING DESIGN
During the Preliminary Engineering Design Phase, the HVAC
Group will prepare the following documents:
HVAC Design Basis #7
HVAC system zoning and room pressurization plans
HVAC air flow diagrams and sketches
HVAC equipment and utility list
HVAC preliminary duct routing plans.
These documents will be issued for ImClone Review and Approval
and as a "Basis of Estimate". The group will also prepare HVAC
control and material take-off costing estimates.
The Fire Protection Group will assist the Plant Design Group
to develop an underground fire water supply piping arrangement
and fire hydrant arrangement for submittal to the Planning
Board. They will prepare a fire protection Design Basis and
obtain pricing from subcontractors for the estimate.
All activities are to be performed concurrently as much as is
practical.
3.7.2 DETAIL ENGINEERING DESIGN
The HVAC and Fire Protection Groups will base their Detail
Engineering Design on the Basis of Design, developed during
the conceptual and preliminary engineering phase.
HVAC is responsible for all environmental air handling systems
engineering and design layouts. They are also responsible for
the engineering of the Plant Steam and Plant/Process Chilled
Glycol Systems. They will establish the arrangement of all
HVAC air handling equipment within the electronic 3D Cad Model
and co-ordinate the requirements of any Process and Electrical
equipment that is to be located within Mechanical Rooms with
their equipment. HVAC will finalize all HVAC duct system
designs within the electronic 3D Cad Model, then finalize and
check all of the systems' designs within the electronic 3D Cad
Model. Upon completion of the electronic 3D Cad Model checking
phase, they will extract detailed engineering design drawings
and documents from the 3D Model sufficient for construction.
2D Cad generated drawings will also be created for specific
designs as necessary to support the 3D design deliverables and
complete the identification of scope.
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HVAC will also generate HVAC-Utility Flow Diagrams for the
Plant Steam and Plant/Process Chilled Glycol Systems. The
utility flow diagrams will be drafted by the Process
Department and will be part of the P&ID set.
The Fire Protection Group will develop a detailed performance
specification, covering all fire protection requirements
within the building, in co-ordination with ImClone and
ImClone's insurer. The Fire Protection Group will work with
the Plant Design Group to depict the main headers in the 3D
Model and the Plant Design and Civil/Sitework Groups on
requirements for Fire Protection piping and systems outside of
the building structure. The Fire Protection Group will
co-ordinate their spatial requirements within the building
with the other design groups. The Group will oversee the
design of the Fire Protection system by others.
All activities are to be performed concurrently as much as is
practical.
3.7.3 PROCUREMENT ASSISTANCE
The HVAC Group will prepare the scope of work required for the
HVAC and Fire Protection subcontract inquiry package and
assist in the technical bid review and analysis. They will
review and comment on all HVAC subcontractor duct and
equipment submittals.
The HVAC Group will also assist the procurement effort by
obtaining competitive bids for the utility equipment, which is
being directly purchased by Kvaerner.
The Fire Protection Group will assist in the selection of a
design-build subcontractor.
All activities are to be performed concurrently as much as is
practical.
3.7.4 CONSTRUCTION SUPPORT
The HVAC/Fire Protection Group will provide field resolution
and technical assistance for HVAC/Fire Protection related
questions. They will also check compliance of HVAC/Fire
Protection equipment and installation to Kvaerner
specifications. Each will participate in the development of
punch list(s).
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3.7.5 DELIVERABLES:
Design Phase:
- Air Flow Diagrams
- System Boundary Zoning Diagrams
- Classification/Pressurization Diagrams
- Control Diagrams
- Air Handling Equipment Arrangement
- Ductwork Plans and Sections
- Equipment Schedules
- HVAC Details
- Sprinkler, FM-200 Performance Specification
- Equipment Specs.
- Ductwork Specs.
- HVAC Insulation Specs.
- Control System Spec.
- Sprinkler and FM-200 subcontract
- HVAC Subcontract
- Engineering Equipment Requisitions
- Technical Bid Tabulations
- Vendor Drawing/Documentation comments
Construction Support:
- Participation in the development of the Test and Balance
Plan
- Field Resolution of HVAC/Fire Protection related
questions
- Check compliance of HVAC/Fire Protection equipment and
installation to Kvaerner specifications
- Participation in preparation of HVAC/Fire Protection
related items punch list(s)
- Provide technical assistance during precommissioning of
equipment
- AutoCAD Disks of Construction Issued Documents
3.8 PLANT DESIGN
3.8.1 PRELIMINARY ENGINEERING DESIGN
The Plant Design Group will develop, establish and prepare
process and utility equipment arrangement and location plans.
An Underground Plumbing Routing Plan including utility hook
ups (water, sewer, etc.) will also be prepared for submittal
to the Planning Board. Preliminary Piping Design Routing
drawings for the Process and Utility Piping and Aboveground
Plumbing Systems will also be developed and prepared as a
Basis for the Estimate. In addition, Design Basis #10 will
also be produced.
All activities are to be performed concurrently as much as is
practical.
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3.8.2 DETAIL ENGINEERING DESIGN
The Plant Design Group will work with the Process, HVAC and
Architectural Groups to finalize the P&ID's and to establish
final equipment locations/orientation and confirm floor space
requirements for the facility utilizing an electronic 3D CAD
Model.
They will further develop and complete the detailed design of
all process, utility and building plumbing services and then
finalize and check all of the systems' designs within the
electronic 3D CAD Model, utilizing the piping materials
specification database developed and maintained by the Plant
Engineering Group.
This includes the design routing of the piping header systems
for the plant steam and plant/process chilled glycol systems,
the individual branch pipelines from the header valves or
branch connection to each individual HVAC unit, and the design
routing of the Heating Hot Water Piping System which serves
the HVAC reheat coils.
The Plant Design Group will also locate and install all piping
specialties into the appropriate pipelines and on the
appropriate vessels (or other equipment as necessary) in the
electronic 3D CAD Model, utilizing the piping specialties
database developed and maintained by the Plant Engineering
Group.
The Plant Design Group will also locate and install all
in-line instruments into the appropriate pipelines and on the
appropriate vessels (or other equipment as necessary) in the
electronic 3D CAD Model, utilizing the in-line instrument
database developed and maintained by the Process Controls
Group.
Upon completion of the electronic 3D CAD Model checking phase,
they will extract detailed engineering design drawings and
documents from the 3D Model sufficient for construction. 2D
CAD generated drawings will also be created for specific
designs as necessary to support the 3D design deliverables and
complete the identification of scope.
All activities are to be performed concurrently as much as is
practical.
3.8.3 PROCUREMENT ASSISTANCE
The Plant Design Group will review the vendor
drawings/documentation submittals for compliance to Kvaerner
and project requirements and comment. They will develop and
prepare the scope of work for the Mechanical (Piping,
Plumbing, Equipment) Installation subcontract packages, in
conjunction with the Plant Engineering Group.
All activities are to be performed concurrently as much as is
practical.
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3.8.4 CONSTRUCTION SUPPORT
The Plant Design Group will provide field resolution of
equipment, piping and plumbing related contractor questions.
They will also check compliance of piping to Kvaerner/ImClone
specifications, FDA, cGMP regulations. The group will also
assist in the preparation of piping/plumbing punch list(s).
Members of the Group will also be assigned to the
Commissioning Team.
3.8.5 DELIVERABLES
Plant Design, Piping Design, Plumbing Design
- Equipment Arrangements
- Multi-discipline Interstitial Space Lane Systems
Co-ordination drawing
- Process and Utility Piping Design Installation
Isometrics - Above Ceiling
- Process and Utility Piping Design Installation
Isometrics - Below Ceilings
- Utility Services Piperacks Plan drawings
- Process Piping Details
- Utility Piping Details
- WFI System Isometrics
- DIW System Isometrics
- Clean Steam System Isometrics
- CIPS/CIPR System Isometrics
- Underground Plumbing Plans
- Aboveground Plumbing Plans
- Water and Natural Gas Riser Diagrams
- Sanitary Storm Drainage Riser Diagrams
- Plumbing Schedules and Details
- Plumbing Specifications
- Subcontract, Equipment, Piping, Plumbing Installation
Scope of Work
Construction Support:
- Participation in the development of the Piping Testing
Plan
- Field Resolution of piping and plumbing related
contractor questions
- Check compliance of piping to Kvaerner/ImClone
specifications and FDA, cGMP regulations
- Compliance of Plumbing to State and Local Codes
- Participation in preparation of Piping/Plumbing Punch
List(s)
- AutoCAD Disks of Construction Issue Documents
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3.9 PLANT ENGINEERING
3.9.1 PRELIMINARY ENGINEERING DESIGN
The Plant Engineering Group will provide valve and specialty
item take-offs from the P&ID's to support the cost estimate.
These materials, in conjunction with the material take-offs
for piping provided by the Plant Design Group, will be priced
by the Plant Engineering Group to provide a total installed
cost for the piping systems on the project.
The Plant Engineering Group will develop the required piping
specifications to support the project scope and form a basis
of the cost estimate. In addition, they will also provide the
necessary input of the piping material and specialty materials
data into the electronic 3D Cad Model database and validate
that the materials database is complete, correct and current
over the life of the Project.
All activities are to be performed concurrently as much as is
practical.
3.9.2 DETAIL ENGINEERING DESIGN
Piping Material Specifications, as well as other
specifications such as Insulation, Painting, Fabrication,
etc., will be finalized and issued sufficient for construction
by the Plant Engineering Group. Piping Stress Analysis, Pipe
Support Design and Material Control and Requisitioning will
also be performed by the Plant Engineering Group, in
accordance with Design Basis No. 5.
In addition, they will also provide the necessary input of the
piping material and specialty materials data into the
electronic 3D Cad Model database and validate that the
materials database is complete, correct and current over the
life of the Project.
All MTOs required from the electronic 3D Cad Model will be
extracted, tabulated, and managed by the Plant Engineering
Group.
All activities are to be performed concurrently as much as is
practical.
3.9.3 PROCUREMENT ASSISTANCE
The Plant Engineering Group will prepare the requisitions for
the materials identified in DB-5 as well as the subcontract
requisitions for the mechanical work, insulation and painting.
The Plant Engineering Group shall provide technical bid
evaluations for all materials purchased by the group, and will
provide technical assistance to others, including the
contractors, regarding technical acceptability of alternates.
All activities are to be performed concurrently as much as is
practical.
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3.9.4 CONSTRUCTION SUPPORT
The Plant Engineering Group will provide construction
assistance with technical issues on piping materials and
specifications, as well as reviewing the construction for
compliance with the piping requirements. Materials tracking
and reporting assistance will also be provided, as per a
Materials Management Plan
3.9.5 DELIVERABLES
The Plant Engineering Group will provide the specifications,
requisitions and drawings as delineated in Design Basis 5.
3.10 PROCUREMENT
Working as Agent for ImClone, the Procurement Team will prepare and
issue packages for equipment, instrumentation, electrical and all
other necessary material and equipment for bid and purchase on
ImClone paper. They will prepare Commercial/Technical Evaluations
for these items and will coordinate Kvaerner's review of vendor
documentation submittals to insure compliance with specification
requirements. Expediting of deliveries of all purchased goods and
the set up and maintenance of the vendor document files is also a
key part of the Kvaerner procurement function.
3.10.1 DELIVERABLES
Design Phase
- Issue all inquiry packages for bid
- Commence the Commercial and Technical Bid Tab Analysis
- Condition all Vendor offerings for strict compliance
with project requisitions and specifications
- Compile Bidders list for Client review and approval.
- Review and formulate necessary commercial documents for
project use.
- Purchasing Procedure
- Prepare ImClone purchase orders or change orders for
ImClone signature
3.11 SUBCONTRACTS
The Subcontract Group will assist Project and Construction
Management in the preparation of Subcontracts. The Subcontract Group
will prepare subcontract inquiry packages for bid. They will prepare
commercial bid tabs and technical bid tabs, and issue subcontracts
for construction. They will maintain the subcontracts through
construction.
3.11.1 DELIVERABLES
- Subcontract Procedure
- Subcontract Bidders List
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3.11.2 CHANGE ORDERS
- Written scope document to accompany HO originated design
revisions
- Implementation of all FWO's and HO initiated changes as
Subcontract Amendments
3.12 CONSTRUCTION MANAGEMENT
Construction Management will consist of the following services:
- Provide assistance to the design team and lead
constructability reviews
- Participation in the development of the Subcontract Plan
and Subcontract Scopes of work
- Logistics Plan
- Participation in the development of the CPM
Construction, Commissioning and Validation schedule
- Maintain and control all equipment and material
purchased by ImClone as per a Materials Management Plan
- Facilitate the safe work of the ImClone Subcontractors
- Co-ordination of the Subcontractors
- Scheduling the work of the Subcontractors
- Field resolution of Subcontractor questions
- Insuring installation is per drawings and specifications
- Receiving equipment purchased
- Preparing monthly progress reports
- Verifying Subcontractors progress invoices
- Insuring safety regulations are adhered to by
Subcontractors
- Witnessing tests of equipment and installation.
- Facilitating subcontractor "as-built" mark-ups
- Lead in the development of Punch Lists by system or area
- Participation in the planning of the Commissioning/
Start-up by system or area
- Commissioning/Start-up assistance.
- Assistance in development of Turnover Books and
facilitation of ImClone acceptance of individual systems
for care, control and custody
3.13 COMMISSIONING ASSISTANCE
A joint Kvaerner/Subcontractor/Vendor Commissioning Team will be
developed to assist ImClone in the commissioning of the facility.
This team will include an ImClone team leader, members of the
construction management team, various engineering design leads, the
Validation Manager, members of the validation team, and third party
personnel.
The commissioning Team Leader will develop a Commissioning Plan. As
described in earlier sections, each utility and equipment system
will be commissioned after mechanical completion and prior to
Validation (IQ) completion.
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3.13.1 DELIVERABLES
PRIOR TO MECHANICAL COMPLETION OF INDIVIDUAL SYSTEMS
- Commissioning Plan
- Participation in the development of the Factory
Acceptance Test (FAT) plan(s) by vendors; witness FATs
(with ImClone)
- Participation in the development of the Site Acceptance
Test (SAT) plan; witness SATs (where applicable)
- Equipment vendors receive the documentation matrix and
deliver the required validation documents, including IQ
datasheet
- Equipment vendors receive and perform the requirements
outlined in the instrument calibration specification.
- Selected equipment vendors receive and comply with
Control System Requirement and Testing Specification.
- Equipment vendors perform and supply all documentation
required for validation
- Witness the Software Testing and Factory Acceptance
Testing of selected equipment prior to shipment as
approved by ImClone.
- Ensure Subcontractor provides As-Built P&ID and
equipment arrangement drawing mark-ups for Kvaerner
group to CADD
- Verify all lighting and power requirements are supplied
as designed.
AFTER MECHANICAL COMPLETION OF INDIVIDUAL SYSTEMS
- Organize the start up and testing of equipment that
includes training of Commissioning Team and ImClone
operators by selected equipment vendors.
- Run all air handlers for a minimum of 1 week to ensure
all room temperature, humidity, and pressurization
requirements are maintained.
- Test all equipment using water and air.
- Test all utility systems at peak consumption, if
possible, to verify Maximum designed output.
- Test all utilities and equipment using the O.Q. Protocol
as a basis.
In addition to the above activities, it is the Commissioning
Team's responsibility to manage and track/progress the
transition from construction to commissioning of the facility,
and ultimately to final Installation and Operational
Qualification testing.
3.14 VALIDATION
3.14.1 DESIGN REVIEWS
Validation personnel will be assigned to the project full time
during the Preliminary and Detail Engineering Design phases to
review specifications and designs and to perform cGMP audits.
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3.14.2 VALIDATION MASTER PLAN
Prior to the completion of Preliminary Engineering, the draft
Validation Master Plan will be prepared and submitted for
ImClone approval.
3.14.3 INSTALLATION QUALIFICATIONS (IQ)
IQ documentation and protocol development will begin by
Kvaerner during the design engineering stage of the project.
Key components of the IQ development are P&ID's and material
specifications. Documentation for IQ execution will include
review of materials of construction. Actual IQ execution by
Kvaerner of the approved protocol will begin prior to each
system's mechanical completion (see definition in Section
2.4).
3.14.4 OPERATION QUALIFICATIONS (OQ)
OQ documentation and protocol developments will begin by
Kvaerner, where possible, at the design stage, and will be
completed when the equipment operating manuals are received.
Before OQ execution by ImClone commences, SOPs for operation,
cleaning and preventive maintenance must be developed by
ImClone and protocol must be approved. Personnel training for
specific pieces of equipment must also be documented.
3.14.5 PERFORMANCE QUALIFICATION SUPPORT (PQ)
ImClone is responsible for the planning and execution of the
PQ of the facility.
3.14.6 DELIVERABLES
- Development of a draft Validation Master Plan specific
to the Commercial Facility
- Review of documentation, system drawings, P&ID's, etc.,
as appropriate.
- cGMP audit of the facility design
- Assist in the development of Factory Acceptance Test
(FAT) plans (by vendors); witness FATs
- Development and execution of Installation
Qualification(IQ) protocols
- Development of the Site Acceptance Test (SAT) plan;
witness SATs
- Review of the commissioning plan.
- Participate as a member of the commissioning team to
ensure equipment is ready for qualification and the
proper documentation has been compiled.
- Development and Execution of Operation Qualification
(OQ) protocols
- Collation of data from protocol execution
- Ensure that the agreed to changes to the draft protocol
and final report documents are incorporated into the
final documents
- Ensure that any problems encountered during protocol
execution are brought to the attention of the ImClone
Project Manager
- Write separate IQ/OQ Final Reports for each system.
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3.14.7 IMCLONE WILL BE RESPONSIBLE FOR THE FOLLOWING:
- Providing IQ and OQ protocol format
- Reviewing and approving protocols and final reports on a
timely basis, and co-ordination of comments on to one
mark up document
- Ensuring that draft SOPs are in place prior to OQ
protocol execution
- Ensuring that the proper training has taken place prior
to OQ protocol execution
- Providing equipment and operators during protocol
execution.
- Witness Factory Acceptance Tests (FAT's)
- Supplying validation test equipment
- Development and execution of Performance Qualification
(PQ) Protocols.
3.14.8 CLARIFICATION AND ASSUMPTIONS:
- Protocol format will be established prior to the start
of protocol development. ImClone will provide Kvaerner
with a disc copy of the protocol format to be used for
IQ, OQ, and the Final Report.
- Protocols will be circulated to ImClone personnel for a
single review. All ImClone comments will be consolidated
onto a single document prior to being returned to
Kvaerner. All document development and comments to the
protocols must adhere to the dates listed in the project
schedule in order to meet the targeted completion date.
- All validation test equipment (if required) will be
supplied by ImClone.
- Protocols will be approved before any validation
execution will take place.
- Preparation of SOPs for operation, cleaning,
preventative maintenance and calibration, and cleaning
qualification studies are not included in the Kvaerner
scope.
- ImClone will be required to operate all equipment during
validation testing.
Exhibit F
IMCLONE COMMERCIAL FACILITY
MECHANICAL COMPLETION - GENERAL DEFINITION
1. Construction of the facility shall be completed and evidenced by
documented verification reasonably satisfactory to Owner that all aspects
of the installation are architecturally and mechanically complete, and
adhere to the design and installation specifications, as well as to the
documented specifications of applicable suppliers. Facility will be turned
over to Owner on a system-by-system (or sub-system) basis as defined by
each system checklist and the Turnover Sequence Guideline.
2. All installations forming a part of the Work shall have been completed
including, without limitation, structural work, piping, mechanical
equipment, laboratory and production equipment, HVAC, electrical and
instrumentation work, and telecommunications work, all in accordance with
the Project drawings and specifications, P&IDs, and applicable codes. By
way of further clarification, the following activities must be completed
and Owner must have received, in connection therewith, the appropriate
documentation and certifications:
- Verified receipt of all equipment (includes skid mounted
equipment/components), instrument and specialty items
purchased for the Project.
- Installation of all equipment, including setting, anchoring,
reassembly (where required). Connection of all utilities to
all equipment (including skids).
- Piping systems are to be completely fabricated, installed,
tested, flushed and in-line instruments and other in-line
devices ready for operation.
- Electrical polarity checks and installation resistance
measurements are to be complete and satisfactory.
- Instruments and process controls are to be bench calibrated,
installed, and dry loop checked. PLC and SCADA control
components for the custom and/or standard equipment packages
and CIP Systems, respectively, are installed, software loaded
and factory tested.
- All rotating equipment is to be checked for freedom of
rotations, correct rotational direction, and cold alignment.
- Critical pipe supports and spring hangers, if applicable, are
to be checked for proper adjustment to cold conditions.
- Lighting and power distribution is to be completed in
accordance with the requirements set forth in the
specifications.
- Appropriate lubricants are to be applied as specified by
suppliers.
- HVAC systems are to be checked and tested and initial balance,
controls and complete systems are to be fully operational with
all written test and balancing reports submitted to and
approved by the Owner's Project Manager/Engineer. This
includes cleaning, installation of filters/belts and alignment
of fans. Final balance to be completed as punch-list item.
Lubricants to be provided by Owner and installed by
contractors under the direction of Kvaerner.
- Building and power control systems are to be completely tested
and operational.
Page 1 of 3
IMCLONE COMMERCIAL FACILITY
MECHANICAL COMPLETION - GENERAL DEFINITION
- All locks, signs, and barricades previously under construction
control are to be removed. The care, custody and control of
the turned over systems is by Owner from this point forward.
- Mechanical, pneumatic, and hydrostatic pressure/tightness
tests of utility systems are to be completed and documented.
- The building (erection/installation of walls, interiors,
roofing, windows, doors, hardware, etc.) is to comply with the
drawings and specifications and such compliance is documented.
- All facility equipment is to be installed in accordance with
the supplier's recommendations and the project specifications.
- All utilities, infrastructure, and ancillary systems connected
to or associated with the facility equipment are to be in
accordance with the project drawings and specifications. These
systems are to be ready for commissioning and available for
the installation qualification (IQ) effort.
- All installation activities that are critical for starting IQ
or that may affect the operation, safety of the equipment and
operators, processing parameters or quality attributes of the
product are to be completed.
- Pre-commissioning and turnover documentation (as outlined in
turnover sequence document) is to be completed and submitted
to Owner for approval.
- As-built mark-up drawings (current as of mechanical
completion) are to be submitted and approved, by Owner, from
all sub-contractors and or suppliers. Kvaerner produced CAD
as-builts to follow.
- Construction cleaning (free of construction materials, dirt,
dust, and debris) of building areas consistent with area
classification (cGMP and non-classified areas).
3. The Master Punch List (on a system by system basis) shall be completed
with agreed upon documented exceptions approved by Owner's PM/PE. The
completion of these items must be done so as to not affect the occupancy
or operation of the facility. The list shall include items that were
identified as "errors and omissions" and "out of scope" items (regardless
of when identified). For fee purposes, "out of scope" items generated
during Master Punch List preparation will not be considered in determining
Mechanical Completion. Completion of all items is the responsibility of
Kvaerner.
4. "Sign-off" of all "building systems" and components thereof is required
and shall be completed. "Sign-off" means the agreement of the Owner's
PM/PE that said systems and components have successfully met the
requirements of the specifications and drawings. Testing, to demonstrate
that the Work is complete as designed and capable of being used for its
intended purpose, shall be completed. Prior to any such testing, Kvaerner
shall provide Owner with proposed testing criteria for Owner's approval.
"Building Systems"
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IMCLONE COMMERCIAL FACILITY
MECHANICAL COMPLETION - GENERAL DEFINITION
means all mechanical, electrical and other operating building components
required for complete operation of the facility.
5. All final Equipment and System Documents, including Maintenance Manuals,
Operational Manuals and Test and Balance Reports have been submitted to
Owner within 60 days of Mechanical Completion. These include, without
limitation: (i) "as-built" drawings, (including dimensional outline, cross
sectional, component or detail, assembly, erection, foundation, or
loading), (ii) installation, operating, and maintenance manuals in those
quantities reasonably required by Owner (including, without limitation,
all required components of operation criteria, maintenance procedures and
warranty/service details, and shall be professionally organized and
bound), (iii) wiring diagrams, (iv) certified performance curves, test
data, and calculations, as set forth in the specifications, (v) HVAC Test
and Balance Reports including reports for any specialized exhaust or air
handling equipment (including fume hoods), (vi) Supplier Certifications
and Witness Testing, (vii) spare parts list with appropriate drawing cross
references and ordering information, and (viii) all other items required
by the specifications.
The above information shall also be submitted on an on-going basis as
received from equipment vendors/sub-contractors.
6. Maintenance and operational training of Owner's personnel by equipment
vendors/sub-contractors as directed by Kvaerner to provide working
knowledge of all systems shall be completed at least four (4) weeks prior
to commencement of the Operational Qualification (OQ). Upon Owner's
request, additional training shall be provided after sign-off.
7. Pre-commissioning activities shall be part of the Mechanical Completion
scope. This includes the management of sub-contractors during start-up and
pre-commissioning activities.
8. In the event of any conflict between this "Mechanical Completion - General
Definition" and the remainder of Exhibit F, the provisions of this
"Mechanical Completion - General Definition" section shall control.
Page 3 of 3
IMCLONE COMMERCIAL FACILITY
TURNOVER SEQUENCE GUIDELINE
GENERAL OBJECTIVES:
1. Team Effort: Kvaemer Project Management, Kvaerner Construction, Kvaemer
Validation, Kvaemer Commissioning, ImClone Project Management, ImClone
Commissioning, ImClone Facilities, ImClone
Manufacturing, ImClone Validation
2. Confirm Mechanical Completion Turnover and Commissioning Trailer Files are
complete. Effort will allow more time to resolve issues.
3. All of the durations in the Turnover Schedule are based on the following
sequence: Mechanical Completion ----> Commissioning ----> IQ ----> OQ.
RESPONSIBILITIES
KVAERNER is responsible for proper system installation, mechanical completion
and submitting turnover package to commissioning (ImClone and Kvaerner Team) on
or before scheduled mechanical completion date. Included in the package:
- Non-Qualified and Qualified Systems (outside skid boundaries):
Applicable specifications, requisitions, drawings and lists will be
utilized as a checklist. Each item will be initialed and dated.
Discrepancies will be resolved.
- Qualified Systems: Utilize qualification documents as a checklist to
ensure proper utility connections and service where possible.
Note: Kvaerner will not be required to verify components of skid-mounted
equipment.
Note: No items will be left blank. N/C will be entered for "Not Checked".
COMMISSIONING TEAM (Kvaerner and ImClone) is responsible for completing
activities as stated on spreadsheet (including functional portion of draft OQ on
qualified systems) and Submitting Acceptance sign-off sheet to ImClone's Plant
Owner and Validation Manager on or before scheduled commissioning completion
date.
- - Qualified Systems: Utilize qualification documents as a checklist to
ensure compliance with protocol prior to Mechanical Completion and
turnover checklists to Kvaemer Construction for inclusion in Mechanical
Completion Turnover package.
SEQUENCE:
THREE-WEEKS BEFORE MECHANICAL COMPLETION (OR BEFORE)
- - Joint review of draft IQ to Identify tasks to be done and resource
responsible
- - Joint review of system boundary if required
- - Joint Safety - Review
- - ImClone Metrology will compare the instruments included in the Protocols
with the most recent instrument list. Validation will be informed of any
discrepancies.
- - Create preliminary work list include completion of system outside boundary
with responsibility and realistic target completion dates assigned.
- - Kvaerner starts to put together Turnover package.
Page 1 of 2
IMCLONE COMMERCIAL FACILITY
TURNOVER SEQUENCE GUIDELINE
- - A mutually, agreed upon list of documents shall be prepared (by Kvaemer)
and shall be used as a checklist to insure that the turnover package is
complete. This list shall be distributed to the appropriate
sub-contractor(s), ImClone PM/PE and ImClone Commissioning Team Leader.
TWO WEEKS BEFORE MECHANICAL COMPLETION (OR BEFORE)
- - Complete appropriate checklists
- - Review Work List with Kvaemer
- - Kvaemer to present draft Turnover Package
ONE WEEK BEFORE MECHANICAL COMPLETION
- - Complete Turnover Package with acceptable punch list. Assign
responsibility and completion dates.
DAY BEFORE MECHANICAL COMPLETION DATE AND BEYOND
- - Submit Turnover Packageto for approval to appropriate ImClone
Commissioning Team Leader with copy transmittal to ImClone PM/PE.
- - After acceptance of Package, Validation will be informed that system file
is available for audit.
- - Continue to track actual Mechanical Completion beyond initial boundary and
track completion of punch list (Kvaemer will track the Mechanical
Completion Punch-list and ImClone Commissioning Team Leader will track the
Commissioning Punch-list)
IMPORTANT NOTE: Once a Mechanical Completion or Commissioning Turnover Package
is approved by the appropriate parties, the addition of items to a punch-list
included in the package must be approved (initialed and dated) by the same
parties that approved the package initially.
Page 2 of 2
BIOTECH/PHARMACEUTICAL MECHANICAL COMPLETION, PRECOMMISSIONING AND
ACCEPTANCE PROCEDURE
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CONSTRUCTION OPERATION PROCEDURE
APPROVED BY:
-------------------------------------
V. P. Central Construction Operations
AUTHORIZED BY:
-------------------------------------
Sr. V. P. Construction Operations
1.0 MECHANICAL COMPLETION AND PRECOMMISSIONING
BIOTECH/PHARMACEUTICAL MECHANICAL COMPLETION, PRECOMMISSIONING AND
ACCEPTANCE PROCEDURE
- --------------------------------------------------------------------------------
1.1 General
This procedure defines the responsibilities of both Kvaerner and the
Owner with regards to the work required to make the installation
ready for initial operation.
The completion of the work that is the responsibility of Kvaerner,
is set forth in Section 2.0, Mechanical Completion and Section 5.0,
Division of Responsibilities.
Performance of the work that is the responsibility of the Owner, is
set forth in Section 3.0, Precommissioning and Section 5.0, Division
of Responsibilities.
This procedure is intended to expand and supplement, but not to
supersede or vary, the general terms and conditions of the contract.
In the event of any conflict between this procedure and the contract
terms, the contract terms shall govern.
1.2 Definition of Terms
1.2.1 "Mechanical Completion," when referring to an item of work, a
subportion of the plant, a process system, a unit or the
entire facility, means that Kvaerner has provided erection in
accordance with drawings, specifications, applicable codes and
all other contractual requirements.
It is recognized that painting, paving, insulation (when part
of Kvaerner scope) as well as final clean-up must be completed
by Kvaerner before the installation is deemed "final
complete".
However, at the time of mechanical completion of a unit, a
system or an area, this work need not be complete, but should
be in a sufficiently advanced state of completion so as not to
unreasonably interfere with subsequent activities or affect
safety.
1.2.2 "Precommissioning" is defined as the Owner's prestart-up
checkout, loop checks, system adjustment, equipment and system
activation, purging materials and Owner operations required to
prepare the facility for initial operation.
1.2.3 "Completion of Construction" means that Kvaerner has provided
erection in accordance with drawings and specifications, and
other items referred to in the definition of "Mechanical
Completion", plus final cleanup and completion of painting and
insulation work.
1.2.4 "Initial Operation" is the responsibility of the Owner, and is
carried out by Owner's personnel.
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1.2.5 "Kvaerner" means the Kvaerner Company, any of its divisions,
and any party duly authorized to act on Kvaerner's behalf.
1.2.6 "Owner" means the party for whom the facility, or any subpart
of the facility, is being installed, erected, or constructed;
and will ultimately accept full care, custody, control, and
title to the completed works.
1.3 Schedules
Kvaerner will develop, based upon the target dates for completion
specified in the contract, a sequence of work completion activities,
which support an orderly turnover.
So that initial operation may commence at the earliest possible
date, precommissioning work should, insofar as is reasonably
possible, proceed before the entire installation is Mechanically
Complete.
1.4 Personnel
By written agreement between Kvaerner and Owner, Kvaerner can
provide non-technical and technical personnel, and specialized
subcontract services, as required to assist the Owner in
precommissioning and initial operations of the facility.
The number and type of personnel provided by Kvaerner will be
determined by special and separate agreement between Kvaerner and
Owner.
Kvaerner would be reimbursed for the services of these personnel as
follows:
1.4.1 Non-technical Personnel (Craftsmen) - Kvaerner shall be
reimbursed on the same basis as used in the contract work.
1.4.2 Technical Personnel and/or Operations Advisers - Kvaerner
shall be reimbursed for the services of these personnel on a
per diem basis (to include living costs), plus reasonable
travel costs to and from the jobsite.
1.4.3 Specialized Subcontract Services (HEPA Certification, Scale
Calibration, etc.) - Kvaerner shall be reimbursed for
subcontract cost as used in the contract work.
2.0 MECHANICAL COMPLETION BY KVAERNER
2.1 Scope
This section of the procedure defines the work to be performed by
Kvaerner to achieve mechanical completion. The general outline of
mechanical completion work is described in the following
subparagraphs, however, for specific items, refer to the Division of
Responsibilities, Section 5.0.
2.2 Erection in Accordance with Drawings, Specifications and Applicable
Codes
2.2.1 The plant shall be erected in accordance with the drawings and
vendor prints issued for the project.
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2.2.2 The work and materials shall be installed in accordance with
the project specifications and vendor's instructions, as
issued.
2.2.3 Applicable codes, as listed in the project specification,
shall be followed for materials, workmanship and testing.
2.3 Non-operating Adjustments and Cold Alignment
2.3.1 The procedure for the completion of field fabrication,
erection and installation, as called for on the design
drawings, as set forth in the engineering specifications and
as outlined in the manufacturer's installation instructions
shall also include non-operating adjustments and cold
alignment checks on equipment such as steam generators, water
treatment equipment, chillers, bioreactors, bioinactivation
skids, centrifuges, WFI stills, CIP systems, TFF filter skids,
hot water skids, chromatography columns, autoclaves, glass
washers, pumps, compressors, blowers, agitators, emergency
generators, elevators, conveyors and other miscellaneous
specialty equipment.
2.3.2 All rotating equipment will be checked (driver and driven) for
freedom of rotation prior to performing any alignment.
Factory coupled rotating equipment shall be uncoupled in the
field and checked for freedom of rotation.
After freedom of rotation has been checked, the driver shall
be momentarily energized to "bump" the driver. Upon verifying
that proper rotation direction exists, the driver and driven
equipment shall be aligned to specified tolerances.
After acceptance of the alignment, the coupling shall be
installed.
2.3.3 On pumps, compressors, fans and other mechanical equipment the
piping and ducting flanges shall be fitted-up, in close
parallel and lateral alignment, prior to tightening and
bolting.
2.3.4 Pipe supports, spring hangers, including constant support-type
supports, shall be checked for proper adjustment of travel,
and correctly positioned for the cold condition after
installation. Sanitary piping supports shall be used in all
areas. Hangers which have been set at the factory shall
require the travel positions checked after installation. Free
draining / sloped piping systems shall be checked for proper
slope and support.
2.3.5 After all testing is complete on corrugated-type and packed
expansion joints, remove the temporary wood blocks, temporary
steel strapping, shipping rods and spacers, (which were
provided to prevent damage to the joint during shipment,
storage, or field construction and testing).
2.4 Electrical Polarity Checks and Insulation Resistance Measurements
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2.4.1 Proper rotation and insulation resistance megger checks shall
be made for all electrical motor drivers.
2.4.2 After installation, the electrical instrument circuits shall
be checked for continuity.
2.5 Installation and Inspection of Vessel Internals
2.5.1 Vessel internals shall be installed according to process
specifications and manufacturer's instructions.
2.5.2 Vessel internals which are installed in the field shall be
inspected to ensure proper installation and a final inspection
shall be made by the Owner.
2.5.3 Catalyst/Chemical Charges - A vessel will be considered
mechanically complete when it is ready to receive the
desiccants, sieves and the catalyst/chemical charge. The party
installing the charge will be responsible for final heading-up
of the vessel. (Unless otherwise indicated in the Division of
Responsibilities Table.)
2.6 Initial Packing of Pumps
Kvaerner shall install initial pump packing or seals in accordance
with manufacturer's recommendations.
2.7 Mechanical, Hydrostatic and Pneumatic Tightness Tests
2.7.1 The testing of pressure vessels, exchangers, and other such
items of equipment shall have been conducted by the
manufacturer or fabricator in accordance with the codes and
specifications under which such equipment has been procured
and manufactured. No further testing shall be performed,
unless the equipment was damaged in transit, required field
repair, or field alteration.
2.7.2 The testing of mechanical equipment and package systems shall
have been conducted by the manufacturer in accordance with the
codes and specifications under which such equipment has been
procured and manufactured. No further testing shall be
performed, unless the equipment was damaged in transit,
required field repair, or field alteration.
2.7.3 The pressure testing of installed instruments, including
relief valves, shall have been performed by the manufacturer
where called for by the specification under which such
equipment has been procured and manufactured. No further
pressure testing shall be performed.
2.7.4 Pneumatic circuits shall be checked for tightness and routing
continuity with appropriate media.
2.8 Inspection Check of Piping and Instrumentation Versus Flow Diagrams
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An inspection check of piping and instrumentation, as installed,
shall be made by Kvaerner to ensure proper installation in
accordance with the latest versions of the Process & Instrument
Diagrams (P&ID's).
2.9 Service Representatives
2.9.1 Construction Phase of Work - During the construction phase of
the work, Kvaerner will arrange for the services of vendor
representatives to assist and inspect the installation of
equipment items as deemed necessary by Kvaerner.
Owner will furnish the services of manufacturer's
representatives for Owner-furnished and Kvaerner-installed
equipment.
In both cases above, Kvaerner will furnish the necessary
craftsmen and/or field supervision required to assist the
service representative in his work.
2.9.2 During Precommissioning and Initial Operations - Owner will
arrange for the necessary service representatives required by
Owner to precommission and/or start initial operation of the
equipment. Owner will furnish necessary craft assistance to
manufacturer's service representatives, if required, to adjust
said equipment. Owner may request this assistance from
Kvaerner per Paragraph 1.4 above.
2.10 Lubricants
2.10.1 Owner will review manufacturer's lubrication recommendations
and advise Kvaerner of lubricants to be used.
2.10.2 Owner will provide all operating lubricants.
2.10.3 Kvaerner will make initial installation of operating
lubricants.
2.11 Mechanical Completion Acceptance
2.11.1 When Kvaerner considers that portions of the installation (a
unit, system or area) are mechanically complete, Kvaerner
shall notify Owner in writing (Form DP-870-1.001). If Owner
concurs, Owner shall promptly (within 24 hours) approve such
notification for that portion, or, if Owner does not concur,
Owner shall promptly (within 24 hours) notify Kvaerner, in
writing, of any unfinished work or deficiency to be corrected.
Failure of Owner to approve a Certificate of Acceptance or to
provide a list of unfinished work and/or deficiencies within
ten (10) calendar days after notification, shall constitute
approval and acceptance by Owner of mechanical completion of
the unit, system or area. Kvaerner shall notify Owner in
writing when all listed exceptions, if any, have been
corrected.
2.11.2 When all of Kvaerner's work, as defined in this procedure,
has been completed Kvaerner shall submit a final Certificate
of Acceptance to the Owner. The Owner shall approve the final
Certificate of Acceptance for the entire installation within
fourteen (14) calendar days of submittal. Mechanical
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Completion of the plant shall be deemed approved and accepted
by the Owner, if no response is received at the end of the
fourteen (14) day review period.
2.12 Care, Custody and Control
Upon Owner's acceptance of mechanical completion for agreed upon
areas of the installation, Owner shall assume care, custody and
control of such portions of the completed work, and shall also
maintain them in satisfactory operating condition until completion
of the entire facility.
2.13 Forms for Mechanical Completion Acceptance
Form DP-807-1.001 is the form for notification and acceptance of
mechanical completion, which shall be used, either for parts of the
installation or for final acceptance.
3.0 PRECOMMISSIONING BY OWNER
3.1 Scope
This section of the procedure defines the precommissioning work that
is to be done by the Owner in order to prepare the installation for
initial operation.
This work includes running-in and doweling of pumps, compressors,
turbines, motors, seals, and other machinery and/or mechanical
equipment, mechanical seal systems; adjustments to packing of pumps
and valves; removal and/or cleaning of strainers, where required;
functional test, setting or calibration of instruments, loop checks,
setting of relief devices or alarms; flushing and drying of systems,
chemical cleaning, hot alignment checks; charging of the plant with
utilities, chemicals, catalysts and/or other operating materials,
and the individual items, per the Division of Responsibilities,
Section 5.0 of this specification.
Owner shall provide necessary qualified maintenance and/or
operations personnel during this precommissioning period.
3.2 Commissioning of Utility Systems
Commissioning of systems which involve the transfer of utility media
(i.e., electric power, air, water, fuel, gas, steam, etc.) to or
from the installation, and which are needed to run-in and adjust
equipment, shall be the responsibility of the Owner. The operation
of valves, removal of blinds, etc., shall be done by Owner.
Owner will be responsible for the safety and control of "hot" and
"cold" work permits issued during the activation of the systems
noted above.
3.3 Drying-Out of Process Equipment
The drying-out of process lines or items of equipment (i.e.,
furnaces, reactors, etc.), where such drying-out is a process
requirement (i.e., critical operating temperatures or possible
contamination of catalysts), shall be the responsibility of the
Owner.
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4.0 INITIAL OPERATION BY OWNER
4.1 Scope
Initial operation is the responsibility of the Owner, and is
carried-out by Owner's personnel.
4.2 General
Initial Operation
Owner will:
4.2.1 Activate and operate utility systems.
4.2.2 Perform general tightness tests, where required, after
precommissioning work but prior to introduction of process
fluids.
4.2.3 Perform hot bolting of piping and equipment.
4.2.4 Install rupture disc, orifice plates, etc.
4.2.5 Introduce feedstock to the installation and establish
operating conditions.
4.2.6 "Tune" instruments when process fluids are available, and
finalize control mode settings, and commission other
instruments.
5.0 DIVISION OF RESPONSIBILITIES
5.1 The attached list defines, for each type of equipment, what work is
to be done by Kvaerner to meet the requirements for mechanical
completion.
5.2 Kvaerner shall perform the checks, tests and other work listed in
accordance with Kvaerner's specifications, drawings, and applicable
codes.
5.3 The list also defines, for each type of equipment, what work is to
be done by Owner during precommissioning of the installation.
5.4 Items of equipment not specifically shown in the checklist shall be
handled in the same manner as similarly-listed equipment.
Page 8 of 25
BIOTECH/PHARMACEUTICAL MECHANICAL COMPLETION, PRECOMMISSIONING AND
ACCEPTANCE PROCEDURE
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BY
EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
5.1
Vessels 1. Install internals not shop installed and perform any tests X
required by specifications.
2. Install packing where required. X
3. Clean out all vessels and open manholes and other X
openings for final inspection by Owner's operating staff.
4. Inspect internals as deemed necessary for operational X
inspection.
5. Head up vessels. X
5.2
Bio-Reactors 1. Install internals not shop installed and perform any tests X
required by specifications.
2. Unhead vessels. X
3. Inspect vessels. X
4. Loop check-out auxiliaries, control systems, alarms, X
signals, shutdown devices for continuity.
5. Head up vessels. X
5.3
Tanks 1. Unhead and check internals. X
2. Cleanout for Owner inspection. X
3. Inspect internals and gauging equipment, etc. X
4. Head-up after inspection. X
5. Strap tanks (if required). X
5.4 1. Internal inspection or testing to be done only if
Shell and Tube specifically called for by Kvaerner or vendor X
Exchangers specifications or drawings.
2. Verify hydrostatic test pressure is intact and/or perform X
hydrostatic test on graphite exchanges prior to off-
loading.
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BY
EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
3. Usually commissioned without further work. X
5.5
Cooling Towers 1. Install proper lubricants supplied by Owner. X
2. Check fan rotation manually for freedom of movement. X
3. Couple fan to motor after motor bumped for rotation. X
4. Check motor nameplate speed, horsepower and voltage
against data sheets
5. Check fan rotation, vibration, vibration switches and X
blade setting.
6. Check basin for cleanliness and install screens in suction X
pit.
7. Check bearing temperatures and vibration of fans and X
pumps.
5.6 1. Perform a cold hydrostatic test (for packaged boilers X
Fired Boilers only if specified). Drain water after test, if required.
2. Install refractory. X
3. Connect burner piping after fuel lines have been blown X
clean.
4. Check registers and dampers. X
5. Cure furnace refractory by following manufacturer's X
recommended cycles.
6. Operate boiler auxiliaries for boiler. X
7. Provide chemicals for boilout. X
8. Commission utilities for boilout. X
9. Boilout in accordance with boiler manufacturer's instructions. X
10. Arrange for manufacturer's start-up services, if required. X
11. Blowdown each steam tracing line ahead of steam traps. X
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BY
EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
12. Blowdown steam lines to H.P. steam turbines until all X
scale is removed from lines.
5.7 1. Set and cold align units or drives to approximate "hot X
Pumps and set" as recommended by manufacturer. Furnish record
Agitators of alignment to Owner.
2. Install proper lubricants supplied by Owner. X
3. Install packing and/or seals if not factory installed. X
4. Check pump and/or agitator rotation manually to ensure X
freedom of movement.
5. Couple units to drivers after motor has been "bumped" X
for rotation.
6. Install temporary strainers in suction piping. X
7. Make final check of cold alignment. X
8. Check all vents, drains, seals, flushing, bypasses, etc., X
for conformance to specifications and drawings.
9. Check motor nameplate speed, horsepower and voltage X
against data sheets.
10. Check alignments, bearing temperatures, vibration, etc.
during flushing operations; report any malfunctions to X
Kvaerner.
11. Check and run-in pumps, maintain them after turnover,
make final hot alignment check and do any required X
doweling of the pumps and drivers.
12. When necessary, clean pump screens after pumps have X
been in operation for a reasonable period.
5.8
Vacuum
Equipment 1. Hydrotest as required by specifications. X
2. Treat vacuum pumps as per 5.10 (1 thru 11). X
3. Air test entire system; check all j joints for leaks. X
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BY
EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
4. Perform cold static vacuum test on system. X
5.9
Compressors,
Gears and Drives 1. Treat compressors and small blowers per Paragraph X
5.10 (1 thru 11).
2. Install equipment and make piping corrections, as X
required to obtain proper alignment.
3. Check compressor, suction piping, interstage piping,
and ensure each is free of mill scale, weld spatter, and
loose and foreign material resulting from any prior X
cleaning activity.
4. Install temporary strainers in suction piping. X
5. Install proper lubricants and oil supplied by Owner. X
6. Install packing and/or seals if not factory installed. X
7. Check driver and driven units rotation manually to X
ensure freedom of movement.
8. Set cold alignment for approximate "Hot Set" as directed X
by manufacturer's specifications.
9. Couple driver to driven units if electric drive after motor X
has been bumped for rotation.
10. Loop check-out auxiliaries, control systems, alarms, X
signals, shutdown devices for continuity.
11. Commission piping systems required for run-in tests. X
12. Commission and run-in lube and seal oil systems, X
circulate oil and replace with clean oil, etc., as required.
13. Check run-in and maintain compressor and driver. X
14. Check lube oil during operation for water or other X
contaminants.
15. Check bearing temperatures, vibration, etc., during X
operation.
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BY
EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
16. Make hot alignment of compressors and do any required X
doweling of the compressors and drivers.
17. Remove all temporary screens, etc., after a reasonable
period of operation.
18. Arrange for manufacturer's start-up services, if required. X
5.10
Mechanical 1. Install all equipment and make duct work and piping X
Equipment such corrections as required to obtain proper alignments.
as: CIP Skids, WFI
Stills, Clean Steam
Generators
Autoclaves, Glass
Washers
Centrifuges, etc.
2. Install proper lubricants supplied by Owner. X
3. Install packing and/or seals if not factory installed. X
4. Check driven equipment rotation manually to ensure X
freedom of movement.
5. Couple driven equipment to motors after motor has been X
bumped for rotation.
6. Check out alignment as directed by manufacturer's X
specifications.
7. Loop check-out auxiliaries, control systems, alarms, X
signals, etc., for continuity.
8. Commission piping, ductwork, lube oil systems, etc., X
required for run-in tests.
9. Check and run-in and maintain the equipment during X
initial operation.
10. Check bearing temperatures, vibrations, etc., during X
initial operation.
11. Check lube oil during operations for water or other X
contaminants.
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BY
EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
12. Make hot alignment of equipment and do any required X
doweling of the equipment and drivers.
13. Arrange for manufacturer's start-up services, if required. X
5.11
Miscellaneous 1. Install all miscellaneous mechanical equipment such as X
Mechanical loading arms, racks, mixers, filters, agitators, scales,
Equipment cranes, fans, etc.
2. Install, lubricate as required, perform mechanical checks X
and adjust all equipment prior to turning over to Owner.
3. Calibrate all solids weighting and measuring devices in X
their field-installed operating positions.
4. Remove all rust preventives and oils used to protect the X
equipment during the construction period whenever
these protective materials will be detrimental to
operation.
5. Conduct individual equipment noise surveys, as required X
by the Occupational Safety and Health Administration or
the Owner's specifications.
6. Document all survey data. X
7. Inspect facilities for completeness and correctness of X
installation and make any non-operating checks to
ensure conformance to specifications.
8. Operate all equipment and supply and load all chemical X
and agents related to waste treatment.
9. Obtain the services of a waste treatment consultant to X
advise and monitor the system operation, as required by
the Owner.
5.12
Water Treating
Equipment, 1. Carry out checks required for pumps, motors, turbines, X
Deionizers, Sand vessels and instruments as noted under appropriate
Beds, etc. sections.
2. Functional check of all field-mounted valves, switches by X
simulated contact closing.
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3. Install initial charge of ion exchange bed materials, sand X
bed materials, etc.
4. Provide and charge chemicals. X
5. Provide operation check of cycle timing and equipment X
operation during initial operation.
6. Arrange for manufacturer's start-up services, if required. X
7. Provide test pump for wells; test well delivery; and flush X
wells as they are made available.
5.13
Instruments and
Control 1. Pressure test and check for continuity, all instrument X
tubing runs.
2. Blow down all instrument air lines and tubing X
immediately before commissioning.
3. Blow down all instrument process lead lines after X
flushing.
4. Stroke all valves and set all controllers to the correct X
action.
5. Set all field-mounted switches in accordance with X
instrument data sheets.
6. Bench calibrate instrument and control system. Tag and X
record instruments as they are calibrated.
7. Check continuity of electrical circuits, systems and X
thermocouple or RTD leads.
8. Fill air line lubricators with lubrication oil supplied by X
Owner.
9. Tune instruments when process fluids are available. X
(Finalize control mode settings).
10. Positive Displacement Flow Meters
Blind-off or remove from line during hydrostatic tests; do X
not run on water.
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EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
11. Orifice Plates
a. Check material; measure bore with inside X
micrometer; check against data sheets.
b. Deliver orifice plate to Owner for installation. X
c. Install orifice plates after completion of line flushing X
or steam line blowdown.
12. Torque Tube Level Devices
a. Check mechanical operation and direction. X
b. Commission instrument during operation. X
c. Make calibration checks during operation. X
13. Float Switches
a. No calibration required; check mechanical X
movement against output
b. Commission instruments. X
14. Gauge Glasses
Clean and check illuminators X
15. Pressure Gauges
Install immediately prior to turnover since subject to X
damage during construction, except on insulated lines,
where installation will be as required.
a. Witness X
16. Local Thermometers
Same practice as for pressure gauges. X
17. Hand Control Valves
Actuate each valve manually to ensure that it strokes X
properly through 100% range.
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EQUIPMENT MECHANICAL COMPLETION AND PRECOMMISSIONING KVAERNER BY
DIVISION OF RESPONSIBILITIES OWNER
18. Rupture Discs
a. Check material against data sheets, install X
holders.
b. Deliver rupture discs to Owner for installation. X
c. Install rupture discs after flushing and blowdown. X
19. Control Valves
Lubricate as required. Activate CV's through full range. X
20. Positioners
Check mechanical linkage. X
21. Distributed Control Systems
a. Interconnect all vendor supplied cables X
including grounding and power wiring.
b. Power system and perform site acceptance test X
(field wiring not connected).
c. Follow steps a through d Section 5.20, item 11. X
I. Witness X
d. Power field instruments and check for proper X
valve action for analog loops.
i. Witness X
e. Perform function checkout by simulating field X
contacts and signals for verification of proper
wiring.
i. Witness simulation test. Perform operational X
sequence test/
22. Seal Fluids
Install seal fluids after completion of line flushing, testing, X
etc.
23. Arrange for manufacturer's start-up services if required, X
for all instrument devices.
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DIVISION OF RESPONSIBILITIES OWNER
5.14
Safety Valves 1. Blind-bind off/or gag all PSV's during line testing. X
2. Remove blinds after testing. X
3. Conduct tests required by code, law or insurance. X
5.15 1. Perform any special tests and special cleaning, X
Piping passivation or pickling required by drawings and
specifications.
2. Hydrostatic or pneumatic test all piping as required by X
drawings and specifications.
3. Owner to provide any special media for testing, flushing X
and/or cleaning purposes.
4. Owner to dispose of all special test media. X
5. Expansion joints shall be provided with temporary X
restraints, if required, for additional pressure load under
test or shall be isolated from the test.
6. Provide and install all strainers, both temporary and X
permanent, figure eight blanks and temporary blanks
called for on drawings and specifications.
7. Check steam tracing system for tightness and also X
proper tagging of individual shutoff valve and traps.
8. Make a final flowsheet check of the piping system. X
9. Supply and install line identification tags and signs. X
10. Additional flush or blowout lines at Owner's discretion. X
11. Remove control valves, install blinds, etc., as needed for X
Owner's line flushing and replace when flushing is
completed.
12. Check each steam tracing loop for continuity. X
13. Blowdown each steam tracing line ahead of steam traps. X
14. Remove temporary strainers after water flushing. X
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DIVISION OF RESPONSIBILITIES OWNER
15. Check steam trap operations on a once-a-shift duration X
during the initial operation of steam and steam tracing
system.
5.16 1. Transformers
Electrical
Inspection a. Check oil level. X
and Checkout
b. Examine for mechanical damage, oil leaks, etc. X
c. Check no-load tap changer for proper movement. X
Place tap in center position unless instructed
otherwise.
d. Witness tests. X
2. Switchgear
a. Inspect for damage and missing parts, alignment, X
clearance of moving parts, etc.
b. Verify that instrument transformers, instruments, X
relays, fuses and other devices are of proper type, size
and rating.
c. Test or check direct trip breakers. X
d. Perform one minute "megger" test. X
e. With breaker in test position, test operation with X
local, remote and manual operation.
f. Test automatic transfer equipment by simulating X
power failure or under voltage conditions.
g. Set all relays in accordance with job relay X
schedule.
h. Check fuse holders for damage and fuses for size X
and rating.
I. Witness tests. X
3. Cable
a. Test cables rated at less than 5000 volts with 500 X
volt-megohm instrument.
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DIVISION OF RESPONSIBILITIES OWNER
b. Give high potential test to cables and terminations X
rated at 5000 volts and above. Test voltage to be
80% of IPCEA factory test values.
c. Witness tests. X
4. Plant Ground System
a. Measure actual resistance to ground at the ground X
loop or grid.
b. Check resistance to ground of all equipment and X
tank grounds which connect to individual ground
rods.
c. Witness tests. X
5. Transformer or Generator Neutral Resistance Ground
a. Check grounding transformer, resistor, current X
transformer and relay for size and rating, and set
relay in accordance with job relay schedule.
b. Witness tests. X
6. Main Power Supply
a. Set supply breaker relays and energize supply line. X
b. Close main breaker and check phase rotation and X
voltage.
c. Energize feeders. X
7. Motor Starters
a. Inspect for damage, missing parts, and mechanical X
operation.
b. Check circuit breakers, fuses, overload relays, X
current and potential transformers for size, rating
and setting.
c. If oil immersed, check oil level and type of oil. X
d. Check relay meter and control systems for continuity. X
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e. Test starter and control circuit with "megger". X
I. Witness tests. X
8. Induction Motors
a. With motor disconnected from load, check bearing X
lubrication and rotate by hand.
b. Perform one minute "megger" test and dry motors X
which show unacceptable low values.
c. Bump motor and check rotation. X
d. Run motor and check temperature and vibration X
9. Auxiliary Power Supplies
a. Check battery and charger for damage and check
electrolyte for level and specific gravity. X
b. Adjust charging current and voltage. X
c. Check emergency generator and automatic transfer X
equipment for automatic starting generation and
transfer with simulated loss of normal power.
d. Check static power system for AC and DC input X
voltage and verify that transfer is automatic by
simulating loss of AC supply.
10. Electronic Instrument Loops
a. Check all terminations for proper and tight X
connections, check loops for continuity and
accidental ground.
b. Inspect all terminal boxes for drains and breathers, X
cable seals and moisture.
c. Check for proper type T/C wire. X
d. Check power supply and fuses at control board, X
control loops and field instruments
e. Witness checkout. X
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DIVISION OF RESPONSIBILITIES OWNER
11. Kvaerner Designed Electrical Control. Systems
(For mechanical packaged equipment, refer to
Paragraph 2.7.2)
a. Check continuity of all electrical circuits. X
b. Check function and control arrangement of field X
mounted switches.
c. Perform functional checkout by simulating field X
contacts and signals.`
d. Perform sequence tests. X
5.17
Fire Protection 1. Check firewater mains, laterals and hydrants for X
Facilities completeness of installations.
2. Hydrotest firewater mains and laterals. X
3. Commission and, afterward, operate firewater mains, X
laterals, hydrants and other firefighting equipment.
5.18
Buildings 1. Check for completeness of work as shown on drawings. X
2. Check installation of all equipment provided by Kvaerner X
and Owner furnished items installed by Kvaerner.
3. Provide initial balance of HVAC systems. X
4. Commission lavatories, elevators, and all other building X
services equipment.
5. Start-up and adjust HVAC systems under the direction of X
Owner's maintenance group or service contract
personnel.
6. Assume building and equipment maintenance upon X
occupancy.
7. Provide all furniture and business equipment, unless X
otherwise specified.
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FORM NO TITLE REV DATE
DP-807-1.001 Certificate of Acceptance (Direct Hire Version) 1 01 FE 93
DP-807-1.002 Master Punch List 1 01 Fe 93
DP-807-1.003 Punch List 1 01 FE 93
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