SERVICE AGREEMENT FOR THE OPERATION OF THE NS SAVANNAH

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP64B00346R000400040017-0
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 27
• Document Creation Date: December 15, 2016
• Document Release Date: December 17, 2003
• Sequence Number: 17
• Publication Date: March 19, 1951
• Content Type: CONT

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GLA 3.-19.51 (Special) COACT MA-1889
SAVAAII
SrRVIC2 AGRF ` P ' OPERATION Or TF IBS SAVANNAH
TRIS AGRE 1 ', made as of September 2, 1958, between the
rNIT!D STAThS OF . RICA (herein :.ailed the 4tMnited States"), acting
by and through the DZPAk"WT OP CC 2C , HARITI Mt AI ?I1S"ATI ON,
and STA1*!'S MARIE CORPORATION OF IILAWARE, a corporation organized
and existing under the late of the state of Delaware (herein cal.1ed
the rGeneral Agent-,), and having ite principal place of business at
90 Broad Street, New fork, gees Tork,.
WHEREAS, the NS SAVANNAH ;hereinafter called the 'Ie,rsel"')
is a nucLear -pored merchant vessel presently under construction, the
testing and operation of which :involves certain unique ser?rice&., and
the United States accordingly desires to enter into a .modifie_1 form of
the Admini+stratiorO's General Agency Agreement for the operate 7n of
Government owned merchant Teasels tGAA 3-19.51) with the General Agent,
W AS, the General Agent hae been fully advised t.,iat the
handling of the Vessel will involve special testing and operational
problems, and i;3 willi.ng to accrept the appointment as C)enerai Agent
under such anodif: ad form of Getaer mil Agency Agreement,
NOW ?REPO!, in cne ider ate on )f the Y?e i p JCdA under,
taidinge and promises t.f the parties Herein pxpresaed
ARTICLE 1 A;PPOIW1 E OF GENERAL AUEWI The united States
appoints the Gener&l Agent as 1t-s alter)-, and not ae a:. independea:, on
tractor, to manage are onus. ? the huzinese ar the Veaee_t
ARTICLE 2, ACCEPTA M OF Al'MM774E NT The tennr a1. Agent
accep>tw the appoir:t ;nt and undertakes and crornee5 ,, manage and
conduct the business of the Ve8le1 for the United Sta-t-,- -!'r.
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 A roveeg Force ei ~~ d~ 25or ~A~R~Q,U4~fl04 'pT1+t e' #,
ccora ce
with this Agreement ins the United States has preecrlbf d, or f: ,m t ~ e
to time may prescribe, and upon the terms and conditions herein prc
vided
AMI CI.E 3, t I ES OF THE ClE AL AG (a) Poor the ac .
count of the United States, in accordance With each directions, otders,
regulationem forma and methods of ,supervision and inspection as the
United Stage may ft cm time to time prescribe (or 3n the absence of
such directions, ordera, reg'ul aticns, forma and methods of super%ri s3 or,
and inapecti.ons; in accordance with reasonable c:r ercia practi~ ee and,
or the use cf customary commercial foams) in an economic.*1 end efficient
manner, and exerrleing dur diligence to protect and s,a.feguard the inter
eete of the United States in connection with the duties prescribed in
this Agreement and without prejudice to its rights under Article 6
hereof,. the General Agent I. solely as agent of the United States and
not in any other capacity) sh,ali>
( l.) Conduct the business of the V ie l including, but not
limited to, all matters with respect to vcyage8, cargoes, mail, pas..
eengers, persona to be carried, charters, rates of freight and .7iarge6
and procure or provide all services incident thereto including, but not
limited to, stevedoring and other cargo handling, port actiritiea,
vharfage and i kage, pil.^tage, .canal transi'..s and services of sub..
agents, brccpter e and conauletee
Operate the nu: le ax poo r plant and other rn q ? n ne r y .r.de r
such conditions and for such purposes (, includ'ng . but n.. ,mi. ?ed to,
propulsion, generation of heat or ele,:?`rlnty, irradiat1 r, r,f mk+,eri.tls,
testing ..If :.onp.?nent5 intended for use in conne:.tier, r., ~r~ the Vessel of
in ronnctior, with .tneY Fe? ;i s training 0r Pk* A1':..' of 1ne (}ever
Agent and other-A3 and public information) as the Unite Stara : may deem
?
desirable
l3) C,o1le. s, deposit, remit, disburse and account !or All
monies due the United Stets arising In connection with act, ritl es under
or pureua t to this Agreement, mad to the extent disbusrsewner, ;a mmde by
the General Agent purer),q.nt to thi- Agrse??w!nt a:- recqxar$t,:
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inearancey the General Agent shall take such steps as may be appropriate
to affect such recovery for the account of the United States
(Ii) Equip, victual, supply and arrange for the repair of the
Vessel covering hull., nuclear power plant and other machinery., auxiliary
boilers, tackle, apparel, furniture, equipment and spare parts, and in-
cluding maintenance and voyage repairs and replacements, as may be
necessary to maintain the Vessel in an efficient state of repair and
condition- and cooperate with representatives of the United States in
making any inspections or investigations that the United States may
deem desirable.
(5) Procure the Master of the Vessel operated hereunder,
subject to the approval of the United States a The United States re-
serves the right to remove the Master, or require the removal of the
Chief Engineer, or any officers or crew members if it shall have reason
to be dissatisfied with their conduct or if it considers their employ-
ment to be prejudicial to the interests of the United States., The
Master shall be an agent and employee of the United States, and shall
have and exercise full control., responsibility and authority with
respect to the manning, navigation and management of the Vessel, the
nuclear power plant,, and all source. special nuclear,, and by-product
material aboard, which is delivered to the Vessel or which is produced
in the course of operating the nuclear power plant, provided, however.,
for the protection of health and the promotion of safety, that the
Master shall accept and comply with any requirements, regulations,
orders and directions of the United States with respect to the use and
operation of the nuclear power plant and the handling of source, special
nuclear, and byproduct material, insofar as such requirements, regula-
tions, orders and directions do not interfere with the safe navigation
and handling of the Vessel. The General Agent sha?.'_ ;z ecure and make
available to the Master for engagement by him this .,lf_cers and men re-
quired to meet the requirements of the United States, Such officers
and men shall be pro.ured by the General Agent through the usual channels
and in accordance with the customary practices of commercial operators
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and upon the terms and conditions of the General Agent?s collective bar-
gaining agreements, if any. The procurement of the officers and crew
shall be for such period or periods of time as designated by the United
States, and shall be subject to whatever security clearances are re-
quired by the United States in connection with the operation of the
Vessel. The officers and members of the crew shall be subject only to
the orders of the Master. Except with respect to the training period
covered in Article 3(c) hereof,, all such persons shall be paid in the
customary manner with funds provided by the United States hereunder.
(6) Issue or cause to be issued to passengers customary pas-
senger tickets and to shippers customary shipping documents, freight
contracts and bills of lading. All bills of lading shall be issued by
the General Agent or its agents as agent for the Master and the signa-
ture clause may provide substantially that the General Agent makes no
warranty or representation as to the authority of the United States or
the Master to enter into the agreement,, and that the General Agent
assumes no liability with respect to the goods described therein or the
transportation thereof.
(7) Furnish and maintain during the period that the Vessel is
assigned and accepted. by the General Agent under this Agreement, at its
own expense, a bond with sufficient surety in such amount as the United
States shall determine,, such bond to be approved by the United States as
to both sufficiency of surety or sureties and form, and to be conditioned
upon the due and faithful performance of all and singular the covenants
and agreements of the General Agent contained in this Agreement, including
without limitation of the foregoing the condition faithfully to account
to the United States for all funds collected and disbursed and funds and
property received by the General Agent or its sub-agent. The General Agent
may, in lieu of furnishing such bond., pledge direct cr fully guaranteed
obligations of the United States of the cash value of the penalty of the
bond under an agreement satisfactory in form to the United States,
No monies or slop chest property of the United States shall be
advanced or entrusted by the General Agent to a Master, purser or any
other member of the ship's personnel unless such person Is under a bond
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causod solely or, r, part by the dishonesty or lack of care of any such
person in the performance of the duties of any position covered by the
bond
(8) For account of the United States under Article 5, the
General Agent shall furnish and maintain such other bonds as are re-
quired by lair or by the drritter, direction of the United States, re-
lating lating to the services to be' performed under this Agreement, such
bonds to be submitted to the United States for approval If required
(9) (1) Keep bc?oks, records and accounts (whi:-h shall be
the property cf' the United States) relating to the ac t, vi. ties, main
tenance azzd bu,sineaa of the Vessel .n such form and under 6ucr? regu-
lations and containing such technical, economic, firuancAal, and otter
data as may be prescribed by the United States, and (2) f`i~ r , upon
notice from the United States, ba1an:^e aheeta,, profit and ea state-
ments, and any other s?.atement.s of act:vi
ie s , sped ai re por?.;e or
memoranda of any facts and transactions, qs regna.1red cy the Uni Md
States, and, wherever the Genera Agent emplcy9 any related, affiliated
or holding ?7ompany of the General Agent to render any services or to
furnish any torsi, supplies, equipment, provisions, materite or facili-
ties which are f,--r the a^c.ount of the United State3 under the terms of
this Agreement. the General Agent shall also, as a R:andition to such
employment, obtain from .:,uch related or affiliated or holding company
its agreement to comply with the requirements aforesaid and to make
available to the United States for examination and audit its boons,
records and account, tc the extent t17at .such Aeirice5 affect the re-
suits, or the performance of tr.ar.,iactions or activities under this
Agreement,
(10) Select its Sub-agents, contractors -IT-..j suppiieris, but any
sub.ager,,y agreement; contract or purchase ar ec, ?,hr eXtent required
by the United States, sn,ali be in such form and cc -,t u. 4?eh pry 7`.sione
as the United States may direct, including without limitatitn; eecici y
pro'i3'i?ori non-diecrtmination ciau4ee, etc and shall The rmir.a?ed y
the Crneraa Agent raheneier the United States shall so lir?ect
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(11) Upon termination of this Agreement, turn over to the
United States at the time ,prod place to be fixed by the United States,
the ?.easel and other property of whatsoever kind then in the custody
of the General Agent pursuant to this Agreement, and upon such action
the United States may collect directly, or by such agent or agents as
it may appoint, all freight monies or other debts remaining unpaid,
provided that the General Agent shell, if required by the United States,
adjust, settle and liquidate the business of the Vessel
(b) In the event that the Vessel is allocated by the United
States for use
(i) in a service in which another operator (a United
States citizen) maintained a berth operation with
privately owned United States flag vessels on July 1,
1958, and 1-s recognized by the United States as a
regular berth operator in such services, or
(i1) in a trades not served with privately owned
United States flag vessels on July 1, 1958, or not
served on the date of such allocation by a United
States citizen who is deemed by the United States
qualified to conduct an efficient berth operation,
where the United States deems another operator to be
qualified as an operator in such trade,
such regular or other operator, as the case may be, may be dealgnat.ed by
the United States as the Berth Agent of the United States to conduct such
of the business of the Vessel in such Rervice or trade l he United
States may require During any period while the Vesse i is asalEtsed to
a Berth Agent, the General Agent shall be under no ob:'}ation }:c perform
with raapect to such vessel duties which are imposer: ?.n the Parts Agent
under the terms of the Berth Agency Agreement pret+ r ;~ ~~: by the United
States
(c) The General Agent Beall provide ' i) not more than sixteen
'licensed engineers for .sFe_ .:ai training as requires by the United States,
unt .l two crew s aggregating air`.een men become quala; led as operator; :,f
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the Vessel' s press irived grater nuclear power plant, or until De ::ember 3i
1959, whichever period shall be the less; and (ii) beginning on or after
March 30, 1959 a group of six licensed deck officers for special training
for a period not exceeding twelve months, to qualify three me., as deck
officers of the Vessel, The costs of the training, exclusive of tuition,
under (i.), and the costs of the training, exclusive of tuition,, undr
(ii) for a period not to exceed the first three months, shall be Horne
by the General Agent out of its corporate funds and shall not bereim-
burnable by the United States and shall include subsistence, lodging,
travel, salaries, insurance, pension plat, payments, social security
contributions and all other financial benefits customarily prc-rzded for
its personnel by the Gen=ral Agent.
In the event that any replacements of such trainees shall be_,
c WW necessary under (i) during the training period as set forth 'In the
preceding paragraph, and under (ii) during the first three monirns of
the training period, ..he General Agent shall provide substituted licensed
officers for similar training and shall bear the costs on similar terms
for the following periods of time
In respect of engineers, until they become qualified or
for a period not exceeding twelve months after the ccxnmen;:e
rent of their training period, whichever shall be the lens
In respe:t, :.?f deck officers, until they become qualified
or for a period net exceeding three mcr.the after the oornmenc-
rent of the'r training period, whichever shall be the le:u-
In the event that the Ur.:`mod States Shall ray ire in relation
to the Vessel., further utilization ,f such trained pe.sc,_xr!el aubeegte ,t
to the mir.imLan Teri--)dm asps'. ;.fled abc;ve . all costs rp.; to tr,em all :.l1
be borric, by the Unite Sta'lee
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AM= i I1A '~ (a) At least once a month the
Thtited States shall paV' to the General Agent compensation for the General
Agaritf s services hereunder, and, after redelivery at the 'tassel, sha
also pay to the General Agent oa enaation for services required there
After. To the extent practicable the ditermination of the coerpensation
to be pt id by the United Mates shall be baabd upon the seine factors ails
shall take into consideration the same types of expense which aft utilised
in determining compensation for General Agents wider 1MA Order to. ti?,
as al ndedo Such compensation shall be deemed to corer the General
Agent's adreinistrative and general estpense (as pre aen tl7 it' ni-Lett in
General Order to, 22, revised, of the Administration) and also fees to
tub-agents, branch houses and customs brokers, charges for postage and
patties, and communication expenses, in the continental united States,
advertising expenses, taxes (other than taxes for which the General Agent
is credited under Article 5 hereof), and any other expenses which are not
directly applicable to the actiritiea, maintenancr- and business of the
vessel e
(b) Additional or Substitute. Cnsat:on and Reimbursement.
The General Agent shall also be entitled to payment or credit for any
service, loss, cost or expense, whether or not specifically provided for,
or excepted herein, if and to the extent that such payment or credit is
found by the United States in its sole discretion, to be fair and equitable
and in accordance with the basic principles or intent of this General Agency
Agreement
AR?IG"tZ 5., DX'SBURSTtPNI'S Except as provided in Article 3(c
hereof, the United States shall advance funds to the General Agent to
provide for, and the General Agent shall receive credit for all ends-
turee of every kind made by it in performing, procuring or supplying the
serviced, facilities, stores, supplies or equipment a~- required hereunder,
excepting the items cf expense as are deemed to be c