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HomeMy WebLinkAboutContract 40677CITYSECRETARYl(D'-/J. -'7.~ CONTRACT NO. l.f/ -r -r - CONTRACT Between CITY OF FORT WORTH and SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC. For Professional Services for a Citywide Emissions Inventory and Greenhouse Gas Assessment DEM 10-06: GHG Environmental Management Department July 2010 l __ .. O''ll\.l RJ;CORD -c,TY secRETARY fT. WORTH, TX 08-1 ~ ,u A09:52 IN I Page 1 of 2 City of Fort Worth, Texas Mayor and Council Communication COUNCIL ACTION: Approved on 7/13/2010 DATE: Tuesday, July 13, 2010 REFERENCE NO.: **C-24314 LOG NAME: 52GREENHOUSE GAS ASSESSMENT 2010 SUBJECT: Authorize the Execution of a Contract with Shaw Environmental and Infrastructure, Inc ., in an Amount Not to Exceed $84 ,157.00 to Complete a Citywide Emissions Inventory and Greenhouse Gas Assessment as a Project of the American Recovery and Reinvestment Act (ALL COUNCIL DISTRICTS) RECOMMENDATION: It is recommended that the City Council authorize the City Manager to execute a contract with Shaw Environmental and Infrastructure, Inc., in an amount not to exceed $84,157 .00 to complete a citywide emissions inventory and greenhouse gas assessment as a project of the American Recovery and Reinvestment Act. DISCUSSION: The City's compliance with the U.S. Environmental Protection Agency's Mandatory Greenhouse Gas Reporting rule requires the City to evaluate its internal operations, assess emissions and report its findings , as appropriate. To facilitate the City' s compliance efforts, the services of an environmental and engineering consulting firm are required . A Request for Qualifications (RFQ) was advertised in the Fort Worth Star Telegram on April 29 , 2010 . Responses were submitted by the following 15 firms on May 27 , 2010 : • Breitling Consultants • Bureau Veritas, NA • COM • Eastern Research Group (ERG) • Eco Asset Solutions • Environ • GOS Associates . Inc • MWH Global • Providence Engineering • SCS Engineers • Shaw • Terracon Consultants • TRC/Sage • Trinity Consultants • URS Corporation One response was received after the submittal deadline and was not reviewed under this request. The qualifications packages were evaluated based on a pre-determined combination of qualitative and quantitative (point) measures . These measures included , but were not limited to, experience, qualifications , legal history and work history . City staff recommends the contract be awarded to Shaw Environmental and Infrastructure , Inc ., because of their broad experience and innovative approach to approaching this issue . http :// apps. c fwnet. org/ ecouncil/printmc. asp ?id= 13 786&print=true&Doc T y pe= Print 7 /2 4/2010 .... __ ,. Page 2 of2 On May 26, 2009 , (M&C C-23554) City Council authorized application for and acceptance of a $6 ,738,300.00 grant from the United States Department of Energy (DOE) through the Energy Efficiency and Conservation Block Grant Formula Program (EECBG). Adoption of Appropriation Ordinance No.18634-05-2009 was also authorized , increasing estimated receipts and appropriations in the City' s Grants Fund by $6,738,300 .00 . Effective with the awarding of the grant on September 28, 2009 (CSC No . 39311 ), the grant award Assistance Agreement authorizes implementation of specific activities in accordance with the EECBG application's Energy Efficiency and Conservation Strategy (EE & CS). This project is being funded as part of EECBG approved work plan . M/WBE participation was waived as part of this project. The City facilities included in the study are located in ALL COUNCIL DISTRICTS . FISCAL INFORMATION/ CERTIFICATION: The Financial Management Services Director certifies that funds are available in the current operating budget, as appropriated, of the Grants Fund . FUND CENTERS: TO Fund/Account/Centers CERTIFICATIONS: Submitted for City Manager's Office by: Originating Department Head: Additional Information Contact: ATTACHMENTS FROM Fund/Account/Centers GR76 531200 052484371170 Fernando Costa (6122) Brian Boerner (6647) Brian Boerner (6647) 1. Ava ilable funds 52GREENHOUSE GAS ASSESSMENT 201 0 .txt (CFW Internal) 2. MWBE Waiver-Greenhouse Gas .pdf (CFW Internal) $84 ,157.00 http://apps.c fwnet.org / ecouncil/printmc .asp ?id= 13 7 86&print=true&Doc Ty pe = Print 7/24 /2010 STATE OF TEXAS COUNTY OF TARRANT § § § KNOWN ALL BY THESE PRESENTS: PROFESSIONAL SERVICES CONTRACT This Contract is entered into by and between the City of Fort Worth ("City"), a home-rule municipality located within Tarrant, Denton, Parker, and Wise Counties, Texas, acting through Fernando Costa, its duly authorized Assistant City Manager, and Shaw Environmental & Infrastructure, Inc., a Louisiana corporation ("Contractor"), acting through Jimmy Gibson, its duly authorized District Manager. City and Contractor may be referred to herein individually as a Party, or collectively as the Parties. WITNESSETH: That for and in consideration of mutual covenants and agreements herein contained, the Parties hereto mutually agree as follows: ARTICLE 1. DEFINITIONS City means the City of Fort Worth. Change Order means an officially authorized and executed written amendment to this contract or to a Task Order, issued by the City. Contract Documents shall consist of the written, printed, typed and drawn instruments which comprise and govern the performance of the work. Said Contract Documents include, but are not limited to, the notice to bidders, instructions to bidders, special instructions to bidders, addenda to the notice to bidders, proposal, plans, specifications, maps, blueprints, notice of award, general conditions, special conditions, supplementary conditions, general provisions, special provisions, work order(s), change orders, this Contract and the payment, performance, and maintenance bonds. The Contract Documents shall also include any and all supplemental agreements approved by the Owner which may be necessary to complete the work in accordance with the intent of the plans and specifications in an acceptable manner, and shall also include the additional instruments bound herewith. Contractor means Shaw Environmental & Infrastructure, Inc. GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITY SECRETARY WORTH TX age ~ ·of f:/4 Notice to Proceed means the official letter issued by the City, pursuant to the Code of the City of Fort Worth and City ordinances and policies that authorizes Contractor to begin work . Task Order means an officially authorized and executed written description and specification directing the Contractor to perform specific services within the scope of this contract, issued by the City. ARTICLE 2. SERVICES Contractor hereby agrees to perform as an independent contractor the services set forth in the Scope of Work attached hereto as Attachment "A". City shall not pay for any work performed by Contractor or its subcontractors, subcontractors and/or suppliers that has not been specifically ordered by the City in writing in this contract or a duly authorized Contract Amendment or Change Order. Contractor shall not be compensated for any work that is verbally ordered by any person and shall rely only upon written authorization to conduct work. ARTICLE 3. COMPENSATION Section 1. Fee Schedule . City and Contractor agree to the unit prices, employee labor rates, and other costs as specified in this contract. Contractor shall be compensated in accordance with the Fee Schedule shown in Attachment "A ". Payment shall be considered full compensation for all labor, materials, supplies, and equipment necessary to complete the services described in Attachment "A". However the total fee paid by the City shall not exceed a total of $84 ,107.00 and the City will not be liable for any fees, costs , or other remuneration in excess of this amount unless the City has signed and issued a formal modification to this contract. There is no guarantee of a minimum amount of work to be awarded under this contract and the City retains the right to stop work at any time . If the City orders Contractor to stop work, Contractor will turn over all data and work product as soon as practicable, and submit its final invoice for payment. Section 2. Task Orders. Individual projects will be authorized on a Task Order basis when the City elects to proceed with each specific effort. City shall not pay for any work performed by Contractor or its subcontractors , subcontractors and/or suppliers that has not been specifically ordered by the City in writing on a duly ex e ask Order r Change ; · · ,, · _. · · .:. · · OFFICIAL RECORD GHG Ass~ssnient:Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. CITY SECRETARY FT. WORT '~ o 64 Order. Contractor shall not be compensated for any work that is verbally ordered by any person and shall rely only upon written authorization to conduct work. Section 3. Release Upon Payment Acceptance by Contractor of said payment shall operate as and shall release the City from all claims or liabilities under this Agreement for anything related to, done, or furnished in connection with the services for which payment is made, including any act or omission of the City in connection with such services. Section 4. Invoice and Payment. The Contractor shall provide monthly invoices to the City. Invoices shall contain a detailed breakdown to include: task order, labor including employee name, functional title, date and hours of work performed; internal supplies and services provided; and external supplies and services provided. Payment for services rendered shall be due within thirty (30) days of the uncontested performance of the particular services so ordered and receipt by City of Contractor's invoice for payment of same. In the event of a disputed or contested billing, only that portion so contested may be withheld from payment, and the undisputed portion will be paid. No interest will accrue on any contested portion of the billing until mutually resolved. City will exercise reasonableness in contesting any billing or portion thereof. The Contractor shall also provide the City with quarterly updates showing the total and itemized costs incurred to the City for each task ordered and the amount remaining in the contract not-to-exceed amount. Contractor shall receive no additional compensation for work delays or hindrances except when direct and unavoidable extra costs to the Contractor are caused by the City's gross negligence. ARTICLE 4 . TERM Unless terminated pursuant to the terms herein, this Agreement shall begin upon the date of its execution and ending upon completion of the work specified in the contract and any applicable change orders . ARTICLE 5. INDEPENDENT CONTRACTOR Contractor shall operate hereunder as an independent contractor, an~d~~~~~~~r-r agent, servant, or employee of the City. Contractor shall have excl s v.El the exclusive right to control the details of its work to be performe GHG Assessmef'}t Contract-DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. persons performing same, and shall be solely responsible for the acts and omissions of its officers, agents, employees , contractors and subcontractors. The doctrine of respondeat superior shall not apply as between City and Contractor, its officers, agents, employees, contractors, and subcontractors, and nothing herein shall be construed as creating a partnership or joint venture between City and Contractor. ARTICLE 6. PROFESSIONAL COMPETENCE AND INDEMNIFICATION Work performed by Contractor shall comply in all aspects with all applicable local, state and federal laws and with all applicable rules and regulations promulgated by the local, state and national boards, bureaus and agencies. Approvals issued by the City or another entity shall not constitute or be deemed to be a release of the responsibility and liability of Contractor or its officers, agents, employees, contractors and subcontractors for the accuracy and competency of its services performed hereunder, which shall be performed in accordance with the applicable professional standard of care. In accordance with Texas Local Government Code Section 271.904, the Contractor shall indemnify, hold harmless, and defend the City against liability for any damage caused by or resulting from an act of negligence, intentional tort, intellectual property infringement, or failure to pay a subcontractor or supplier committed by the Contractor or Contractor's agent, contractor under contract, or another entity over which the Contractor's exercises control. Contractor and its subcontractors and agents shall obtain property/facility owner permission prior to accessing or entering a property or facility and shall not commit trespass. ARTICLE 7. INTELLECTUAL PROPERTY Section 1. Rights in data. The City shall have unlimited rights in all data delivered under this contract, and in all data first produced in the performance of this contract. Contractor is advised that all contract documents and work product may be subject to the Texas Public Information Act. Section 2 . Intellectual property rights and ownership. All iatellectl.J~I property work product developed by Contractor under this contract shall b~ Jt,e ,.sole property of the City and the City shall have unlimited rights in such work pro g lJqt. f\11 intellectual property work product developed r this contract shall be considered "work for hire" and rights , ,f L to all GHG As·sessnient Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc . CITY SECRETARY FT.W 4 intellectual property shall vest in the City. Contactor affirmatively, by executing this contract, disclaims all such intellectual property interests in favor of the City. In the event that any rights, title, or interest shall by operation of law or otherwise fail to vest in the City or become void or voidable, Contractor shall a) transfer all rights, title, and interest to intellectual property to the City; or alternatively and at the discretion of the City the Contractor shall b) grant an unlimited and exclusive license for publication, sale, reproduction, or use by the City and its authorized sublicensees of all intellectual property developed under this contract. Contractor agrees to timely execute any documents or take any other actions as may reasonably be necessary, or as the State may reasonably request, to perfect the State 's ownership, license, or other rights to any work product. Contractor shall not use, sell, transfer, or authorize a third party to use any work product, copyrights, trademarks, or other intellectual property (or derivatives thereof) of the work product developed under this contract without the express written consent of the City. ARTICLE 8. INDEMNIFICATION Section 1. Definitions. In this paragraph, the following words and phrases shall be defined as follows: Environmental Damages shall mean all claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, liens costs, and expenses of investigation and defense of any claim, whether or not such claim is ultimately defeated, and of any good faith settlement of judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including without limitation reasonable attorney's fees and disbursements and consultant's fees , any of which are incurred as a result of the existence of a violation of environmental requirements pertaining to work performed under this contract or by the operations of the Contractor and Subcontractors, and including without limitation: a. Damages for personal injury and death, or injury to property or natural resources; b. Fees incurred for the services of attorneys, consultants, contractors, experts, laboratories and investigation or remediation of the monitoring wells or any violation of environmental requirements including, but not limited to, the preparation of any feasibility studies or reports of the performance of any cleanup, remediation, removal, response, abatement, contain restoration or monitoring work required by any federal, staI.e1.-1101f- governmental ~ agency or political subdivision, or otherwise •:' ,i : J I GHG Ass~ssme li)t Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. connection with the existence of such monitoring wells or violations or environmental requirements , and including without limitation any attorney's fees , costs and expenses incurred in enforcing this contract or collecting any sums due hereunder; and c. Liability to any third person or governmental agency to indemnify such person or agency for costs expended in connection with the items referenced in subparagraph (b) herein. Environmental requirements shall mean all applicable present and future statutes, regulations, rules, plans, authorizations, concessions, franchises , and similar items, of all governmental agencies , departments , commissions, boards, bureaus, or instrumentalities of the United States, states, and political subdivisions thereof and all applicable judicial , administrative, and regulatory decrees , judgments, and orders relating to the protection of human health or the environment, including without limitation: a. All requirements, including, but not limited to , those pertaining to reporting , licensing, emissions, discharges , releases, or threatened releases of hazardous materials, pollutants, contaminants or hazardous or toxic substances, materials, or wastes whether solid , liquid , or gaseous in nature, into the air, surfacewater, groundwater, stormwater, or land, or relating to the manufacture , processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants , or hazardous or toxic substances, materials, or wastes, whether solid, liquid , or gaseous in nature; and b. All requirements pertaining to the protection of the health and safety of employees or the public. Section 2. General Indemnification. CONTRACTOR DOES HEREBY RELEASE, INDEMNIFY, REIMBURSE, DEFEND, AND HOLD HARMLESS THE CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES, FROM AND AGAINST ANY AND ALL LIABILITY, CLAIMS, SUITS, DEMANDS, OR CAUSES OF ACTIONS WHICH MAY ARISE DUE TO ANY LOSS OR DAMAGE TO PERSONAL PROPERTY, OR PERSONAL INJURY, AND/OR DEATH, OCCURRING AS A CONSEQUENCE OF THE CONTRACTOR'S OPERATIONS UNDER THIS AGREEMENT, WHEN SUCH INJURIES, DEATH, OR DAMAGES ARE CAUSED BY THE SOLE NEGLIGENCE OF CONTRACTOR, ITS OFFICERS, AGENTS, EMPLOYEES, OR CONTRACTORS, OR THE JOINT NEGLIGENCE OF CONTRACTOR, ITS OFFICERS, AGENTS, EMPLOYEES, OR CONTRACTORS AND ANY OTHER PERSON OR ENTITY. GHG Assessment-Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. 01=s=,c1Al RECORD err'-" 'it:.CRETARY f1 , ·~OR'l'H, lX Section 3. Environmental Indemnification. CONTRACTOR DOES HEREBY RELEASE, INDEMNIFY, DEFEND, REIMBURSE, AND HOLD HARMLESS THE CITY, ITS OFFICERS, AGENTS, AND EMPLOYEES, AGAINST ANY AND ALL ENVIRONMENTAL DAMAGES AND THE VIOLATION OF ANY AND ALL ENVIRONMENTAL REQUIREMENTS RESULTING FROM CONTRACTOR'S OPERATIONS UNDER THIS AGREEMENT WHEN SUCH ENVIRONMENTAL DAMAGES OR VIOLATION OF ENVIRONMENTAL REQUIREMENTS ARE CAUSED BY THE ACT OR OMISSION OF CONTRACTOR, ITS OFFICERS, AGENTS, EMPLOYEES, OR CONTRACTORS, OR THE JOINT ACT OR OMISSION OF CONTRACTOR, ITS OFFICERS, AGENTS, EMPLOYEES, OR CONTRACTORS AND ANY OTHER PERSON OR ENTITY. Section 4. The obligations of the Contractor under this Article shall include, but not be limited to, the burden and expense of defending all claims, suits and administrative proceedings (with counsel reasonably approved by the City), even if such claims, suits or proceedings are groundless, false, or fraudulent, and conducting all negotiations of any description, and paying and discharging, when and as the same become due, any and all judgments, penalties or other sums due against such indemnified persons. Upon learning of a claim, lawsuit, or other liability which Contractor is required hereunder to indemnify, City shall provide Contractor with reasonable timely notice of same. All Contractors under this contract agree that they assume joint and several liability for any claim by the City or for a third party claim against the City for general or environmental damages caused by any of the Contractors herein. The obligations of the Contractor under this paragraph shall survive the expiration or termination of this Agreement and the discharge of all other obligations owed by the parties to each other hereunder. ARTICLE 9. INSURANCE AND BONDS The Contractor certifies it has, at a minimum, current insurance coverage as detailed below and will maintain it throughout the term of this Contract. Prior to commencing work, the Contractor shall deliver to City, certificates documenting this coverage. The City may elect to have the Contractor submit its entire policy for inspection . A. Insurance coverage and limits: 1. Commercial General Liability Insurance $1,000,000 each occurrence; $2 ,000,000 aggregate GHG Assessment'Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. 2. Professional Liability Insurance $1,000,000 each occurrence; $1,000 ,000 aggregate 3. Automobile Liability Insurance Coverage on vehicles involved in the work performed under this contract: $1 ,000,000 per accident on a combined single limit basis or: $500,000 bodily injury each person; $1,000 ,000 bodily injury each accident; and $250,000 property damage The named insured and employees of Contractor shall be covered under this policy. The City of Fort Worth shall be named an Additional Insured, as its interests may appear. Liability for damage occurring while loading, unloading and transporting materials collected under the Contract shall be included under this policy . 4. Worker's Compensation Coverage A: statutory lim its Coverage B: $100,000 each accident $500 ,000 disease -policy limit $100 ,000 disease -each employee 5. Environmental Impairment Liability (Ell) and/or Pollution Liability $4,000,000 in aggregate and per occurrence. Ell coverage(s) must be included in policies listed in subsections 1 and 2 above; or, such insurance shall be provided under separate policy(s). Liability for damage occurring while loading, unloading and transporting materials collected under the contract shall be included under the Automobile Liability insurance or other policy(s). B. Certificates of Insurance evidencing that the Contractor has obtained all required insurance shall be delivered to the City prior to Contractor proceeding with the Contract. 1. Applicable policies shall be endorsed to name the City an Additional Insured thereon, as its interests may appear. The-term City shall include its employees, officers , officials , agents, and volunteers as respects the Contracted services .. 2. Certificate(s) of Insurance shall document that insurance coverage specified herein are provided under applicable policies documented thereon. 3. Any failure on part of the City to request required insurance documentation shall not constitute a waiver of the insurance requirements . 4. GHG Asse ssmeritContract-DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc . in the event of non-payment of premium. Such terms shall be endorsed onto Contractor's insurance policies. Notice shall be sent to Department of Risk Management, City of Fort Worth, 1000 Throckmorton Street, Fort Worth, Texas 76102. 5. Insurers for all policies must be authorized to do business in the state of Texas or be otherwise approved by the City; and , such insurers shall be acceptable to the City in terms of their financial strength and solvency. 6. Deductible limits, or self-insured retentions, affecting insurance required herein shall be acceptable to the City in its sole discretion; and, in lieu of traditional insurance, any alternative coverage maintained through insurance pools or risk retention groups must be also approved. Dedicated financial resources or Letters of Credit may also be acceptable to the City. 7. Applicable policies shall each be endorsed with a waiver of subrogation in favor of the City as respects the Contract. 8. The City shall be entitled , upon its request and without incurring expense , to review the Contractor's insurance policies including endorsements thereto and, at the City's discretion ; the Contractor may be required to provide proof of insurance premium payments. 9. The Commercial General Liability insurance policy shall have no exclusions by endorsements unless the City approves such exclusions. 10. The City shall not be responsible for the direct payment of any insurance premiums required by the contract. It is understood that insurance cost is an allowable component of Contractor's overhead. 11. All insurance required above shall be written on an occurrence basis in order to be approved by the City. 12. Subcontractors to the Contractor shall be required by the Contractor to maintain the same or reasonably equivalent insurance coverage as required for the Contractor. When subcontractors maintain insurance coverage, Contractor shall provide City with documentation thereof on a certificate of insurance. Notwithstanding anything to the contrary contained herein , in the event a subcontractor's insurance coverage is canceled or terminated, such cancellation or termination shall not constitute a breach by Contractor of the contract. 13. Payment and Performance Bonds. Before beginning the work, the Contractor shall be required to execute to the City of Fort Worth a payment bond if the contract is in excess of $25,000 and a performance bond if the contract is in ex_c~ss of $100,000. The payment bond is solely for the protect ion and use of .payr:nent bond beneficiaries who have a direct contrac · · · the GHG Asse.~sm~1;1t Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , In c . OFFICIAL RECORD CITY y FT. WORTH, TX Contractor or subcontractor to supply labor or material; and in 100% the amount of the Contract. The performance bond is solely for the protection of the City of Fort Worth , in 100% the amount of the Contract, and conditioned on the faithful performance by Contractor of the work in accordance with the plans , specifications , and contract documents. Contractor must provide the payment and performance bonds, in the amounts and on the conditions required , within 14 calendar days after Notice of Award. 14. Requirements for Sureties. The bonds shall be issued by a corporate surety duly authorized and permitted to do business in the State of Texas that is of sufficient financial strength and solvency to the satisfaction of the City . The surety must meet all requirements of Article 7.19-1 of the Texas Insurance Code. All bonds furnished hereunder shall meet the requ irements of Chapter 2253 of the Texas Government Code , as amended . In addition, the surety must (1) hold a certificate of authority from the United States Secretary of the Treasury to qualify as a surety on obligations permitted or required under federal law; or (2) have obtained reinsurance for any liability in excess of $100 ,000 from a reinsurer that is authorized and admitted as a reinsurer in the state of Texas and is the holder of a certificate of authority from the Untied States Secretary of the Treasury to qualify as a surety on obligations permitted or required under federal law. Satisfactory proof of any such reinsurance shall be provided to the City upon request. The City, in its sole discretion, will determine the adequacy of the proof required herein . No sureties will be accepted by the City that are at the time in default or delinquent on any bonds or which are interested in any litigation against the City. Should any surety on the Contract be determined unsatisfactory at any time by the City, notice will be given to the Contractor to that effect and the Contractor shall immediately provide a new surety satisfactory to the City. ARTICLE 10. LICENSES AND PERMITS Contractor certifies and warrants that on the day any work is to commence under this contract and during the duration of the contract it shall have and maintain all of the current , valid , and appropriate federal , state, and local licenses and permits necessary for the provision of services under this contract. Contractor also certifies that if it uses any subcontractor in the performance of this contract, that such subcontractor shall have and maintain all of the current, valid, and appropriate federal, state , and local licenses and permits necessary for the provision of services under this contract. ARTICLE 11. TRANSFER OR ASSIGNMENT OFFICIAL RECORD GHG Assessment.Contract-DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc . CtTV SECRETARY FT WORTH,TX City and Contractor each bind themselves, and their lawful successors and assigns, to this Agreement. Contractor has been engaged as a consequence of Contractor's specific and unique skills; Assignment will only be granted under unusual circumstances and at the sole discretion of the City. Contractor, its lawful successors and assigns, shall not assign, sublet or transfer any interest in this Agreement without prior written consent of the City. ARTICLE 12. RIGHT TO AUDIT (a) Contractor agrees that the City shall, until the expiration of three (3) years after final payment under this Agreement, have access to and the right to examine any directly pertinent books, documents, papers and records of Contractor involving transactions relating to this Agreement. Contractor agrees that the City shall have access during normal working hours to all necessary facilities and shall be provided adequate and appropriate workspace in order to conduct audits in compliance with the provisions of this section. City shall give Contractor reasonable advance notice of intended audits. (b) Contractor further agrees to include in all its subcontracts hereunder, a provision to the effect that the subcontracting contractor agrees that the City shall, until the expiration of three (3) years after final payment under the subcontract, have access to and the right to examine any directly pertinent books , documents, papers and records of such subcontractor, involving transactions to the subcontract, and further, that City shall have access during normal working hours to all subcontractor facilities, and shall be provided adequate and appropriate work space in order to conduct audits in compliance with the provisions of this article. City shall give Contractor and any subcontractor reasonable advance notice of intended audit. ( c) Contractor and subcontractors agree to photocopy such documents as may be requested by the City. The City agrees to reimburse Contractor for the cost of copies at the rate published in the Texas Administrative Code in effect as of the time copying is performed. (d) Contractor and subcontractors agree to all rights to audit by the federal government as required by federal law and the EECBG grant program. ARTICLE 13. NON-DISCRI Ml NATION During the performance of this contract, Contractor shall not discriminate in its employment practices and shall comply with all applicable provisions of Chapter 17, Article Ill of the Code of the City of Fort Worth and all applicable state and federal law .. Contractor agrees not to discriminate against any employee or applicant for employment because of because of age, race, color, religion, sex, disability, national GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . origin, sexual orientation, transgender, gender identity or gender expression in any manner involving employment, including the recruitment of applicants for employment, advertising, hiring, layoff, recall, termination of employment, promotion, demotion, transfer, compensation, employment classification, training and selection for training or any other terms, conditions or privileges of employment. Contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of the non-discrimination clause. Contractor also agrees that in all solicitations or advertisements for employees placed by or on behalf of this contract, that Contractor is an equal opportunity employer. Notices, advertisements, and solicitations placed in accordance with federal law, rule or regulation shall be deemed sufficient for the purpose of meeting the requirements of this section. ARTICLE 14. OBSERVE AND COMPLY Contractor shall at all times observe and comply with all federal, state, and local laws and regulations and with all City ordinances and regulations which in any way affect this Agreement and the work hereunder, and shall observe and comply with all orders, laws ordinances and regulations which may exist or may be enacted later by governing bodies having jurisdiction or authority for such enactment. No plea of misunderstanding or ignorance thereof shall be considered. Contractor agrees to defend, indemnify and hold harmless City and all of its officers, agents and employees from and against all claims or liability arising out of the violation of any such order, law, ordinance, or regulation, whether it be by itself or its employees. IMPORTANT NOTICE: FUNDING FOR THIS PROJECT IS PROVIDED BY THE FEDERAL GOVERNMENT THROUGH AN ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT (EECBG) PURSUANT TO THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (ARRA). THE FEDERAL GOVERNMENT IMPOSES EXTENSIVE AND SIGNIFICANT REQUIREMENTS, RULES, REGULATIONS, STATUTES, AND REPORTING OBLIGATIONS ON THE CITY AND CONTRACTOR AS A CONDITION OF THE GRANT. CONTRACTOR, BY EXECUTING THIS CONTRACT ACKNOWLEDGES THAT IT HAS HAD THE OPPORTUNITY TO HAVE AN ATTORNEY REVIEW AND EXPLAIN THE LEGAL OBLIGATIONS IMPOSED BY THE FEDERAL GOVERNMENT AS A CONDITION OF THIS EECBG FUNDED CONTRACT. GHG As:ses·smerit Cohtract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. CONTRACTOR FLOW-DOWN REQUIREMENTS. REQUIREMENTS IS APPENDED IN ATTACHMENT 8. A COPY OF THESE CONTRACTOR, ITS SUCCESSORS, AND ASSIGNS HEREBY AGREES TO COMPENSATE OR REIMBURSE THE CITY OF FORT WORTH FOR ALL COSTS INCURRED BY THE CITY AS A RESULT OF THE FAILURE OF CONTRACTOR TO TIMELY COMPLY WITH ALL OF THE TERMS OF THE FEDERAL FLOW-DOWN REQUIREMENTS. ARTICLE 15. REPORTING Contractor must timely submit all reports as specified in Attachment C and as required by city , state , and federal law as applicable. 17. PREVAILING WAGE RATES Contractor shall comply with TEXAS GOVERNMENT CODE, Chapter 2258, with respect to payment of Prevailing Wage Rates for public works contracts and Contractor shall comply with the Davis -Bacon Act for building and construction trades , and shall comply with the prevailing wage requirements as specified in Attachment C. A worker employed on a public work by or on behalf of the City of Fort Worth shall be paid not less than the general prevailing rate of per diem wages for work of a similar character in the locality in which the work is performed ; and not less than the general prevailing rate of per diem wages for legal holiday and overtime work. A worker is employed on a public work if the worker is employed by a contractor or subcontractor in the execution of a contract for the public work with the City of Fort Worth . The contractor who is awarded a public work contract , or a subcontractor of the contractor, shall pay not less than the prevailing wage rates to a worker employed by it in the execution of the contract. A contractor or subcontractor who violates this requirement shall pay to the City of Fort Worth , $60 for each worker employed for each calendar day or part of the day that the worker is paid less than the wage rates stipulated in the contract. This requirement does not proh ibit the contractor or subcontractor from paying an employee an amount greater than the prevailing wage rate. 14. MODIFICATION No modification of this Contract shall be binding on the Contractor or the City unless set out . in-wri tj ng and signed by both parties. Any changes to the scope of work or com pensation must be in the form of a written , formal, authorized modification of this contract that is in accordance with all applicable state and cit laws1' re ulationsh nd OFFl"IA RECORu GHG Ass essment <;;ontract -DEM 10-06 -GHG Cl · q Y Shaw Environmental & Infrastructure , Inc. e"T WORTH TX If" , • ' ordinances. In no event shall any verbal authorization changing the scope of work or verbal agreements for additional compensation be binding upon the City. Contractor expressly agrees a) not to make changes to its legal, financial, or logistical position on any matter based on any oral representation by an employee or agent of the City prior to obtaining a written modification to this contract; b) that it waives any claim based upon reliance or estoppel as a result of acting or not acting due to an alleged oral change to a material term of this contract from the City, its employees, or agents; and c) that it waives any claim for compensation for work performed based upon an alleged oral change to a material term of this contract from the City, its employees, or agents. ARTICLE 15. DEFAULT If Contractor fails to begin work or to complete work within the time specified in a Task Order City shall have the right to take charge of and complete the work in such a manner as it deems appropriate. If the City exceeds the costs detailed herein or in the Task Order, City may deliver to Contractor a written itemized statement of the excess costs and Contractor shall reimburse the City for such excess costs without delay. If at any time during the terms of this contract, the work of the Contractor fails to meet the specifications of the Contract Documents or to meet the standards of duty, care, or proficiency of a reasonable and competent Contractor, City may notify the Contractor of the deficiency in writing. Failure of the Contractor to correct such deficiency and complete the work required under this contract or a Task Order to the satisfaction of the City within ten (10) days after written notice shall constitute default, and shall result in termination of this contract. Contractor shall not be deemed to be in default because of any failure to perform under this contract if the failure arises solely from causes beyond the control of the Contractor and without any fault or negligence by the Contractor. Such causes shall include acts of God, acts of war or terrorism, fires, floods, epidemics, quarantine restrictions, labor strikes, freight embargoes, and events of unusually severe weather. ARTICLE 16. TERMINATION City may terminate this contract without cause by giving ten (10) days written notice to Contractor. In the event of termination, any work in progress will continue to completion unless otherwise specified in the notice of termination. If the City terminates this contract under this provision, City shall pay Contractor for all services performed prior to the termination. Termination shall be without prejudice to any other remedy the City may have. All data and completed or partially completed documents pr:~eP~~a~r~e~d ~--u;o~~~'=='!'l ntract shall be promptly turned over to the City upon termination of t~h!!:i ~f1.!!Lgl;il:;._--i GHG Assessmerit :"~ohtract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITYS! "WORTH,TX ARTICLE 17. VENUE AND JURISDICTION If any action, whether real or asserted, at law or in equity, arises on the basis of any provision of this Agreement, venue for such action shall lie in state courts located in Tarrant County, Texas or the United States District Court for the Northern District of Texas -Fort Worth Division. This Agreement shall be construed in accordance with the laws of the State of Texas. ARTICLE 18 . CONTRACT CONSTRUCTION The Parties acknowledge that each party and, if it so chooses, its counsel have reviewed and revised this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party must not be employed in the interpretation of this Agreement or any amendments or exhibits hereto. In the event of any discrepancy between this contract and any other contract documents, this contract shall prevail and control. ARTICLE 19. HEADINGS The headings contained herein are for the convenience in reference and are not intended to define or limit the scope of any provision of this Agreement. ARTICLE 20. COUNTERPARTS This Agreement may be executed in one or more counterparts and each counterpart shall, for all purposes, be deemed an original, but all such counterparts shall together constitute but one and the same instrument. ARTICLE 21. SEVERABILITY The prov1s1ons of this Agreement are severable, and if any word, phrase, clause, sentence, paragraph, section or other part of this Agreement or the application thereof to any person or circumstance shall ever be held by any court of competent jurisdiction to be invalid or unconstitutional for any reason, the remainder of this Agreement and the application of such word, phrase, clause, sentence, paragraph, section, or other part of this Agreement to other persons or circumstances shall not be affected thereby and this Agreement shall be construed as if such invalid or unconstitutional portion had never been contained therein. GHG Assessment Co.ntract -DEM 10-06 -GHG I ' • • Shaw Environmental & Infrastructure, Inc. ARTICLE 22. RIGHTS AND REMEDIES NOT WAIVED In no event shall the making by the City of any payment to Contractor constitute or be construed as a waiver by the City of any breach of covenant, or any default which may then exist, on the part of Contractor, and the making of any such payment by the City while any such breach or default exists shall in no way impair or prejudice any right or remedy available to the City with respect to such breach or default. Any waiver by either party of any provision or condition of the contract shall not be construed or decreed to be a waiver of any other provision or condition of this Contract, nor a waiver of a subsequent breach of the same provision or condition, unless such waiver be expressed in writing by the party to be bound. All costs and attorneys fees incurred by the City in the enforcement of any provision of this contract shall be paid by the Contractor. The remedies provided for herein are in addition to any other remedies available to the City elsewhere in this contract and by law. ARTICLE 23. NOTICES Notices to be provided hereunder shall be sufficient if forwarded to the other Party by hand-delivery or via U.S. Postal Service certified mail return receipt requested, postage prepaid, to the address of the other Party shown below: If to the City: If to the Contractor: City of Fort Worth Department of Environmental Management Attn: Brian Boerner, CHMM, Director 1000 Throckmorton Street Fort Worth, Texas 76102-6311 Shaw Environmental & Infrastructure, Inc. Attn: Jimmy Gibson 6330 Commerce Drive , Suite 190 Irving, Texas 75063 ARTICLE 24. WARRANTY Contractor warrants that it understands the currently known hazards and suspected hazards which are presented to persons, property and the environment by the types of work which are to be performed under this contract. GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITV $ECRETARY f l ·~oRTli, TX -__ eage,_:i.c:;;..et-t;~ Contractor further warrants that it will perform all services under this Contract in a safe, efficient and lawful manner using industry accepted practices, and in full compliance with all applicable state and federal laws and standards governing its activities and is under no restraint or order which would prohibit performance of services under this Contract. ARTICLE 25. NO THIRD-PARTY BENEFICIARIES This Agreement shall inure only to the benefit of the parties hereto and third persons not privy hereto shall not, in any form or manner, be considered a third party beneficiary of this Agreement. Each party hereto shall be solely responsible for the fulfillment of its own contracts or commitments. ARTICLE 26. ENTIRETY This contract, the contract documents, and any other documents incorporated by reference herein are binding upon the parties and contain all the terms and conditions agreed to by the City and Contractor, and no other contracts, oral or otherwise, regarding the subject matter of this contract or any part thereof shall have any validity or bind any of the parties hereto. In the event of any conflict between this contract and any other contract documents , then the terms of this contract shall govern. 29. AUTHORITY AND EXECUTION By signing this contract Contractor warrants that it has had the opportunity 1) to examine this contract in its entirety, 2) to have its legal counsel examine and explain the content, terms, requirements, and benefits of this contract if Contractor so chooses, and 3) to negotiate the terms of this contract within the bounds of applicable law. Having had the opportunity to submit its qualifications and also to specifically negotiate the terms of this contract, Contractor agrees to be bound by this contract and expressly agrees to the terms of this contract, including terms that may vary from those of the Request for Qualifications or the Contractor's Statement of Qualifications. The signatory to this contract represents that he or she is legally authorized by the Contractor to enter into a binding agreement on behalf of the Contractor. This portion of page left intentionally blank. GHG Assessrner:i t Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFJCIAL RECORD CITY $ECRETARY FT. WORTH, TX Page 17 of 64 ATTACHMENT A SCOPE OF WORK AND COMPENSATION SCHEDULE The agreed Scope of Work and Compensation Schedule, subject to the terms and conditions of this contract and subject to the Not-to-Exceed amount, is shown in the following document entitled "Work Plan -Citywide Emissions Inventory and Greenhouse Gas Assessment -Project DEM 10-06: GHG", dated July 1, 2010. GHG Assessment.Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. OFFICIAL RECORD CITY SECRETARY f l . WORTH, TX Page 18 of 64 Work Plan Citywide Emissions and Inventory and Greenhouse Gas Assessment Project DEM 10-06: GHG July 1, 2010 Submitted to: City of Fort Worth Environmental Management Department I 000 Throckmorton Fort Worth, Texas 76102 Submitted by: 6 Sfiaw • Shaw Ernironmental & Infrastructure, Inc. 6330 Commerce Drive , Suite 190 Irving, Texas 75063 GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc . OFFICIAL RECORD CITY SECRETARY FT. WORTH TX 9 of 64 ' 6 Sliaw· Shaw EMonmental ·-"" I Table of Contents 1. 0 Introduction: ......................................................................................................................... 3 2. 0 Description of Emission Inventory ...................................................................................... 3 Organizational Bmmdary: ........................................................................................................... 3 Operational Boundary ................................................................................................................. 4 Scope of Emission Inventory ...................................................................................................... 4 GHGs and Regulated Pollutants ................................................................................................. 5 Base line for Inventory ................................................................................................................. 5 Emission Calculation Protocol.. .................................................................................................. 5 Emissi on Aggregation ................................................................................................................. 6 C ompliance Triggers and Directions .......................................................................................... 6 3.0 Project Deliverables: ................................................................................................................. 6 4.0 Project Tasks: ............................................................................................................................ 7 Task 1: Delineation and compilation of assets included in the inventory .................................. 7 Task 2: Compilation of input data sheets .................................................................................... 7 Task 3 : Data collection ............................................................................................................... 7 T ask 4: Data quality assurance ................................................................................................... 8 Task 5: Development of emission inventory software tool ........................................................ 8 Task 6: Popul ating emission inventory software tool... ............................................................ 10 Task 7: Pr esentation of draft emission inventory ..................................................................... 10 Task 8 : Final emission inventory and report... ......................................................................... 10 5.0 Project Schedule : .................................................................................................................... 10 6.0 Estimated Level of Effort and Cost Estimate ........................................................................ 11 Tas k 1: Delineation and compilation of assets included in the inventory ................................ 11 Task 2: Compilation of input data sh eets .................................................................................. 11 Task 3: Data collection ............................................................................................................. 11 Task 4: Data quality assurance ................................................................................................. 11 Task 5: Devel opment of emission inventory software ............................................................. 11 Task 6: Populating emission inventory software ...................................................................... 11 Task 7: Presentation of draft emission inventory ..................................................................... 11 Task 8: Final emission inventory and report ............................................................................ 11 7.0 Project Inv oic ing ..................................................................................................................... 12 8 .0 Reporting for ARRA ............................................................................................................... 12 List of Figures Figure 1: Emission C alculation Scheme ......................................................................................... 9 Figure 2 : Estimated Schedule for GHG Inventory ...................................................................... 10 List of Tables Table l: Estimated Level of Effort and Cost Estimate ................................................................ 11 Attachments Attaclunent 1: Labor Categories and Rates. . ............................................................ 13 ~COittyy~of~F;;;ortt\WMo;rth;GGIH*G;il;nv;en;.to;;:jry-;-: PPr~oj;.ecjt DIDE;M;-:1100--0~6 GGIH:UG;--------=~l ~~~~~~~c~=~ f't WORTH, TX GHG Assessment-Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. Page 20 of 64 tl _______________ Sli __ aw __ ._Shavv __ Errvi_·ron_mental __ &_l_nfrastruct ___ ure_, lnc----11 1.0 Introduction: The City of Fort Worth (City) plans to complete a baseline emission inventory for its operations, with the exce ption of Village Creek Waste Water Treatment Plant and the Southeast Landfill, to: • Determine compliance activities required pursuant to the United States Environmental Protection Agency's (USEPA) greenhouse gas (GHG) mandatory reporting rule (MRR); and • Prepare for future requirements related to attainment of the National Ambi ent Air Quality Standards for ozone. The primary purpose of the baseline inventory to be developed under this contract is to prepare the City for compliance with all provisions of the MRR . The City has varied operations as part of its service to the residents, which include numerous buildings, on-road and off-road vehicles, and power generating units consuming fossil fuel and generating GHGs. Because the applicability of the MRR will be based on exceeding a threshold of annual GHG emissions (25,000 metric tons of carbon dioxide equivalent or "mtC02e") a comprehensive, accurate, and transparent baseline inventory is the most important first step for the City in order to establish compliance wi th the MRR and future regulations. The Dallas/Fort Worth metropolitan area is also a non-attainment area for federal air quality standards with respect to ozone, which may require the City to control selected operations in the future . The precursors of ozone are volatile organic compounds (VOCs) and nitrogen oxides, which are emitted al ong with GHGs from the combustion of fossil fuel. A s econdary purpose of the project therefore will be to develop an inventory of these ozone precursors from fossil fuel combustion for City operations that also generates GHGs . The City has been funded for this project out of the federal American Recovery and Reinvestment Act (ARRA). In addition to creating jobs and stimulating the economy, the goals of ARRA are to: i) reduce fossil fuel use; ii) reduce total energy consumption; and iii) improve energy efficiency. As a prerequisite to developing strategies to achieve these goals, the City needs to have an in-depth lUlderstanding of its fossil fuel and overall energy usage . As fossil fuel and other energy usage translates directly to GHG emissions, another objective of the baseline inventory developed in this project will be to map the fossil fuel usage, carbon footprint, and carbon intensity within the City's operations to support the ARRA goals. This work plan is developed to delineate the project tasks r equired to achieve these project objectives 2.0 Description of Emission Inventory Organizational Boundary: The organizational boundary will be limited to the City's municipal operations and will not include the extraterritorial jurisdiction (ETJ) or any of the surrounding community operations. Ci t y o f Fort Worth GHG Invent ory: Proj ect DEM 10-0 6 GHG GHG Assessment Contract -DEM 10 -06 -GHG Shaw Environmen tal & Infras truc ture , Inc. OFFlCIAL RECORD CJTY SECRETARY Fl. WORTH, TX .,__ ___________ Sli_Q_. _~_. Shaw __ Envi_'ron_mental __ &_lnfrastruct ___ ure_._1~-11 Operational Boundary The operations will include the assets and area where the City has direct ownership or operational control. These include : • Offices, Wl!rehouses, and other buildings owned by the City • Streetlights and traffic signals • Water delivery facilities (water treatment and pumping stations) • City airports such as Meacham, Spinks and Alliance (limited only to the City 's activities) • Vehicle fleet owned and operated by the City • Power and heat generation facilities . This category will include boilers, combustion turbines, emergency generators, emergency pumps, etc. • Several closed solid waste facilities • Sign shops and other process operations owned and/or operated by the City Though the MRR does not require inclusion of emergency equipment such as emergency generators and pumps, these will be listed in order to develop a comprehensive inventory and to comply with future regulations related to ozone nonattainment. The following operations will be excluded from the inventory. Shaw understands that GHG inventories for these operations are being separately developed by the City. • Village Creek Waste Water Treatment Plant • Southeast Landfill • MED ST AR operations • All public transit system and commuting systems (The T) • DFW airport and related operations • Leased buildings The City does not have electric power transmission and distribution (T&D) operations. Therefore electrical stations and T&D operations are also excluded from the inventory. Scope of Emission Inventory The emission inventory will include only Scope 1 and Scope 2 operations and equipment. These scopes as defined in the World Resource Institute's (WR!) ''The Greenhouse Gas Protocol" are; Scope 1: Direct GHG emissions from operations included in the inventory. This scope will be used for GHG and ozone pre-cursors . Scope 2: Indirect GHG emissions due to purchase of utilities such as power, steam, or electricity for the operations included in the inventory. These emissions actually occur not at City operations but at the point of generation of the utilities . This scope will be used only for GHG emissions. Ci ty of Fort Worth GHG Inve ntory: Project DEM 1~6 GHG GHG As·sessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. ."'.:cv:~ Al QSECORD \ er ... ·• ;;1::c.i:ctrf ARY l ,I!) -N.0 q 1·H ·r~ '----ee-2~ _____________ Sfi_6_~ __ ._S_haw_81vi_·ron_mernal __ &_lnfrastruct ___ ure._lnc.----tl Scope 3 : Items which include indirect impact of the City's operations such as employee commute, business travels, supply chain, and emissions from the City's resident5, are excluded from this inventory. GHGs an d Regulated Po ll ut ants The GHGs included in the emission inventory will be limited to the requirements of the MRR and are : • Carbon dioxide (COi) • Methane (CH4) • Nitrous oxide (N20) Annualized emission of each of the GHGs and the combined carbon dioxide equivalent (C02e) will be calculated using global warming potential (GWP) per the USEPA's MRR. In addition, the following criteria pollutants will be included in the inventory as ozone pre- cursors: • Volatile organic compounds (VOC) • Nitrogen oxides (N Ox -which includes nitrogen dioxide and nitrogen monoxide) Baseline for Inventory The MRR requires reporting on or before March 31 , 2011 for the operations in calendar year (CY) 2010. As the complete operational data for the CY 2010 will be available only after Dec ember 31 , 2010, the operational data from CY 2009 will be used as the basis of the emission inventory. The City will complete data collection and data input to the emissi on inventory software to be developed as part of this project in order to compile the CY 2010 inventory for reporting in 2011. "Back-casting" of the emissions to a prior year will not be conducted. Emission Calculation Protocol The following protocols will be us ed for estimating the GHG emissions. • For clearly identified emission source categories under the MRR, the detailed calculation procedures in the MRR will be followed for regulatory compliance . These source categories will be identified during the project and finalized after discus.5ion with the City. Typically, these will be stationary sources such as boilers, combustions turbines, and h eaters burning process fuel, and solid waste landfills; • For other emission sources (mainly fleet emissions and i:treetlights), WRI's ''The Greenhouse Gas Protocol'' will be primarily used with appropriate 'fill in' from the California Climate Action Registry (CCAR) General Reporting Protocol and The Climate Registry (TCR) protocol; and • For the voe and NOx emissions from the fuel combustion sources, USEPA's Air Pollution Emission factor (AP-42) database will be used. Cit y of Fort Worth GHG Invent ory: Proj ect OEM 10--06 GH G GHG Assessme nt.Contract -DEM 10-06 -GHG Shaw Env ironmen tal & Infrastru ctu re , In c . OFFICIAL RECORD CITY SECRETARY FT. WORTH , TX Page Emission Aggregation Emissions will be calculated at the emission unit level at which data is available . All buildings and warehouses will be aggregated to metered connections because further segregation of fuels or electricity usage data may n ot be available. Vehicle fleet emissions will be estimated at either individual vehicle level or at vehicle group level or at the departmental level, based on data availability. Emission from sources identified as being subject to the MRR will be calculated separately for determining applicability and compliance . All emissions will be aggregated to the operational group levels (such as buildings, solid waste facilities, street lights and traffic signals, airport, stationary combustion systems) and finall y at the City level fo r a view of City-wide operations. Compliance Triggers and Directions The emission inventory software will include built in triggers to fl ag emission sources and operations for the following : • Applicability of MRR based on emission thresholds in the regulation • Applicability as a major source ofVOC and NOx based on Dallas/Fort Worth ozone nonattainment regulations The final report as part of the project deliverable will provide clear directions for compliance with the MRR and ozone non-attainment regulafrons as existing during the project timeline. 3.0 Project Deliverables: The deliverables from this project will be as follows : • A final report that describes the City's facilities and operations covered in the .inventory, the estimated emissions of GHGs and ozone precursors, fossil fuel usage, carnon footprint and intensity and clear directions on applicability and compliance of the MRR and ozone nonattainment regulations. Shaw will submit 3 paper copies and one electronic copy on disc in base software or pdf. • A copy of the emission software tool with an accompanying user 's guide that will clearly describe all input data used, all emission calculation procedures including variables, assumptions, and default values. The software will be transferrable to the City and/or other vendors for tracking emissions for future years . (Further discussed in Section 4 .0, Task 5) Cit y of Fort Wort h GHG Inventory: Project DEM 10-06 GH G GHG As'sessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. 6 j ? • e age 24 of 64 tl .,.... ____________ Sti_· _aw_~_Shaw __ Environmental_· ___ &_1ntras_tructu __ re._1nc--il 4.0 Project Tasks: This section provides the tasks to be lUldertaken by Shaw and its subcontractors to achieve the project objectives . Task 1: Delineation and compilation of assets includ.ed in the inventory The first task will be to clearly identify the assets and operations that will be included in the inventory. Innnediately upon award, Shaw requests that the City provide an initial master asset list, which will then be reviewed in detail to ensure all assets are included. Shaw expects several conference calls and meetings with the City to finalize this asset list. Task 2: Compilation of input data sheets Based on the type of operation, Shaw will develop input data sheets for collection of data required for emission calculations. These data sheets will be customized to the City's operation and the City staff will be able to complete these electronically. Single data sheets will be developed for each type of operation to collect data regarding GHG emissions, ozone precursor ernissions, and carbon footprint/intensity calculations so that the impact on City staff persoJU1el's time will be minimized. Each data sheet will include a user's instructions document that describes each of the data elements and how to fill in the data . Shaw will also host a Live Meeting (online) explaining the data sheets , if required by the City on any data sheet whose instructions are not clearly lUlderstood by the City staff. Task 3: Data coUection Shaw will seek to establish a collaborative approach with the City in collecting the data. City staff will be primarily responsible for collecting the emission unit level data and Shaw staff will be responsible for planning and managing the overall data collection effort. If and when required, Shaw staff will help the City staff in collection of data also; but this is expected to be limited to complex operations or instances where data are not available and alternative data will be required to be estimated or collected. Shaw proposes to use a web portal for ease of data management and transfer between the City and Shaw. The web portal will reside within Shaw and will be dedicated for this project only . Staff assigned to the project by the City will be provided complete access for uploading, downloading, and editing the data sheets . For purchased electricity, Shaw proposes to use supplier-specific GHG emission factors. Shaw would request this data to be gathered by the City from the current electricity supplier (Oncore). If required, Shaw will discuss the requir ements to the supplier in a meeting or a conference call . Shaw will track the progress of the data collection effort on the portal and will contact the City project lead if any delay in the data collection effort is encolllltered . C1tyof Fort Wort h GHG Inventory: Project DEM 10-06GHG GHG Assessment Cc>"ntract-DEM 10-06 -GHG Shaw Environmenta l & Infrastructure , Inc . 6 .p-____________ Sli_aw_· _a_Shaw __ Environ_._mental __ &_l nttastructu_· __ re,_lnc.-1 As the data sheets are filled, Shaw will conduct a preliminary revi ew of the completeness of the data and w ork with the data supplier to fill in data gaps, if a ny. Tas k 4 : Data quality assurance Data quality is of critical importance for compiling a credible and accurate inventory. Shaw has extensive experience in developing emission inventories and performing emission inventory calculations and will use our best practices to assure the quality of the data . Each data sheet will be reviewed and any discrepancies will be sorted out prior to input in the emission software. In addition, Shaw plans a sele cted number ofrepresentative operational units in the City's inventory (such as buildings, sign shop, stati onary combustion systems) to verify the input data and data collection procedure. The results of these verifications will be recoded and uploaded in the portal . Shaw plans to use a dedicated staff for quality assurance management for this project The person will report to the Shaw Project Manger and will help in sorting out data quality issues, if any, as they arise. Task 5: Development of emission inven to ry software too l Parallel with the data collection effort, Shaw will develop an emission calculation software tool as a deliverable for the project. The s oftware will be built around an open platform such a Microsoft Excel and will be a set oflinked spreadsheets. Individual spreadsheets will be developed for each emission activity group such as office buildings, vehicle fleet, streetlights, solid waste facilities etc. The spreadsheets will include the list of emission tu1its covered under that emission activity group, the m ethodology used for emi ssion calculations, the input data used, the assumptions, and the defaults for each type of calculation for each emission unit A m~er spreadsheet will be developed which will include several tabs, each tab linked to emission activity group spreadsheets described above and summarizing the t otal emissions from that group for both GH G and ozone· precursors. The master spreadsheet will have a summary -tab, that will roll up all City-wide emissions from the individual emission activity group tabs . The s cheme of the software is shown in Figure 1. City o f Fort W ort h GHG Invent ory: Pr oject DEM 10-06 GH G GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. OfflCIAL RECORD CITY SECRETARY ft. WORTH, TX Figure 1: Emission Calculation Scheme The master spreadsheet will include. graphs and charts to demonstrate relative contribution of each group of activities on the carbon footprint of the municipal operations and carbon intensity ofrelevant activities. The emission calculation software tool will be accompanied by a user's guide on explanation of the data fields and operation of the spreadsheets and data fields and for entering/editing/deleting input data in future . Once a draft version of the software tool is completed, Shaw will make a presentation to City officials . Shaw will explain the architecture of the spreadsheets, show all data elements and instructions, demonstrate how emission calculations will be performed, and how emissions will be rolled up to the City level. Shaw will solicit suggestions from the City to make the software tool more user-friendly and refle ct the needed changes in the final version of the software. Ci ty o f Fort Wo rth GHG Inventory: Project DEM 10-06 GHG GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX ~ .,__ ____________ Sli_aw __ 3_Shaw __ Environmenta1_· ___ &_1nfrastructu ___ re._1nc.--11 Task 6: Populating emission inventory software tool After all input data have been collected and have gone through the quality assurance checks , the data will be input by Shaw in the emission calculation software tool to develop the baseline GHG emissions and ozone precursor emissions. As menti oned earlier , the data will be for CY 2009 operations at this time ; but the City will have the ability to reload a duplicate spreadsheet with CY 2010 operational data , when these are available. Task 7: Presentation of draft emission inventory On completion of the emission calculations, Shaw will make a presentation to the City on the results of the basel ine inventory. Shaw expects to do this in a one day meeting in Fort Worth with City officials. The presentation will cover all aspects of the project from asset identification, input data collection, data quality assurance, the emission calculation software, and results of the baseline inventory. Task 8: Final emission inventory and report After the presentation and incorporating any comments the City may have , Shaw will finalize the project deliverables and submit final copies to the City, both in paper (3 copies) and electronic fonnat. 5.0 Project Schedule: The project schedule is shown in Figure 2 . Shaw will complete the project within 22 weeks of award Considering the project starts on August 2,2010, Shaw will complete the project deliverables for submission during the week of December 21", 2010. The project schedule assumes that data collection efforts are completed as shown in the schedule . Figure 2: Estlmate.d Sc he dule fo r GHG I nventory Weeks Ta.ii: 9 1 2 3 4 s 6 1 8 9 10 l! u 13 14 1S 16 17 IS 1~ 20 21 22 Ptojed Aw ard ID' Contract NegothtUon a11d flnaillzatJon 'ib %i Kk:kvoff m~tina ~ Ust of Doti Need to City ' Data COlli,ctlon Emlulon Cakuli!Uon, "4i,Ml I·• 0.-.ftReporl I Final report I ·:; I Ci ty o f Fort Wo rth GHG Inventory: Project DEM 10-06 GHG -1 GHG As1ses srrie nf Co-ntract -DEM 10-06 -GHG Shaw Env ironmen ta l & Infrastructu re , Inc. OfFICIAL RECORD CITY SECRETARY FT. WORTH, TX _I -Page 28 of 64 6 ______________ S1i __ aw_~_Shaw __ Envi_._ronmentaJ ___ &_1n_tras_tructu __ re._1nc--il 6.0 Estimated Level of Effort and Cost Estimate Table 1 shows the level of effort and cost of the proj ect divided in tasks as described above. Table 1: E~timated Level of Effort and Cost Estimate Task ID/Description Total Labor Total Estimated Cost \~J Hourso.1 64 $9,977 Task 1: Delineation and compilation of assets included in the inventory 72 $7,26 0 Task 2: Compilation of input data sheets 90 $18,016 Task 3: Data collection 84 $8,512 Task 4: Data quality assurance 204 $20,432 Task 5: Development of emission inventory software 72 $7 ,356 Task 6 : Populating emisgon inventory software 38 $6,382 Task 7: Presentation of draft emission inventory 46 $6 ,172 Task 8: Final emission inventory and report Total: 670 $84,107 (t) Labor hours for subcontractors will be an addtional 98 hours; included as subcontractors costs within non-labor costs. (2) Cost in clude all labor and non-labor costs such a s travel, material s, s ubcontra cts, reprographics, and mi scellan eous. The cost includes all labor costs and n on-labor costs . Lab or costs will be charged based on l abor category and category rates as sh own in Attachm ent 1. The actual mix of the labor categories for Ci ty of Fort Worth GHG Inventory: Project DEM 10-06 GHG GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. OFF~CIAL RECORD CITY SECRETARY 6 •~-----------Sli_aw __ " Shavv __ Environ_· _menta1 __ &_1ntrastructure. ____ 1nc.--11 each task will be determined during execution of the tasks. All non-labor costs such as travel, materials, subcontracts, reprographics and miscellaneous will be marked up by 10%. The total estimated cost of the project (sh own in Table 1) will not be exceeded for the scope of work described in the work plan. The cost for individual tasks may vary. 7.0 Project lnvoi.cing The project will be invoiced on a time and material (T &M) basis each month during the first week the following month. The invoice will include details of all labor costs by each category of labor, all non-labor costs with appropriate mark-ups for individual project tasks described above . Shaw will follow all documentation required by the City and as spelled out in the signed contract. 8.0 Reporting for ARRA The City has been funded for this project out of the ARRA stimulus funding . There are reporting requirements to USDOE for the projects funded by ARRA. While the City will submit these reports directly to USDOE; Shaw will provide al l necessary details to the City for completing this report for the project. Ci ty o f Fort Worth G HG Inventory Project DEM 10-06 GHG GHG Assessment ·Co nt ract -DEM 10-06 -GHG Shaw Env ironmental & Infrastructure , Inc . 12 Po <' l OFFICIAL RECOR D CITY SECRETARY FT. WORTH, TX !....... l"'age 30 of 64 tl •~------------Sli __ aw_~_s_haw_Errvi_._ron_mentaJ __ &_1ntras __ tructu __ re._1nc.-----11 ATTACHMENT 1 SHAW -City of Fort Worth Labor Categories and Rates 2010 PERSONNEL CHARGES (per hour) Cateaorv M IYPical Cateoorv Function HoyrJy Bme N 0 p Q R s T u V Technical Publications Assistant 1 Laborer 1 Administrative Assistant 1 Drafter 1 Laborer2 Equipment Operator 1 Technician 1 Administrative Assistant 2 Transaction Processing Assistant 3 Laborer 3 Equipment Operator 2 Technician 2 Scientist 1 Administrative Assistant 3 Project Controls Cost Scheduler 1 Project Accountant 1 Drafter 2 Equipment Operator 3 Foreman Technician 3 En<ineer 1 Admin/Executive Assistant 4 Subcontractor Administrator 1 EH&S Specialist 1 Scientist 2 Subcontractor Administrator 2 Project Controls Cost Scheduler 2 Drafter 3 Engineer 2 Proj ect Accountant 2 Technician 4 Scientist 3 Subcontractor Administrator 3 Drafter 4 EH&S Specialist 2 Project Accountant 3 Project Controls Cost Scheduler 3 EH&S Specialist 3 Project Scientist 3 Project Accountant 4 Site Superintendent 1 Engineer 3 Scientist 4 City of Fort Worth GHG Inventory: Project DEM 10--06 GHG GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . S41 $48 $ 58 S 66 $79 $88 $99 $108 $116 $124 OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX category w X y z TYPical Cateoorv Function Project Controls Cost Scheduler 4 Subcontract Administrator 4 Site Superintendent 2 Engineer4 Project Engineer 3 Project Scientist 4 Client Pro!J"am Manger 1 Project Manager 1 Scientist 5 Project Engineer 4 Client Program Manager 2 Business Line Manager 1 Engineer 5 Scientist 6 Project Engineer 5 Project Scientist 5 Client Pro!J"am Manager 3 Project Manager 2 Business Line Manager 2 Principal Engineer Princioal Consultant HoudY Bde $133 $151 $173 $200 The category functions are typical of the category and there may be additional category function in the category . Billing will be done by category type (M through Z) with description of category function. Depositions and expert witness testimony , including preparation time , will be charged at 150% of the above rates . Travel time will be charged in accordance with the above rates , up to a maximum of 8 hours per day. OTHER DIRECT COSTS (ODCs) Charges for subcontract labor, special outside services , equipment , and facilities not furnished directly by Shaw will be billed at cost plus 10%. Travel costs such as mileage, meals , and lodging will be invoiced at current US General Services Administration rates. City o f Fort Wo rth GHG Invent ory: ProJect DEM 10--06 GHG GHG A sfses·smerit:Cb"ntract-DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. 14 0 '.l ~ e ATTACHMENT 8. ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT PROGRAM ADDITIONAL REQUIREMENTS ENERGY EFFICIENCY AND CONSERVATION BLOCK GRANT (EECBG) -AMERICAN RECOVERY AND REINVESTMENT ACT (ARRA) PROJECT All contracts funded in whole or in part by EECBG funds shall comply with the following: l. Ensure the safety and structural integrity of any repair, replacement, construction, and or alteration performed. 2 . Comply with provisions of the City of Fort Worth EECBG Waste Stream Plan attached hereto . 3. Submit Information in Support of ARRA R eporting by the 4th day of each month, including financial , job creation/retention and performance progress reports. Submit backup documentation fo r expenditures of funds under ARRA including such items as timecards, invoices , and validation of purchasing American made goods . 4. Submit to City on a weekly basis: (1) Payroll, (2) Statement of Compliance-for each payroll, as appli cable for all laborers and mechanics, for services and activities accomplished by Contractor in performance of this Contract. Payroll and the Statement of Compliance must be signed by a duly authorized agent of the Contractor and submitted each Friday of the week following the week being reported. 5. Upon identification of possible breaches of contract, and prior to exercising its termination rights under this Contract for breach, City may elect to exercise any of the following administrative remedies : a. issuance of warning letter indicating that further fail ure to comply with app li cable requirements will re sult in serious sanction and giving Contractor a limited time to correct the deficiency; b. placing conditions upon award of future grants ; c . directing Contractor to stop incurring costs until the deficiency is corrected and the correction is verified ; d. requiring repayment of previously reimbursed grant funds; or e . reducing the amount of pending grant awards or disallowing future awards to Contractor. f. The City's election to exercise any, all, or none of the aforementioned administrative remedies does not act as a waiver of any of City's other rights or remedies under the law or this Contract for the enforcement of this Contract or the recovery of any damages relating to Contractor's actions or inactions relating to the Program, EECBG funds , and/or this Contract. 6. Follow mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Ene rgy Policy and Conservation Action (Pub . L. 94A 163 , 89 Stat. 871), (53 FR 8068 , 8087 , Mar. 11 , 1988 , as amended at 60 FR 19639 , 19642 , Apr. 19 , 1995). 7. Comply w1th 10 CFR 600 which outlines DOE requirements and regulations pertaining to patent rights with respect to any discovery or invention which arises or is developed in the course of or under this contract. 8 . Comply with l O CFR 600 which outlines DOE requirements and regu a · rights in data. GHG Assessmen.t .Gontract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. CJTV SECRETARY FT. W l' 6 'ghts and SUBRECIPIENT OR SUBCONTRACTOR FLOWDOWN REQUIREMENTS Subawardees who receive federal fund s under an as sistance agreement shall comply with the flow down requirements for subawardees specified in the "Special Provisions Relating to Work Funded under American Recovery and Reinvestment Act of2009" which apply to this award . Additionally, as required by 10 CFR 600 .2(b), 10 CFR 600 .236 , and 10 CFR 600.237 , any new, continuation, or renewal award and any subsequent subaward shall comply with any applicable Federal statute , Federal rule , Office of Management and Budget (0MB) Circular and Government-wide guidance in effect as of the date of such award. These requirements include , but are not limited to the following: a. DOE Assistance Regulations, 10 CFR Part 600 at http://ecfr.gp oaccess.go v . b. In addition to 10 CFR 600, Appendix A, Generally Applicable Requirements , the National Policy Assurances to Be Incorporated as Award Terms in effect on date of award at http ://ma nagement.energy.gov/b usiness doe/13 74 .htm apply . c. 2 CFR 215, "Uniform Administrative Requirements for Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations (0MB Circular A-11 O)." d. 0MB Circular A-102, "Grants and Cooperative Agreements with State and Local Governments" Common Rules. e. 0MB Circular A-21, "Cost Principles for Educational Institutions," 0MB Circular A-87, "Cost Principles for State, Local, and Indian Tribal Governments," 0MB Circular A- 122 , "Cost Principles for Non-Profit Organizations ," or FAR at 48 CFR Part 31, "Contract Cost Principles and Procedures," for Profit Organizations, as applicable. f. 0MB Circular A-133, "Audits of States , Local Governments, and Non-Profit Organizations." g. Subawardee Application/proposal as approved by DOE. GHG Asses·smerit C6ntract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX Page 34 of 64 SUBGRANT FLOWDOWN PROVISIONS FOR EECBG FINANCIAL ASSISTANCE AWARDS SPECIAL TERMS AND CONDITIONS Table of Contents Number Subject 1. RESOLUTION OF CONFLICTING CONDITIONS ................................................... 36 2. CEILING ON ADMINISTRATIVE COSTS ............................................................... 36 3. LIMITATIONS ON USE OF FUNDS ........................................................................ 36 4. REIMBURSABLE INDIRECT COSTS AND FRINGE BENEFIT COSTS ................. 36 5. USE OF PROGRAM INCOME ................................................................................ 37 6. STATEMENT OF FEDERAL STEWARDSHIP ........................................................ 37 7. SITE VISITS ............................................................................................................ 37 8. REPORTING REQUIREMENTS .............................................................................. 37 9. PUBLICATIONS ..................................................................................................... 37 10. FEDERAL, STATE, AND MUNICIPAL REQUIREMENTS ...................................... 38 11. LOBBYING RESTRICTIONS .................................................................................. 38 12. NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) REQUIREMENTS ............. 38 13. HISTORIC PRESERVATION .................................................................................. 38 14. WASTE STREAM ................................................................................................... 39 15. DECONTAMINATION AND/OR DECOMMISSIONING (D&D) COSTS ................... 39 16. SUBGRANTS AND LOANS .................................................................................... 39 17. JUSTIFICATION OF BUDGET COSTS .................................................................. 40 18. ADVANCE UNDERSTANDING CONCERNING PUBLICLY FINANCED ENERGY IMPROVEMENT PROGRAMS ................................................................................ 41 19. SPECIAL PROVISIONS RELATING TO WORK FUNDED UNDER AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (May 2009) ............................. 41 20. REPORTING AND REGISTRATION REQUIREMENTS UNDER SECTION 1512 OF THE RECOVERY ACT ............................................................................................ 46 21. NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS --SENSE OF CONGRESS ................................................................. 46 22. REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS -SECTION 1605 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 .................................................................................................................. 47 23. REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS (COVERED UNDER INTERNATIONAL AGREEMENTS)-SECTION 1605 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 ............................ 49 24. WAGE RATE REQUIREMENTS UNDER SECTION 1606 OF THE RECOVERY ACT ......................................................................................................................... 53 25. RECOVERY ACT TRANSACTIONS LISTED IN SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS AND RECIPIENT RESPONSIBILITIES FOR INFORMING SUBRECIPIENTS ................................................................................................... 53 26. DAVIS-BACON ACT AND CONTRACT WORKHOURS AND SAFETY STANDARD ACT ......................................................................................................................... 54 27. PROCUREMENT ...................................................................................... 54 GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITY SECRETARY H,TX 1. RESOLUTION OF CONFLICTING CONDITIONS Any apparent inconsistency between Federal statutes and regulations and the terms and conditions contained in this award must be referred to the DOE Award Admini strator for guidance. 2. CEILING ON ADMINISTRATIVE COSTS STATES a. State Recipients may not use more than 10 percent of amounts provided under the program for administrative expenses (EISA Sec 545 (c)(4)). These costs should be captured and summarized for each activity under the Projected Costs Within Budget: Administration. b. Recipients are expected to manage their administrative costs . DOE will not amend an award solely to provide additional funds for changes in administrative costs . The Recipient shall not be reimbursed on this project for any final administrative costs that are in exces s of the designated IO percent administrative cost ceiling. In addition, the Recipient shall neither count costs in excess of the administrative cost ceiling as cost share, nor allocate such costs to other federally sponsored project, unless approved by the Contracting Officer . LOCAL GOVERNMENT (Cities & Counties) and INDIAN TRIBES a. Local government and Indian Tribe Recipients may not use more than 10 percent of amounts provided under this program, or $75,000, whichever is greater (EISA Sec 545 (b)(3)(A)), for administrative expenses, excluding the costs of meeting the reporting requirements under Title V, Subtitle E of EISA. These costs should be captured and summarized for each activity under the Projected Costs Within Budget: Administration. b . Recipients are expected to manage their administrative costs . DOE will not amend an award solely to provide additional funds for changes in administrative costs . The Recipient shall not be reimbursed on this project for any final administrative costs that are in excess of the designated 10 percent administrative cost ceiling. In addition, the Recipient shall neither count costs in excess of the administrative cost ceiling as cost share, nor allocate such costs to other federally sponsored project, unless approved by the Contracting Officer. 3. LIMIT A TIO NS ON USE OF FUNDS a. By accepting funds under this award , you agree that none of the funds obligated on the award shall be expended, directly or indirectly, for gambling establishments, aquariums , zoos , golf courses or swimming pools . b . Local government and Indian tribe Recipients may not use more than 20 percent of the amounts provided or $250 ,000 , whichever is greater (EISA Sec 545 (b)(3)(B)), for the establishment ofrevolving loan funds . c. Local government and Indian tribe Recipients may not use more than 20 percent of the amounts provided or $250 ,000 , whichever is greater (EISA Sec 545 (b)(3)(C)), for subgrants to nongovernmental organizations for the purpose of assisting in the implementation of the energy efficiency and conservation strategy of the eligible unit of local government or Indian tribe . 4. REIMBURSABLE INDIRECT COSTS AND FRINGE BEN GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. ECORD CITY SECRETARY ,TX a. The Recipient is expected to manage their final negotiated project budgets, including their indirect costs and fringe benefit costs. DOE will not amend an award solely to provide additional funds for changes in the indirect and/or fringe benefit co sts or for changes in rates used for calculating these costs. DOE recognizes that the inability to obtain full reimbursement for indirect or fringe benefit costs means the Recipient must absorb the underrecovery. Such underrecovery may be allocated as part of the Recipient's cost share. b. If actual allowable [indirect and/or fringe benefit] costs are le ss than those budgeted and funded under the award, the Recipient may use the difference to pay additional allowable direct costs during the project period . If at the completion of the award the Government 's share of total allowable costs (i.e., direct and indirect), is less than the total costs reimbursed , the Recipient mu st refund the difference. 5. USE OF PROGRAM INCOME If you earn program income during the project period as a result of this award, you may add the program income to the funds committed to the award and used to further eligible project objectives . 6. STATEMENT OF FEDERAL STEWARDSHIP DOE will exercise normal Federal stewardship in overseeing the project activities performed under this award. Stewardship activities include, but are not limited to, conducting site visits; reviewing performance and financial reports ; providing technical assistance and/or temporary intervention in unusual circumstances to correct deficiencies which develop during the project; assuring compliance with terms and conditions; and reviewing technical performance after project completion to ensure that the award objectives have been accomplished. 7. SITE VISITS DOE's authorized represe ntatives have the right to make site visits at reasonable times to review proj ect accomplishments and management control systems and to provide technical assistance , if required. You must pro vide , and must require your subawardees to provide , reasonable access to facilities , office space , re sources , and assistance for the safety and convenience of the government representatives in the performance of their duties . All site visits and evaluations must be performed in a manner that does not unduly interfere with or delay the work. 8. REPORTING REQUIREMENTS a . Requirements . The reporting requirements for this award are identified on the Federal Assistance Reporting Checklist, DOE F 4600 .2, attached to this award . Failure to comply with these reporting requirements is considered a material noncompliance with the terms of the award. Noncompliance may result in withholding of future payments, suspension or termination of the current award , and withholding of future awards. A willful failure to perform , a history of failure to perform, or unsatisfactory performance of this and/or other financial assistance awards , may also re sult in a debarment action to preclude future awards by Federal agencies. b . Additional Recovery Act Reporting Requirements are found in the Provision below labeled : "REPORTING AND REGISTRATION REQUIREMENTS UNDER SECTION 1512 OF THE RECOVERY ACT." 9. PUBLICATIONS a . You are encouraged to publish or otherwise make publicly available the results of the work conducted under the award. GHG Ass~ssment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc . b. An acknowledgment of DOE support and a disclaimer must appear in the publication of any material, whether copyrighted or not, based on or developed under this project, as follows: Acknow ledgment: "This material is based upon work supported by the Department of Energy [National Nuclear Security Administration] [add name(s) of other agencies , if applicable] under Award Number(s) [enter the award number(s)]." Disclaim er: "This report was prepared as an account of work sponsored by an agency of the United States Government. Neither the United States Government nor any agency thereof, nor any of their employees, makes any warranty, express or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name , trademark, manufacturer, or otherwise does not necessarily constitute or imply its endorsement, recommendation, or favoring by the United States Government or any agency thereof. The views and opinions of authors expressed herein do not necessarily state or reflect those of the United States Government or any agency thereof." 10. FEDERAL, STATE, AND MUNICIPAL REQUIREMENTS You must obtain any required permits, ensure the safety and structural integrity of any repair, replacement, construction and/or alteration, and comply with applicable federal , state, and municipal laws, codes, and regulations for work performed under this award . 11. LOBBYING RESTRICTIONS By accepting funds under this award, you agree that none of the funds obligated on the award shall be expended, directly or indirectly, to influence congressional action on any legislation or appropriation matters pending before Congress, other than to communicate to Members of Congress as described in 18 U.S .C. 1913 . This restriction is in addition to those prescribed elsewhere in statute and regulation. 12. NATIONAL ENVIRONMENTAL POLICY ACT (NEPA) REQUIREMENTS You are restricted from taking any action using Federal funds , which would have an adverse effect on the environment or limit the choice of reasonable alternatives prior to DOE providing either a NEPA clearance or a final NEPA decision regarding this project. If you move forward with activities that are not authorized for Federal funding by the DOE Contracting Officer in advance of the final NEPA decision, you are doing so at risk of not receiving Federal funding and such costs may not be recognized as allowable cost share . If this award includes construction activities, you must submit an environmental evaluation report/evaluation notification form addressing NEPA issues prior to DOE initiating the NEPA process. 13. HISTORIC PRESERVATION Prior to the expenditure of Project funds to alter any historic structure or site, the Recipient or subrecipient shall ensure that it is compliant with Section 106 of the National Historic Preservation Act (NHPA), consistent with DO E's 2009 letter of delegation of authority regarding the NHP A. Section 106 applies to historic properties that are listed in or eligible for listing in the National Register of Historic Places. If applicable, the Recipient or subrecipient must contact the State Historic Preservation Office , and the T "}) 1 Historic Preservation Officer (THPO) to coordinate the Section 36 GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc . CITY SECRETARY FT. 4 CFR Part 800. SHPO contact information is available at the following link: http://www.ncshpo.org/find /index.htm. THPO contact information is available at the following link: http://www .nathpo.org/map.html. Section 1 lO(k) of the NHPA applies to DOE funded activities. If applicable, the Recipient or subrecipient certifies that it will retain sufficient documentation, to demonstrate that the Recipient or subrecipient has received required approval(s) from the SHPO or THPO for the Project. Recipients or subrecipients shall avoid taking any action that results in an adverse effect to historic properties pending compliance with Section 106. The Recipient or subrecipient shall deem compliance with Section 106 of the NHP A complete only after it has received this documentation. The Recipient or subrecipient shall make this documentation available to DOE on DOE's request (for example, during a post-award audit). 14. WASTE STREAM The Recipient assures that it will create or obtain a waste management plan addressing waste generated by a proposed Project prior to the Project generating waste. This waste management plan will describe the Recipient's or subrecipient's plan to dispose of any sanitary or hazardous waste ( e.g., construction and demolition debris, old light bulbs, lead ballasts , piping, roofing material, discarded equipment, debris, and asbestos) generated as a result of the proposed Project. The Recipient shall ensure that the Project is in compliance with all Federal, state and local regulations for waste disposal. The Recipient shall make the waste management plan and related documentation available to DOE on DOE's request (for example, during a post-award audit). 15. DECONTAMINATION AND/OR DECOMMISSIONING (D&D) COSTS Notwithstanding any other provisions of this Agreement , the Government shall not be responsible for or have any obligation to the Recipient for (i) Decontamination and/or Decommissioning (D&D) of any of the Recipient 's facilitie s, or (ii) any costs which may be incurred by the Recipient in connection with the D&D of any of its facilities due to the performance of the work under this Agreement, whether said work was performed prior to or sub sequent to the effective date of the Agreement. 16. SUBGRANTS AND LOANS a. The Recipient hereby warrants that it will ensure that all activities by sub-grantee(s) and loan recipients to accomplish the approved Project Description or Statement of Project Objectives are eligible activities under 42 U.S .C . 171534(1)-(13). State recipients hereby warrant that they will ensure that all activities by sub- grantee(s) and loan recipients pursuant to 42 U.S .C. 17155(c)(l)(A) to accomplish the approved Project Description or Statement of Project objects are eligible activities under 42 U .S.C. 171534(3)-(13). b. Upon the Recipient's selection of the sub-grantee(s) and loan recipients , the Recipient shall notify (i.e. approval not required) the DOE Contracting Officer with the following information for each, regardless of dollar amount: Name of Sub-Grantee DUNS Number A ward Amount Statem~nt of work including applicable activities GHG Assessrnent Contract -DEM 10-06 -GHG t-Shaw Environmental & Infrastructure , Inc. OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX State recipients shall notify the DOE Contracting Officer with the above information within 180 days of the award date in Block 27 of the Assistance Agreement Cover Page. c. In addition to the information in paragraph b. above, for each sub-grant and loan that has an estimated cost greater than $2 ,000,000, the recipient must submit for approval by the Contracting Officer, a SF424A Budget Information -Nonconstruction Programs, and PMC 123 .1 Cost Reasonableness Determination for Financial Assistance ( available at http://www.eere-pmc.energy.gov/forms.aspx). 17. JUSTIFICATION OF BUDGET COSTS a. In the original application , the recipient did not provide sufficient information to justify the approval or release of funds for the proposed activ ities. In order to receive reimbursement for the costs associated with the activitie s listed in the approved Statement of Project Objectives (SOPO), a justification for all proposed costs must be submitted to the DOE Contracting Officer. b. The Recipient must provide justification for the following costs: Personnel Costs: The Recipient must submit cost justification for the following personnel costs : for approval by the Contracting Officer. Fringe Benefit Costs: The Recipient must submit a fringe benefit rate proposal/agreement for approval by the Contracting Officer. Travel Costs: The Recipient must submit cost justification for the following travel costs : for approval by the Contracting Officer. Equipment Costs : The Recipient must submit vendor quotes for equipment with an individual item cost of $50 ,000 or more, for approval by the Contracting Officer. Supplies Costs : The Recipient must submit cost justification for the following supplies costs: for approval by the Contracting Officer. Contractual Costs: 1. The recipient shall provide the following information for each individual or company that will receive EECBG funding , regardless of dollar amount: Name DUNS Number A ward Amount Statement of work including applicable activities NEPA documentation, as applicable 2. In addition to the information in paragraph 1. above, for each individual or company that has an estimated cost greater than $2,000,000, the Recipient must submit a separate SF424A Budget Information -Nonconstruction Programs, and Budget Justification. The DOE Contracting Officer may require additional information concerning these individuals or companies prior to providing written approval. Other Direct Costs: GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITY SECRETARY FT p1WC.IR;r~ The Recipient must submit cost justification for the following other direct costs: for approval by the Contracting Officer. Indirect Costs: The Recipient must submit an indirect rate proposal/agreement for approval by the Contracting Officer. c. Upon written notification and/or approval by the Contracting Officer, the Recipient may then receive payment for the activities listed in the approved SOPO for allowable costs incurred in accordance with the payment provisions contained in the Special Terms and Conditions of this agreement. These written · notifications and/or approvals will be incorporated into the award by formal modification at a future date. 18. ADVANCE UNDERSTANDING CONCERNING PUBLICLY FINANCED ENERGY IMPROVEMENT PROGRAMS The parties recognize that the Recipient may use funds under this award for Property- Assessed Clean Energy (PACE) loans, Sustainable Energy Municipal Financing, Clean Energy Assessment Districts, Energy Loan Tax Assessment Programs (EL TAPS), or any other form or derivation of Special Taxing District whereby taxing entities collect payments through increased tax assessments for energy efficiency and renewable energy building improvements made by their constituents. The Department of Energy intends to publish "Best Practices" or other guidelines pertaining to the use of funds made available to the Recipient under this award pertaining to the programs identified herein. By accepting this award, the Recipient agrees to incorporate, to the maximum extent practicable, those Best Practices and other guidelines into any such program(s) within a reasonable time after notification by DOE that the Best Practices or guidelines have been made available. The Recipient also agrees , by its acceptance of this award, to require its sub-recipients to incorporate to the maximum extent practicable the best practices and other guideline into any such program used by the sub-recipient. 19. SPECIAL PROVISIONS RELATING TO WORK FUNDED UNDER AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (May 2009) Preamble The American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, (Recovery Act) was enacted to preserve and create jobs and promote economic recovery, assist those most impacted by the recession, provide investments needed to increase economic efficiency by spurring technological advances in science and health, invest in transportation, environmental protection, and other infrastructure that will provide long-term economic benefits, stabilize State and local government budgets, in order to minimize and avoid reductions in essential services and counterproductive State and local tax increases. Recipients shall use grant funds in a manner that maximizes job creation and economic benefit. The Recipient shall comply with all terms and conditions in the Recovery Act relating generally to governance, accountability, transparency, data collection and resources as specified in Act itself and as discussed below. GHG As$eS~r:T)e.r,it_Contract-DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. Recipients should begin planning acti vities for their first tier subrecipients , including obtaining a DUNS number ( or updating the existing DUNS record), and registering with the Central Contractor Registration (CCR). Be advised that Reco very Act funds can be used in conjunction with other funding as necessary to complete projects, but tracking and reporting must be separate to meet the reporting requirements of the Recovery Act and related guidance . For projects funded by sources other than the Reco very Act, Contractors must keep separate records for Recovery Act funds and to ensure those records comply with the requirements of the Act. The Government has not fully developed the implementing instructions of the Recovery Act, particularly concerning specific procedural requirements for the new reporting requirements. The Recipient will be provided these details as they become available. The Recipient must comply with all requirements of the Act. If the recipient believes there is any inconsistency between ARRA requirements and current award terms and conditions , the is sues will be referred to the Contracting Officer for reconciliation. Definitions For purposes of this clause, Co vered Funds means funds expended or obligated from appropriations under the American Recovery and Reinvestment Act of 2009 , Pub. L. 111-5. Covered Funds will have special accounting codes and will be identified as Recovery Act funds in the grant, cooperative agreement or TIA and/or modification using Recovery Act funds. Covered Funds must be reimbursed by September 30 , 2015. Non-Federal employer means any employer with respect to covered funds --the contractor, subcontractor, grantee, or recipient, as the case may be, if the contractor, subcontractor, grantee, or recipient is an employer; and any professional membership organization, certification of other professional body, any agent or licensee of the Federal government, or any person acting directly or indirectly in the interest of an employer receiving covered funds ; or with re spect to covered funds received by a State or local government, the State or local government receiving the funds and any contractor or subcontractor receiving the funds and any contractor or subcontractor of the State or local go v ernment; and does not mean any department, agency, or other entity of the federal go vernment. Recipient means any entity that receives Reco very Act funds directly from the Federal government (including Recovery Act funds received through grant , loan , or contract) other than an individual and includes a State that recei ves Recovery Act Funds. Special Provisions A. Flow Down Requirement Recipients must include these special terms and conditions in any subaward. B. Segregation of Costs GHG As'sessri1erit Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITY SECRETARY ~!:ii ni~·a 4TX ' Recipients must segregate the obligations and expenditures related to funding under the Recovery Act. Financial and accounting systems should be revised as necessary to segregate, track and maintain these funds apart and separate from other revenue streams. No part of the funds from the Recovery Act shall be commingled with any other funds or used for a purpose other than that of making payments for costs allowable for Recovery Act projects. C. Prohibition on Use of Funds None of the funds provided under this agreement derived from the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5 , may be used by any State or local government, or any private entity, for any casino or other gambling establishment, aquarium, zoo , golf course, or swimming pool. D. Access to Records With respect to each financial assistance agreement awarded utilizing at least some of the funds appropriated or otherwise made available by the American Recovery and Reinvestment Act of 2009 , Pub. L. 111-5, any representative of an appropriate inspector general appointed under section 3 or 8G of the Inspector General Act of 1988 (5 U.S .C . App .) or of the Comptroller General is authorized -- ( 1) to examine any records of the contractor or grantee, any of its subcontractors or subgrantees, or any State or local agency administering such contract that pertain to, and involve transactions that relate to , the subcontract, subcontract, grant, or subgrant; and (2) to interview any officer or employee of the contractor, grantee, sub grantee, or agency regarding such transactions. E. Publication An application may contain technical data and other data, including trade secrets and/or privileged or confidential information, which the applicant does not want disclosed to the public or used by the Government for any purpose other than the application. To protect such data, the applicant should specifically identify each page including each line or paragraph thereof containing the data to be protected and mark the cover sheet of the application with the following Notice as well as referring to the Notice on each page to which the Notice applies: Notice of Restriction on Disclosure and Use of Data The data contained in pages ----of this application have been submitted in confidence and contain trade secrets or proprietary information, and such data shall be used or disclosed only for evaluation purposes, provided that if this applicant receives an award as a result of or in connection with the submission of this application, DOE shall have the right to use or disclose the data here to the extent provided in the award. This restriction does not limit the Government's right to use or disclose data obtained without restriction from any source, including the applicant. Information about this agreement will be published on the Internet and link ecf"ffl"'the'"W1~:tte-- GHG Asses.s.ment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD P QC RETARY FT. WORTH, TX www.recovery.gov, maintained by the Accountability and Transparency Board. The Board may exclude posting contractual or other information on the website on a case-by-case basis when necessary to protect national security or to protect information that is not subject to disclosure under sections 552 and 552a of title 5 , United States Code. F . Protecting State and Local Go v ernment and Contractor Whistleblowers. The requirements of Section 1553 of the Act are summarized below. They include, but are not limited to: Prohibition on Reprisals: An employee of any non-Federal employer receiving covered funds under the American Recovery and Reinvestment Act of 2009 , Pub. L. 111-5 , may not be discharged, demoted, or otherwise discriminated against as a reprisal for disclosing, including a disclosure made in the ordinary course of an employee's duties , to the Accountability and Transparency Board, an inspector general , the Comptroller General , a member of Congress, a State or Federal regulatory or law enforcement agency, a person with supervisory authority over the employee ( or other person working for the employer who has the authority to investigate, discover or terminate misconduct), a court or grant jury, the head of a Federal agency, or their representatives information that the employee believes is ev idence of: -gross management of an agency contract or grant relating to covered funds ; - a gross waste of covered funds; - a substantial and specific danger to public health or safety related to the implementation or use of covered funds; -an abuse of authority related to the implementation or use of covered funds; or -as violation oflaw, rule , or regulation related to an agency contract (including the competition for or negotiation of a contract) or grant, awarded or issued relating to covered funds . Agency Action: Not later than 30 days after receiving an inspector general report of an alleged reprisal , the head of the agency shall determine whether there is sufficient basis to conclude that the non-Federal employer has subjected the employee to a prohibited reprisal. The agency shall either issue an order denying relief in whole or in part or shall take one or more of the following actions: -Order the employer to take affirmative action to abate the reprisal. -Order the employer to reinstate the person to the position that the person held before the reprisal , together with compensation including back pay, compensatory damages, employment benefits, and other terms and conditions of employment that would apply to the person in that position if the reprisal had not been taken. -Order the employer to pay the employee an amount equal to the aggregate amount of all costs and expenses (including attorneys' fees and expert witnesses' fees) that were reasonably incurred by the employee for or in connection with, bringing the complaint regarding the reprisal , as determined by the head of a court of competent jurisdiction. Nonenforceability of Certain Pro v isions Waiv ing Rights and remedies or Requiring Arbitration : Except as provided in a collective bargaining agreement, the rights and remedies provided to aggriev ed employees by this section may not be waived ~b~a[!nY.lJlgi:l~~~-. GHG Assessment /Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . Of i:i~~~ORD CITY SECRE'f. RY FT. WORTH! TX policy, form , or condition of employment, including any predispute arbitration agreement. No predispute arbitration agreement shall be valid or enforceable if it requires arbitration of a dispute arising out of this section. Requirement to Post Notice of Rights and Remedies: Any employer receiving covered funds under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, shall post notice of the rights and remedies as required therein. (Refer to section 1553 of the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5, www.Recovery.gov, for specific requirements of this section and prescribed language for the notices.). G. Reserved H. False Claims Act Recipient and sub-recipients shall promptly refer to the DOE or other appropriate Inspector General any credible evidence that a principal, employee, agent, contractor, sub-grantee, subcontractor or other person has submitted a false claim under the False Claims Act or has committed a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity or similar misconduct involving those funds. I. Information in Support of Recovery Act Reporting Recipient may be required to submit backup documentation for expenditures of funds under the Recovery Act including such items as timecards and invoices. Recipient shall provide copies of backup documentation at the request of the Contracting Officer or designee. J. Availability of Funds Funds obligated to this award are available for reimbursement of costs until 36 months after the award date. K. Additional Funding Distribution and Assurance of Appropriate Use of Funds Certification by Governor-For funds provided to any State or agency thereof by the American Reinvestment and Recovery Act of 2009, Pub. L. 111-5, the Governor of the State shall certify that: 1) the state will request and use funds provided by the Act; and 2) the funds will be used to create jobs and promote economic growth. Acceptance by State Legislature --If funds provided to any State in any division of the Act are not accepted for use by the Governor, then acceptance by the State legislature, by means of the adoption of a concurrent resolution, shall be sufficient to provide funding to such State. Distribution --After adoption of a State legislature's concurrent resolution, funding to the State will be for distribution to local governments , councils of government, public entities, and public-private entities within the State either by formula or at the State's discretion. GHG Assessment Contract-DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. r-------- OFFICIAL RECORD CRETARY FT. WORTH, TX L. Certifications With respect to funds made available to State or local governments for infrastructure investments under the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5 , the Governor, mayor, or other chief executi ve, as appropriate, certified by acceptance of this award that the infrastructure investment has received the full review and vetting required by law and that the chief executive accepts responsibility that the infrastructure investment is an appropriate use of taxpayer dollars. Recipient shall pro vide an additional certification that includes a description of the investment, the estimated total cost, and the amount of covered funds to be used for posting on the Internet. A State or local agency may not receive infrastructure investment funding from funds made available by the Act unless this certification is made and posted. 20. REPORTING AND REGISTRATION REQUIREMENTS UNDER SECTION 1512 OF THE RECOVERY ACT (a) This award requires the recipient to complete projects or activities which are funded under the American Recovery and Reinvestment Act of 2009 (Recovery Act) and to report on use of Reco v ery Act funds provided through this award . Information from these reports will be made available to the public. (b) The reports are due no later than ten calendar days after each calendar quarter in which the Recipient receives the assistance award funded in whole or in part by the Recovery Act. (c) Recipients and their first-tier subrecipients must maintain current registrations in the Central Contractor Registration (http ://www.ccr.go v ) at all times during which they have active federal awards funded with Reco very Act funds. A Dun and Bradstreet Data Univ ersal Numbering System (DUNS) Number (http ://www.dnb.com) is one of the requirements for registration in the Central Contractor Registration. ( d) The recipient shall report the information described in section 1512( c) of the Recovery Act using the reporting instructions and data elements that will be provided online at http ://www.F ed eralR eporting.gov and ensure that any information that is pre-filled is corrected or updated as needed. 21. NOTICE REGARDING THE PURCHASE OF AMERICAN-MADE EQUIPMENT AND PRODUCTS --SENSE OF CONGRESS It is the sense of the Congress that, to the greatest extent practicable, all equipment and products purchased with funds made available under this award should be American-made. *Spec ial Note: Definitization of the Provisions entitled, "REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS -SE CTION 1605 OF THE AM ERICAN RECOVERY AND REINVESTMENT ACT OF 2009 " and "REQUIRED USE OF AMERICAN IRON , STEEL, AND MANUFACTURED GOODS (COVERED UNDER INTERNATIONAL AGREEMENTS)-SECTION 1605 OF THE AMERICAN RE COVERY AND REINV E STMENT ACT OF 2009" will ~~~~.QeJ;~IQn..aD41 review of final activ iti es . GHG Assessment Contract-DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . OFFICIAL RECORD CITY SECRETARY TX 22. REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS -SECTION 1605 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 If the Recipient determines at any time that any construction, alteration, or repair activity on a public building or public works will be performed during the course of the project, the Recipient shall notify the Contracting Officer prior to commencing such work and the following provisions shall apply. (a) D efinitions. As used in this award term and condition- (1) Manufactured good means a good brought to the construction site for incorporation into the building or work that has been- ( i) Process ed into a specific form and shape ; or (ii) Combined with other raw material to create a material that has different properties than the properties of the individual raw materials. (2) Public building and public w ork means a public building of, and a public work of, a governmental entity (the United States ; the District of Columbia; commonwealths, territories , and minor outlying islands of the United States; State and local governments; and rnulti- State, regional , or interstate entities which have governmental functions). These buildings and works may include, without limitation, bridges , darns , plants, highways , parkways, streets, subways , tunnels , sewers, mains, power lines , pumping stations , heavy generators , railways, airports, terminals , docks , piers , wharves , ways, lighthouses , buoys, jetties, breakwaters, lev ees , and canals, and the construction, alteration, maintenance, or repair of such buildings and works. (3) Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. (b) Domestic pref erence. (1) This award term and condition implements Section 1605 of the American Recovery and Reinvestment Act of2009 (Recovery Act) (Pub. L. 111-5), by requiring that all iron, steel, and manufactured goods used in the project are produced in the United States except as provided in paragraph (b)(3) of this s ection and condition. (2) This requirement does not apply to the material listed by the Federal Government as follows: To Be Determined (3) The award official may add other iron, steel , and/or manufactured goods to the list in paragraph (b)(2) of this section and condition if the Federal Government determines that- (i) The cost of the domestic iron, steel , and/or manufactured goods would be unreasonable. The cost of domestic iron, steel , or manufactured goods used in the project is unreasonable when the cumulative cost of such material will increase the cost of the ove 1 ro · ect by · rnore ·than· 25 percent; GHG Assessr;nen\ Contract -DEM 10-06 -GHG Shaw Envi ronmental & Infrastructure, Inc. OFFICIAL RECORD CITY SECRETARY ag H,TX (ii) The iron, steel , and/or manufactured good is not produced, or manufactured in the United States in sufficient and reasonably available quantities and of a satisfactory quality; or (iii) The application of the restriction of section 1605 of the Recovery Act would be inconsistent with the public interest. (c) R equ est for determination of inapplicability of Section 1605 of th e R ecovery Act. (l)(i) Any recipient request to use foreign iron, steel , and/or manufactured goods in accordance with paragraph (b)(3) of this section shall include adequate information for Federal Government evaluation of the request, including- (A) A description of the foreign and domestic iron, steel , and/or manufactured goods; (B) Unit of measure ; (C) Quantity; (D) Cost; (E) Time of delivery or availability; (F) Location of the project; (G) Name and address of the proposed supplier; and (H) A detailed justification of the reason for use of foreign iron, steel , and/or manufactured goods cited in accordance with paragraph (b )(3) of this section. (ii) A request based on unreasonable cost shall include a reasonable survey of the market and a completed cost comparison table in the format in paragraph ( d) of this section. (iii) The cost of iron , steel , and/or manufactured goods material shall include all delivery costs to the construction site and any applicable duty. (iv) Any recipient request for a determination submitted after Recovery Act funds have been obligated for a project for construction, alteration, maintenance, or repair shall explain why the recipient could not reasonably foresee the need for such determination and could not have requested the determination before the funds were obligated. If the recipient does not submit a satisfactory explanation, the award official need not make a determination. (2) If the Federal Government determines after funds have been obligated for a project for construction, alteration, maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official will amend the award to allow use of the foreign iron, steel , and/or relevant manufactured goods. When the basis for the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds , and/or other actions taken to cover costs associated with acquiring or using the foreign iron, steel , and/or relevant manufactured goods. When the basis for the exception is the unreasonable cost of the domestic iron, si,w.~.1.1..&~u.wa~.u.u.~ .. goods , the award official shall adjust the award amount or redistribut least the differential established in 2 CFR 176.11 O(a). GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. CITY SECRETARY FT. WORTH , TX Pa e 48 of 64 (3) Unless the Federal Government determines that an exception to section 1605 of the Recovery Act applies , use of foreign iron, steel , and/or manufactured goods is noncompliant with section 1605 of the American Recovery and Reinvestment Act. (d) Data. To permit evaluation ofrequests under paragraph (b) of this section based on unreasonable cost, the Recipient shall include the following information and any applicable supporting data based on the survey of suppliers: Foreign and Domestic Items Cost Comparison Cost Description Unit of measure Quantity (dollars)* It em 1: Fo rei gn stee l, iron, or manufactured good Domesti c steel, iron , or manufactured good Item 2: Fore ign stee l, iron, or manufactured good Domestic stee l, iron , or manufactured good List name, address , telephone number, email address , and contact for suppliers surveyed. Attach copy of response; if oral , attach summary . Include other applicable supporting information. *Include all delivery costs to the construction site. 23. REQUIRED USE OF AMERICAN IRON, STEEL, AND MANUFACTURED GOODS (COVERED UNDER INTERNATIONAL AGREEMENTS) -SECTION 1605 OF THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009 (a) Definitions. As used in this award term and condition- D esignated country -(1) A World Trade Organization Government Procurement Agreement country (Aruba, Austria, Belgium, Bulgaria, Canada, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hong Kong, Hungary, Iceland, Ireland, Israel , It aly, Japan , Korea (Republic of), Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal , Romania, Singapore, Slovak Republic , Slo v enia, Spain, Sweden, Switzerland, and United Kingdom ; (2) A Free Trade Agreement (FTA) country (Australia, Bahrain, Canada, Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras , Israel , Mexico, Morocco , Nicaragua, Oman, Peru, or Singapore); or (3) A United States-European Communities Exchange of Letters (May 15 , 1995) country: Austria, Belgium, Bulgaria, Cyprus , Cz ech Republic, Denmark, Estonia, Finland , France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxemb'-f"'~ol.1'.Ll:i.w.i..._ ___ _ Netherlands; Poland, Portugal , Romania, Slovak Republic, Slovenia, S1-1P1i ~~~a'i'I United Kingdom. GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. Designated country iron, steel, and/or manufactured goods -(1) Is wholly the growth , product, or manufacture of a designated country; or (2) In the case of a manufactured good that consist in whole or in part of materials from another country, has been substantially transformed in a designated country into a new and different manufactured good distinct from the materials from which it was transformed . Domestic iron, stee l, and/or manufactured good -(1) Is wholly the growth, product, or manufacture of the United States; or (2) In the case of a manufactured good that consists in whole or in part of materials from another country, has been substantially transformed in the United States into a new and different manufactured good distinct from the materials from which it was transformed. There is no requirement with regard to the origin of components or subcomponents in manufactured goods or products , as long as the manufacture of the goods occurs in the United States. Foreign iron, steel, and/or manufactured good means iron , steel and/or manufactured good that is not domestic or designated country iron, steel, and/or manufactured good. Manufactured good means a good brought to the construction site for incorporation into the building or work that has been- ( 1) Processed into a specific form and shape; or (2) Combined with other raw material to create a material that has different properties than the properties of the individual raw materials. Public building and public work means a public building of, and a public work of, a governmental entity (the United States; the District of Columbia; commonwealths , territories , and minor outlying islands of the United States ; State and local governments; and multi- State, regional , or interstate entities which have governmental functions). These buildings and works may include, without limitation, bridges, dams , plants , highways, parkways , streets , subways, tunnels, sewers, mains , power lines, pumping stations, heavy generators, railways, airports , terminals, docks , piers, wharves , ways , lighthouses , buoys , jetties, breakwaters, levees , and canals, and the construction, alteration, maintenance, or repair of such buildings and works. Steel means an alloy that includes at least 50 percent iron, between .02 and 2 percent carbon, and may include other elements. (b) Iron , steel, and manufactured goods. (1) The award term and condition described in this section implements- (i) Section 1605(a) of the American Recovery and Reinvestment Act of 2009 (Pub. L. 111-5) (Recovery Act), by requiring that all iron , steel , and manufactured goods used in the project are produced in the United States; and (ii) Section 1605(d), which requires application of the Buy America reqmrement ... i;.,.n,,a,.,,,1~n manner consistent with U.S. obligations under international agreeme GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. CITY SECRETARY TX section 1605 of the Recovery Act do not apply to designated country iron, steel, and/or manufactured goods. The Buy American requirement in section 1605 shall not be applied where the iron, steel or manufactured goods used in the project are from a Party to an international agreement that obligates the recipient to treat the goods and services of that Party the same as domestic goods and services. This obligation shall only apply to projects with an estimated value of $7,443,000 or more. (2) The recipient shall use only domestic or designated country iron, steel, and manufactured goods in performing the work funded in whole or part with this award, except as provided in paragraphs (b )(3) and (b )( 4) of this section. (3) The requirement in paragraph (b)(2) of this section does not apply to the iron, steel, and manufactured goods listed by the Federal Government as follows: To Be Determined (4) The award official may add other iron, steel, and manufactured goods to the list in paragraph (b)(3) of this section if the Federal Government determines that- (i) The cost of domestic iron, steel, and/or manufactured goods would be unreasonable. The cost of domestic iron, steel, and/or manufactured goods used in the project is unreasonable when the cumulative cost of such material will increase the overall cost of the project by more than 25 percent; (ii) The iron, steel, and/or manufactured good is not produced, or manufactured in the United States in sufficient and reasonably available commercial quantities of a satisfactory quality; or (iii) The application of the restriction of section 1605 of the Recovery Act would be inconsistent with the public interest. ( c) Request for determination of inapplicability of section 1605 of the Recovery Act or the Buy American Act. (l)(i) Any recipient request to use foreign iron, steel, and/or manufactured goods in accordance with paragraph (b)(4) of this section shall include adequate information for Federal Government evaluation of the request, including- (A) A description of the foreign and domestic iron, steel, and/or manufactured goods; (B) Unit of measure; (C) Quantity; (D) Cost; (E) Time of delivery or availability; (F) Location of the project; (G) Name and address of the proposed supplier; and GHG Assessm.ent <;;Qntract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD CITY SECRETARY FT. WORTH, TX Page 51 of 64 . (H) A detailed justification of the reason for use of foreign iron, steel, and /or manufactured goods cited in accordance with paragraph (b)(4) of this section. (ii) A request based on unreasonable cost shall include a reasonable survey of the market and a completed cost comparison table in the format in paragraph ( d) of this section. (iii) The cost of iron , steel , or manufactured goods shall include all delivery costs to the construction site and any applicable duty. (iv) Any recipient request for a determination submitted after Recovery Act funds have been obligated for a project for construction, alteration, maintenance, or repair shall explain why the recipient could not reasonably foresee the need for such determination and could not have requested the determination before the funds were obligated. If the recipient does not submit a satisfactory explanation, the award official need not make a determination. (2) If the Federal Government determines after funds have been obligated for a project for construction, alteration , maintenance, or repair that an exception to section 1605 of the Recovery Act applies, the award official will amend the award to allow use of the foreign iron, steel , and/or relevant manufactured goods. When the basis for the exception is nonavailability or public interest, the amended award shall reflect adjustment of the award amount, redistribution of budgeted funds, and/or other appropriate actions taken to cover costs associated with acquiring or using the foreign iron, steel , and/or relevant manufactured goods. When the basis for the exception is the unreasonable cost of the domestic iron, steel, or manufactured goods , the award official shall adjust the award amount or redistribute budgeted funds, as appropriate, by at least the differential established in 2 CFR 176.110( a). (3) Unless the Federal Government determines that an exception to section 1605 of the Recovery Act applies, use of foreign iron, steel, and/or manufactured goods other than designated country iron, steel, and /or manufactured goods is noncompliant with the applicable Act. (d) Data. To permit evaluation ofrequests under paragraph (b) of this section based on unreasonable cost, the applicant shall include the following information and any applicable supporting data based on the survey of suppliers: Foreign and Domestic Items Cost Comparison Cost Description Unit of measure Quantity (dollars)* Item 1: Foreign steel, iron, or manufactured good Domestic steel , iron, or manufactured good Item 2 : Foreign steel , iron, or manufactured good Domestic steel , iron, or manufactured good GHG Asses'srh~nt Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. List name, address, telephone number, email address, and contact for suppliers surveyed. Attach copy of response; if oral, attach summary. Include other applicable supporting information. *Include all delivery costs to the construction site. 24. WAGE RATE REQUIREMENTS UNDER SECTION 1606 OF THE RECOVERY ACT (a) Section 1606 of the Recovery Act requires that all laborers and mechanics employed by contractors and subcontractors on projects funded directly by or assisted in whole or in part by and through the Federal Government pursuant to the Recovery Act shall be paid wages at rates not less than those prevailing on projects of a character similar in the locality as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code. Pursuant to Reorganization Plan No. 14 and the Copeland Act, 40 U .S.C. 3145 , the Department of Labor has issued regulations at 29 CFR parts 1, 3 , and 5 to implement the Davis-Bacon and related Acts . Regulations in 29 CFR 5.5 instruct agencies concerning application of the standard Davis-Bacon contract clauses set forth in that section. Federal agencies providing grants, cooperative agreements, and loans under the Recovery Act shall ensure that the standard Davis-Bacon contract clauses found in 29 CFR 5.5(a) are incorporated in any resultant covered contracts that are in excess of $2,000 for construction, alteration or repair (including painting and decorating). (b) For additional guidance on the wage rate requirements of section 1606, contact your awarding agency. Recipients of grants, cooperative agreements and loans should direct their initial inquiries concerning the application of Davis-Bacon requirements to a particular federally assisted project to the Federal agency funding the project. The Secretary of Labor retains final coverage authority under Reorganization Plan Number 14 . 25. RECOVERY ACT TRANSACTIONS LISTED IN SCHEDULE OF EXPENDITURES OF FEDERAL A WARDS AND RECIPIENT RESPONSIBILITIES FOR INFORMING SUBRECIPIENTS (a) To maximize the transparency and accountability of funds authorized under the American Recovery and Reinvestment Act of 2009 (Pub. L. 111 -5) (Recovery Act) as required by Congress and in accordance with 2 CFR 215.21 "Uniform Administrative Requirements for Grants and Agreements" and 0MB Circular A-102 Common Rules provisions , recipients agree to maintain records that identify adequately the source and application of Recovery Act funds. 0MB Circular A-102 is available at http ://www.whitehouse.gov/omblcircularsl al 02 /al 02 .html. (b) For recipients covered by the Single Audit Act Amendments of 1996 and 0MB Circular A-133 , "Audits of States , Local Governments, and Non-Profit Organizations," recipients agree to separately identify the expenditures for Federal awards under the Recovery Act on the Schedule of Expenditures of Federal Awards (SEFA) and the Data Collection Form (SF- SAC) required by 0MB Circular A-133. 0MB Circular A-133 is available at http ://www.whitehouse.gov/omblcircularsl al 33/al 33 .html. This shall be J;;';;vmmT,~~'Tff--- GHG Assessmer:it,<::;ontract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc . identifying expenditures for Federal awards made under the Recovery Act separately on the SEF A, and as separate rows under Item 9 of Part III on the SF-SAC by CFDA number, and inclusion of the prefix "ARRA-" in identifying the name of the Federal program on the SEFA and as the first characters in Item 9d of Part III on the SF-SAC. (c) Recipients agree to separately identify to each subrecipient, and document at the time of subaward and at the time of disbursement of funds, the Federal award number, CFDA number, and amount of Recovery Act funds. When a recipient awards Recovery Act funds for an existing program, the information furnished to subrecipients shall distinguish the subawards of incremental Recovery Act funds from regular subawards under the existing program. ( d) Recipients agree to require their subrecipients to include on their SEF A information to specifically identify Recovery Act funding similar to the requirements for the recipient SEF A described above. This information is needed to allow the recipient to properly monitor subrecipient expenditure of ARRA funds as well as oversight by the Federal awarding agencies, Offices of Inspector General and the Government Accountability Office. 26. DAVIS-BACON ACT AND CONTRACT WORKHOURS AND SAFETY STANDARD ACT Definitions: For purposes of this provision, "Davis Bacon Act and Contract Work Hours and Safety Standards Act," the following definitions are applicable: (1) "Award" means any grant, cooperative agreement or technology investment agreement made with Recovery Act funds by the Department of Energy (DOE) to a Recipient. Such Award must require compliance with the labor standards clauses and wage rate requirements of the Davis-Bacon Act (DBA) for work performed by all laborers and mechanics employed by Recipients (other than a unit of State or local government whose own employees perform the construction) Subrecipients, Contractors, and subcontractors. (2) "Contractor" means an entity that enters into a Contract. For purposes of these clauses, Contractor shall include (as applicable) prime contractors, Recipients, Subrecipients, and Recipients ' or Subrecipients' contractors, subcontractors, and lower-tier subcontractors. "Contractor" does not mean a unit of State or local government where construction is performed by its own employees." (3) "Contract" means a contract executed by a Recipient, Subrecipient, prime contractor, or any tier subcontractor for construction, alteration, or repair. It may also mean (as applicable) (i) financial assistance instruments such as grants, cooperative agreements, technology inve stment agreements, and loans; and, (ii) Sub awards, contracts and subcontracts issued under financial assistance agreements. "Contract" does not mean a financial assistance instrument with a unit of State or local government where construction is performed by its own employees. (4) "Contracting Officer" means the DOE official authorized to execute an Award on behalfofDOE and who is responsible for the business management and non-program aspects of the financial assistance process . (5) "Recipient" means any entity other than an individual that receives an Award of Federal funds in the form of a grant, cooperative agreement, or technology investment agreement directly from the Federal Government and is financially accountable for the use of any DOE funds or property, and is legally responsible for carrying out the terms and conditions of the program and Award. -----, GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. (6) "Subaward" means an award of financial assistance in the form of money, or property in lieu of money, made under an award by a Recipient to an eligible Subrecipient or by a Subrecipient to a lower-tier subrecipient. The term includes financial assistance when provided by any legal agreement, even if the agreement is called a contract, but does not include the Recipient's procurement of goods and services to carry out the program nor does it include any form of assistance which is excluded from the definition of "Award" above. (7) "Subrecipient" means a non-Federal entity that expends Federal funds received from a Recipient to carry out a Federal program, but does not include an individual that is a beneficiary of such a program. (a) Davis Bacon Act (1) Minimum wages. (i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and, without subsequent deduction or rebate on any account ( except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the Contractor and such laborers and mechanics. Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1 (b )(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph (a)(l)(iv) of this section; also , regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds , or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill , except as provided in § 5 .5(a)(4). Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein, provided that the employer's payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under paragraph (a)(l)(ii) of this section) and the Davis- Bacon poster (WH-1321) shall be po sted at all times by the Contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers . (ii)(A) The Contracting Officer shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the Contract shall be classified in conformance with the wage determination. The Contracting Officer shall approve an additional classification and wage rate and fringe benefits therefore only when the following criteria have been met: (1) The work to be performed by the classification requested is not performed by a classification in the wage determination; (2) The classification is utilized in the area by the construction in f.t:?St--.T"-Jr,,"'Mlrti-------. GHG A~sessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. OFFICIAL RECORD CITY SECRETARY Pa cieTS~~l\TH, TX (3) The proposed wage rate, including any bona fide fringe benefits , bears a reasonable relationship to the wage rates contained in the wage determination. (B) If the Contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives , and the Contracting Officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by the Contracting Officer to the Administrator of the Wage and Hour Division, U.S. Department of Labor, Washington, DC 20210 . The Administrator, or an authorized representative , will approve , modify, or disapprove every additional classification action within 30 days of receipt and so advise the Contracting Officer or will notify the Contracting Officer within the 30-day period that additional time is necessary. (C) In the event the Contractor, the laborers or mechanics to be employed in the classification or their representatives, and the Contracting Officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the Contracting Officer shall refer the questions, including the views of all interested parties and the recommendation of the Contracting Officer, to the Administrator for determination. The Administrator, or an authorized representative , will issue a determination within 30 days of receipt and so advise the Contracting Officer or will notify the Contracting Officer within the 30-day period that additional time is necessary. (D) The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs (a)(l)(ii)(B) or (C) of this section, shall be paid to all workers performing work in the classification under this Contract from the first day on which work is performed in the classification. (iii) Whenever the minimum wage rate prescribed in the Contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate , the Contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof. (iv) If the Contractor does not make payments to a trustee or other third person, the Contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, provided that the Secretary of Labor has found, upon the written request of the Contractor, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the Contractor to set aside in a separate account assets for the meeting of obligations under the plan or program. (2) Withholding. The Department of Energy or the Recipient or Subrecipient shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld from the Contractor under this Contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the Contractor or any subcontractor the full amount of wages required by the Contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work ( or under the United States Housing Act of 193 7 or under the Housing Act of 1949 in the construction or development of the project), all or part of the wages required by the Contract, the Department of Energy, Recipient, or Subrecipient, may, afte:i-1,J~~IT'fl:Ot1'.'C'e'1U'"tttie-1 Contractor, sponsor, applicant, or owner, take such action as use GHG Ass;essmentBontract-DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. CITY SECRETARY FT. 4 the suspension of any further payment, advance, or guarantee of funds until such violations have ceased. (3) Payrolls and ba sic records. (i) Payrolls and basic records relating thereto shall be maintained by the Contractor during the course of the work and pre served for a period of three years thereafter for all laborers and mechanics working at the site of the work (or under the United States Housing Act of 1937 , or under the Housing Act of 1949 , in the construction or development of the project). Such records shall contain the name , address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid ( including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1 (b )(2)(B) of the Davi s-Bacon Act), daily and weekly number of hours worked, deductions made , and actual wages paid . Whenever the Secretary of Labor has found under 29 CFR 5 .5(a)(l)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section l(b)(2)(B) of the Davis-Bacon Act, the Contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanic s affected , and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs , the registration of the apprentices and trainees , and the ratios and wage rates presc ribed in the applicable programs . (ii) (A) The Contractor shall submit weekly for each week in which any Contract work is performed a copy of all payrolls to the Department of Energy if the agency is a party to the Contract, but if the agency is not such a party, the Contractor will submit the payrolls to the Recipient or Subrecipient (as applicable), applicant, sponsor, or owner, as the case may be, for transmission to the Department of Energy. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals . Instead, the payrolls shall only need to include an individually identifying number for each employee ( e.g., the last four digits of the employee's social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH-347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime Contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker, and shall provide them upon request to the Department of Energy if the agency is a party to the Contract, but if the agency is not such a party, the Contractor will submit them to the Recipient or Subrecipient (as applicable), applicant, sponsor, or owner, as the case may be, for transmission to the Department of Energy, the Contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to , ,. . the. prime contractor for its own records, without weekly Sttt~~ttel~~~-- GHG Assessment .Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure , Inc. OFFICIAL RECORD Feti ETARY FT. WORTH, TX sponsoring government agency (or the Recipient or Subrecipient (as applicable), applicant, sponsor, or owner). (B) Each payroll su bmitted shall be accompanied by a "Statement of Compliance," signed by the Contractor or sub contractor or his or her agent who pays or sup ervises the payment of the persons emp lo ye d under the Contract and shall certify the following: (1) That the payroll for the payroll period contains the information required to be provided under§ 5.5 (a)(3)(ii) of Regulations , 29 CFR part 5, the appropriate information is being maintained under§ 5.5 (a)(3)(i) of Regulations , 29 CFR part 5, and that such information is correct and complete; (2) That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the Contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned , other than permissible deductions as set forth in Regulations , 29 CFR part 3 ; (3) That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the app licable wage determination incorporated into the Contract. (C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submi ssion of the "Statement of Compliance" required by paragraph (a)(3)(ii)(B) of this section. (D) The falsification of any of the above certifications may subject the Contractor or subcontractor to civil or criminal prosecution under section 100 l of title 18 and section 3 729 of title 31 of the United States Code. (iii) The Contractor or subcontractor shall make the records required under paragraph (a)(3)(i) of this section available for inspection, copying, or transcription by authorized representatives of the Department of Energy or the Department of Labor, and shall permit such representatives to interview emp lo yees during working hours on the job. If the Contractor or subcontractor fails to submit the required records or to make them available, the Federal agency may, after written notice to the Contractor, sponsor, applicant , or owner, take such action as may be necessary to cause the suspension of any further payment, advance , or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5 .12. ( 4) Apprentices and trainees- (i) Apprentices. Apprentices will be permitted to work at le ss than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the Contractor as to the entire work force under the re · st y worker listed on a payroll at an apprentice wage rate, who is not registe s as stated above , shall be paid not less than the applicable wage rate on t e wa~1 ete~ im; CITY SECKt:" KT GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. FT. WORTH, TX Page 58 of 64 the classification of work actually performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a Contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates ( expressed in percentages of the journeyman's hourly rate) specified in the Contractor's or subcontractor's registered program shall be observed. Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice's level of progress , expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training , Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the Contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee's level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the Contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved. (iii) Equal employment opportunity. The utilization of apprentices , trainees, and journeymen under this part shall be in conformity with the equal employment opportunity re uirements of Executive Order 11246, as amended and 29 CFR part 30. GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFFICIAL RECORD ~ TARY Fl WORTH, TX (5) Compliance with Copeland Act requirements. The Contractor shall comply with the requirements of29 CFR part 3, which are incorporated by reference in this Contract. (6) Contracts and Subcontracts. The Recipient, Subrecipient, the Recipient's, and Subrecipient's contractors and subcontractor shall insert in any Contracts the clauses contained herein in(a)(l) through (I 0) and such other clauses as the Department of Energy may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The Recipient shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all of the paragraphs in this clause. (7) Contract termination: debarment. A breach of the Contract clauses in 29 CFR 5.5 may be grounds for termination of the Contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12. (8) Compliance with Davis-Bacon and Related Act requirements. All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3 , and 5 are herein incorporated by reference in this Contract. (9) Disputes concerning labor standards. Disputes arising out of the labor standards provisions of this Contract shall not be subject to the general disputes clause of this Contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the Recipient, Subrecipient, the Contractor ( or any of its subcontractors), and the contracting agency, the U.S. Department of Labor, or the employees or their representatives. ( 10) Certification of eligibility. (i) By entering into this Contract, the Contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the Contractor's firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(l). (ii) No part of this Contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12{a)(l). (iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S .C. 1001. (b) Contract Work Hours and Safety Standards Act. As used in this paragraph, the terms laborers and mechanics include watchmen and guards. (1) Overtime requirements. No Contractor or subcontractor contracting for any part of the Contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-halftimes the basic rate of pay for all hours worked in excess of forty hours in such workweek. (2) Violation; liability for unpaid wages ; liquidated damages . In the event of any violation of the clause set forth in paragraph (b)(l) of this section, the Contractor and any subcontractor responsible therefor shall be . liable for the .unpaid wages. In addition, such Contractor and subcontractor shall b · · States (in the case of work done under contract for the District of Columbia or o1¥Ficl~c~~.y,\l!i!Sfli\<I GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. CITY SECRETARY e TX ' to such territory), for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (b )( 1) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (b )( 1) of this section. (3) Withholding for unpaid wages and liquidated damages. The Department of Energy or the Recipient or Subrecipient shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the Contractor or subcontractor under any such contract or any other Federal contract with the same prime Contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such Contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (b )(2) of this section. (4) Contracts and Subcontracts. The Recipient, Subrecipient, and Recipient's and Subrecipient's contractor or subcontractor shall insert in any Contracts, the clauses set forth in paragraph (b )( 1) through ( 4) of this section and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The Recipient shall be responsible for compliance by any subcontractor or lower tier subcontractor with the clauses set forth in paragraphs (b )( 1) through ( 4) of this section. (5) The Contractor or subcontractor shall maintain payrolls and basic payroll records during the course of the work and shall preserve them for a period of three years from the completion of the Contract for all laborers and mechanics, including guards and watchmen, working on the Contract. Such records shall contain the name and address of each such employee, social security number, correct classifications, hourly rates of wages paid, daily and weekly number of hours worked, deductions made, and actual wages paid. The records to be maintained under this paragraph shall be made available by the Contractor or subcontractor for inspection, copying, or transcription by authorized representatives of the Department of Energy and the Department of Labor, and the Contractor or subcontractor will permit such representatives to interview employees during working hours on the job. (c) Recipient Responsibilities for Davis Bacon Act (1) On behalf of the Department of Energy (DOE), Recipient shall perform the following functions: (i) Obtain, maintain, and monitor all Davis Bacon Act (DBA) certified payroll records submitted by the Subrecipients and Contractors at any tier under this Award; (ii) Review all DBA certified payroll records for compliance with DBA requirements, including applicable DOL wage determinations; (iii) Notify DOE of any non-compliance with DBA requirements by Subrecipients or Contractors at any tier, including any non-compliances identified as the result of reviews performed pursuant to paragraph (ii) above; (iv) Address any Subrecipient and any Contractor DBA non-compliance issues; if DBA non-compliance issues cannot be resolved in a timely manner, forward complaints, summary of investigations and all relevant information to DOE; · (v) Provide DOE with detailed information regarding th ~Bse'**fflfHl'lHH'i¥-l~rrl. non-compliance issues; GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. OFF~CIAL RECORD CITV SECRETARY 'Ff:Wo~Wt, Tx (vi) Perform services in support of DOE investigations of complaints filed regarding noncompliance by Subrecipients and Contractors with DBA requirements; (vii) Perform audit services as necessary to ensure compliance by Subrecipients and Contractors with DBA requirements and as requested by the Contracting Officer; and (viii) Provide copies of all records upon request by DOE or DOL in a timely manner. (d) Rates of Wages The prevailing wage rates determined by the Secretary of Labor can be found at http://www.wdol.gov/. 27. PROCUREMENT (10 CFR 600.236, Section (i) "Contract Provisions," numbers 1-13) (i) Contract provisions. A grantee's and subgrantee's contracts must contain provisions in paragraph (i) of this section. Federal agencies are permitted to require changes, remedies , changed conditions, access and records retention, suspension of work, and other clauses approved by the Office of Federal Procurement Policy. (1) Administrative, contractual, or legal remedies in instances where contractors vio late or breach contract terms, and provide for such sanctions and penalties as may be appropriate. (Contracts more than the simplified acquisition threshold) (2) Termination for cause and for convenience by the grantee or subgrantee including the manner by which it will be effected and the basis for settlement. (All contracts in excess of $10,000) (3) Compliance with Executive Order 11246 of September 24, 1965 , entitled "Equal Employment Opportunity," as amended by Executive Order 11375 of October 13, 1967 , and as supplemented in Department of Labor regulations (41 CFR chapter 60). (All construction contracts awarded in excess of$10,000 by grantees and their contractors or subgrantees) (4) Compliance with the Copeland "Anti-Kickback" Act (18 U.S.C. 874) as supplemented in Department of Labor regulations (29 CFR Part 3). (All contracts and subgrants for construction or repair) (5) Compliance with the Davis-Bacon Act (40 U.S.C. 276a to 276a-7) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts in excess of $2000 awarded by grantees and subgrantees when required by Federal grant program legislation) (6) Compliance with Sections 103 and 107 of the Contract Work Hours and Safety Standards Act (40 U .S.C. 327- 330) as supplemented by Department of Labor regulations (29 CFR Part 5). (Construction contracts awarded by grantee s and subgrantees in excess of $2000, and in excess of $2500 for other contracts which involve the employment of mechanics or laborers) (7) Notice of awarding agency requirements and regulations pertaining to reporting. (8) Notice of awarding agency requirements and regulations pertaining to patent rights with respect to any discovery or invention which arises or is developed in the course of or under such contract. (9) Awarding agency requirements and regulations pertaining to copyrights and rights i GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. ICIAL RECORD SECRETARY u ii 'i. lrlffi'ir!fart, TX (10) Access by the grantee, the subgrantee, the Federal grantor agency, the Comptroller General of the United States, or any of their duly authorized representatives to any books , documents , papers, and records of the contractor which are directly pertinent to that specific contract for the purpose of making audit, examination, excerpts, and transcriptions. ( 11) Retention of all required records for three years after grantees or sub grantees make final payments and all other pending matters are closed . (12) Compliance with all applicable standards , orders, or requirements issued under section 306 of the Clean Air Act (42 U.S.C . 1857(h)), section 508 of the Clean Water Act (33 U.S.C . 1368), Executive Order 11738 , and Environmental Protection Agency regulations ( 40 CFR part 15). (Contracts, s ubcontracts, and sub grants of amounts in excess of $100 ,000). (13) Mandatory standards and policies relating to energy efficiency which are contained in the state energy conservation plan issued in compliance with the Energy Policy and Conservation Act (Pub. L. 94-163 , 89 Stat. 871) . Remainder of page is intentionally left blank. GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. • • .. OFFICIAL RECORD CIT¥ $ECRETARY • 1~l ~ORTH, TX Page 63 of 64 SIGNATURE PAGE FOR GREENHOUSE GAS INVENTORY CONTRACT -DEM 10-06 -GHG IN WITNESS THEREOF, the parties hereto have made and executed this Agreement in multiple originals the day and year first above written, in Fort Worth, Tarrant County, Texas. CITY OF FORT WORTH: SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC . Fernando Costa Assistant City Manager • APPROVEDASTOFORMAND LEGALITY: ~ti-~ Arthur N. Bashor Assistant City Attorney .JjmyGibson District Manager Seal : --<\.~~i.\1t'tl.-,., ~<>-v---oR't ~~~ ATTEST: f t!ooooooo~O~Q p ~,P °oo~~ l ~ \.. ~\. J:J Jk ~¢: O o0 t=/ USA BROUSSARD MY COMMISSION EXPIRES Januaiy 23, 2012 artyHendri~ ~~* 00 0000000°; .§ City Secretary C,..). c..{3,~ ~~bJ'EXt~<>-.cy r------ 6 \ \\\ -,,-0\ 0 Contract Author i zatioa41i\» OFFICIAL RECORD =:1)~ ~~ CITY SECRETARY Date• • o-a-te_1.:...-_..;l£l?:-'l.x0_____ FT. WORTH, TX GHG Assessment Contract -DEM 10-06 -GHG Shaw Environmental & Infrastructure, Inc. Page 64 of 64 INSURANCE AND BOND CONTRACTOR COMPLIANCE WITH WORKERS' COMPENSATION LAW Pursuant to V .T.C.A. Labor Code §406 .96 (2000), as amended, Contractor certifies that it provides workers' compensation insurance coverage for all of its employees employed on City of Fort Worth Department of Environmental Management Project DEM 10-06: GHG . STATE OF TEXAS COUNTY OF TARRANT CONTRACTOR SHAW ENVIRONMENTAL & INFRASTRUCTURE, INC. .... Title \ - b ,;, tr-\::_t-f-'l o~.,. r"' § § § . Bef e me, the undersigned authority, on this day personally appeared \t'nl'V\ \ , known to me to be the person whose name is subscribed to the foregoing nstrument, and acknowledged to me that he executed the same as the act and deed of ~\::nu ) t:nu1 fO Dr:::e:o:b \ rl 1b£«:i;-shc .v:-k»e l irc . for the purposes and consideration therein expressed and in the capacity therein stated. Given Under My Hand and Seal of Office this ~h day of ...:.......i.~7"""--=----~-- Notary Public in and for the State of Texas USA BROUSSARD MY COMMISSION EXPIRES JanuaJy 23, 2012 ... W1lhs CERTIFICATE OF LIABILITY INSURANCE Page 2 of 3 I DATE 07/27/2010 PRODUCER 877-945-7378 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Willis of Pennsylvania, Inc. HOLDER . THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 26 Century Blvd. ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P. O. Box 305191 Nashville, TN 37230-5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental & Infrastructure , Inc. INSURER A: Lexington Insurance Company 19437-002 Shaw Environmental, Inc. INSURER B: See Page 2 for List of Other Insureds 4171 Essen Lane INSURERC : Baton Rouge, LA 70809 INSURER 0 : I INSURER E: DESCRIPTION OF OPERATIONS /LOCATIONSNEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVIS IONS Named Insureds: The Shaw Group Inc.; Shaw International, Inc.; Stone & Webster, Inc.; Stone & Webster Construction, Inc.; B.F. Shaw, Inc.; Shaw Sunland Fabricators, Inc.; Shaw Global Energy Services, Inc.; Shaw SSS Fabricators, Inc.; Shaw Maintenance, Inc.; Shaw Constructors, Inc.; Shaw NAPTech, Inc.; Shaw Energy Delivery Services, Inc.; Shaw Field Services, Inc.; S&W Engineering NY, PC; Shaw Environmental, Inc.; Shaw Environmental and Infrastructure, Inc.; Shaw Coastal, Inc.; Shaw Beneco, Inc.; EMCON/OWT, Inc.; Shaw Infrastructure, Inc.; Stone & Webster Consultants, Limited; Stone & Webster Management Consultants, Inc. Shaw GBB, LLC., GBB Maint enance Company, Inc., GBB International, LLC; Shaw Tulsa Fabricators, Inc.; Shaw Global Offshore Services, Inc. The Shaw Group Inc. and its majority owned subsidiaries are Named Insureds under the insurance policies listed on this Certificate. The above list is a representative list of the major subsidiaries of The Shaw Group Inc. and should not be consider ed complete. This Certificate of insurance becomes valid upon completion of negotiations and signing of the Agreement. Coll:3080696 Tpl:974163 Cert:14484129 " Page 3 of 3 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER This Certificate of Insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon . ACORD 25 (2009/01) Coll:3080696 Tpl:974163 Cert:14484129 ACORD® CERTIFICATE OF LIABILITY INSURANCE Page 1 of 3 I DATE (MM/DD/YYYY) ~ 08/05/2010 PRODUCER 877-945 -7378 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Willis of Pennsylvania, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND , EXTEND OR 26 Century Blvd . ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P . o . Box 305191 Nashville, TN 37230-5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental & Infrastructure, Inc . INSURERA: Chartis Specialty Insurance Company, USA 26883-002 Shaw Environmental , Inc. INSURERS: See Page 2 for List of Other Insureds 4171 Essen Lane INSURERC: Baton Rouge, LA 70809 INSURERD: I INSURER E: COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD IN DIC ATE D . NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCU MENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISS UED OR MAY PERTAIN , THE IN SURAN CE AFFORDED BY THE POLICIES DES CR IBED HEREIN IS SUBJECT TO ALL THE TERMS , EXCLUSION S AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR ~°s~I TYPE OF INSURANCE POLICY NUMBER ~2Hfi"M~~t~1 C2}~~r.MC~~~ LIMITS LTR ~NERAL LIABILITY EACH OCCURRENCE $ COMMERC IAL GEN ERAL LIABILITY DAMAGE TO RENTED $ PREMISES (Ea occurence l -D CLAIMS MA DE D OCCUR -MED EXP (An y one person} $ PERSONAL & AD V INJUR Y $ - GENERAL AGGREGATE $ - GEN 'L AGGREGATE LIMIT APPLIES PER: PR ODU CTS -COMP /OP AGG $ ' n PRO-POLI CY JECT n LOC ~TOMOBILE LIABILITY COMBINED SINGLE LIMIT $ AN Y AUTO (E a accid ent) - -ALL OWNED AUTOS BODILY INJURY $ SCHEDULED AUTOS (Per person) ,__ HIRED AUTOS BODILY INJURY ,__ $ NON -OW NED AUTOS (Per accident) - -PROPERTY DAMAGE $ (Per accident) GARAGE LIABILITY AUTO ONLY -EA ACCIDENT $ R AN Y AUTO OTHER THAN EAACC $ AUTO ONLY: AGG $ EXCESS/ UMBRELLA LIABILITY EACH OCC URRE NCE $ D OCCUR D CLAIMS MADE AGGREGATE $ $ Fl DEDU CTIBLE $ RETENTION $ $ WORKERS COMPENSATION I W CSTATU- I IOTH-TOR Y LIMITS ER AND EMPLOYERS' LI ABILITY Y IN AN Y PROPRIETO R/PARTNER/EXECUTIVE D E.L. EAC H ACCIDENT $ OFFICER/MEMBER EXCLUDED ? E.L. DISEASE -EA EMPLOYEE $ (Mandatory in NH) [~~~:ti'il'~vrs~~NS below E.L. DISEASE -POLICY LIMIT $ A OTHERContractors 6694572 9/1/2009 9/1/2010 $5,000,000 Each Claim Pollution Liability $5,000,000 Annual Aggregate (Claims-Made) DESCRIPTI ON OF OPERATIONS / LOCATIONS /VEHICLES/ EXCLUSIONS ADDED BY ENDORSEMENT/ SPECIAL PROVISIONS Shaw Environmental and Infrastructure, Inc., CERTIFICATE HOLDER City of Fort Worth Attn : Environmental Management Department 1000 Throckmorton Fort Worth, TX 76102 Project: City of Fort Worth, DEM 10-06: GHG CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF , THE ISSUING INSURER WILL ENDEAVOR TO MAIL ~ DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. A~REPRESENT ACORD 25 (2009/01) Coll: 3090743 Tpl: 974451 Cert: 14531553 © 1988-2009 ACORD CORPORATION . All rights reserved. The ACORD name and logo are registered marks of ACORD Wtllts CERTIFICATE OF LIABILITY INSURANCE Page 2 of 3 I DATE 08/05/2010 PRODUCER 877-945-7378 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Willis of Pennsylvania, Inc . HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 2 6 Century Blv d . ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P. 0. Box 305191 Nashv ille, TN 37230 -5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental & Infrastructure, Inc. IN SUR ER A: Char tis Specialty Insurance Company, USA 26883-002 Shaw Environmental, Inc . INS URER B: See Page 2 for List of Other Insureds 4171 Essen Lane INSUR ERC : Baton Rouge, LA 70809 INSU RE R 0 : I IN SURERE : DESCRIPTION OF OPERATIONS/LOCATIONSNEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Named Insureds: The Shaw Group Inc .; Shaw International, Inc.; Stone & Webster, Inc.; Stone & Webster Construction, Inc.; B.F. Shaw, Inc.; Shaw Sunland Fabricators, Inc.; Shaw Global Energy Services, Inc.; Shaw SSS Fabricators, Inc.; Shaw Maintenance, Inc.; Shaw Constructors, Inc.; Shaw NAPTech, Inc.; Shaw Energy Delivery Services, Inc.; Shaw Field Services, Inc.; S&W Engineering NY, PC; Shaw Environmental, Inc.; Shaw Environmental and Infrastructure, Inc.; Shaw Coastal, Inc.; Shaw Beneco, Inc.; EMCON/OWT, Inc.; Shaw Infrastructure, Inc.; Stone & Webster Consultants, Limited; Stone & Webster Management Consultants, Inc. Shaw GBB, LLC., GBB Maintenance Company, Inc., GBB International, LLC; Shaw Tulsa Fabricators, Inc.; Shaw Global Offshore Services, Inc. The Shaw Group Inc. and its majority owned subsidiaries are Named Insureds under the insurance policies listed on this Certificate. The above list is a representative list of the major subsidiaries of The Shaw Group Inc. and should not be considered complete. Coll:3090743 Tpl:974451 Cert:14531553 Page 3 of 3 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed . A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER This Certificate of Insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend , extend or alter the coverage afforded by the policies listed thereon . ACORD 25 (2009/01) Coll:3090743 Tpl:974451 Cert:14531553 THE STATE OF TEXAS COUNTY OF TARRANT PAYMENT BOND Bond No . 1055510 § § § KNOW ALL BY THESE PRESENTS: That we, (1 ), Shaw Environmeotnl & Infrastructure, Inc., a Louisiana corporation, as Principal herein, and (2) Lexon Insurance Company a corpor ation organized and existing under the laws of.the State of (3) _T_e_x_as ____ _ as surety, are held and firmly bound unto the City of Fort Worth, a municipal corporation situated in Tarrant, Denton, Parker and Wise C01mties, Texas , Obligee herein, in the amount of Eight.Y-. four thousand one hundred and seven dollars ($84,107.00) for the payment whereof, the said Principal and Surety bind themselves and their heirs, executors, administrators, successors and assigns, jointly and severally, finnly by these presents: WHEREAS, the Principal has entered into a certain written contract with the Obligee dated the _filb__day of August , 20.JQ., which contract is hereby referred to and . made a part hereof as if fully and to the same extent as if copied at length, for the following ·project: professional services for a Citywide Emissions Inventory and Greenhouse Gas Assessment designated as Project Number DEM 10-06: GHG. NOW, THEREFORE, THE CONDITION OF THIS OBLIGATION IS SUCH, that if the said Principal shall faithfully make payment to each and every claimant (as defined in Chapter 2253, Texas Government Code, as amended) supplying labor or materials in the prosecution of the work under the contract, then this obligation shall be void; otherwise, to remain in full force and effect. PROVIDED, HOWEVER, that this bond is executed pursuant to Chapter 2253 of the Texas Government Code, as amended, and all liabilities on this bond shall be detennined in acc9rdance with the provisions of said statute, to the same extent as if it were copied at length herein. ..,. IN WITNESS WHEREOF, the duly authorized representatives of the Principal and the Surety have executed this instrument. SIGNED and SEALED this _9_th __ day of _ __:.A..:.:u=g=us:;;.:t'--____ __,, 20..10_. ATTEST: NOTE: (1) (2) (3) Shaw Environmental & Infrastructure, Inc .• a Louisiana corporation :~IN~~ Name: G~~ P. l=Aa n Title : fte _~n t Address: 6330 Commerce Drive #190 loting , TX 75053 Lexon Insurance Company SURETY By:~~ Name:;; n au: Attorney in Fact Address: 10002 Shelbyville Road. Suite 100 I 011isville, l:<:Y 40223 Telephone Number: 502-253-6500 Correct name of Principal (Contractor). Correct name of Surety. State of incorporation of Surety Telephone number of surety must be stated. In addition. an original copy of Power of Attorney shall be attached to Bond by the Attorney-in-Fact. The date of bond shall not be prior to date of Contract. " .• POWER OF AlTORNEY Lexon Insurance Company LX-79 3 0 6 KNOW ALL MEN BY THESE PRESENTS, that LEXON INSURANCE COMPANY, a Texas Corporation, with its principa l office in Louisville, Kentucky, does hereby constitute and appoint: Brook T . Smith, Kathy Hobbs, Raymond M . Hundley, Jason D. Cromwell, James H. Martin, Sandra F . Harper , Myrtie F . Henry, Virginia E. Woolrid ge, Deb orah Ne ichte r , Jill Kemp , J ackie C. Koe s tel , Sheryon Quinn its true and lawful Attorney(s)-ln-Fact to make , execute, seal and deliver for, and on its behalf as surety, any and all bonds , undertakings or other writings obligatory in nature of a bond . Th is authority is made under and by the authority of a resolution which was passed by the Board of Directors of LEXON INSURANCE COMPANY on the 1st day of July, 2003 as follows : Resolved, that the President of the Company is hereby authorized to appoint and empower any representative of the Company or other person or persons as Attorney-In-Fact to execute on behalf of the Company any bonds , undertakings, pol icies , contracts of indemnity or other writing s obligatory in nature of a bond not to exceed $2,500 ,000.0 0, Two-million five hundred thousand dollars, which the Company might execute through its duly ele cted officers, and affix the seal of the Company thereto. Any said execution of such documents by an Attorney-In-Fact shall be as binding upon the Company as if they had been duly executed and acknowledged by the regularly elected officers of the Company. Any Attorney-In-Fact, so appointed , may be removed for good cause and the authority so granted may be revoked as specified in the Power of Attorney. Resolved, that the signature of the President and the seal of the Company may be affixed by facsimile on any power of attorney granted, and the signature of the Vice President , and the seal of the Company may be affixed by facsimile to any certificate of any such power and any such power or certificate bearing such facsimile signature and seal shall be valid and binding on the Company. Any such power so executed and sealed and certificate so executed and sealed shall, with respect to any bond of undertaking to which it is attached, continue to be valid and binding on the Company. IN WITNESS THEREOF, LEXON INSURANCE COMPANY has caused this instrument to be signed by its President, and its Corporate Seal to be affixed this 2nd day of July, 2003. LEXON INSURANCE COMPAN Y BY-----+a~~~· ~~~---------r--- ACKNOWLEDGEMENT David E. Campbell Pres ident On this 2nd day of July, 200 3, before me, personally came David E. Campbell to me known, who being duly sworn , did depose and say that he is the President of LEXON INSURANCE COMPANY, the corporation described in and which executed the above instrument ; that he executed said instrument on behalf of the corporation by authority of his office under the By-laws of said corporation. "OFFICIAL SEAL" MAUREEN K. AYE Notary Public, State of Illinois My Commission Expires 09/21/13 CERTIFICATE ~.S;f.f Notary Public I, the undersigned, Secretary of LE XON INSURANCE COMPANY , A Texas Insurance Company, DO HEREBY CERTIFY that the i.'f original Power of Attorney of which the foregoing is a true and correct copy, is in full force and effect and has not been revoked and the I resolutions as set forth are now in force . a,/ .///,d,,_ Sigoed aod Sealed at Lomba,d, lllioois this g tJ_ Day of ~· 20 /{) I ~,Jjf)~ Donald D. Buchanan 1 Secretary "WARNING : Any person who knowingly and with intent to defraud any insurance company or other person, files an application for insurance o r statement of claim containing any materially false information, or conceals for the purpose of misleading, information concerning any fact materi- al thereto, commits a fraudulent insurance act, which i s a crime and subjects such person to c riminal and civil penalties." LX1 REQUEST FOR . QUALIFICATIONS ~ Stiaw ® Submitted to: City of Fort Worth Environmental Management Department 1000 Throckmorton Fort Worth , Texas 76102 Proposal for Citywide Emissions Inventory and Greenhouse Gas Assessment Project: DEM 10-06: GHG May 27, 2010 Submitted by: Shaw Environmental & Infrastructure, Inc. 6330 Commerce Drive , Suite 190 Irving , Texas 75063 214 .277 .7838 This Document Was Produced and Bound Us ,ng 30% Post-Consumer and 100 % Recyclable Matenals ~ Sliaw• Shaw Envmnmenta1 & Infrastructure. Inc. I Table of Contents 2.1 Qualifications Document Checklist 2 .2 Acknowledgement of Receipt of Addenda 2.3 Qual ifications Summary 2.4 Qualifications of Prov ider 2.5 Insurance Certificates 2.6 Nondiscrimination 2 .7 Provider's Legal and Compliance History 2.8 Financial Statement City of Fort W ort h 2.0 QUALIFICATIONS DOCUMENTS 2.1 QUALIFICATIONS DOCUMENT CHECKLIST All Qualifications Documents , including this Checklist, must be completed in full and subm itted in a sealed envelope, in the requested order, or the Qualifications Package may be considered as a non-responsive submittal. Qu alifi ca tions Documents 1. QUALIFICATIONS DOCUMENT CHECKLIST 2. ACKNOWLEDGEMENT OF RECEIPT OF ADDENDA 3 . QUALIFICATIONS SUMMARY 4. QUALIFICATIONS OF PROVIDER 5 . INSURANCE CERTIFICATES 6 . NONDISCRIMINATION 7 . PROVIDER'S LEGAL & COMPLIANCE HISTORY 8. PROVIDER'S FINANCIAL STATEMENT I understand that fa ilu re to s ubmit all of these items may cause my submittal to be considered non-respo Name Title Company k({1I, s-q_JJ i 4 'I: w E/l--1't<Vl-t. '\ ( "-i.l'\f/•U 1/'< t ,,r r :r-" C . 2-1 2 .2 ACKNOWLEDGEMENT OF RECEIPT OF ADDENDA 2.2 .1 Check if applicable / The undersigned acknowledges the receipt of the following addendum (a) to the Request for Qualifications , and has attached all addenda following this page. (Add lines if necessary). x Addendum Number 1 May 7 , 201 o -----------(Date received) X Addendum Number 2 May 14• 2010 -----------(Date received) x Addendum Number 3 May 24 • 201 O -----------(Date received) Addendum Number 4 (Date received) 2.2 .2 Check if applicable __ The undersigned acknowledges the receipt of no addenda to the Request for Qualifications . PROVIDER: Shaw Env ironmental and Infrastructure, Inc. Company Name 6330 Commerce, Suite 190 Address Irving, TX 75063 City , State, Z ip BY: Charles P. Gaddy (print or type name of signatory) ~nL~Sy= Title (print or type) 2-2 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM#1 This addendum responds to questions asked by interested consultants for clarification on the referenced Request for Qualifications. • Under Section 2.4 . Three client references from local government agencies. Are these references specific to emission inventories and greenhouse gas work or in general? o Work in general but focus on emission inventory and greenhouse gas work if your firm has completed such work. • Do Airports and tollway authorities qualify as local government agencies? o For this request, yes. • Is there an M/WBE participation goal for this project? o No • List ofltems, Schedule of Requirements , Scope of Work, Terms of Reference , Bill of Materials required. o These are included in the Request for Qualifications and/or will be negotiated as part of the final contract • Soft Copy of the Tender Document through email. o Please refer to http://www.fortworthgov.org/purchasing/defau1t.aspx?id=74690 for a copy of the RFQ and addenda • Names of countries that will be eligible to participate in this tender. o Any wishing to submit • Information about the Tendering Procedure and Guidelines o All funds will be made in US dollars and subject to rules outlined in the Attachment A • Estimated Budget for this Purchase o $84,157 is available for this purchase • Any Ex ten sio n of Bid di ng D ea dl ine? o None at this time • Any Add endum or Pre B id meeting Minut es? o No Pre-Bid Meeting was held. Please refer to http://www.fortworthgov.org/purchasing/default.aspx?id=74690 for a copy of the RFQ and addenda PROJECT: DEM 10-06: GHG May 7, 2010 Page lof 3 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM#1 • Page 1-1, paragraph 2: Are all funds to be awarded under the subsequent contract ARRA funds? Or will there be a mix of City and ARRA funds? o All funds are ARRA funds • What type of contract does the City envision will be awarded? Time & Materials (based on loaded labor hours), or Fixed Price by Task, or some other type? o The final contract type can be negotiated by the successful company. Typically the City uses a price per task model. • Page 2-8: Will the City waive some of more stringent and expensive insurance requirements for small business subcontractors as long as the prime contractor carries the required types and limits? o That can be negotiated as part of the contracting process • Attachment A-2: These terms appear to be those of the grant to the City of Ft. Worth. Do the grant funds come through the state of Texas, or are they issued directly from DoE to the City of Ft. Worth? Is paragraph 2 .a applicable to this procurement? Is the City of Ft. Worth the "Recipient" mentioned in the terms, or is this term a reference to the successful awardee of this work? o All persons receiving work as a result of ARRA funding are expected to abide by these special conditions; the City of Fort Worth, its subawardees, and contractors. • If award is made to a for-profit corporation, does the 10% ceiling on administrative costs apply? If so, does this include the awardee's indirect costs such as overhead or general and administrative (G&A)? What about fringe benefits? o Typically the City awards these contracts on a price/task, which incorporates these costs. As such, this would not apply. • Is the Dallas-Fort Worth International Airport part of the scope of this project? o No • Page 1-3 , paragraph 1. 7: The evaluation criteria provide for 20% of the points to be attributed to subcontractor qualifications . How are responses scored if no subcontractor is proposed ? o If no s ubcontractors are proposed, this score will be eliminated and the remainder normalized to account for this omission. • Page 2-4 , regarding su bcontractor qualifications. Please clarify if the response to items 1 through 9 may be combined for the prime and subcontractor(s). For example, would it be acceptab le to provide a total of three references for the prime and subcontractor, combined , o r must three each (fo r the prime and the subcontractor) be provided? o We must have 3 references for the prime and then whatever else the subcontractor might bring. PROJECT : DEM 10-06 : GHG May 7, 2010 Page 2of 3 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM#1 • Page 2-4, regarding client references from "local government agencies ." Please clarify if references from state or regional clients are acceptable . o State clients no. Regional Clients, utilities, and authorities, yes. PROJECT: DEM 10-06: GHG May 7, 2010 Page 3of 3 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM#2 This addendum responds to questions asked by interested consultants for clarification on the referenced Request for Qualifications. Section 1.1 of the of the request for qualification (RFQ) states that the baseline inventory will be used for determining compliance activities related to attainment of National Ambient Air Quality Standards (NAAQS) for ozone. The Scope of Services on page 2-5; however states that the deliverable will be a report will estimated emissions of GHGs . Please clarify whether the inventory will include only GHGs or GHGs with ozone precursors such as volatile organic compounds (VOCs) and nitrogen oxides (NOx)? • City understands that an emission inventory, in addition to other information, will be required to comprehensively estimate the annual emission of greenhouse gasses per the EPA GHG reporting rule. The deliverable will be the GHG baseline emissions but, as part of the support documentation, the other information will be included. The RFQ does not list the operations of the city that will be covered for the baseline inventory other than stating that the Village Creek Waste water Treatment Plant and the Southeast Landfill will not be included. Is there a list available which states which operations are covered in this inventory? Or is this part of the scope of the work for the project? • The City of Fort Worth maintains approx imate ly 400 faciliti es citywide. A comple te list of affected facilities, including address and square footage will be provided to the contracted consultant. Will the GHG baseline inventory include all the six Kyoto GHGs? • The GHG Baseline inventory needs to include all information required for compliance with the EPA Greenhouse Gas Reporting Rule Will the baseline inventory include only scope 1 and scope 2 emissions as defined in the World Resource Institute (WRI) protocol? The WRI definitions are as follows : Scope 1 will be direct emissions from city-owned operations Scope 2 will be purcha sed electricity , heat , and steam • The GHG B ase line inventory needs to include all info rma tio n required fo r compliance with the EPA Green house Gas R eporting Rule PROJECT: DEM 10--06: GHG May 14 , 2010 Page lof 3 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM #2 Section 2 .3 of the RFQ states that Pricing Information will need to be included in a sealed envelope ; however, The RFQ does not provide any format or details for presenting pricing information. How should the pri c ing information be submitted , if at all? • Pricing will be nego tia ted w ith th e s uccessful respondent. Th ere is a not to exceed price, pursuant to th e EECBG fundin g a ward, included in this project. Do not include p r icing information w ith this s ubmittal. Article 20 -addresses quarterly reporting requirements . It appears that the City expects the contractor to log on to www .federalreporting .gov and report on that site, rather than submitting the information to the City who would then report to DOE. Please confirm that this is correct. If it is correct, has the City done any of this reporting to date, have any of their contractors done it, and if so, do they have any written instructions ? I believe that this is different than what other state/county/city/parish governments have required. For other government contracts, the contractor has submitted the information to the client who has then reported to DOE. • Th e contra ctor will pro vide required information to the City who w ill, in turn , file th e require d f ederal reports to DOE and oth er required agencies. To what extent will City staff be involved in assisting the consultants with inquiries , is sues , and overall coordination of the project? Will there be dedicated City of Fort Worth staff on the project to assist in coordinating with the appropriate City branches/employees for data gathering/collection ? Will City staff be available assist in actual data gathering and processing? • Th e City will ass ig n a s taff m ember to b e a point of conta ct to obtain information and acces s from th e City of Fort Worth . The City will provide copies of utility bills . The Consultant will be respons ible th e collection and process ing of any additional required data. We believe there are approx imately 300 facilities , 5 ,000 on/off ro ad vehicle s, and -IO gen erators / power prov iding facilities that will be covered in the GHG In ventory . C an yo u pl ease provide a s pec ific fa c ility li s t? • A specific facility and equipmen t list wi ll be provi ded to the successful co ns ultant as we begin nego tiating the work plan and contract. PROJECT : DEM 10-06: GHG May 14 , 2010 Page 2of 3 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM #2 In what type of form will usage data ( energy, natural gas, mileage on City-owned vehicles, recycling data, etc) be provided to the consulting firm? (i.e ., Will the information be provided per facility via monthly bills/usage, or will it be provided in as a comprehensive MS Excel file with everything clearly identified, and all facilities included)? • The City will work to provide as much information as possible in an MS base file as possible. Some monthly utility bills will be converted to PDF format and provided to the contractor use. PROJECT: DEM 10--06 : GHG May 14, 2010 Page Jof 3 CITY OF FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT ADDENDUM#3 This addendum responds to questions asked by interested consultants for clarification on the referenced Request for Qualifications . In addition to the completion of a baseline emissions inventory of Greenhouse Gas Emissions, is the City also interesting in a baseline inventory of all criteria pollutants or criteria pollutants that a re precursors to o z one? We understand a criteria pollutant inventory may be needed in order to prepare for future requirements related to attainment of the National Ambient Air Quality Stand ards . • City understands that an emission inventory, in addition to other information. will be required to comprehensively estimate the annual emission of greenhouse gasses per the EPA GHG reporting rule. The deliverable will be the GHG baseline emissions but, as part of the support documentation, the other information will be included. The project description for the RFQ asked for the completion of a baseline emissions in ventory for the City of Fort Worth's operations. Will this include its facilities and also its transportation sources such as fleet vehicles and other City owned vehicles? • The GHG Bas elin e in ve ntory n eeds to include all informa tion required fo r complian ce with the EPA Greenhouse Gas Reporting Rule The scope of services identifies a list of deliverables for this project which contains a final report on the City 's municipal operation that includes "their greenhouse gas impact/c arbon footprin t/carbon loading". With regards o the reference to "carbon footprint ", we would li ke to know if the City 's request includes the preparation of just direct carbon e missions from municipal operations or life cycle carbon footprint of all its operations . Secondl y, we are also interested in the City 's interpretation of carbon loading. For example, w ould this in c lude carbon sequestration ? • Th e G H G B ase lin e in ve nto ry n ee ds to include all infor matio n req uir er/fo r co mp li a n ce w ith th e E PA Gr ee nh o use Gas Reporting Rule. Regardi n g section 2 .8 -Fi nanci a l Statem ent. We can o nl y provide financial stateme nts within a separately sealed confidentia l package (w h ich is no t bound in th e pro posa l pac kage ). Will this fo rm of deli very be ac ce ptable for this solicitation ? • Ye s PROJECT: OEM 10-06: GHG May 24 , 2010 Pa gel of I 2.3 QUALIFICATIONS SUMMARY TO THE CITY OF FORT WORTH: The undersigned hereby proposes to furnish the equipment, labor, materials, superintendence, and any other items or services necessary to complete an emissions inventory and greenhouse gas assessment for the City of Fort Worth's municipal operations . The Scope of Services is outlined on the following pages of the Qualifications Documents. All Qualifications Documents have been submitted in one sealed package with the Pricing Information included within its own sealed envelope within the package. Three Addenda to the Request for Qualifications have been received as acknowledged in Section 2.2 . This Qualifications Summary and the accompanying Qualifications Documents are intended to be complete and will remain valid for sixty (60) days from the date of submittal. PROVIDER: Shaw Environmental and Infrastructure, Inc. (Company Name) 6330 Commerce Drive , Suite 190 (Address) Irving , TX 75063 (City, State, Zip) 214 .277 .7819 Phone) BY: Charles P. Gaddy (print or type name of signatory) ~PA~ (Signature) Business Line Manager Title (print or type) 214.277 .8600 (FAX) 2-3 2.4 QUALIFICATIONS OF THE PROVIDER Provider shall identify its company name, address, telephone number(s), and FAX number(s) for the local office as well as the headquarters . Responses submitted should be concise and shall be limited to a maximum of 20 pages (10 pt type minimum). All respondents shall address the following , as a minimum, and should conform to the numbering system used below. 1 Name, address and telephone number of the firm or individual, with contact name(s). 2. Statement substantiating firm's understanding of project objectives to include description of the final products your firm would provide . 3. Names of key personnel who would be available to work on the project, their titles, experience, professional licenses, professional affiliations and other qualifications, and years with the firm ; total size of firm's staff. 4. Proposed project manager and written summary of two projects the proposed project manager has completed in the last five years. 5 . Statement of qualifications of the firm . 6 . List of previous clients for work similar to this project conducted over the past five years , with project size, scope , cost, location , time adherence , and contact names and telephone numbers. 7. Three client references from local government agencies . 8 . Description of current workload of your firm, including project quantity and magnitude, percent complete, completion dates , and impact on key personnel. 9. Date at which work could begin and proposed schedule for completion of the work. If subcontractors are to be utilized , a current statement of qualifications for each subcontractor must also be included (10-page maximum per subcontractor, 10 pt type minimum). INCLUDE A COPY OF THE QUALIFICATIONS WITHIN THIS SECTION AND BOUND WITHIN THE QUALIFICATIONS PACKAGE 2-4 SCOPE OF SERVICES Qualifications are being accepted by the City of Fort Worth for the completion of an emissions inventory and greenhouse gas assessment for the City of Fort Worth's municipal operations, with the exception of Village Creek Waste Water Treatment Plant and the Southeast Landfill. Providers are being asked to present the qualifications and experience of their company and their personnel for this work. Deliverables for this project include, but are not limited to : • a final report which contains o A delineation of all city facilities and operation o Their measured/ stimated emissions o Their greenhouse gas impact/carbon footprint/carbon loading o Direction of compliance with the EPA Green house gas rule • A copy of any software or compliance tool used to manage the emissions inventory and calculate greenhouse gas impacts o No "black box' or proprietary software programs will be allowed under this scope o The City must be able to "see" all variables used as well as how impacts are calculated . o Software must be transferable to another vendor should the data management or manipulation be required under a future request. 2-5 ~ Stiaw ® Submitted to: City of Fort Worth Environmental Management Department 1000 Throckmorton Fort Worth, Texas 76102 Proposal for Citywide Emissions and Inventory and Greenhouse Gas Assessment Project DEM 10-06: GHG May 27, 2010 Submitted by: Shaw Environmental & Infrastructure, Inc. 6330 Commerce Drive, Suite 190 Irving , Texas 75063 (214) 277-7838 This Document Was Produced and Bound Usmg 30 % Post -Cons umer and I 00 % Recyclable Matenals C ITY OF FORT WORTH C ITYWIDE E MISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT CONTENTS Shaw Environmental & Infrastructure 2 .0 QUALIFICATIONS DOCUMENTS 2 .1 Qualifications Document Checkli st ................................................................................................................ 2.1-1 2 .2 Acknowledgement of Rece ipt of Addenda ..................................................................................................... 2.2-1 2 .3 Qua li f icat ions Summary .................................................................................................................................. 2.3-1 2 .4 Qual if ications of the Prov ider ......................................................................................................................... 2.4-1 2.4 .1 Contact Information of Sh aw ................................................................................................................................... 2.4-1 2.4 .2 Understanding o f Objec tives ................................................................................................................................... 2.4-1 2 .4 .3 Key Personn el ........................................................................................................................................................... 2.4-4 2.4.4 Pro posed Project Ma nager Q ualifications ............................................................................................................ 2.4 -9 2.4 .5 Statement of Qualifications of Shaw .................................................................................................................... 2.4-11 2.4 .6 Client References for Si mila r W ork ...................................................................................................................... 2.4-14 2 .4 .7 References .............................................................................................................................................................. 2.4-17 2.4 .8 Current Workload .................................................................................................................................................... 2.4-18 2.4 .9 Schedul e .................................................................................................................................................................. 2.4-19 2 .5 Insurance Cert ificates ..................................................................................................................................... 2 .5-1 2 .6 Nondiscrimination ........................................................................................................................................... 2.6-1 2 .7 Provider 's Legal and Compliance History ..................................................................................................... 2.7-1 2 .8 Financial Statement ........................................................................................................................................ 2 .8-1 CP& Y Inc . (Subcontractor) 1. CP& Y's Dallas Headquarters ................................................................................................................................. 2 2 . Understanding ........................................................................................................................................................ 2 3. Key Pe rsonnel ........................................................................................................................................................ 3 4 . Project Manager Qualifications & Project Summaries ......................................................................................... 3 5 . Statement of Qualificat ions ................................................................................................................................... 5 6 . List of Cl ients with Sim ilar Projects ...................................................................................................................... 8 7 . Client Re ferences ................................................................................................................................................... 8 8 . Current Workload ................................................................................................................................................... 8 9 . Date Work Can Begin ............................................................................................................................................. 8 SHAW E NVI RONMENTAL & INFRASTRUCTURE , I NC . CO NTENTS 06C0520 10 T C ITY OF FORT WORTH C ITYWIDE E MISSIONS INV ENTORY A N D GREE N HOUSE GAS ASSESSMENT 2.4 Qualifications of the Provider 2.4.1 Contact Information of Shaw B e low is th e required informatio n o n o ur compan y na me, a ddresses, telephone numbers, and fax num- bers for Shaw's local Irvin g office as well as o ur headqu a rte rs . Headquarters: The Shaw Group Inc.® 4 17 I Esse n Lane B a to n Ro uge, Louisiana 70809 (22 5 ) 925-5604 (225) 925 -32 14 Fax Irving Office: Shaw Environmental & Infrastructure, Inc. 6330 Commerce Driv e , S uit e 190 Ir vi ng, Texas 75063 (2 14) 277-7800 (2 14) 277 -8600 Fax Co nt act Name: Jimmy Gibson , Texas District Ma nager Phone: 2 14-277 -78 15 Although th e m ajorit y of Shaw's proposed pe rso nn e l a nd s ubc o ntractors a re locaJ, we are a bl e to d raw o n Shaw's personnel in A us tin , Ho u sto n , Midland, and e lsew he re in th e firm for ass istance . SHAW ENVIRONMENTAL & INFRASTR UC T URE , INC . 06C052010T 2.4.2 Understanding of Objectives Shaw assists both public-and private-sector organi- zations to design and develop well focused, system- wide sustainability practices that reduce adverse en- vironmental effects and enhance program results. We bring a large and diverse set of technical res ources to each project and focus on truly understanding our clients ' unique needs. Shaw can provide the most ef- fective greenhouse gas inventory and assessment for the City to support the City 's goals in serving and pro- tecting its citizens well into the future . By applying our proven approach, the City will be able to demonstrate environmental stewardship in a manner that is trans- parent and provides tangible value to its stake- holders. Greenhou se gas (GHG) ma nage me nt in response to climate change has taken th e cent e r stage in th e las t few years in the United States, both a t sta te and fed- eral leve ls. Even though th e United States has not ye t co mmitted to a n international GHG treaty, many s tates a nd th e United States Environmental Protection Agency (USEPA) have been d eve loping s trategies for GHG man age ment. An important s te p to that effec t was take n b y USEPA in promul gatin g the GHG Mandatory Re portin g Rul e (M RR ) o n D ece mber 29, 2009, unde r th e Clean Air Act (4 0 CFR Part 98). The MRR re quires pote ntially te n s of thou sand s of facili- ties nationwide to re port annual GHG e mi ss io n s s tart- in g 20 l l. While th e MRR is ma inl y targe te d for in- dustrial facilities, ma ny commercial, sta te, a nd local agencies are a lso re quire d to re port unde r so me of the s ubcategori es of the rule . USEPA has take n a noth e r importa nt s te p in d eve lopin g e mi ss io n s tandard s for passenger ve hi c les in March 2010, th ere by e levati ng GHGs as "regul a te d a ir po llut a nt s" cove re d b y th e Clean A ir Ac t. Du e to thi s, numerou s fac iliti es e mit- tin g a threshold quantity o f GHG will tri gger major sou rce air permitting w ith pote nti a l cont ro l a nd e mis- s io n fees . The prima ry purp ose o f th e base lin e in ve nto ry to be pre par e d unde r thi s contrac t is to pre pa re th e C it y o f Fo rt W o rth (City) to c ompl y w ith a ll pro v is io n s o f th e MRR . The City has varied o pe ration s as pa rt o f it s service to the re s ident s , w hi c h includes nume rou s buildings, o n-roa d a nd off-road ve hi cles, a nd powe r ge neratin g units cons umin g fo ss il fuel a nd ge neratin g G H G s. Because the a pplicability of th e MRR wi ll be based o n excee ding a thre s ho ld of an nu a l GHG e mi ss io ns (25 ,000 milli o n ton s of carbo n dioxide QUALi FI C ATIONS 2 .4-1 CITY OF FORT WORTH C ITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS ASSESSMENT equivalent or "mtC02e") a comprehensive, accurate, and tran s parent base lin e inv e ntory is the mo st impor- tant first ste p for the City for compliance with the MRR and future regulation s. Shaw unde r sta nd th e proj ec t objectives, and s uch an inventory is the planned deliverable from thi s proj ect. The Ft . Worth/Dallas metropolitan area is also in non-atta inment for federal ozone stand ards, which may require additional control requirement for City operations in the future. The precursors of ozone are volatile organic compounds and nitrogen oxides, which are emi tted along with GHGs from combustion of fos s il fuel. A secondary purpose of the project, therefore, will be to develop an inventory of these ozone precursors from fos s il fu e l combustion for the City operation that also generate the GHGs. Typical- ly , these will be generators, boilers, vehicles, s pace heaters and s imilar operations. The City has been funded for thi s project out of the Federal American Recovery and Reinve s tment Act (ARRA). In addition to creating jobs and stimulating the economy, the goals of ARRA are to reduce fossil fuel u se, reduce total energy consumption, and im- prove energy efficiency. As a prerequi ite to deve lop- ing strategies to achieve these goals, the City need s to have an in-depth understanding of it s fossil fuel and energy usage . As fossil fuel and other energy u sage translates directly to GHG emissions, another objec- tive of the base line inventory developed in thi s project will be to map the fossil fuel u sage within the City's operations to s upport the ARRA goals. In the past 2 years, Shaw has completed or is current- ly performing approximately 24, multi-phase, multi- tas k projects involving literally thou sands of facility- based GHG inventories in the so lid waste, retail, utili- ty, manufacturing, petrochemical, communications, medical se rvices, acad e mia, a nd other indu stry sec- tors. Shaw is experienced in conducting GHG e mi s - s io ns inventories that comp ly with a ll internationally reco g nize d protocol s a nd indu s try-based profess io nal an d trade o rgani za ti o n ' guidan ce documents on thi s s ubj ec t. T o show the d e pth of our ex perience, we have ummarize d below GHG inve nt ories performed gro upe d by indu s try sec tor a nd c li e nt , delineating the numbe r of inventories b y facility, fr eque ncy a nd du- ration o f project e ngage ment, a a ppropri ate . Solid Waste Management Projects • Casella W a te Systems -GHG In ve nt ories pe r- fo rm ed for 18 la ndfill s, annua ll y, for th e yea rs 2005 th ro ug h 2008 und e r th e protocol a nd goa l se t- ting of th e US EPA Climate Leaders Pro gram. S HAW E NVIRON MENT AL & IN FRASTRUCTURE , INC . 06 C05201 0 T • Confidential Client -GHG lnventories for nearly 300 landfill s throughout the country purs uant to the c reat ion and s ub s equent banking of emiss ion re- duction c redits, prior to finalization of The Climate Regi try and re lated protocol s that lead the ma rket today. • Yalta Proj ec t -GHG In ve ntory and e ngineering fea s ibility assess me nt of GHG e mi ss ion s from landfill ve rsu s mass burn waste-to-energy (W-T-E) facility options to esta bli s h reduction s under the Joint Impleme ntation (JI) mechani s m of the Kyoto Protocol. (While the draft final re port was s ubmit- ted in October of 2006, Shaw is still e ngaged, pro- ducing implementation s tatu s re ports through 20 IO. As s uch , this is an ongoing project.) • Metrowaste, Des Moines, IA: Developing GHG inventory for landfill operations a nd reporting to State regulatory agency . Retail Management Projects • Publix Supermarkets -GHG Inventories for over I IOO se parate facilities, performed annually, for the years 2006 through 2008 under the protocol and goal setting of the US EPA Climate Leaders Program . • Confidential Client -GHG Inventories for over 2000 separate facilities , performed annually, for the years 2004 through 2008 u si ng The Climate Regi stry protocol to s upport the development of a Carbon Di sclo s ure Project re s pon se for the 2008 base year (i.e ., CDP?). Utility I Manufacturing Projects • Westar Energy -GHG Inventory for all Westar's facilities including nine generating facilities, tran s mi ss ion and di stribution network, and office location s, based on TCR protocol. • NRG Energy -GHG In ve nto ri e for eight NRG fa- c iliti es following th e CA Climate Action R egis try a nd Power/Utility Protoco ls. • Re liant E ne rgy -GHG e mi ss io n s ca lc ul atio ns a nd re p o rting fo r fo ur faci liti es under NJ G HG re po rt - ing regulati o n . • Dominion Electri c Generatin g -GHG [n vento ry de ve lo ped to s upport com pl iance wi th MA GHG Re po rtin g P rogra m. • Murphy Oil -GHG Inv e nt o ry a udits for a ll unit o peration s of three major re fin e rie s fo r the years 2006 a nd 2007 . • SAB[C -GHG foo tprint fo r Saudi Bas ic Indu s tri es Corporatio n (SAB[C) for 18 pe troche mical facili- tie s in S a udi Arabia, u s in g IPCC guide lin es a nd QUALIFICATIONS 2 .4-2 C ITY OF FORT W ORTH C ITYW IDE E MI SS IO N S INVE NTO R Y AN D GREE N HOUSE G A S ASSESS M E N T W o rld Re sources In stitute (WRI) protoco ls . Proj ec t a lso in vo lve d d eve lo pme nt of GHG miti ga- ti o n o pti o ns , qu a ntifi cat io n of p ro toco ls fo r GHG c re dits and c redit gene ra ti o n und e r th e C DM o f th e Kyo to pro t oco l. Other Sectors • Co nfide nti aJ T e leco mmuni cati o ns Cli e nt -GHG foo tprint e n co mp as sed 55 00 fac ilit ie s a nd a lar ge fl eet. Deve lo pe d assess me nt p ro toco l ba sed o n th e W o rld Resources ln stitute (WRD g uid e lin es; c u s- to mi zed th e a sse ss me nt tool fo r thi s cli e nt 's s pec if- ic o pe rati o n s. • MA M edi cal Ce nt e r s (2), A lli a nce L eath e r a nd Bri sto l a nd W e stfi e ld Sta te Community Co ll eges - C o nducted fi ve M A C li e nt GHG foo tprint s deve l- o pe d to s uppo rt compliance w ith S tate GHG Re - po rtin g P rogra m . • O th e r , s ma ll e r cli e nt proj ects over the past 2 year s . S in ce th e promul gation o f th e MRR in D ec e mbe r 2009, Sha w has as s is te d we ll over 30 fac iliti es in MRR co mpli a nce includin g d eve lo pme nt of ba se lin e GHG in ve nto ri es and h as ma ny o th e r MRR co m- pli a nce project s und e r way. W e have also d evelo ped GHG in ve nt o ri es fo r vo luntar y a nd manda to ry re port- in g p rograms s uc h as th e C a rb o n Di scl o s ure Proj ect, th e C hi cago C lima te Exc ha nge a nd vari o u s sta te GHG re po rtin g rul es . Thi s h as e na bl ed us to deve lo p ex pe rti se in u s in g several GHG e mi ss io n protoco ls a nd ad vise o ur c li e nt s on th e s tre n gth s a nd we ak - ne s ses o f th e input d a ta require me nt s a nd e mi s s io n ca lcul ati o n procedures. Thi s in s ig ht w ill be a n asse t to th e C it y in thi s proj ect to deve lo p a co mpre he n siv e a nd acc urate in ve nto ry w ithin th e a ll ocate d budget. S haw has been a lead e r in th e a ir qu a lity ma nage me nt se r v ices fo r th e e ne rgy indu s try , deve lo pin g co m- p li a nce p rogra ms a nd pe rmittin g s trategies fo r c riteria a nd haza rd o u s a ir po lluta nt s. W e have ex pe rti se in a ll ty pes of fo ss il fu e l co mbu s ti o n s y s te m s fr o m tra di - ti o na l fu e ls s uc h a s c o a l, fue l oi l, natu ral ga s to la nd- fill gas, b io fu e l , a nd sy nth e t ic fue l. The e x pe rti se a nd o ur bac kgro un d in no n-atta inme nt co mpl iance w ill be a n a ss e t in developin g t he e mi ss io n calc ul a- ti o n s o f t he ozo ne prec ursor s as pa rt of thi s in ve nt o ry . S h aw has s igni fica nt ex pe ri e nce in the des ig n , im- p le me nt a t io n a nd ma na ge me nt of e ne rgy e ffic ie ncy prog rams a nd in ma nagin g d ive rse stake ho ld e r processes fo r a va ri et y o f c lie nt s . Of pa rti cu la r be ne fi t to t he C it y is o ur ex te n si ve ex pe ri e nce w ith A RR A fun di ng a nd associate d re po rt in g req ui re me nt s. W e S HAW E NVIRO NM E NTAL & IN F RASTRU C TUR E , IN C . 06C0520 10T are c urre ntl y wo rkin g wi th a numbe r o f sta tes, coun- ti e s , and muni c ip a liti es o n iss ue s re la tin g to th e ARR A in c ludin g th e deve lo pme nt of E ne r gy Effi- c ie ncy a nd C o n se r va ti o n Cons ult a nt Strategies (EECCS s) th at le verage utility in centi ve s , E ne rgy Ef- fi c ie ncy a nd C o n se r va ti o n Bl oc k Grant (EECBG) fund s , a nd State E ne rgy Progra m d o ll ars. T hu s, a s th e C it y p rogre ss e s fr o m th e base lin e GHG in ve nt o ry to o th e r require me nt s of th e ARRA , S haw w ill be a bl e to as s ist in a co mpre he ns ive ma nn e r. ln additi o n , Sh aw has th e ca pa biliti es of ad v is in g th e C it y in d eve lo pin g carbo n c redit s if thi s se r v ice is re - quired at a late r s tage o f th e p roj ec t. We h ave ad vise d both nati o na l a nd inte rn a tio na l c li e nt s in d eve lo pin g carb o n a ss e t po rt fo li o s a nd can ass ist th e City in thi s a rea if need ed . O ne o f o ur T ec hni caJ Ad v iso rs fo r thi s contrac t is D av id Bube ni c k . In a pri o r a ffili ati o n as S r. Vi ce Pres id e nt a nd G e neral M a nage r of The A ir- B a nk , Mr. Bube ni c k ' s ex pe ri e nce in c luded addre ss- in g iss ues o f th e NO x ozone att a inme nt s ta tu s in th e H o u sto n/east Texas indu stri a l corrid o r. The se a ll ow- a nce pro grams a re in fac t ca p a nd trade p rogra ms , no t unlike th a t w hi c h w ill lik e ly be impl e me nted fo r CO2 e mi s s io n s in th e comin g years in th e US . 2.4.2. 1 Approach S haw pl an s to d evelop th e b a se lin e in ve nt o ry in thi s proj ect in an e ffi c ie nt a nd tran s pare nt ma nn e r utili z- in g several s ta ndardi zed c heck lis t s an d d a ta ta bl es we ha ve d evelo pe d for numerous GHG in ve nt o ry p roj ects. Tho ug h th e prima ry foc u s o f th e in ve nto ry w ill be o n MRR compli a nce, S haw wi ll d eve lo p th e in ve nt o r y in a fl ex ibl e ma nn e r to be a bl e to s uppo rt th e goals o f ozo ne n o n-a tt a inme nt s t ra tegy d eve lo p- me nt a nd ARRA. For thi s purpo se, S haw w ill d e s ig n tri gger leve ls w ith in th e in ve nt o ry to fl ag p o te nti a ll y s ig ni fica nt ozo ne precurso r so urces th at may tri gge r n o n- a tt a inme nt regul a ti o ns a nd maj o r so urces th a t ma y t ri gge r GHG BACTs a nd Ti tl e V pe rmit s. S haw w ill a lso d e s ig n a nd imp le me nt severa l carb o n loadin g a nd e ne r gy int e ns ity me tri cs w ithin th e ba e lin e in- ve nt o ry to assis t t he C it y in p ri o r it izi ng e ne rgy e ffi - c ie ncy p rogram s. Fo r th e so urces tri gge r ing th e fl ags me nti o ned a bove , S haw will p rovi de reco mme nd a- ti o ns to t he Cit y fo r poss ib le cour se o f ac ti o n . S haw p lan s to d eve lo p t he base lin e in ve nt o ry u s in g a n o pe n pl a tform suc h as Microsoft Exc e l. A ll input d ata w ill be s to re d in the d ata base in mo du les de - pe nd in g o n ty pe o f so urces a nd in ta bul ar fo rm a t. A ll in put data wi ll be tra n s pare n t to th e use r, in c lu d in g Q UALi F IC AT ION S 2 .4-3 CITY OF FO A T W O RT H C ITY WI DE E M ISS IONS INVE NTORY AND GREEN H OUSE GAS A SSESSM E N T th e so urce o f th e d ata a nd a ll qu a lit y co ntrol c hec k s pe rfo rme d o n th e d a ta. A ll calcul a ti o n s w ill be v is ibl e to the u se r in th e vari o u s ce ll s of the d a ta b ase a nd a l- o w ill be co mpil e d in a re po rt. The GHG e mi ss io ns wi ll be calcul a te d in a hi e rarc hi cal ma nn e r , aggregat- in g up . W e can e ffi c ie ntl y so li c it d a ta startin g w ith th e C it y a nd th e n wor ki ng d ow n to aJI re levant d e - pa rtme nt s. A ll o utputs s uc h as ta bl es, fig ures, c harts w ill be accompanie d by a ppro pri a te leve ls of notes a nd comme nt aries. T he d a ta w ill be tran s ferabl e to a no the r u ser s ho uld additi o na l d a ta man age me nt o r ma nipul a ti o n be re quire d in th e future, a ft e r compl e - ti o n of thi s proj ect. As pa rt of th e p roj ect , S haw w ill pre pa re a re po rt w hi c h w ill include th e fo ll ow in g: • A d esc ripti o n of th e projec t purpose a nd goals • A co mpre he n s ive in ve nto ry o f o pe rati o ns a nd e mi ssio n so urces in c lude d in th e e miss io n calcul a - ti o n s • A d e ta il e d d escripti o n o f t he input d a ta co ll ec ti o n a nd e mi ssio n calcul a ti o n me th od o logy • All input d a ta c ollecte d fo r th e proj ect in s ta ndar- di zed fo rmat in cl udin g a ll qua lit y c heck s pe r- fo rme d • The calcul a te d base lin e e mi ss io n in ve ntory fo r co mpli an ce w ith MRR • GHG e mi ss io n s impac t fr o m th e City's o perati o n in te rms of carb o n foo tprint a nd carbo n loading • R eco mme nd a ti o n s a nd direc ti o ns to th e City fo r compli a nce w ith t he USEPA 's MRR a nd proposed 'T a il o rin g Rul e' • A n in ve nto ry of ozone precursor s fr o m th e GHG e miss io n sources • E ne rgy inte ns it y me tri cs fo r foss il fu e l combu sti o n units S haw w ill d e live r to th e C ity th e M ic ro soft d a tabase th a t w ill be deve lo pe d fo r th is p rojec t a lo n g w ith a b r ief U ser 's Manu a l. 2.4.2.2 Implemen tation On conclu s io n of negotiations a nd award of th e project, Shaw wi ll condu c t a kick-off meetin g with the City to d eve lo p the detai le d scope a nd sc hedu le o f the proj ect. The meetin g will a lso fina li ze the City o perat io ns to be included in the in ve nt ory, t he SHAW ENVIRONMENTAL & INFRASTRUCTURE , INC . 06C0520 10 T protoco ls to be u sed , a nd th e fo rma t a nd avail a bilit y of input d a ta a nd input d a ta co ll ecti o n mec ha ni s m s. Shaw w ill th e n deve lo p input d a ta re quest fo rm s fo r co ll ect io n of necessary d a ta fo r calc ul a ti o n s. The in- put d a ta re quest s w ill be gro upe d b y t y pe of ac ti vity o r operati o n suc h as o ffi ce buildings, ve hi c le fl eet, p ower generato r s. T h o u g h o nl y co pe I e mi ss io n sources (i .e . direct e mi ss io ns) a re re quire d fo r co m- pli a nce w ith th e MRR, S haw pl an s to a lso inc lude scope 2 e mi ss io n s (i .e. pu rc h ased e lec tri c ity, heat , s team ) in th e da ta re quest fo r ser v in g o the r purposes of th e e mi ss io n in ve nt o ry. The coll ecte d d a ta w ill be reviewed w ith a n a ppro ved qua lity contro l procedure. As part of the qu a lit y c hec k , S h aw w ill v is it a sampl e se t o f o perati o ns to ve ri fy th e d a ta. A ll qua lit y con- t ro ll e d d a ta w ill be e nte re d into th e d a ta b ase u s in g in- put d a ta fo rms. As the d a ta coll ecti o n progresses, Sha w w ill h o ld several m eetings a nd con fe re nc e call s to in fo rm th e City o f th e p rogress and id e ntify issues, if an y, th a t re qu ire the C it y's inte r ve nti o n . A n y d a ta gaps o r d a ta qu a lity iss ues w ill be broug ht to C it y's no ti ce in th ese meetin gs . A ft e r a ll qu a lit y controlle d d a ta a re c oll ecte d a nd e n- te re d into the d a ta b ase, Shaw w ill develo p se ve ral draft e miss io n estima tes a nd m a ke a presenta ti o n to th e C it y of th e inte rpre ta ti o n o f th e d a ta. P o te nti a l e n- han ce me nts o r mo difi cati o n o f the calcul a ti o n s o r d a ta b ase will be a lso di sc ussed . Afte r thi s presenta ti o n, S h aw w ill fin a li ze t he in ve n- tory, th e d a ta b ase, and a re po rt fo r d e li ve ry to th e C it y i n bo th pa per a nd e lectronic fo rm at. Deliverable: draft re po rt fo r rev iew a nd in fin a l re - po rt in e lectro ni c a nd hard co p y fo rma t s. 2.4.3 Key Personnel O ur o rgani zati o n fo r thi s proj ect (d epic te d in Exhibit 2-1 ) is s trea mline d a nd s tra ig ht fo r ward , offerin g clear lin es of res p o ns ib il ity and a s ing le poi nt of contact for the City in o ur Proj ect Manage r . Be hind thi o rga ni- zati o n s tands a cadre o f ex pe ri e nc e d professionals a nd tec hni cal advi . o rs who may be tapped as the need arises. This is a hi g hl y qualified team th a t brings im- mediate bene fit to t he City. Exhibit 2-2 ummarizes t he ed u cation an d ex perie nce of th e team me m bers. QUALIFICATIONS 2 .4-4 C ITY OF FORT W ORTH C ITYWID E E MISSIONS INV ENTORY AND GREE NHOUSE GAS ASSE SSMENT Exhibit 2-1. Shaw 's Proposed Organization fORTWORTH ~ Executive Sponsor ""'"o,,,,.,.,. .. '"""''-'"'" Jimmy Gibson , P.E. District Manager Contract Support Cost & Schedule Contracts/Subcontracts QA/QC Project Manager Arijit Pakrasi, Ph .D., SCEE Technical Advisors David Bubenick , Carbon Management Bill Abolt , LEED AP , Sustainability William Haas , LEED AP , ARRA Program Requirements Data Collection and Reporting Catalina Lamadrid, LEED AP, GHG IQ Leah Blinn Jordanna Rub in, LEED AP Lo ri Evans , P.G . Sushama Paranjape , CHMM Gary Anderle , P.E. Jonathan Dierking , GEM , LEED AP Scott Furlong Freddie Guerra , REM , RHCMM , RS , CIPS, CAPM (CP& Y) 2.4.3. 1 Project Manager Name: Arijit Pakrasi, Ph.D., QEP Title : Air Quality National Practice Lead Years with Shaw : 18 Education: Doctor of Philosophy , Env ironme ntal Engi- neering , Un iversity of Tennessee , Knoxv ille , Tennessee , 1992 Master of Science , Env ironmental Eng ine er ing , University of Tennessee , Knoxville , Tennessee , 1988 Lic enses : Professional Engineer (Chemical ) OH E-60572 ; Board Cert ified Environm en tal Engineer (Amer ican Academy of Environmental Engineering) Professional Affil iation s: Amer ican Meteorological Soc iety Dr. Arijit Pakras i is assoc ia te d wi th o ur [r v in g, T e xas o ffi ce . He is a profess io na l c he mi ca l e ng in ee r wit h over 25 years of ex pe ri e nce in a ll as pec ts of a ir quali - ty . Hi s s pecialized re levant expe rti se is in the a rea of deve lo pin g air e mi ss io n inve ntory a nd tox ic re lease in ve nt ories. He has comp le te d over I 00 e mi ss ion in- ve ntori es in la st 5 yea r s a nd many o f these include d es timatio n o f GHGs (mo st ly C O 2). ln thi s proc ess, he has d eve lo pe d severa l e lec tronic calc ul a ti o n too ls fo r es timating c rit e ri a po lluta nt s a nd GHG s. He has de- ve lo pe d g ree nh o u se gas in ve nt o ri es for vari o us SH AW ENVI RO NM ENTAL & INFRASTRUCTURE, INC . 06CD52D10T indu stri a l c li e nt s a nd is currently wo rlcin g o n e mi s - sio n in ve nto rie s for a group of petrochemical pl a nt s, e lec tric utiliti es, a nd bu s in ess faci li ties. Dr. Pakras i is fully familiar wit h the exi sting GHG accountin g pro- tocol s such as the WRI protoco l, The Climate Regi- stry protoco l, the Cali fornia Climate Action Re gis try protocol , and th e IPCC protocol. H e a nd hi s team has been us in g GHG ca lculation too ls s uch as th e CAPC so ftware b y ICLEI, th e GREET .7 softw a re by A r- gonne National Laboratories, a nd USEPA e mi ss io n factor database. He has a lso authore d three c h a pte r s on fo ss il fu e l combu s tion in "Air Po lluti o n Control Ha ndbook ," publi s he d by th e A ir & W a ste Manage - me nt A ss ociation . Dr. Pakras i is c urre ntl y leadin g several projects re lated to GHG inventory a nd co m- pl ia nce with th e M RR . Dr. Pakrasi has prese nt e d semi nars o n GHG accou nt - ing me th odo logy based o n WRI protoco l to the O hi o Manufacturer's Associati o n, the H o nd a Su ppli e r 's Con fe re nce, a nd in te c hni cal sess io n of th e Ai r & W as te Manage men t A ssoc ia ti o n . QUALIFICATIONS 2 .4-5 C ITY OF FORT W O RTH C ITYWIDE E MISSIONS INVENTORY AND GREENHOUSE G AS AS SESSMENT r I Bill Abolt LEED AP Tech~ical -~dvisor -Energy & ' Sustainab !!!!}'. ·-____ _ Data Collection and Reporting Administration B .E. Civi l . 1 Gary Anderle , P.E. ,Leah Blinn 1 Data Collection and Reporting Enaineerina + 1 i --t--r--M.S. Civil/ I 1 1 I 1David Bubenick !Technical Advisor -Carbon Man-Environmen4al , 25 • I • • ! • • I i k-lagement ____ _ -t--Engineerin __ :1• -~--f--+-J__ •Jonathan Dierking , I B .S. 1 !(PE in IL) GEM, Data Collection and Reporting I Mechani~al ; 10 I • • • : • \ • 1· !~c.:::=-=r~=-=~=-v-'--:"--~-s·.-P-.G-.--'oata C~llect;on and Report;~~--. --~~~ r~B ' . -. -·~ -1 --.-- Scott Furlong 1 Da ta Colle.ction and Reporting .. S.S . Environmental 121 • -·-··--r-. I • \ ---·--------+--_ _ _ _Jechnol9.9.y___T _ ,_ __ 1----+---I---1-__ Jimmy Gibson , P.E. Executive Sponsor M.B.A. 20 i I • - 1William S. Haas rCatalina Lamadrid I \Technical Advisor -ARRA Program M.P.A. Environ . • I I Reauirements _ -j Science and Policy +---. I I 8 • • I • I • i t---· MM I Data Collection and Reporting Lead I M.S. Environ . Mgmt • • I i 3 • • • & Sustainability l -------.__ ----~ -·-------------~-1..-- Arijit Pakrasi , Ph .D., P . t M QEP roiec anager Sushma Paranjape Data Collection and Reporting Ph .D. Environ . Enaineerina M.S . Sta tistical Methods 21 26 • • • • • I • I • Jordanna Rubin , ltgED AP I Data Collectio n and Reporting M. p .A. Environ . and 1 o • • • • • 1 ---------·-__ L Energ y Policy___---·~-----'--~-~-__ _ 2 .4 .3.2 Name: Shaw Title : Lead Technical Advisors William Abolt , Energy & Sustainability Energy & Sustainability Nat ional Practice Years with Shaw : 6 Education : Bachelor of Arts and Applied Sc ience , Augustana College , Rock Island , Illinoi s ; Master of Public Adm inistration , Northern Illinoi s University, DeKalb , Illi no is License s: LEED Accredited Professional , 200 6, Act ive , Illinois , 01 /2050 Affiliations: Ch icagoland Chamber of Commerce Environmental Committee and the Chamber 's Green Bus ines s Adv isory Co , Cha irm ansh ip; Ch ica go Council on Global Affairs Task Force SH AW EN VIRO NMENTAL & INFRASTRUCTURE . INC . 06C052010T on National Energy Po licy an d Midwest Competitiveness , Chairmanship ; Exec utiv e Commi ttee of the Illi no is Chapter of the Nat ional Brownfields Association , Chairmanship ; Illinois Regulatory Rev iew Comm ission , Chairmanship ; Nat ional As- sociat ion of Local Government Environmental Profess ionals , Board of Directors ; Municipal Waste Management Assoc iation of the US Conference of Mayors , Board of Trustees; Alliance for the Great Lakes , Board of Directors; Illinoi s League of Con- servati on Voters , Board of Directors ; Northeastern Illinois Plannin g Comm is sion , Board member ; Ch ica go 's Emissions Credit Trading Bank , Cha irman Mr. A b o lt lead s Shaw' Energy a nd Su s tai na bilit y Na ti o na l Prac ti ce a nd direc t it s C lean E ne rgy a nd S us tai na bility Ce nt e r o f Exce ll e nce. Prior to j o inin g Shaw , he se rv e d as E n v ironme nt Commi ss io ne r , QU ALi FiCA TIONS 2 .4-6 CITY O F FORT WORTH CITYWIDE EMISSIONS INVENTORY AND GREENHOUSE GAS AS SESSMENT Director of th e Office o f Budget and Management and Chief of Management, Office of the Mayor, for the City of Chicago, where he was re s pon s ible for deve loping Chicago's strategy to become one of the greenest cities in the United States. Mr. Abolt ha s 25 years of experience managing com- plex environmental, e nergy and public is s ues includ- ing e nergy planning and s u s tainability program de- s ign, multi-stakeholder budget processes; s us tainable Brownfield redevelopment; green infrastructure plan- ning and analysis and design and implementation of grant programs . As a part of hi s re s ponsibilities at Shaw, he manages and directs s pecific consulting projects for corporate and public clients including but not limjted to as- s ignments involving renewable energy and energy ef- ficiency and s u stainable design. Currently, Mr. Abolt serves as the project director and se nior technical ex- pert for multiple city and state e nergy programs funded under ARRA, the federal economic stimulus program. All programs require the rapid development and deployment of energy effic iency and renewable energy strategies. As Commissioner of the City of Chicago Department of Environment, Mr. Abolt developed a comprehen- s ive energy management plan for the City that in- cluded the expansion of gas and electric efficiency and renewable energy initiatives into City operations, codes and Brownfields redevelopment. He also over- saw the City's franchise with electric utility ComEd . As part of tho se re s pon s ibilitie s, he negotiated the settlement of a franchi se di s pute that provided for more than $ I billion in utility investments in the City, including creation of a $100 million energy future s fund. Name: David Bubenick, Carbon Management Shaw Title: Program Manager-Director of Climate Change/Carbon Management Services Years with Shaw: 7 Education : Master of Science , Civil/Environmental Engineer ing , University of Illinois -University Fellow , Cham- paign-Urbana , Illinois , 1975 ; Bachelor of Science , Civil Engi- neering , Rutgers Un iversity -Summa Cum Laude, Piscataway , New Jersey , 1973 ; Bachelor of Arts , Economics, Rutgers Uni- vers ity -Cum Laude , New Brunswick, New Jersey , 1973 Affiliations : American Society of Civi l Engineers , 2004 ; Air and Waste Management Asso ci ation , 1977; Who 's Who in Finance and Industry Mr. Bubenick has over 25 years o f ex pe ri e nce in manage ment consulting, env ironme ntal program de - ve lopment a nd management, facility operations SHAW ENVIRONMENTAL & INFRASTRUCTURE, IN C . 06C052010T management and air/waste technology assess ment. He lead s Shaw's GHG initiative nationally in the area of deve lopment of carbon emissions reduction portfo- lio s for commercial and government clients. This in- cludes developing e mj ss ion s base lines, reductions s trategies and implementation, portfolio 'c reditabili - ty ' assess me nt s as well as providing po rtfolio tran sac- tion assistance. He has worked with a ll inte rnationally recognized emission inventory protocols for d eve lop- ing carbon footprints and multi-year emission in ve n- tory comparisons and advised clients o n carbon man- agement s u stainability strategies. He has exten s ive experience with EPA's GHG mandatory re porting rule . An ex peri e nced air emissions broker and portfolio manager, Mr. Bubenick' s expertise includes credit certification and verification audits, control strategy and compliance assessments, credit market forecast- ing and regulatory liai son. He co-developed and ran a nationally-recognized emissions brokerage and con- s ulting business-The AirBank, serving hundreds of clients through the US. Mr. Bubenick managed one of the largest portfolios ever marketed in the US result- ing in the s uccess ful tran sac tion of 1200 tons of NOx and other criteria pollutant offsets for Consolidated Edison of New York. Among his credentials in air consulting, Mr. Bube- nick led a team that publi s hed the fir st comprehensive life cycle analysis of acidic depos ition (S02 and NOx) in North America (US DOE). Thi s effort re- sulted in the publication of two books on acid rain. He also convened and hosted the first US EPA Greenhouse Gas Emission Reduction Options confe- rence with the former Deputy Administrator of the US EPA. Mr. Bubenick is also res pon s ible for managing, de- veloping and s upporting air, so lid waste and e nergy projects nationally, in vo lving : indu s trial processes; conventional a nd so lid waste fuel combu st ion ; waste management tec hn o logies/ strategies; o pera- ti o ns/sec urity ri s k management ; as well a s e mi s io n credit trading. Mr. Bubenick ha s managed waste-to-energ y , recy- c lin g, pl a ti cs processing an d meta ls beneficiation proj ec ts for municipal a nd pri va te c lients . He pa rtici- pates on the project team work in g for th e C it y of Or- lando inve s tigating the fea s ibility of gas ifi cati o n of RDF o r sy n-fuel fr o m was te . H e recentl y co mpl e te d a fea s ibility s tudy fo r th e Ukraine and US Trade A sso- c ia ti o n involving life cyc le eva lu atio n s of so lid waste managemen t tec hn ologies for the City of Yalta. QUALIFICATIONS 2 .4-7 C ITY OF FORT W ORTH CITYWI DE E MI SSIONS I NVENTORY AN D GREEN HO U SE GAS A SSESSME NT Rece ntl y, Mr. Bube ni c k mana ge d a co mpre he nsive e mi ss io ns in ve nt o ry proj ec t fo r Case ll a W as te Sys - te ms fo r 18 o f th e ir M SW la ndfill s in th e north eas t, ass istin g th e co mp a ny to j o in EPA's C lim ate Leade rs Progra m. Name: William Haas , ARRA Reporting Requirements Sha w Titl e: Cl ient Pro gra m Manager Yea rs wi th Shaw : 2 Educat ion : Master of Publ ic Adm inistrati on, Env ironmen- tal Sc ience and Po li cy , Co lumb ia Univers ity , New York , New York , 2003 ; Bache lor of Arts , Envi ro nmen tal Scienc e, Law- re nce Univ ersity , App leton , Wisco ns in, 2002 Lice nses : LEED AP Willi a m S . Ha as, LEED A .P . will pro vid e Tec hnic a l Ad viso ry se r vices in th e area o f ARRA re po rtin g. Mr. Haas is an energy and s usta in a bilit y cons ult a nt at Sh aw, where he is res pon sibl e fo r th e manage me nt and exec ution o f ene rgy e ffi c ie nc y, re newabl e ene rgy and sustainability proj ects. He is e xp eri e nce d manag- in g co mpl ex e nvironme nt al and publi c po li cy iss ues a nd is skill ed in po li cy ana lys is, des ign and impl e - me nt ati o n and e ne rgy pe rform a nc e cont rac tin g within environme nt al co nt ex ts. Mr . Haas is a n ex pe rt in ARRA pro gra m require- me nt s a nd curre ntl y se rves as proj ec t ma nage r fo r th e S tate of Mi sso uri EECBG and SEP pro gra ms and is th e tea m lead er fo r th e Loui s iana EECBG pro gra m. Pri o r to j o inin g Sh a w, Mr. Haa s se rv ed as En e rgy Di- vis io n Re prese ntati ve for th e Illin o is De part ment o f Co mm e rc e a nd Econo mi c O pp o rtunity, wh e re he ma- naged e ne rgy e ffi c ie ncy and re newabl e e ne rgy gra nt and re bate pro grams, pe rfo rm ed leg is lati ve ana lys is, ass isted with impl e me nt ati o n o f th e state's Energy Effic ie ncy and Renewa bl e Po rt fo li o Sta nd ard s and wo rk ed to deve lo p and ex pand the re newa bl e e ne rgy sec to r and co rres po ndin g suppl y c ha in . As part of his res po ns ibiliti es, Mr. Haas ma nage d a po rt io n of Illi - no is' Sta te Ene rgy Progra m (SEP) do ll ars a nd int e r- faced wi th U.S . DOE's Office of Ene rgy Efficiency and Re new able Energy . 2.4.3.3 Key Team Nam e: Cat alina Lam ad ri d, Lea d Dat a Co llectio ns/Report in g Shaw Title: Environmental Engineer Years with Shaw: 1 Education : Master of Business Administration , Illinois In· sti tute of Technology , Chicago , Illinoi s , 2009; Master of Environmental Management. Illinois Institute of Technology , Chicago, Illinois , 2009; Bachelor of Chemical Engineering , Monterrey TEC, Monterrey , Mexico , 200 7 S HAW ENVIRONMENTAL & INFRASTRUCTURE , INC . 06C052010T Lic enses : Greenhouse Gas In ventory Quant ifier , 20 10 , Active , Nation wi de ; LEED Accred ited Profession al, 2009 , Act ive , Nat ionwi de Ms. La madrid is a LEE D AP O+M a nd has ex te nsive ex pe ri e nce in prov idin g LEE D co ns ultin g se rvices fo r co mm e rc ia l buildin gs. In additi o n s he is an acc redit ed Gree nh ouse Gas In ve nt o ry Qu a ntifi e r. She parti c i- pates in s usta in a bility co nsultin g pro j ec ts and pro - vid es s upp o rt in the eva lu ati o n of o pp o rtuniti es fo r pri va te cli e nt s and mun ic ip a liti es i n th e areas o f ener- gy effi c ie ncy, gree nh ouse gas in ve nt o ri es, a nd rene w- a bl e e ne rgy. Ms. La madrid prov id es se r vices to pub- li c clie nt s in th e areas o f ene rgy progra m des ign and impl e me nt ati on. Pri or to j o inin g S haw, M s. La madrid se r ve d as re- searc h ass ista nt fo r th e Stu art Schoo l o f Bu s in ess Mas te r in E nviro nm e nt al Ma nage me nt pro gra m, where she was res po ns ibl e fo r id e ntifyin g o pp o rtuni - ti es fo r th e sc hoo l to imp rove it s su stain a bilit y prac - ti ces as we ll as o ffe rin g ad vice and con s ultin g se rvic- es to c lean e ne rgy a nd was te-to -e ne rgy start-up s. As part o f Shaw's s upp o rt o f th e Ci ty o f Mi a mi Ga r- de ns, FL and Palm Bay Co unt y, FL Ene rgy Effic ie n- cy and C o nse rva ti o n Bl ock G ra nt Pro gra ms, M s. La- madrid pe rfo rm ed a GHG base lin e assess me nt. Fo r th e State o f Loui siana State E nergy Program and th e EE CBG , both fund ed throu gh ARRA , M s La ma- drid particip ated in de ve lopin g th e pro gram des ign fo r a Tran s port ation E ffi c ie ncy a nd Alte rn ati ve Fu e ls Pro gra m, a Re newa bl e E ne rgy Program as we ll as th e EECBG . Oth e r ac ti viti es in vo lve d co ndu c tin g o ut - reac h fo r potenti a l a ppli cant s, pr e pari ng grant agree - ment s, provid ing tec hni cal ass ista nce to a ppli ca nt s , mo nit orin g co mpli ance with ARRA, state a nd local regul atio ns. Ms. La madrid pa rti c ip ates in a proj ec t to ass ist th e Misso uri De partm e nt of Na tural Reso urces in th e de- s ign, mark e tin g a nd impl e me nt ati o n o f th e EEC BG progra m fu nd ed th ro ugh th e ARRA . T he progra m wi ll provide approximate ly $12 mi ll ion in gra nt fund- ing to e li g ible units of loca l gove rnm e nt to reduce fos sil fuel em iss io ns; reduce the total e ne rgy use; im- prove e nergy effici e ncy, and c reate a nd retain jobs . Nam e: Leah Bli nn , Da ta Co ll ectio ns/Repo rti ng Shaw Title: Project Manager Years with Shaw : 8 Educat io n: Bachelor of Engineering, Chemical Engineering, The Pennsylvania State University , Un iversity Park, Pennsylvania , 2001 QUALIFICATIONS 2 .4-8 CITY OF FORT WORTH C ITYWIDE EMISS IONS INVENTORY AND GREENHOUSE GAS ASSESSMENT Ms . Blinn is a project manager and chemical engineer with over 8 years of ex perience in air di s pers ion modeling , emission calculations, and permitting . She has performed emission calculations for chemical manufacturers, utility indu stries, la ndfill s, wood pre- servation companies, and other indu strie s. Ms . Blinn has also pre pared state and federal permit a pplica- tion s for various indu s trie s in T exas, W est Virginia, Colorado, Illinoi s, Ohio, New York , Florida, and P e nn sy lvania . She has prepare d a ir emiss ion inventori es and hazardou s waste/chemical s ub s tance reports for utilities, landfill s, and chemical manufac- turers to comply with federal legi s lation . She has per- formed ai r di s persion mode ling and air quality analy- s is re ports for utilitie s and landfill s in s upport of PSD permit applications. She also deve loped e nvironmen- tal manageme nt information sys tems for utility clients to manage their Title V permits u s ing a web-based software (E nviance). Name: Johathan Dierking, Data Collections/ Reporting Shaw Title : Pro ject Manager Years with Shaw : 2 Education : Bachelor of Eng ineer in g, Mechanical Engi- neering , University of Colorado at Boulder , Boulder , Colorado , 2001 Licenses: LEED Accredited Professional , 2005 , Active , Nationwide , 01 /2015 ; Engineer in Training , 2002 , 537 43, Ac- tive , Colorado , 01 /2012 ; Professional Engineer , Mechanical , 2009 , 062062139 , Active , Illinois , 11 /2011 ; Certified Energy Manager, 2005 , Active , Nationw id e, 12/2008 Aff ili ations : Association of Energy Engineers , Member , 2004 ; USGBC , Member, 2004 ; ASHRAE , Member , 2002 Mr. Dierking is re s pon s ible for the program manage- ment and execution of energy efficiency, s u stai nabili- ty and e nvironmental projects. Prior to joining Shaw, he se rve d as a Manager within the Building Technol- ogy a nd Sustainability Group for Realfoundations, Inc ., as an Energy Con s ulta nt for Sieben Energy A s- s oc ia tes, a nd before that , a s a Proj ect Manager fo r Nexant, Inc . Mr. Di e rking has 9 years o f ex peri e nce in manag in g a nd exec utin g e ne rgy e ffi c ie ncy, bu ildin g commi s- s io nin g, LEE D and s us tai nab ilit y projec ts wit h in the public a nd pri va te ectors . Thi s include s th e d eve l- o pme nt a nd executi o n o f e xecutive leve l e ne rgy e ffi- c ie ncy and building technology s t rategies incorporat- ing th e assess ment of market tre nd s, o pportunities a nd po te ntial ri s ks. Mr. Di e rkin g has d es ig ne d a nd exec ut e d numerou s co mmi ss io nin g a nd re tro- co mmi ss io nin g proj ec ts in corporat in g e ne rgy e ffi- c ie nt des ign a nd LEED. He has a lso ma naged project SH AW E NVIRONMENTAL & INFRASTRUCTU RE , INC . 06C052010T teams in the assessment and impl e mentation of port- folio-wide e nergy management, utility manage ment a nd building automation building s y ste m s. A s ignifi- cant amount of thi s ex perience is concentrated within the commercial, re s id e ntial, indu st rial, and public utility sec tors. Mr. Dierking s pecializes in developing and conducting e nergy efficiency initiatives, technol- ogy strategies, a nd s u stainable de s ign o r "gre e n" projects. Current and past professional affi li ation s in- cl ude the ASHRAE, USGBC, and the A ssociation of Energy Engineers. For one of the large st re staurant chains in the US , Mr. Dierking developed, managed and implemented port- folio-wide comprehensive e nergy a udit s. He per- formed s ite assessment of building systems to devel- op and define energy cost re duction meas ure s, utility commodity management opportunities, and cost anal- ysis emphasizing clients' return on investment. The program re sulted in the deve lopment of a Corporate Energy Management Plan . As a re sult of the Com- prehensive Energy Management Strategy, Mr. Dierking's team identified projects and programs re- s ulting in a potential energy cost sav ing s of $24.9 million per year. The estimated total potential energy cost sav ings represe nt an approximate 13 percent re- duction in the chain's total portfolio energy costs. Mr. Dierking led in the de sign and development of the Louisiana Department of Natural Re source s State Energy Program. The program was de s igned to di s- perse $71 million in federal s timulu s dollars through- out the State of Loui s iana to support the implementa- tion of energy e fficiency projects, create jobs and s timulate the economy. For the Florida Fish and Wildlife Conservation Commission, FL, Mr. Di e rking develope d , managed and implemented portfolio-wide comprehensive e ne rgy audits . He performed s ite assess me nt of build- ing sys te ms to de ve lop and d efi ne e nergy cos t re duc- ti o n meas ure s, utility co mmodity management op po r- tunities, a nd cos t a na lysis e mpha izing re turn o n inves tme nt. The assess me nt a ls o include d water a nd was te a udit ac ti viti es. The prog ram goal wa s to id e n- tify e ne rgy e ffici e ncy projects th a t co uld be competi- ti ve ly bid throu g h a Req ues t for Proposa l proce s to Energy Service C o mpani es. 2.4.4 Proposed Project Manager Qualifications As Shaw's Air Quality National Prac ti ce Lead, Dr. Pakra s i ha s been o n the fo re fr o nt o f e mi ss io ns inv e n- to ry and g reenh o use g as assess me nt se rv ic es for the co mp a ny throughou t th e US a nd a broad . QUALIFICATIONS 2 .4-9 C ITY O F FO RT W O RT H C IT Y WI DE E MI SSIONS INVENTOR Y AN D GREE NHO U SE G A S A SSESSM E NT Fo ll o win g a re e xa mpl e proj ect s man aged b y Dr. P akras i . MRR Compliance for Electric Utilities - Nationwide Facilities Con tac t/Phone: Just in Paron ish/ (724 ) 597 -8392 Location : Mu ltiple Stat es Cos t: $1 24 ,000 Tim e Adherence : Phase 1 Comp leted wi th in sc hedu le; Phase 2 on-go ing , scheduled comp let ion Ma rch 31 , 201 1 Sco pe : Shaw ha s d eve lo pe d co mpli a nc e pl a n fo r 20 e lectric utilities in P A, OH, NJ , IL, FL , CA, a nd MS fo r full c o mpli an ce with the USEPA 's Manda tory Re po rtin g Rule . The proj ec t re quire d d eve lo pme nt o f a n inv e n- to ry o f a ll covere d so urc es in th e fac iliti es a nd a base- line GHG e mi s s io n in ve ntory s tri c tl y foll o w in g the protocols o f the MRR. The fir st phase o f the proj e ct need e d to be compl e te d within re g ul a to ry d eadline o f April 1, 2010. D a ta coll e ctio n fr o m th e di ve rse fac ili- ti es w ith vari e d o pe rati o na l mo d es a nd diffe re nt d a ta co ll ecti o n me th o d s w as a c ha ll e n ge in the proj ect. Sha w rev iewed th e fac ilit y o pe rati o n s in d e pth a nd d eve lo pe d a proce dure for e ffici e nt d a ta coll e cti o n, rev ie w e d a ll d a ta with ex isting Title V pe rmit d a ta, conducte d quality c he cks o n the data as ne c essary, a nd fin a li zed the inve ntori es for re porting purposes . Sha w me t with th e c o rp orate divi s ion s o f c li e nts s uc h as (d a ta man agem e nt , fu e l purchase) multiple times to communi c ate the progress a nd resol ve iss ues as need e d . Sha w a ls o had c onfe re nce call s w ith all 20 faciliti es to e n s ure th e qu a lity of th e in ve ntory a nd d a ta coll e cti o n proce dures a nd re c o mme nde d best m a n age me nt prac tic es . Shaw is c urre ntl y h e lpin g th e faciliti es to c o mpl y w ith a ll compli a nc e m o nitoring re quire me nts o f th e MRR includin g fu e l mo nito rin g , fu e l a n a ly s is, cali - b rati o n o f fu e l me te r s a nd runtime me te rs for o pe ra t- in g ho urs. Shaw w ill a lso p rov ide se r v ice to th e fac il - iti e s regardin g registrati o n w ith US EP A , pre parati o n o f fir s t ye a r 's (20 11 ) a nnu a l G HG e mi ss i o n in ve nt o - ry, a nd s ubm itta l o f th e in ve nto r ies to U S EPA o n be- ha l f of th e fac il ities . GHG Em ission I nventory Evaluat ion for Murphy Oil Refi neries Contact/P hone : Sam Ch ambe rl ain/ (87 0) 864 -63 34 Loc at ion : El Dor ado , AR Cost: $10 ,000 Ti me Adhere nce : Complete d on ti me Scope : M urphy O il o pe ra tes th ree re fi ne ri es (t wo in US , o ne in U K) a nd numerou s bulk o il s torage fac iliti es in th e S HAW ENVIR O N M E NTA L & INF R A S T R UCTURE , IN C . 06C052010T US . The comp a n y h as d eve lo pe d a GHG in ve nt o ry for worldwide o perati o n s s inc e 2003 u s in g th e SANG EATM so ft ware . H owever the qu ality o f th e in - ve nt o ry was no t ascerta in e d yet. Murphy O il con- trac te d Shaw to rev iew in de ta il a ll co ll ecte d d a ta fro m th e fac iliti e s fo r the 200 6 a nd 2007 inve nto ry a nd reco mme nd th e be s t ma n ageme nt practi ce. In thi s p roj ect, Sha w rev ie w e d the ex is tin g d a ta a nd calc ul a ti o ns in-de pth to provide a quality a ss urance to the c li e nt. Shaw 's exte n s ive ex pe ri e nce in in ve nto ry a nd e mi s s io n calcul a ti o n s was a n as se t to th e c li e nt in thi s proj ect. Several d e fi c ie nc ie s a nd a reas of im- pro ve me nt we re no te d a nd di sc u ssed w ith the c li e nt. F rom ex istin g SANGE A s pread s heets, Sha w a lso d e- ve lo p e d u se r-frie ndl y exec uti ve s umma ri es o f th e 2006 a nd 2007 GHG e mi ss io n s res ult s corres p o ndin g to th e E QT re fin e ry di vis io n . P e rfo rma nc e me tric s were a l so d eve lo pe d t o id e ntify units with p o te nti a l for e ne rgy e ffi c ie nc y. Summa r y co mpa ri s on s were ma d e to compar e pe rfo rmance o f s imil a r unit s acro ss the fl eet. C o mpa ri s o n ta bl es a nd illu st rati ve g raphics o f e mi ss io n s a nd pe rforma nce m e tri cs w e re pre pare d a nd the n a nnota te d with key o b serv a ti o n s a nd tre nds. T o ass ist in th e id e ntifi cati o n a nd pri oriti zati o n o f GHG miti gati o n o pti o n s b y Murphy O il manageme nt , the to p e mittin g sources fo r e a c h re fin e ry w e re id e nti - fi e d in te rm s o f the ir a nnua l tC02e contributi o n ra nk- in g o n a n a ll-re fin e ry scale . Shaw pre p ar e d a c o nc ise a nd highly readabl e re port for u se b y C o rp o rate EHS , Board me mbe rs, as w e ll as plant m a nagers. Metrowaste Authority Conta ct/Phone : Jeff Dwore k/ (515 ) 33 3-4445 Locat ion : Des Moines , IA Cos t: $24 ,000 Time Adherence :On -go ing ; All tasks complete d on time Sc ope : Metro waste A uth o rity o perate s two sa nita ry la ndfill s fo r th e C it y of De s Moin e s. S haw ha s been p rov idin g a ir q u a li ty c o mpli a nce a nd e mi ss io n in ve ntory se r v ic - es to Me tro was te fo r several years. W ith th e promul - gati o n o f th e MRR , M e trowaste co ntrac te d S h aw to he lp in a ll as pec ts of co mp lia nce wi th thi s regu la ti o n . S ha w d eve lo pe d an in ve nt o r y o f a ll covere d p rocesses w ithin the fac ilit y a nd rev iewe d in d e ta il the data co ll ec t io n a nd mo n ito ri n g proc e d ures. T he compli a nc e is com pli cated by th e fac t th a t a no th e r e nti ty ow n s a nd o perates t he gas co ll e c ti o n syste m in th e la ndfil ls . S haw rev ie we d th e regul a ti o n s , ha d se ve ra l di sc us - s io ns w ith USEP A a nd th e indu stry assoc ia ti o n to QUALI F IC ATI O N S 2 .4 -1 0 C ITY OF FORT W O RT H C ITY WID E E MISS IO N S INV E NTORY AND GREE N HO U SE GAS A SSESS M E NT deve lo p th e co mpli a nce plan for M e tro was te . Sh a w th e n d eve lo ped a n e ffi c ie nt d a ta co ll ec ti o n procedure a nd deve lop e d th e base lin e in ve nt o ry for th e facilit y . Th e in ve nto ry s ho we d th at o ne o f th e landfill s wo uld no t tri gger th e MRR a nd need no t re po rt th e GHG e mi ss io n s in 2011 . H owever , th e la ndfill was pre - di c ted to tri gge r MRR by 20 15 ; th e refore, Shaw ad- vised a d a ta co ll ec ti o n and mo nit o rin g sys te m be put in pl ace fo r thi s fac ilit y a lso a lo ng w ith th e ma in fa - c ilit y th a t tri ggered re po rtin g 20 I 0 . Sha w d evelo pe d a GHG co mpli a nc e pl a n a nd is c urre ntl y he lpin g th e c li e nt w ith impl e me nt a ti o n o f th e mo nit o rin g pl a n . 2.4.5 Statement of Qualifications of Shaw Shaw E n viro nme nta l & lnfras tru c ture, lnc. brings th e ri g ht mi x o f ex pe rti se, e xp e ri e nce, local commitme nt , a nd resources to e n s ure th e s uccess of th e C it y's e mj ss io n s in ve nto ry a nd GHG assess me nt proj ec t. 2.4.5. 1 Firm Background The Sh a w Group lnc.® was fo unded in 198 7 a nd is in corp orate d in L o ui s ia na w he re we ma int a in o ur ho me o ffic e in B a to n Rou ge . W e have mo re th a n 28,000 peopl e and 180 o ffi ces worldwide. A Fo rtun e 500 firm , The Sh a w G ro up had a n a pprox ima te $7 .32 billion in re ve nu e in 2009 and is fin a nci a ll y s ta bl e . C o mpri se d o f di ve r se , ye t sy ne r g isti c compo ne nt s, we offer a world o f soluti o ns to a multitude o f indu stri es aro und the g lo be . Exhibit 2-3 d e pi c ts The Shaw Group o rgani zati o n . ln 2 003, The Shaw Group d e bute d o n t he En gi nee r - in g N ews Reco rd (ENR ) to p 100-li s t o f "A me ri ca's M ost A dmjred C o mp a ni es ." Thi s recogniti o n sup - po rt s Shaw's commitme nt to prov ide a pre fe rre d p lace o f e mploy me nt. B y a tt rac tin g a nd kee ping hi g h qu a lit y a nd tale nt e d p rofess io n a ls, Sh aw brin gs inno- va ti ve and effec ti ve se r v ices to o ur c u s to me rs. W e ar e hi g hl y ac ti ve in T exas, w ith lo n g-te rm con- trac t s w ith T exas Co mmi s io n o n En viro nme nt a l Qu a lit y, T exas De partme nt of Tra n s po rt a ti o n , T exas De pa rtme nt o f Ho u s in g a nd Community Affair s, C it y o f A u stin , 7 -E leve n , AT &T , a nd BNSF a mo n g o th e rs. S ha w brin gs e n vironme nt al a nd infras tru c ture so lu- ti o ns in a variet y of fo rm s: fr o m assess me nt , e n vi- ro nme nt a l resto rati o n, a nd re d eve lo pme nt of tro ubl e d s ites, to e n v iro nme nt a l pl a nnin g a nd des ig n fo r new impro ve me nt s, to p rogram develo pme nt , e ne rgy au - dits a nd effic ie ncy pl a nnin g fo r c li e nt s seekin g to re - duce th e ir carbo n foo tprint, build e ne rgy c re dits, and beco me res po n si bl e steward s o f th e e n v iro nme nt. As th e world has s tru ggled to adju st to c ha ng in g e n vi- ro nme nt a l issu es a nd econo mi c cri ses, we have re- s po nd e d b y brin gi ng togeth e r ac cl a imed ex pe rti se in e ne rgy e ffi c ie ncy, su sta in a bility, pro gra m ma nage- me nt , grant id e ntifi cati o n , re p o rtin g. A ha llma rk o f o ur se rvi ce is our proactive a pproac h to con s ultin g. W e take se ri o us ly o ur res po n s ibility to guide yo u in d eve lo pin g tas k ass ignme nt s th at p rov id e th e C ity of Fort W o rth with max imum va lu e fo r th e mo ney s pe nt. As a result , we d eve lo p a mutua ll y sati s fa c to ry, lo ng-te rm cli e nt/ad v isor re la ti o ns hip . Immediate Value for the City of Fort Worth With the vast resources of an international fi rm and the a pproach to serv ice of a neighborhood enterprise , Shaw brings a unique mix to its neighbors in the City of Fort Worth . We are committed to our Texas clients and to our communities. We have a firm understanding of the local commun ity , have s ign ificant energy and en vi ron - mental experience , a re well ve rsed in f ederal reporting require ments and t he increased levels of transp a rency required by the ARRA , and have a pro ven tra ck reco rd serving mun icipalit ies in GHG endeavors . Exhibit 2-3. Business Segments in the Shaw Group Organization Environmental and Infrastructure Fossil and Nuclear SHAW EN V IRONMENTAL & INFR A STRUCTURE , INC . 06C0520 10 T Energy and Che mical Fa b rication an d Ma nufac turing Mai ntenance QUALIFICATIONS 2 .4-11 C ITY OF FORT W ORTH C ITYW IDE E M ISSIONS INVENTOR Y AN D GREEN H OUSE G A S ASSESS M E N T 2.4.5.2 General Qualifications in ARRA Related Efforts O ve r 8 5 pe rce nt o f o ur bu s in e s s in T exas come s fr o m re turnin g c li e nts-proo f th at o ur e mph a s is o n c li e nt sa t isfac ti o n works . S haw has ex pe ri e nce in a nd th o - ro ug hl y und e rsta nd s th e tran s pa re ncy , ove rs ig ht , a nd account a bility re qui re me nt s th at acco mp a ny th e A me ri can Recovery a nd R e in ve st me nt Ac t (ARRA) d o ll a rs . Gi ve n o ur indu stry leadin g pe rfo rm a nce a nd experi e nce ma nagin g s uc h programs, S haw is be s t pre pared to s uppo rt th e C ity of Fort W o rth in it s G HG assess me nt a nd in ve nt ory ac ti viti es. Eve ry t ax paye r d o ll ar s pe nt o n econo mi c recove ry w ill be s ubj ec t to unprecede nted leve ls o f tra ns pa re n- cy a nd accounta bility. Eac h gove rnme nt e ntit y receiv- ing A RRA fundin g mu st p rov id e a d e tail ed d esc rip- ti o n of eac h in ve s tme nt o r proj ec t th a t is fund e d , w hy th a t proj ec t was se lec te d , th e tot a l cos t , and w hy th e ac ti vity s ho uld be fund ed w ith tax paye r recover y d o l- la rs. F urth e rmo re, ARRA p rograms mu s t meet s peci f- ic goals and target s, and contribute to improve d pe r- form a nce o n broad eco no mi c indi cato rs. S ha w has s ig nifi cant ex pe ri e nce in th e des ign , im- pl e me nt ati o n and ma nage me nt o f e ne rgy effic ie ncy programs a nd in ma nag in g di ve rse sta ke ho ld e r processes fo r a va ri e ty of cli e nt s. W e are c urre ntl y wo rkin g w ith a numbe r o f sta tes, counti es, a nd muni- c ip aliti es o n is s ues re latin g to ARRA in c ludin g th e d eve lo pme nt o f EECCS s that leverage util ity in ce n- tives, EECBG fund s, a nd Sta te E ne rgy P rog ram d o l- la rs . S haw's profes s io na ls have been at th e for e fr o nt o f carbo n a nd ozone prec urso r e mi ss io ns c ha rac te r- izati o ns, asset d eve lo pme nt , a nd lifec yc le proj ec ts fo r ove r 25 yea rs . S peci fic all y, o ur key carb o n e mi ss io ns ma nage me nt (includin g t he carb o n imp ac t of all gree nh o use gas emiss ions) services include : • S us ta in a bility Pl a nni ng -Carb o n, e ne rgy , fac iliti e s , wa s te , wa ter, b us ine ss , a nd fi na nc ia l • Emi ss io ns Inv e nt ory M an age me nt -Carbon • C arb o n 'Footprint' Deve lo pme nt -Broad -base d indu stry sec to rs • E mi ss io n Re du c ti o n Meas ures -Ide nt ifi cat io n, evalu ati o n , imple me nt a ti o n • C arbo n I mpac t Eva luatio ns -Project fe a s ib il ity a nd 'wo rt hin e ss' a ss ess me nt s • C a rb o n Portfol io Deve lopme nt -C e rt ificatio n, ve - rific a ti o n, reg istrati o n • E mi ss io n Cre dit Advi so r/Pa rt ne r -Po rtfo lio va lua - t io n , ma na ge me nt , re pre se nt a ti on SHAW ENVIRONMENTAL & IN F RASTRU C TURE , IN C . 06C0520!0 T • Carbon Se qu e stra ti o n Manage me nt -Power proj e c ts 2.4.5.3 Qualifications in Emissions Assessments and GHG Inventories We have parti c ip a te d in GH G proj ec ts aro und th e wo rld a nd are fa mili ar w ith deve lo pin g na ti o na l pro - gra ms fo r G HG e mi ss io ns s uc h a s T he C lim a te Regi- stry , th e K yo to P ro toco l, th e C lean Develo pme nt M e- c hani s m , th e Cali fo rni a C lima te Ac ti o n R egistry, th e C hi cago C lim a te Exc han ge, US EPA 's C lima te Lead e rs Progra m a nd o th e r GHG re late d programs . We as s ist clie nt s o n d eve lo pin g pro gra ms in the ma ny states e ndeavorin g to in stitute G H G ma nage me nt progra ms at the ir fac iliti es. T hi s secti o n p rov id e s fur- th er d e tai ls o n these p rojec ts a nd o n o ur ex perie nce i n thi s a re na . O ur ex pe rt s we re part of a g roup th at se t up "Car bo n B a nk ," a ve ry early inte rn a ti o na l e mi ss io n tradin g e ntit y d ealin g w ith GHG e mi ss io ns . W e parti c ip ate d in th e d eve lo pme nt of th e C hi cago Clima te Exc hange (CCX), th e fi rst "ope n ma rke t" trad ing pl a t fo rm fo r G HG c re dit trad es. W e are a lso a me mbe r o f US EP A's L a ndfill M e th a ne O utreac h P rogram (LMOP) and th e inte rn ati o nal program , "M e th a ne to M ark e t s," a n inte rn ati o na l c o -o perati ve e ff o rt o f 22 na ti o ns to co nt ro l a nd be ne fi c iall y use was te me th a ne, a po te nt gree nh o use gas . O ur pe rso nn e l i n th e US a nd e lsewhe re around th e wo rld parti c ip a te in regio na l GHG initi a ti ves s uch as Reg io na l Gree nh o use G as Initi ati ve (RGGI) a nd The Cali fo rni a P rogram as a n ac ti ve partic ip a nt in t he co nse ns u s buildin g proces s . W e a re parti c ip atin g in th e curre nt d eve lo pme nt of protocols fo r The Clima te Regis try w hi c h re pre se nts th e effo rt s o f 44 s ta tes, a numb e r o f Indi a n tribes, sta tes fr o m Mex ico, a nd a Canadian prov in ce . A s p a rt of th e COr coaliti o n, we he lp e d th e C he m ica l Coun c il of New Je rsey o n pro - po sed CO2 regu la ti o ns . S haw 's nati o nw id e ne two rk of carbo n e mi ss io ns ma nage me nt profess io na ls ha ve been a t t he fo re fr o nt o f carb o n a nd ozone prec urso r e mi ssio ns c harac te ri - za ti o ns, e nv iro nme nt a l asset deve lo pm e nt a nd li fe- cyc le proj ec ts fo r ove r 25 year s. Ou r a pproac h to gree n ho use g as (GHG) a nd c limate c ha nge mit iga ti o n serv ic es bu ild s o n a fo undati o n o f s ustai na bil ity so lu- ti o ns-from th e e sta bl is hme nt of the ini tial ba se lin e o f e mi ss io ns and c a rbo n foot pri nt to th e s trategy for furt he r e m iss io ns re d uct io n acti o ns . So me e xamp les o f thi s im po rt a nt wo rk fo ll o w. QUALI F IC A TIONS 2 .4-12 C IT Y OF FORT W O RT H C ITYWI DE E MI SS IO N S INVE NTO R Y AND G R EE NHOUSE G A S A S SESS M E N T Baseline GHG Inventory -Sound Transit Authority, Seattle, WA The C e ntra l Pu get S o und Re g io na l Trans it A uth o rit y (Sound T ra ns it ) pl a ns, build s a nd o perates regio na l tra n s it s y ste ms a nd ser vices fo r C e nt ra l Pu ge t So und in W e ste rn W as hin gto n S tate . S tre tc hin g over Kin g, Pi e rce a nd S no ho mi s h counti e s, Sound Tran s it is re - s p o n s ibl e fo r d e li verin g a hi g h-ca p ac it y t ra n s it s ys te m w ithin th e regio n 's mo s t heav il y t rave led corrid o rs. The s y ste m in c lude s ex pre ss bu s ro ut e s, s o unde r commute r rail , link li g ht ra il , hi g h-occ upa ncy ve hi c le la ne acce ss im prove me nt s, a nd pa rk -and -rid e lo ts a nd tra n s it c e nte rs. The Sound Trans it impl e me nt s it s E n v iro nme n ta l Po li cy a nd S u sta in a bili ty Exec ut ive O rd e r co mmit - me nt s , b y e mbe ddin g s us ta in a bl e p rac ti ces into its d a il y ac t iv iti e s . So und T ra ns it u se s it s En viro nme nt a l a nd S u st ain a bility Manage me nt S y ste m (ESMS ) to mo nito r , ma int a in , a nd meas ure th e effective ne ss o f ste p s take n to he lp to ac hi eve a mo re s u s ta in a bl e co mmunity . This in cl ud e s building hi g h capac it y tra n s it faci liti e s a nd se r vices to re duce re li a nce o n s in g le -occupa nt cars; purc ha s in g hy brid ve hicl e s a nd a lte rn a t ive fu e ls fo r revenu e a nd no n-revenu e fl eet to reduce greenh o u se gas e mi ss io n s , a mo n g o th e r initia- t ives . S haw d eve lo ped a b a se lin e GHG in ve nt o ry fo r th e Sound T ra n s it to he lp th e a uth o rity be tte r pre pare fo r greenh o u se gas ma nage me nt a s pa rt o f th e s u s ta in a- bility po li cy . Shaw d evelo pe d th e corp orate / geo- graphi c bo unda ri e s, the organi zati o na l b o unda ri e s , in ve nto ri e d a ll GHG e mittin g s o urces , d e ve lope d a da ta co ll ec ti o n procedure , a nd e stima te d th e a nnu al GHG e mi ss io n s b a se d o n co ll ec ted da ta . As re - q ue s ted by th e Sound T ra ns it , S haw u sed th e pro toco l deve lo pe d b y the Wo rld Bus iness Co unc il fo r Su s - ta inable Development (WB CS D ) and Wo rld Re - so urces In s titute (WR /) t it led "Gree nhouse Ga s Pro - tocol : A Co rp o ra te A cco untin g and Rep o rti n g Sta ndard," o ne o f t he mo s t w ide ly used protoc o l fo r thi s proj ec t. Bo th d ire c t and in d irec t GHG e m iss io n s s uc h a s fro m na t ural ga s co m bu s ti o ns , o ffic e b uil d- ings, no n-reve n ue fl eet , So u nd e r Ra il S e rv ic e, e m- ployee tra ve l, a nd pu rc hase d e lectri c ity/heat were inc lud ed in th e in ve nt o ry . A re po rt was p re pare d s how in g th e co ntributi o ns o f the va ri o us grou p s o f o perat io ns o n th e to ta l G HG e m is s io ns . In t hi s proj ec t, S ha w a lso he lped th e S o u nd T ra n s it w it h rec - o mme nd a t io ns for meeti ng it s s u sta ina bi lit y goa ls . S H A W E N V IRO NM ENTAL & INFR ASTRU C TU R E , INC . 06C052010T Municipal Energy Efficiency/Renewable Energy Initiative -Metropolitan Mayor 's Caucus S haw was hired by th e M e tro po lit a n Mayors Cauc u s to hel p it s mem be rs-a ll of the muni c ip a lit ie s in th e C hi cago reg io n-se ll e ne rgy effic ie ncy a nd re newa- bl e e ne rgy (EERE) to th e sta te's utilit ies . A s pa rt o f it s wo rk , S haw wo rke d w ith th e Cauc u s to deve lo p a p ro po sed M uni c ip a l Se t-A s id e th at mand a tes at lea st IO pe rc e nt of utility a nd s tate in ve stme nt s in e ne rgy e ffi c ie ncy be targe ted at units of local gove rnme nt. T h e set-a s ide pro po sa l was ad o pt e d int o s ta te law a nd re s ulted in a pprox ima te ly $2 5 milli o n in ne w e ffi - c ie ncy s pe ndin g fo r C hi c a go -ar ea local governme nts ove r t he nex t 3 year s . In a nti c ip a ti o n o f t hese new re - so urces , S haw is workin g w ith t he C a uc u s a nd it s me mbe r s to id e nti fy EERE proj ects most li ke ly to be purc h ased a nd de fin e th e da ta muni c ip a liti e s w ill need to p rov id e fo r th e a pp ro pri a te meas ure me nt a nd ve rifi cati o n o f p roj ect s . S haw a ls o worked w ith t he C a uc us to d eve lo p a muni ci pa l clean e ne rg y p ro du c t th at can be so ld to th e st ate's util iti e s . The produ c t, call e d "C lean T ags ," is s imil ar to a re newabl e e nergy ce rti fica te, o r "gree n tag," but re present s bo th re new- a bl e e ne rgy a nd e ne rgy effi c ie ncy . Unlike mo st g ree n tags, Cl e an T ags re prese nt local e ne r gy e ffi c ie ncy a nd re newabl e e ne rgy p ro du c ts , w hi c h imp rove local and regio nal a ir qu a lity a nd p rov id e a so urce of reve nu e to local muni c ip a liti e s th a t p ro mo te cl ean e nergy throu g h th e ir po li c ie s a nd prac ti ces . S haw has wo rk e d w ith th e Cauc us to d e ve lo p a Greenh o u se G a s Calc u- lato r fo r Munic ip a l S pec ia l Eve nt s a nd conducted a n e mi ss io n s in ve nt o ry fo r th e C hi cago Bi cyc le Fed e ra - ti o n 's Bo ul e vard Lake fr o nt T o ur, the fir s t cl ima te- ne ut ral event s po n s o re d b y th e C a uc u s. A t th e eve nt , e mi ss io n s we re offse t u s in g a co mbin ati o n of bo th g reen tag s a nd muni ci pa ll y ge nerate d C lean T ags . Operational Environmental Impact Analysis, Chicago, IL S haw e va lua ted th e e n v iro nme nt a l imp act o f t he C hi - cago Bo ta ni c G ard e n 's ex ist in g o pe rati o ns a nd d eve l- o pe d pro toco ls to e nh a nce the s us ta in ab ilit y o f th o se o pe rati o ns. S haw began by cond u c ti ng a n e n v iro n- me nt a l a ud it o f th e Gard e n 's o pe rat io n s to ide nti fy e xa mpl es of s ustain a b i lit y exce ll e nc e as we ll as o p- po rtun it ies fo r imp rove me nt. Us ing kn ow led ge o f s us ta ina b le p rac ti ces a nd t he be s t practi ces o f s im il ar in s t itu t io n s, Shaw deve lo ped s u s- ta ina bl e p rac ti ce pro toco ls to e nh a nce th e s u s ta in a- bi lity o f th e Garde n 's o perat io ns . We a lso be nc h- ma rk e d th e G a rde n 's s u s tai na bilit y initi a t ive aga in st th o se of s imil ar in s ti tuti o ns; d e fi ned cos t a nd QU A Li FiCA TION S 2 .4-13 CITY OF FORT W ORTH C ITYWI D E E M ISSION S INV ENTO RY AND GREENHOUSE GAS ASSESS M E NT pe rfo rm a nce me tri cs th at could be integrated into ex- is tin g s ys te ms to trac k th e imp ac ts o f s u sta in a bility imp rove me nt s; pri o r iti ze d s us ta in a bl e prac ti ce pro to - cols fo r impl e me nt a ti o n ; a nd id e ntifi e d inte rn a l a nd ex te rn a l e ntiti es a nd prog rams to be inc lud e d in th e impl e me nt ation o f th e pro toco ls. W e ide ntifi e d gov- e rnme nt a nd o th e r resources avail a bl e to he lp s uppo rt th e impl e me nt ati o n of recomme nd ed s u st a in a bl e prac ti ce pro tocols. City of Chicago Climate Action Plan Sh aw is prov idin g e ne rgy a nd was te a na lys is se r vices to th e City o f C hi cago in s uppo rt of it s Climate Ac- ti o n Pl a n. The C it y o f C hi cago's C lima te Ac ti o n Pl a n es ta bli s hes aggress ive goa ls fo r g ree nh o use gas re - du c ti o n over th e nex t 12 years . S ha w is he lpin g the Ci t y id e nti fy e ne rgy effi c ie ncy a nd re ne w a bl e e ne rgy st rategies th at bo th s upp o rt it s Clima te Ac ti o n Pl a n goals a nd ar e like ly to be e li g ibl e fo r fundin g unde r th e st ate's new ma nd a ted e ne rg y e ffi c ie ncy a nd re - newabl e e ne rg y portfo li o require me nt s. W e are s up - po rtin g th e C it y in it s negoti a ti o n s w ith C omEd as th e utility d evelo p s it s pl a n fo r e ne rgy e ffi c ie ncy s pe nd - ing in it s te rrito ry. W e al so a re upda tin g th e City's e ne r gy c ode to a hi g he r leve l o f pe rfo rmance to s up- po rt the Clima te Pl a n 's goal s. F in a lly , Sha w is eva- lu atin g was te reduc ti o n a nd recyclin g (e.g., a nae robi c di gesti o n ) o pti o ns th a t suppo rt th e C it y 's C lima te Ac- ti o n Pl a n a nd zero was te ma nageme nt s t ra tegy. California Action Registry Advisor and CCX S haw has bee n ac ti ve ly in vo lved in the d evelo pme nt , impl e me nt a ti o n , re po rt ing a nd ve rific a ti o n as pects of th e C a li fo rni a C lima te Ac ti o n Regis try a nd N o rth east S ta tes' Regio n al Gree nh o use G as R egistry . S haw pa r- ti c ip ate d in the initi a l di sc uss io ns th a t res ult ed in t he fo undin g o f C C X . S haw is a me mbe r o f th e CCX a nd w ill soon be a n offic ia l ve rifi e r of GHG re du cti o ns fo r th e Exc ha nge . S haw has ex te n s ive ex pe ri e nce in m uni c ipal, s ta te a nd regio na l gove rn a nce po li c ies a nd e n v iro nme nta l iss ue s. Air -Energy Integration Initiative for the De- partment of Energy Midwest Region al Office S haw was retained by th e U.S . D e pa rtment of Energy Midwest Regional Office of E ne rgy Efficie ncy and Re ne wable Energy to man age it s Air-Energy [ntegra- ti o n lniti a ti ve. T h rough thi s multi-state in itiati ve, th e U.S. DOE Midwest Re gio nal Office a nd U.S . EPA Region 5 de ve lop a nd support pi lo t projects th at d e mo n s trate how EERE tec h no logies a nd practi ces can result in re d uc t io n o f crit e ria po lluta n ts and G H G s that are qua nt ifiab le, re p licab le a nd sca lea b le, a nd t ha t can be in co rp orated int o s ta te a ir q ua lity SHAW E NVIRONM ENTAL & INFRASTRUCTURE . INC. 06C0520 10 T pl a ns. T he purpose of th e ini t ia ti ve is to s uppo rt in - c reases in bo th effic ie ncy a nd re newabl e p roj ec ts a nd in crease coo peratio n be twee n s ta te a ir regul a to r s a nd e nergy o ffi c ials. Ass ista nce prov id e d by S haw in - c lud es s uppo rtin g th e d eve lop me nt of e li g ibl e p ilo t proj ec t act iviti es in th e mid wes t ; pro vidin g regio na l s uppo rt fo r in c reas in g coll a borati o n be twee n sta te e ne rgy a nd a ir q uali ty offi ces a nd fe de ral age nc ies; a nd he lpin g to id e nti fy a nd sec ure reso u rces neede d b y t he pil o t p roj ec t s, s uc h as di s pa tc h mo d e lin g a nd o th e r tec hni cal se r v ices. As a part o f thi s p roj ec t , S haw wo rk e d wi th t he Ill ino is D e partme nt o f Com- me rce and Eco no mi c O pp o rtunity to mod e l th e im- pac t o f Sta te of Illin o is EERE po li c ies o n gr ee nh o u se gas e mi ss io ns a nd o th e r po lluta nt s. The pil ot pro j ect has bee n co mpl e ted a nd , based o n excell e nt res ults, a mu c h broade r projec t was rece ntl y a uth o ri zed a nd fun ded by USDOE. In th e next ph ase o f th e project , S haw w ill mod e l mo re aggress ive s ta te EERE po li c ies to assess th ei r impac t o n ac hi evin g Tilin o is' C lima te Ac ti o n Pl an goals. GHG Management Plan for the City of Boulder, CO A s pa rt of a joint proj ect fo r th e City o f B o ulde r, C o l- o rad o, S haw, in assoc ia ti o n w ith th e Uni ve rs it y o f Co lorad o W irth Ce nt e r , deve lo ped a st rategy to fi nance th e City's GHG manage me nt pl a n . O ur wo rk o n thi s proj ec t include d a na lyzi ng th e City's o pera- ti o ns, ex ist ing reve nu e sources, GHG In ve nt ory a nd man age me nt pl an , a nd d evelo pin g s ustain a bl e fin a nc- in g a pproac hes . S haw's fin an c in g st rategy e mpha- s ize d a pproac hes th a t can capture qua nti fia bl e eco- no mi c a nd e nviro nme nt a l valu e fr o m EERE programs . 2.4.6 Client References for Similar Work Client : Contact/Phon e: Location : Cost: Missouri Department of Natural Resources Andy Popp , Environmental Manager Ph : (573) 751-6981 Missouri $4,920 ,000 Time Adherence: Ongoing and on schedul e Scope: S haw is pro v idin g th e State of Mi sso uri with g rant program d es ign, impl e me nt a ti o n , a nd admini s trati o n ser v ices fo r the Mi o uri EEC BG an d the State Ener- gy Program (SEP ). T he Mi sso uri Departme nt of at- ura l R eso urces is priorit izin g $12 milli on in EECBG funding for s ma lle r c iti es a nd counti es to: • Reduc e fossi l fue l e m is io ns • Re d uce th e to ta l e ne rgy use of th e e li g ib le e nt iti es QUALIFICATIONS 2 .4 -14 C ITY OF FO RT W ORTH C ITYWI DE E MI SS IO N S INV E N TO R Y A N D GREENHOUSE GAS ASSESSMENT • Impro ve e ne rgy e ffi c ie ncy in th e t ra n s po rt a ti o n , building, a nd o th e r a ppropri a te sec to r s • C reate a nd re ta in j o b s S ha w is desig nin g cost-e ffec ti ve e ne rgy pro grams, e ngagin g c iti es a nd counti es throu g h a n ex te n s ive educati o n a nd o utreac h initi a ti ve, d eve lo pin g a pro- g ram ma nu a l and we b s it e, a nd pro vidin g tec hni cal as - s is ta nce to e li g ibl e pro gram a ppli cant s. A ft e r th e re- lease o f the program, Shaw w ill p rov id e ass is ta nce with g rantee evalu a ti o n a nd selec ti o n , d eve lo p a compre he ns ive r is k ma nage me nt pl an and ri sk as - sess me nt o f eac h s ub-grantee, a nd man age a ll as pect s o f th e progra m in re la ti o n to ARRA tran s p a re ncy a nd re po rtin g require me nt s. The S EP p rog ram meets th e sa me hi g h s ta nd a rd s fo r tran s pa re ncy a nd re portin g and targets ARR A grant s to e ne rgy e ffi c ie ncy im- pro ve me nt s in ho mes a nd bu s in esses th ro ug hout th e sta te . Client: Louisiana Department of Natural Resources Contact/Phone : Lor i LeBlanc , Deputy Secretary Ph : (225 ) 342-45 05 Location : Lou isiana Cost: $2,600 ,000 Time Adherence :Ongo ing and on schedule Scope : Sha w is pro vidin g compre he n s ive d es ig n , impl e me n- ta ti o n, o ve rs ight , mo nito rin g, and p rogram ma na ge - me nt ex perti se for s ub -grant p rograms unde r SE P a nd EE_C~G Program , whi c h o utlin e la rge-scale e ne rgy e ffi c ie nc y goals fo r L o ui s ia na . • Buildings: Lead by Example -Thi s pro gram is d es ign e d to meet th e e ne rgy e ffi c ie ncy goals for s ta te fac iliti es, offic e buildin gs a nd compl exes, pe r a n Executi ve Orde r fr o m th e G overn o r o f Lo ui s ian a . • Home Energy Rebate Option (HERO) -The HE R O New Ho mes P rogra m is d es ig ne d to in- c rease th e leve l o f e ne rgy effic ie ncy in new ho mes th ro u g h pe rfo rm a nce in ce nti ves . T h e HE R O Ex ist- in g Ho mes Programs is de s ig ned to e nc o ura ge re- tro fittin g o f ex istin g homes throu gh re bates o ffered o n impro ve me nts o f 30 percent o r more . • Trans portation Effici e ncy a nd Alte rnati ve Fu els -The pro gra m is assisting local co mm u nities to d e fra y the cost of co nve rt ing pub l ic tra n s portati o n ve hi c les to co m pre ssed natu ra l gas ve hi c les of the sa me ty pe . A dditi o na ll y, it is e ncourag in g th e de p- loy me nt o f e ne rg y effic ie nt lig hting th roug h LED traffic li g ht s a nd e ne rgy e ffici e nt s tree t li g htin g. S HAW E NVIRONMENTA L & INFR A STRUCTURE , INC . 06C0520 10T • Renewables -The Re newabl es pro gram is d e - s ig ne d to e ncoura ge a nd in centi v ize th e de pl oy - me nt o f comme rc ia ll y ava il a bl e re newa bl e e ne rgy resources in th e state . • ENERGY STAR® Appliance Rebate -As de - fin ed by th e U .S . De pa rtme nt o f Ene rgy, thi s pro - gra m is des ig ne d to e ncou rage th e purc hase o f ENE RGY ST A R® a ppli a nces a mo ng th e state's resid e nt s th ro ug h re ba tes. Sh a w is coordin a tin g w ith local re ta il e rs a nd ma tch pa rtn e rs to ma rke t th e ENERGY ST A R® progra m . Sha w is prov idin g a na lys ts o n the cost be ne fit s of utili z in g re ba te process in g s ub cont rac to rs aga in s t Sh a w 's inte rn a l grant process in g sys te m. • EECBG -The EECBG P rogra m is pro v idin g no n- e ntit_le me nt communiti es w ith fundin g to d evelo p a nd impl e me nt proj ects toward th e impro ve me nt o f e ne rgy e ffi c ie nc y and reducti o n o f fo ss il fu e l e mi s- s io ns. Client: Co ntac t/Pho ne: Loc at ion : Co st: City of Palm Bay Sue Hann , Deputy City Manage r Ph : (321 ) 952-3411 Pa lm Bay , FL $202 ,000 Time Adhere nce :Ongo ing and on schedule Scope : S haw d e ve lo pe d an EE CCS and Su sta in a bilit y M as ter Pl a n fo r th e City of P a lm Bay. W o rkin g with th e City's EECBG s teerin g c ommittee, Sha w was c ho se n to fa cilitating th e d e ve lopme nt o f a ro adma p for e ne r- gy con se rvati o n base d on s usta in a bility goa ls a nd o b- j ecti ves , re turn o n inv estme nt , ava il a bl e fundin g a nd community va lu e . The sc o pe o f wo rk includes: researc hin g e ne rgy e ffi- c ie nc y con ser va ti o n proj ec t o ppo rtuniti es; conductin g ~ne rgy sc~pin g sess io n s a nd publi c fo rums; id e ntify- in g po te nt ial fundin g so urces to leverage ava il ab le fund s; pri o riti z in g programs fo r in c lu s io n in th e EECCS a nd Maste r Pl a n ; a nd d eve lo pin g a nd s ubmit- ti ng t he fi na l EECCS to t he US DOE . S haw is cur - re nt ly pro vi din g Mas ter P la n imp le me nt a ti o n se rv ices to the C ity , including a s u sta in a bilit y asse ss me nt o f Pa lm Bay codes a nd regu latory programs, a ci ty-w ide GHG inventory a nd ene rgy audits o f public facilities . Client: City of Miami Gardens Contact/Phone : Laurin Yoder , Commun ity Development Speciali st Location : Cost: Ph : (305 ) 622 -8000 Miami Gardens , FL $68 ,500 Time Adherence:Ongoin g and on schedul e QUALIFICATIONS 2 .4 -15 C ITY O F FO RT WORTH C ITYW ID E E M ISSION S INVENTORY AND GREENHOUSE G AS ASSESSMENT Scope : W o rking with a City Stee rin g Committee, Shaw is developing an EECCS , GHG Inve ntory , a nd Energy Forecas t for the City o f Miami Garde ns, FL. Pro gram e le ments of th e ir strategy include the devel o pme nt and adoption of s us tainabl e de s ign policies and build- ing codes, impl e me ntati o n of an e nergy manage me nt s ys te m , and a bu s iness and res id e ntial e ne rgy e ffi- ciency re trofit program. Client: Contact/Phone : Locat ion : Cost: City of Augusta George Patty Ph: (706) 821-1796 Augusta , GA $150 ,000 Time Adherence :Ongoing and on schedule Scope : Shaw is developing the City of Augusta's Energy Ef- fici e ncy Conse rvation Strategy. Shaw was chosen to work with the City 's committee of community stake- holders in as sembling an Overs ight Committee (EECCS Overs ight Committee) to participate in strategy development. The scope of work includes the development of a n Energy Management Action Plan that provides the City with a foundation for energy management and a s trategy for achieving it s e ne rgy-related goals. Shaw is developing a draft li st of EECCS-eligible e ne rgy e fficiency and con se rvation projects for the City 's review. We are performing energy audits to help id e ntify where the energy e fficiency implementa.tion will be focused . The focu s of eac h energy a udit as- sess ment is to identify no-co st/low-co st meas ure s , sys tem retrofits, re newable e ne rgy opportunities a nd capital replacements to e nable the City to reduce e nergy usage, maximi ze re sources , and improve s ys- te m o peration s . Shaw is ai ding the City in working with the local util- it y a nd with the State En e rgy Office to coordinate se r vices a nd strategie s o n programs suc h as th e S tate E ne rgy Program. OTHER PROJECTS OF NOTE City of Chicago EERE Strategies In 2007, S haw he lp ed the City o f C hi cago identify e ne rgy e ffici e ncy a nd re newabl e e ne rgy s trategies th at bo th s upporte d it s C lim ate Ac ti o n Pl a n goals a nd were lik e ly to be e li g ibl e fo r funding unde r th e s tate's new ly-ma nd a te d portfo li o re quire me nt s. W e provided tec hni cal a nd strategic ass is ta nce to th e C it y in it s S HAW E NVIRO NMENT AL & INFRASTRUCTURE , INC. 06C052010T negotiations with ComEd as th e Exelon-owned elec- tric utility d eve lope d it plan for e ne rgy effic ie ncy s pe nding in it s terri tory . Shaw also upd ated th e City 's e nergy code to a high e r leve l of performanc e and eva- lu ated was te re duction and recyc ling (e.g., anaerobic digestion ) options that s upported the City 's Climate Action Pl a n a nd zero wa te manageme nt strategy. Whe n ComEd and State of Illinoi s e lectric effic ie ncy inc e nti ves became ava ilable in mid-2008, Shaw worked with th e Me tropolitan Mayors C a uc us to he lp it s me mbers access incentive s that s upported th e ir municipal s ustainability a nd climate ac tion goals. With th e Caucus, we are now assi s ting communities to deve lop e ne rgy strategie s that leverage utility in- centives, EECBG fund s a nd State Energy Program dollars. Shaw also is working with the Caucus to h e lp it s members voluntarily adopt the IECC 2009 res i- dential energy code. Shaw's technical a ss istance in- cludes cost-benefit analyses; mod e l ordinance de ve l- opment; code e ducation , training and enforcement program deve lopment; training works hops; and code policies and procedures implementation . Community Energy Challenge, ComEd. In June 2008, ComEd, the large st utility in Illinois , hired Shaw to de s ign a nd implement a program that would es tabli s h community-based partnerships to e nhance the deli very of ComEd' s energy efficiency incentives to commercial, re s id e ntial and local government cus- tomers. Recognizing that cities are the most effective and tru sted provide r of service s, Shaw developed the ComEd Community Energy ChaJienge (CEC), a competitive program that leverage s municipalities ' e xisting programs and delivery channels to deli ve r e nergy efficiency inc e ntives while advancing munici- pa l s u stainability goals. Shaw he lped CEC participants develop energy plan s to reduce the a mount of e ne rgy used by municipal o peration s, res id e nt s a nd bu s inesses while advancing it s ow n o bj ecti ves. Eac h muni c ip a lity was re quired to d esc ribe th e proj ec ts it would undertake to reduce e ne rgy use a nd ad va nce co mp le me ntary o bj ec ti ves, s uc h as re ducin g gree nh o use gas emissio ns, d ecreas - in g wate r cons umpti o n o r c reatin g gr ee n jobs . S ha w c reated a planning a nd technical ass ista nce fr a mework for C EC pa rti c ip a nt s in de ve lo pin g th e ir muni c ip a l e ner gy plans. [n ad diti o n , we facilitated th e municipal e nergy planning process for the 10 munici- pa l pa rticipant s a nd provide d o ne-on -o ne techni ca l ass ista nce to th e m as th ey d eve lo ped th e ir pl a ns. QUALIFICATIONS 2 .4-16 CI TY OF FORT W ORTH C ITYWIDE EMISSION S INV ENTORY AND GREENHOUSE G AS ASSESSMENT In May 2009, 10 municipal e ne rgy pl a n s were sub- mitt ed to a rev iew pa nel convened by ComEd, to pro- vid e a n initial rating o f eac h plan b ased o n it s esti- ma ted e ne rgy saving s a nd contributi o n to muni c ip a l goa ls. The muni c ip a lit y th a t d eve lo pe d th e to p-ra nk e d plan u sed it as th e bas is for it s EECCS a s did the sev - e n o th e r EECBG e ntitl eme nt communit ies th at part i- ci p ated in th e CEC . Shaw is now providing tec hnic a l ass is tance to all CEC participants to he lp th e m im- pl e ment their e ne r gy plan s. Confidential Retailer. Shaw has bee n e n gaged by th e Confide nti a l Client to d eve lo p multi-yea r GHG in - ve nt o ri es, e mi ssion s tre nd ana lyses, Pote ntial res - pon ses to the Carbon Di sc los ure Proj ect a nd addi - ti o nal con s ultin g se rvice s toward ass is tin g this c li e nt in evalu at in g a nd ma n ag in g it s p oten ti a l e mi ss ion s reduction po rtfoli o. To initiate th e project we began th e deve lopme nt of an a udita bl e carbon e mi ss ion s in- ven tory toward identifying a base lin e year agai nst which the impl e me nt a tion of e mj ss ion reducti o n strategies may be measure d . The GHG e mi ss ions in ve ntory is bei ng deve loped ac- cordin g to th e re quirement s identified by The Climate Registry (TCR). Thi s is th e most widely acce pted re- g is try in the US today, based o n th e WRI o r W o rld Resourc es In stitute protoco l. The sco pe of thi s client's effort will focu s on Scopes I a nd 2 -carbon e mi ss ions fr om direct sources (s tati o nary combu s tion, mobil e combu s tion a nd re frigerant s) a nd indirect sourc es (purc hased e lectri c power), res pect ive ly. A TCR-grade GHG in ve ntory w ill ass ure the c li e nt o f the greates t po te ntial for eve ntuaJi y c reatin g a 'c re dit- a ble ' carbon e mi ss io n s reduction portfolio with po- tentially marketabl e value. As th e client wis hes to participate in the Carbon Di s - c losure Proj ect (CDP), Shaw is wo rkin g with the c li e nt in prepari ng a d e tail e d qualitati ve a nd qu a ntit a - ti ve res pon se to the program 's la tes t questi o nn a ire . Casella Waste Systems , Inc . Shaw took o n th e tas k o f ca lc ul atin g GHG emiss io n s fo r a ll of th e ir landfill s t hroug ho ut five state s in th e no rth eas t. Shaw fie ld measured a nd/o r e s timated , using e mi ss ion factors , th e GHG emi s sions fo r a ll of their la ndfill s . T he o b- jectives were to determjne th e e mi ss io n rates, id en tify e mi ss io n c h arac teristic s a nd es ta bli s h s ite-specific e mi ss io ns in ve nt o ri es for eac h s it e for ca le nd a r years begi nnin g wi th 2005 . The met h od s us e d to de te rmin e GHG e mi ss io ns fo ll owed the protoco ls desc rib e d in EPA 's C limate Leade rs P rogra m a nd it s assoc ia te d so lid waste faci lit y g uidanc e modul e. SH AW ENVIRONMENTAL & INFRASTRUCTURE , INC . 06C0520 10T Based o n thi s initi a l e ffort , Shaw recogni zed that th e required EP A protocol c rite ria did no t full y accou nt for a ll la ndfill e mj ss io n s. Therefore Shaw developed a mo re acc urate a pproac h to calc ul ate landfill me- than e e mi ss io ns from non -cont ro ll e d portion s o f a la ndfill. EPA ap pro ve d a nd ad o pte d th e a lte rn a ti ve a pp roac h as part o f the Climate Lead ers Program pro- tocol. Shaw 's co mpre he n s ive e mi ss io ns base lin e data provide d o ur c li e nt w ith a base from which to: meas- ure th e cost -be nefi t of take n o r pl a nn ed/future steps to impro ve effic ie nc y of th e gas ex t rac ti o n s ys te m (we ll fi e ld e fficienc y); be nefic ia ll y u se la ndfill gas rath er than s impl y fl arin g it ; and 'b a nk ' GHG e mi ss io n s re- duction s that are created as a result of vo lunt a ry im- prove me nt s to the gas co ll ec ti on a nd control sys tem. With Shaw 's a ss is tanc e, C ase ll a became th e fir s t so l- id waste management com pa n y to join th e Climate Leaders Program. Publix Supermarkets. Shaw pe rformed a n ent it y - wide carbon footprint inve ntory for Publix . The in - ve nt o ry accounted for over 1,000 re tail ou tl e t s, ma nu- facturing facilitie s , di stribution cent ers, corporate/ suppo rt office s as well as fleets. The inventory sati s - fied the requirements pre scribed b y multipl e proto- cols includin g The Climate Regis try , USEPA Climate Lead e rs a nd th e WRI GHG Protoco l for maxi mum flexibility. Ultimate ly, Publix will be a bl e to demon- s trate GHG reduction s at the facility level a nd o n a square foot bas is as it impl e me nt s carbo n e mi ss ions mitiga tion strategies within it s grow in g numbe r of groce ry o utl ets. Shaw ass isted Publi x in joinin g the Climate Leade rs Pro g ram as a first in it s c lass to do so. 2.4. 7 References City of Fort Worth Roger Grantham Environmental Supervisor Department of Environmental Management 1000 Throckmorton Street Fort Worth , TX , 761 02-6311 Phone: (817 ) 392 -8592 City of Austin Steve A. Nelson , P.G. City of Austin Public Works Department Project Management Div ision 505 Barton Springs Rd ., Ste 900 Austin , Texas 78767 Phon e: (5 12 ) 974-7145 City of Palm Bay Sue Hann , Deputy City Manager 120 Malabar Road , SE Palm Bay , FL 32907-3009 Phone : (321 ) 952-341 1 QU ALIFI C ATI O NS 2 .4-17 CITY OF FORT WORTH CITYWIDE E MISSIONS INV E NTORY ANO G R EE NHOUSE GAS ASSESSMENT City of Miami Gardens Laurin Yoder , Community Development Specialist 1515 N.W . 167th Str eet: Bldg. 5, Suite 200 Miami Gardens, FL 33167 Phone : (305) 622-8000 2 .4.8 Current Workload S haw has offices across the United States. Here in Texas, we have a lmo s t 250 people assigned lo our five offices in t he state . O u r local Irving office, on ly 25 miles from the City of Fort Worth , will be our cen- ter of operations for thi s contract. Current utilization of our personne l varies by office but co ll ective ly, S haw Texas is approximately 70 pe rcent uti li zed. W h ile muc h of ou r team is located in Texas (o ur Projec t Manager wi ll be attached to the Irv in g office fo r t he performance of t h is cont ract), othe rs of the team are activated from o ur S ustainabi lity Center of Excelle nce office in C h icago a nd elsew here. Ex hibit 2 -4 is a su m mar y of projects currently being per- formed by our team. T he tab le ide nt ifies the nat ure of the project, contract va l ue, sched ul e, and assigned person ne l (including t heir time commitment to each project). None of our projects has experienced sche- d ule de lays due to our abi lity to execute the work in a time ly man ne r and effective ly draw on our resou rces. Exhib it 2-4 Current Projects . O ur cap aci ty will be sufficie nt to com plet e th e anticipated assi gnments for thi s cont ra ct Client : (Location) Nature of Work : State of Missouri -De- partment of Natural Re- sources State Energy Program and Energy Effi ciency and Con- servation Block Grant Program Development and Implementation I Catalina Lamadrid -20 % Jon Dierkin - 5% State of Louisiana - , Department of Natural 1 Resources Palm Bay , FL Miami Gardens , FL ComEd I , State Energy Program and Energy Efficiency and Con- servation Block Grant Program Deve lopment and Im- plementation Energy Conservation Strategy Im plementation Energy Conservation Strategy Development I $2 ,soo ,000 I I $202 .000 September 2012 1 Bill Abolt -5% ' Bill Haas -20 % Catalina Lamadrid -20% Jon Dierk in - 5% September Jordanna Rubin - 5% 1 1 2012 i--------+---·---+---------i I $68,500 May 2010 Jordanna Rubin -30 % ! Confidential I July 2011 Jon Dierkin - 5% Design and Implementation of ComEd Commun ity Energy Cha ll enge -energy efficiency program -I ____ _ [ Confident ial • Jon Dierking - 5% Bill Haas -5% AT&T Serv ice s, I PST Audits , NPDES Permitting and Wastewater Dis - Nationwide · char e A li cabili 7_!1even ~ _ t Leakin Petro leum Stora~Tank Assessme.Qls ___ _ ! Texas Commiss ion on I Quality Assu rance and Data Validat ion Environmental Quali!Y_ __ ~------------ ; ARI Energy Deve lop in g Compliance Plan for GHG MAR r --- Mom ent ive 1 Calpine i : Metrowaste Authorit ·-- ' NRG Energy t-D~~ping_£~c_ili!}'_corl]_~lic!_nE e el ar:! for Tit le V per_mit RM P/PSM Audit -t ----------- I GHG MAR Compliance Plan i Air permittin g for multi-po llutant control SHAW ENV IR ONMENTAL & INFRASTRUCTURE , IN C . 06C052010T Conf identi al 1 Confident ial $124 ,00 0 t---- $270 ,000 +· ---- $6 8,000 i $24 ,000 ' I ! $280 ,000 September Lori Evans -60 % i 2011 ___J Ongoing Lori Evans -15 % ~-:.~-;--j r ngoing -I S,shama Pa,;.,jape -,,;;;- --t ---1 1 On-going , AriJ it Pakras i- 5% 1 Leah Blinn -10% ,. On -gQ!_ng_ 1 On-going (to 1 be complete d r----- t-~riii!.J:>akrasi - 5% Ar iji t Pakras i -30% l June2_Q_}_O_L t ____ _ On-go ing , AnJit Pakras 1 -5% I I ___ ,i__ --1 I Ar iji t Pakrasi - 5% , QUALi FiCA TIONS 2 .4-1 8 C ITY OF FORT WORTH C ITY WIDE EMISSI O N S INVENT ORY AND G R EE NHO U S E G AS A S S ESSM E NT 2.4.9 Schedule We an t ici pate a 22-week sc he dule to comp lete the work for the City of Fort Worth, w ith t he final de li- ve rab le on Week 22 . Exhibit 2-5 s how s th e sche dule. Exhibit 2-5 Schedule TASK 0 1 2 3 4 5 6 Project Award 1~'7 Contract Negotiation and Finalization ~-:; II Ki ck-Off Meeting k1:? Li st of Data Need to Ci ty ,:s, 1,.-.~ 7 Data Collection . r; ,. if' . Emission Calculations Draft Repor t Final Report Why Shaw? 8 ''.\·3'. ·,:. Weeks 9 10 11 12 13 14 15 16 17 18 19 20 21 '/r·~ ;,-·. :,,, ... - (~./. l'.v ~;~ [·'r:, 1.:\;' r· ,!,.'.;,', ·\ ·" ·· .. ·7] ;'1 Location -a vital , thriving office located in Irving , Texas , supported by other fully staffed and fully equipped Texas offic es Experienced -successfully developed and implemented numerous municipal GHG inventories , energy manage- ment plans , and energy efficiency conservation strategies . Quali fied -A Texas resident Project Manager with direct experience in emissions inventories and GHG assess- ments Personnel Resources -LEED APs and experienced GHG data collectors 22 • -1 .. S HAW E NVI RO NM E NT A L & IN FR A STR UCTU RE , INC. QUALi FIC A T IO N S 2 .4 -19 06C052010T In Partnership with : Shaw Group May 20, 2010 Submitted by: CP&Y, Inc. Headquarters 1820 Regal Row, Suite 200 Dallas, Texas 75235 Point of Contact: Freddie Guerra (214) 638-0500 (Phone) (214) 638-3723 (Fax) Page 1 of 10 ..._ ___ . .._ . ._ . ..-.-.~-----·-- CP&Y 's Dallas Headquarters ..................................... 2 Understanding .......................................................... 2 Key Personnel. ........................................................... 3 4 . Project Manager Qualifications & Project Summaries ................................................... 3 5 . Statement of Qualifications ...................................... 5 6 . List of Clients with Similar Projects ........................... 8 7. Client References ...................................................... 8 8 . Current Workload ..................................................... 8 9. Date Work Can Begin ................................................ 8 1. CP&Y's Dallas Headquarters CP&Y , Inc . Headquarters 1820 Regal Row , Suite 200 Dallas , Te xas 75235 Point of Contact: Freddie Guerra (214) 638-0500 (Phone) (214) 638-3723 (Fax) 2. Understanding As represented by our work implementing energy efficiency programs CP& Y has a clear understanding of the challenges and barriers that City administrators and fac ility personnel face . Regardless of how well fac ility managers believe that their buildings are performing , in our experience we have found that there are usually significant opportunities for improvement in energy use . In many cases , cities do not have adequate funds to install energy efficiency measures or are unaware of, or uncomfortable with , all the funding options available to them . In other ses , other barriers impede their ability to implement improvements , eluding : • Lack of knowledge or personnel to identify cost-effective energy efficiency projects • Limited experience with the "best practices " of implementing efficiency measures • Lack of coordination between departments regarding energy efficiency responsibility • Lack of an actionable plan to procure project implementation • Inexperience with developing project specifications , the RFP process , evaluat ion of contractor proposals , and researching alternat ive courses of act ion • La ck of unde rstand ing regard ing sust ain abi lity and res ili en cy pla nning and their long-term benefits • Limited experience related to greenhouse gas emissions reduction • Lack of understanding of renewable energy technology and its application to municipal operations SOQ -City of Fort Worth DEM10-06 Greenhouse Gas Unl ike vendors that provide tech ni cal assistance as a way to sell their eq ui pmen t, the Team will pro vi de analys is and recommendations that the City can count on to be completely unbiased with regard to any particular technology or vendor . Therefore , the City can be confident that the Plan 's analysis , audit findings , recommendations , and training program present the most unbiased and therefore truest picture of their energy efficiency opportun ities and that the information will lay a foundat ion for action by the City to impro ve your energy performance . Project Implementation Strategy and Approach We believe that the most effective way to get the City to improve its energy performance is to prov ide you with information , provide economic motivation and prov ide information that helps you become comfortable with decisions so they can take action . We will imp lement this project using experience we have ga ined from working intensively on energy efficiency issues with public and private sector clients . Based on this experience , our proposed six-step project implementation strategy will be to : 1. Inspire -Perform outreach via a public participation plan to make the public and private aware of the value of investing in energy efficiency and the importance of integrating susta inability and resiliency into the Plan . 2. Assess -Gather and analyze information from the City that will help them better understand the ir opportunities . 3. Quantify-Use the data to quantify the opportunities . 4. Present -Present City senior decision-makers with the findings of the audiVanalysis and discuss how they can implement the recommendations . 5. Motivate -Show the City how to pay for and implement improvements by using state and federal sources as well as through public-private partnerships. 6. Support -Provide on-going technical assistance as needed to the City in a var iety of areas that will help them improve their energy performance . Figure 1 -Six-Step Project Implementation Strategy Page 2 of 10 . Key Personnel Team Member Freddie Guerra , REM , RS , CIPS , CAPM Josh Marazzini , EIT Sharon Price Years with · Registration - Finn 2 • Reg istered Env ironmental Manager • Reg istered Hazardous & Chem ic al Materials Manager , • Reg istered San itarian • Corrective Act ion Pro 'ect Mana er 2 • Eng ineer in Tra in ing (EIT), Te xas #35464, 2005 • Area of Expertise SOQ -City of Fort Worth DEM10 -06 Greenhouse Gas • Pub lic Involvement , Renewable Energy , Env ironmental /Susta in able Pract ices , Carbon Credits & Renewab le Energy Cred its , Public Sector Sustainability and Env ironmental Programs , Greenhouse Gas Em issions Inventor ies , Gra nt Writing and Fund ing , EPA and TCEQ Programs and Initiatives • Plann ing , design ing , pe rmitt ing and management of civil engineer in g projects . • Public works, energy efficiency , water and wastewater projects including program and project management , water treatment facilities , wastewater collection studies , wastewater collection improvement evaluations , lift station evaluations and designs , wastewater system field evaluation and data collection , wastewater collection system modeling , stormwater pollution prevent ion plan (SWPPP) inspections, equipment evaluation and selection , construction inspections, br idge and roadway design , geographic information systems (GIS) database development , GIS data conversion and mapping , and permitting for domestic and industrial wastewater streams • Developing Renewable Energy Strategies for commer ci al , in dustr ial and public markets . • Energy Demand Profiling , Energy Resource Availability , identifying suitable technolog ies , building energy system integrat ion , financ ial anal sis , and e ui ment rocurement. otal Fir m Size : 175 Professionals in six offices in Dalla s, Houston , Fort Worth , McKinne y, Sa n Anto nio , and Aus tin . 4. PM Qualifications & Project Summaries Freddie Guerra, REM, RS, CIPS, CAPM-Project Manager Mr . Guerra is an exper ienced CP&Y project manage r who has broad involvement related to environmental engineering , comp li ance , permitting , sustainab ility and energy consulting with Federal , state , local , private sector and non-profit organizations . During his 15-year career, Mr. Guerra has been responsible for project scheduling , budgeting , cost , team superv ision , report and master plan preparation , eng ineer in g design , construction documents preparat ion , quality assurance , and resource management. Mr. Gue rra has conducte d feasibility studies for the gasificatio n of animal waste , green waste and concession waste for the generation of on-site heat and power for the Dallas Zoo and proposed Te xas Horse Park . In addition , is in the process of preparing an appl ic at io n grant for biomass CHP for the City of Plano . He served as the project manager for the evaluation of the electrical system and the evaluation of alternat iv e energy technologies at the Dallas-Fort Worth Internatio nal Airp ort. Mr . Guerra has evaluated commercial/industrial facilities for the impl ementat ion of energy effic iency and conservation strateg ies whic h has in clu ded the coveri ng of anaerob ic lagoons for Cargill Meat Solutions to capture methane gas for conveyance to boilers and turbines to the deployment of comb ined heat and power (CHP) and solar PV stems . He has also assi sted in the evaluation of potential ca rbo n credits and renewable energy credits for various munic ipal projects throughout the U.S. He has also been involved in the application of sustainable engineer ing/consulting , and development of commun ity outreach programs . He assisted with the preparation of the greenhouse gas emissions inventories and prepared sustainability act ion plans for various municipalities -locally City of Dallas and City of Arlington .. In addition , he developed "Pride in Your Ne ighborhood " Program for the City of Dallas and prepared grants for a waste characterization at Dallas Love Field , construction of biod iese l plants us ing cooking oil and grease , gas ification of biomass for onsite heat and power , and healthy homes . Agencies included DOE , USEPA, SEGO , and the NCTCOG . Grants were also prepared for the deployment of renewable energy to the USDA NRCS as well as to ORCA. The majority of the grant app lic ation were approved and admin istered by Mr . Guerra . Recently , CP&Y was retained by the City of Del Rio to develo p its EECS Plan and prepare a Greenhouse Gas Emi ss ion Inv entory (as well as a Climate Action Plan). Mr . Guerra is in the process of finalizing an applicat ion for the City of McKinney to integrate solar thermal and sola r air-c ondition ing at the proposed $44M aquatics and recreat ional center. Other grants hav e been prepared for school distric ts for demonstration of solar ene rg y. While Vice Preside nt of Keep Dallas Beautifu l, Mr . Guerra developed sco pes of work for Supp lementary Envi ronme ntal Project (S EP ) via the TCEQ -specifically for the community clean ups of the Tr ini ty River. He also served as a board member for Rebuilding Together Greater Dal las Paae 3 of 10 SOQ -City of Fort Worth DEM10 -06 Greenhouse Gas a'napreparea'"grants''to DOE for wealher iz ation of low-i nc ome homes . r both organ iz ations , he established partners hi ps in both the private d public sectors . As the des ignated Project Manager , Mr. Guerra will insure consistent level of work produc ti on and coordination for this project. He will ensure tha t qual ified personnel who are familiar with applicable regulations , des ign standards and have experience with categories specified under this contract are ass igned to each work task . He is fully author ized by CP& Y to commit resources and implement the work to best meet overall program objectives and will ensure that the work is completed on time , within budget and with high technical quality . Mr. Guerra served as the Project Manager for the City of Dallas ' Water Conservation and Grease Abatement Program . He was instrumental in the transition of the program to a commun ity-based , social marketing approach . Target areas were identified - hig h water consumption and frequent sanitary sewer overflows ; as a consequence , resources were better util ized . Pilot programs were established with churches , schools and local businesses . In addition , the program "piggy-backed " on existing City programs and efforts of non-profit organizations . Daya Dayananda , Assistant Director Public Works P.O. Box 672 Pasadena, Texas 77501 Phone : 713.475 .7269 Ongoing Andrew Alva , Community Development Block Grant Manager 233 N. Pecos , Ste . 590 San Antonio , Texas 77207 Phone : 210 .335 .37 42 Michael Flores Phone : 469-789-9920 Fax : 206-716 -3 503 e-ma il: MFlores@McKINSTR Y. com Projtct Harne, Location and Brief Dtlc:rlptfon City of Pasadena , Energy Savings Performance Contract CP& Y has been retained by the City of Pasadena , under sub-contract to McKinstry , in November 2009 as its ESCO partner responsible for water and wastewater facilities. CP&Y began by performing a technical energy audit on all City water and wastewater facilities to assess the current operation of the system and obtain an understanding of the equipment currently in use. With this information CP&Y evaluated the potential energy and water savings the city could garner by improving energy and water efficiency through the use of more efficient equ ipment, properly sized equipment and changes to the operation of the overall system . Recommendations included the development of a recycled water program for industrial customers resulting in significant savings in potable water and the energy used to both treat and convey , installation of CHP systems to make use of the energy available from waste heat at various facilities , establish multiple pressure planes and modifying the operat ional procedures of the tanks to pump during non-peak power demand times , replace aging equipment that is close to the end of its useful life with more effic ient equipment which possibly make use of VFD 's depending on the application , elimination or consolidation of redundant pump and lift stations throughout the City , use a SBR plant to shave off and treat peak wet weather flows and investigate the gasification of biosolids in conjunction with an alternate fuel source . CP& Y has presented these recommendations to the City and has moved forward with the first phase of recommendations at the Cities two wastewater treatment plants . Improvements include the addition of VFDs to existing Aerators , the replacement of existing blowers with new high efficiency blowers integrally equipped with VFDs and the replacement of existing impellers with more efficient units . Bexar County, Energy Efficiency Community Block Grant Project CP& Y has been retained by Bexar County , under sub-contract to McKinstry , in January 2010 as its partner responsible for water and wastewater projects . CP& Y began by performing a technical review on all proposed County water and wastewater projects to assess the current opportunities and obtain an understanding of the current function of each facility. With this information CP&Y was scoped with providing engineering and design services associated with a rainwater and air handling unit condensate collection and storage system at the San Antonio Food Bank. The proposed system ties into the existing roof drainage system and diverts flows into a 60,000 gallon above ground storage tank . From the tank , a drip irrigation system being design by another teaming partner will distribute the collected water out over approximately 5 acres of farm land being worked by the Food Bank and its volunteers . Upon completion the system will potentially collect and make use of upwards of 500 ,000 gallons of captured water per year , producing approximately 5,000 pounds of food for distribution at the Food Bank . City of Grand Prairie -Energy Savings Performance Contracting The City plans to leverage an Energy Efficiency and Conservat ion Block Grant of nearly $1 .5 mill ion from the Department of Energy , and other fund ing resour ces , includ ing ut ili ty rebate programs ; LoanSTAR , a State Energy Conservat ion Office program ; as well as other ava ilable grants and incentives to create maximum impact for the cit izens of Grand Pra irie . The result will be over seventy -six energy-efficiency upgrades to Grand Prair ie facilities , and an Energy Mas ter Plan that decreases energy-related expenditures for years to come . The City of Grand Prairie selected McKinstry as its general co ntractor to implement energy efficiency measures and to fulfill re port ing accountability requirement s of the American Reinvestment and Recovery Act. CP& Y, in partners hip with McKins try , will assist in the identific ation , design , development , and delivery of the most effective facility and technology upgrades to reduce the City 's overall energy costs . Improv eme nt s inc lude upgrades to HVAC equipment, lighting systems , energy management contro l systems , as well as installat ion of renewable technologies like solar hot water systems and photovoltaic energy systems . In alignment with President Obama 's vision of stimulating the US Econ omy , it is expected that this work will spur sustainable ·ob creation , enerate an annual cost-savin s im act for the cit of Grand Prairie , and contribute to a more Paae 4 of 10 SOQ -City of Fort Worth DEM10-06 Greenhouse Gas Project Name, Location and Brief Description env ironmentally sound city overall. Robert Alexander Eads Assistant City Manager City of Del Rio Development of Energy Efficiency & Conservation Strategy, Greenhouse Gas Emissions Inventory, and Climate Action Plan 109 W. Broadway Street Del Rio , Texas 78840 Office : (830) 774 -8558 Fax : (830) 774 -8542 REads@ city ofd elrio .co ill On-go ing CP&Y has been retained to deve lop for implementation by the City an energy effi ciency and conservation strategy designed to set and achieve goals in the following five metric areas : job creation/retent ion , energy savings on a per dollar invested bas is, energy use reduct ion , reduction of greenhouse gas emissions , as well as a plan for leveraging outside and internal funding to create a sustainable energy program . Additional scope includes the development of accurate greenhouse gas emission inventory metrics for the organization . The EECS will include goals that provide for energy efficiency , conservation , and usage . Further , the EECS will identify strategies to achieve the goals through any combination of strategies that increase energy efficiency , reduce foss il fuel emiss ions , reduce energy consumption , and/or encourage behav ioral changes . A part of the strategy will include the development of an energy program and plan for identifying and funding activities for the purpose of reducing the use of energy throughout the City organization as well as recommendations for the funding of such activities . Additionally , CP&Y will provide assistance to ensure the sustainability of the energy program through creation of a strategy for planning and achieving future energy use reduction activities. The EECS will be a comprehensive strategy that covers , at a minimum , all items detailed in DOE-EECBG Funding Opportunity Announcement (DE-FOA- 0000013). 5. Statement of Qualifications CP&Y's Commitment CP&Y committed to helping the City achieve its objective identifying energy efficiency options and make informed efficiency decisions and implement energy effic iency strategies . To deliver outstanding results Project, every member of CP& Y will work in a highly-collaborative d cooperative manner with the City staff and stakeholders. Throughout this engagement, CP&Y will closely coordinate activities between our companies ; we will reach out to others to share ideas , information and best practices ; and we will listen carefully to City management in order to refine our approach and make course corrections when necessary . Why Choose CP&Y? Expert Staff of Engineers, Energy Efficiency, Climate Change, and Sustainable Solutions Professionals -CP&Y has assembled a strong , exper ienced team of engineers , planners , scientists , architects and energy efficiency professionals. We have brought together three firms with decades of experience in both energy efficiency , climate change and "green " initiative program implementation and best-in-class energy engineering capabilities. The diverse services we have provided to the both the public and private sectors , In addition , most of the propo se d staff in bas ed in the Metropl ex an d has es ta bli shed relations hips wi th ke y stakeh olders as well as a thorough und erst andi ng of implementing initiatives in the local area . Staff has been categorized in to 4 grou ps : Strong Texas Market Knowledge and Experience - Key mem bers of CP& Y opera te offic es in the vici nity of City of Uvalde . We are intima te ly fam ili ar with the Te xas business cl ima te, the challenges of mun icipal ities throughout the state and we have almost two decades of experience working with governmental energy users in the state. We also have long -stand ing re lat ionsh ips with energy supp liers and servi ce rov iders thro ughout the state . We believe that these prominent firms d this strong lo cal presence and knowledge will prove to be valuable in establish ing credibility with the City and helping influence action on the recommendations we provide through the prograrrf.. CP& Y is currently developing energy master plans for City of Del Rio (GP& Y). Corporate Culture & Objectivity -All of the teaming partners are establ ished , financially stable firms . None is affiliated with any provider of energy or with any equipment manufacturer or vendor . This level of independence and objectivity allows us to provide unbiased project delivery for the City, and this we believe is critically important to protecting the strong integrity and credibility that the City enjoys in the public sector and throughout the state . Comprehensive Approach from Planning to Implementation of "Shove Ready" Projects -We understand the importance of meeting the DOE deadlines and completing the EECS Plan ; however , it is critical to insure that during the assessment and planning phases that assistance/guidance be provided related to procurement and how projects will be executed . Projects need to be "shovel ready " by the implementation phase of the project. Our team can provide ALL of the services needed from inception to full execution of projects . This is the basis for our approach. In addition , we have experience in the preparation of application for the State Energy Conservation Office - "LoanSTAR Program II " -which was recently released by SECO. Specific Expertise Pertinent to the Project Introduction CP& Y is responsible for the overall project management and coordination of activ ities with the City of Uvalde . This organ ization will pro vi de the City with perso nnel re sour ces an d ex pert ise ne cessa ry to consi ste ntl y excee d the City 's ex pecta tions on th is con tract. Furthermor e, CP& Y's resource capacit y will en sure th at tasks are com pleted on time without com promis ing the quality of the wo rk. CP& Y al so share s management phil osop hie s to in sure that sch edule s are met. Share d philos op hie s inclu de : 1) utili za tion of cro ss -tra ined staff to insure uni nter rupted perfo rma nce of tasks and 2) cons istent commun ic ation with cli ent to insure clarity of goals or expectations . CP& Y has provided innovative so lut ions combined with responsive professional serv ic es to our clients fo r 29 yea rs. We deliver a full ra nge of servi ces that sa tisfy cl ient needs for progress ive and susta inable plann ing , env ironmental eva luation , eng ineer ing , des ign , consult ing , program management , and construction management as well as energy services (demand management , generation , renewable energy technology application , etc .). With annual revenues greater than $30 mill ion and over 179 profess ionals in 9 offices in Texas , Oklahoma , Page 5 of 10 ~nzonaana Puerto'"RiccJ,"C'P~r-riiainta ins the size , stability , and sources to take on a wide range of projects successfully . Our jects range from small , short-term solutions to complex , ongo in g civil and public works facility management programs that all share a common focus : our driving philosophy of provid in g exceptiona l cl ien t service and building long-term relationships . As a reflection of our commitment to our customers , more than 85% of our projects are with repeat cl ients. Sustainability Solutions CP& Y is a leader in provid in g sustainability serv ice s to governmental and private bus in ess clients and assisting those clients to be good neighbors and responsible stewards of their resources wh il e meeting their business objectives . We provide a wide range of cost-effective sustainability solutions to solve our clients ' environmental and infrastructure challenges . CP& Y's skilled engineers , consultants , and scientists are implementing solutions such as identifying energy efficiencies , creating waste minimization programs , restoring wetlands and developing strategies for emissions trading . We offer a set of integrated services that helps our clients "operationalize " sustainability concepts into practical applications . Experience We have been involved in energy services for our clients for over a decade and have developed hundreds of energy efficiency plans for a broad range of clients. We can support our clients with our proven experience in energy consumption and supply assessments, asset management of energy infrastructure as well as the development of renewable energy solutions on a global basis. We understand your usiness , the trade-offs to be made and how to translate ideas into suits . Our goal is to enable the City to manage your complete energy stem in line with your strategic objectives . Organization of Team & Personnel Utilization We emphasize communication with City staff, and focus on obtaining a thorough understanding of all aspects of the proposed project, and all of the various interests and considerations of City staff and stakeholders identified by the City . We also emphasize our availability , at all times throughout the project , to discuss deve lopments , findings , plans and schedules with the City . The team organization provides this emphasis on communication and availability . CP& Y advocates a strong project management philosophy to coordinate the activities of all staff. The project manager is responsible for both the technical and management performance of assignments . The project manager is supported in the management aspects of his duties by specialized staff and management tools . The manager focuses on issues affecting project status and identifies potential problems and either takes corrective actions himself or advises our client of recommended actions that need to be taken . The project team establishes the management approach and assoc iated controls for a proj ect based upon the nature of the technical work, complexit y of the team , requirements and expectations of the clie nt , and level of risk . The project organization and projec t work plan is structured to keep key personnel involved and in formed . They are involved on a day-to -day bas is with all action and communications affect ing areas of respons ibil ity. Management support staff produces schedule and budget variance reports for rev iew and analysis by the project manager . addition , task managers ass ist with task scheduling and tracking . SOQ -City of Fort Worth DEM10 -06 Greenhouse Gas Consultant's Capabilities, Resources & Responsiveness Staffing , Current Work Load & Availability , and Local Experience The Project Manager 's allocation of time is estimated at 65% to 75%. This allocation will require continuous adjustment due to priorities to prov id e balanced coverage of projects . Further, project changes , delays , and other issues increase the need of time allocation . If needed , the Project Manager may allocate 100% of time during a short-period , to ensure effective contract execution and administration. Each key staff member is available for the commitment necessary to allocate all project needs . We anticipated that different people may be available at different times and that the specific availability will influence the identification of personnel for specific tasks. CP&Y has the flexibility to operate in this manner because we have built redundancy into our staffing . CP&Y has more than 50 staff members in the vicinity of the City who are qual ifi ed in either in green build in g, energy and construction management and that can be available to this project as needed . All of the identified core management members are local in Texas. The benefit to the City is the availability of an additional pool of local staff resources , which are easily accessible should the need arise . The team consists of the following personnel : CP&Y will maintain an accounting of current and projected workflows to ensure that adequate staff is available to commit to existing and future projects . History of Meeting Deadlines The key factors in keeping a project on track are to understand what causes delays and then to properly plan and manage schedule issues before they become problems . The Project Manager understands that delivering a project on time relies on managing the proper scoping of work, choosing experienced professionals , assessing timeframes realistically, and anticipating that some unforeseen problems are likely to come up. He intends to institute an aggressive management of typical scheduling issues that occur throughout projects to ensure that projects are completed within the intended timeframe . Delays are often encountered due to lack of understanding or to improper planning . CP&Y understands that to stay on schedule requires setting real istic goals , understanding subconsultant's capacity , monitoring performance of subconsultants , and addressing minor issues properly to avoid major issues . CP&Y understands that projects , especially those with critical requirements and rapid delivery , have issues that hinder progress . It is imp ortant to ensure that these issues are identified and resolved quickly by the Project Manager. The first step in effect ively dealing with these is sues is to mak e th e en tire CP&Y team aware of the importance of identify ing issues and getting proper resolution -th is fosters accounta bility . CP& Y will use th e following pro cedure to en su re that the issues are visibly track ed to ensure schedule is on track : 1) Identify is sues : At project start, CP& Y staff and subconsultants will beg in to id en ti fy issues that could hinder the ab ility to meet the objectives of the project/work order ; 2) Document the iss ue : Project Manager will document all issues in a centralized location ; 3) Assign responsibility for resolving issues : The Project Manager will determine th e ap propr iate in divi dual respons ible for resolv in g each issue ; 4) Monito r and control progress : Issues will be tracked using an issu e log th at formally provides the status and resolution of the iss ues ; 5) Report prog re ss on issue resolution : An Issues log will be a part of the weekly status report and discussed in the weekly status meeting , and 6) Commun icate issue resolution : The Issues log and documented resolutions of issues will be made available to all resour ces . Page 6 of 10 Historyott<eep'iii'g withinBudget &Y is committed to completing its projects on -time and wit hin dget. CP& Y's ability to complete projects on-time and within budget is due to the following : • We conduct thorough scoping to ensure that we and the client are awa re of potent ial issues that could affect the project schedule and budget befo re we enter into a contract; • We commit staff who have the know ledge and experience to complete the project on-time and with in budge t. Internal Quality Control Policies/Procedures CP&Y embeds Qua lity Assurance (QA) from inception and throughou t every phase in our project management approach. In short , quality is not an "add on " -it is integrated into every phase of the project. CP&Y 's Quality Assurance program is intended to assure that the quality of all the work str ictly conforms to the project requirements as well as applicable codes and standards . CP& Y's QA/QC involves three key elements : Management Planning , Management Execution and Control , and Management Reporting. Management Planning Management Planning includes comprehensive plann ing and technical approach developed at the beg inning of the project to provide technical gu idance for conducting the project. In add ition , this involves the assignment of sufficient qualified staff resources and provision of appropriate resource , schedul ing and the budgetary control tools which will be required for successful project implementation. anagement Execution and Control nagement execution begins with selection and assignment of staff and continues throughout its execution with frequent work performance reviews by senior technical associates. Therefore , the quality of work and its responsiveness to our client's needs is recognized to be highly dependent on the experience and sk ills of the project staff and project managers , both in the office and in the field. Management controls are primarily designed to prevent errors and duplication and secondly , identify deviat ions or errors early in the project for corrective actions to be taken . Important QA/QC controls , which are established during project planning , include : document control , design control , non- conformance control , monitoring , correct ive action , and aud its . Key components are : 1) Monitoring: The purpose of monitoring is to ensure subco ntractor is complying with terms and cond itions of contract and app li cab le regu lat ions ; prevent substandard performance by identifying and resolving potentia l problems by provi di ng constructive , time ly feedback : and make pro gress to ward the expe cted results and ou tcome s. Thi s is accomplished by period ic contractor reporting and invoice rev iews .; an d 2) Corrective Act ion : Cond itions adverse to qua lity or substandard performance will be identified promptly an d corrected as soon as pract ical. In the case of a sign ificant deviat ion , the cause shall be determ ined and corrective action tak en to preclude recurren ce. The ident ification , cause and corrective act ion for sign ificant cond itions adve rse to qua lit y will be docu ment ed and re po rte d to the ap prop ri ate level s of management and fol low up actio ns will be tak en to ver ify imp lement ation of this correc ti ve action . Proj ect Ma nage me nt Approach & Y has manage d the insta ll at ion of ov er a billio n doll ar s wort h of ork . Th is experien ce is a tremendous asset to del iv ering projects on time , with in scope , and on budget. The Team uses a combination of people and processes to manage every project . Our first priority is to have the right people ass igned to the project. These include tenured and experienced staff that can use the ir ex pe ri enc e to mi ni miz e an y SOQ -City of Fort Worth DEM10 -06 Greenho use Gas impacts to the key performance ind icators of the project. The Team strongly believes that a suc cessful project requ ires specific sk ills and that you cannot simply insert any project manager at this process and hope that things will all just work out. The roles and responsib ilit ies of our staff are des igned to match the flow of the project requ iremen ts. This staffing starts with a Project Manager and Task Mangers , who all play a sign ificant ro le in the prope r management of the pro cess . For the City , we will be assigning Mr . Freddie Guerra as the Project Manager . Mr . Guerra is based in Dallas and he will be the single point of accountability for the development and execution of all work related to this RFQ . He will have the day-to -day responsibility for development project control. His expertise in taking conceptual improvemen t projects through the aud it ing and engineering process and into an implementable , properly designed , and successfully executed project is a key role . His ability to perform his job well is closely ti ed to our assigned Task Managers . To ensure that all work is progressing effic iently and in a timely manner the Project Manager will be respons ible to assign each Task Manager a clear role and responsibilities . Documentation will also be important to ensure that information is communicated quickly and clearly . The project team will use schedule/cost control , draw ing/document/e-mail exchange and control software to manage the project. The specific personnel roles and responsibil ities are detailed as follows : • Overall management and City liaison . • Solicit City involvement and comments (e .g. constructability issues) • Respond to technical rev iewers . • Attend City and direct team meetings . • Conduct weekly progress meetings with Task Managers . • Chair milestone review meetings . • Internal advisory to Team , and final issue resolution . • Monthly progress reports and invoicing to the City . Task Managers will manage interaction between disciplines . Their responsibilit ies include : • Reporting and communication with the PM • Keeping track of inputs and outputs , and changes • Timely distribution of new information to/from the PM . • Spot check verification and written 'sign off on milestone submittals. • Ass ist ing the PM in communicat ing with the City 's Project Manager . • Rev iew data collect ion needs with City and prov ide list of required information to fellow Task Managers . • Preparing techn ical letters/responses to the technical rev iewers for the PM . • Regular week ly progress meetings/c on ference call s with PM . All of our project Team will utilize ind ustry -standard schedul ing too ls (i.e., Microsoft Project ) to form ul ate schedu les . The Team will deve lo p a work plan that details all of the major tasks associated with the project and includes information such as : the requ ired completion date for each task, th e status of each task , th e resp onsible party , potential risks , and proactive meas ur es ta ke n to mitig ate and min imize possible risk s. Updates to the sche du le and bud get are do ne wee kl y and revie we d wi th the cl ient to en sure the pro ject is tra ckin g to the plann ed pat h. Any de viati ons are noted and a pla n is devised to minimize project im pa ct. Criteria for Succe ssful Im plementation of the Program CP& Y has ident ified six (6) measures of success for the implemen tat ion of the program : Page 7 of 10 SOQ -City of Fort Worth DEM10-06 Gre enh ouse Gas -..,-.-................ __ ."'-_..,._._. __ ( ,,,, SuccntThemt •, V ! ' <i. Indication of SllCCfla "(!.' ,.; ''t' ~ - . . -Improves • Crea tion of "green " jobs from energy efficiency retrofi ts , conservation and green building though economic/social /environmental potential implementation strategies • Expanded busine ss opportunities for both new and existing companies • Realistic goals for reduction in greenhouse gas emiss ions Provides for immediate act ion • Identification of some sim ple strateg ies to input without significant resources Addresses short-and long-term needs • Reduce energy consumption (EEC Strategy) • Create "green " jobs • Reduction of greenhouse gas emissions (Carbon Footprint & Climate Action Plan) • Compass for City Master Plans (Climate Action Plan) Attracts new people , organizations , and • Additional of 15% new stakeholders to City's existing "gr een " database for community & busines s businesses to participate leaders , non-profit organizations , churches , schools , etc . Leverages existing community assets • Built upon the City 's Green Initiatives • Built upon private sector 's green efforts -solicit businesses with a corporate environmental policy or stewardship Knits together community and region • Integrate components of other munic ipal "green " programs as well as align EEC strategy with other plans and programs • Solicit input reqardinq EEC strateqy from utility and surround inq municipalities Bui lds new community assets and • Retrofitting for energy efficiency and conservation capital • Development of community gardens (solicit grant or in -kind support) 6 . List of Clients with Similar Projects project changes, delays, and other is sues increase the need of time allocation. If needed, some personnel may allocate 100% of time during a short-period , to ensure effective contract execution and administration. Each key staff member is available for the commitment necessary to allocate all See sect ion 4 (Projects) for listing of Clients with Similar Projects . . Client References See section 4 (Projects) for listing of client references . project needs . 8. Current Workload 9. Date Work Can Begin CP&Y's Task Manager and staff's all ocation of time is estimated at 65 %. This allocation will requi re continuous adjustment due to prior ities to provide balanced coverage of projects . Further, CP&Y is prepared to begin upon the Notice to Proceed from the City of Fort Worth. CP&Y's Key Personnel (Resumes) Alfredo Guerra REM, RHCMM, RS, CIPS , CAPM -(CP& Y) [Role -Project Manager] -Education Registration/Certifications Affiliations • MS -Env iro nmen tal Studies, • TxDOT Sequence No . 13784 , 2.13 .1 Hazardous • Member, Amer ican Society of Agricultural Bay lor University , 1992 Materials Initia l Site Assessment and Bio logic al Eng ineers , #1021022 • BS -Bi olog y, University of Mary • Registe red Environmental Manager , #11806 • Corrective Action Project Manager , Hard in Baylor , 1990 • Registered Hazardous & Chemical Mater ial s #0000264 Manager , #3151 • Keep Da ll as Beautiful • Registered San itar ian , #4175 • Rebuild ing Together Greater Dallas • Certified Infrastructure Preparedness Specialist, • Town of Flower Mound -Environmental #01853 Conservation Commiss ion Background and Experience Guerra has over 15 years of experience as a consultant and diverse experience with a large municipal it y. He has experience in both the ulatory and techn ic al aspects of wastewater and water quality impacts including development of discharge permits in accordance with federal and state water quality regulati ons , receiving wate r quality modeling , development of TMDLs , wastewater treatment system analysis , and facilities planning . Additional experience includes watershed analysis , water quality stud ie s, environmental compliance audits , preparation of compliance, spill prevent ion , and pollution prevention plans , soil and groundwater remediation , air pe rmitting and monitoring ; underground storage tank and above Page 8 of 10 SOQ -City of Fort Worth DEM10-06 Greenhouse Gas ntl slo rage TanR"'iiianagemeiil;and design and construction of biogas recovery system . Mr . Guerra exper ience in energy includes extensive erience in demand-side management (DSM) program planning , design , imp lementation , and evaluation. This work has included managing activ iti es to quantify DSM potent ial , develop DSM plan s, and identify and promote energy efficiency and combined heat and power projects at commercial , institutional, and industrial facil ities . He has also been involved with renewable energy projects , application of sustainable engineering /consult ing , and development of community outreach programs . His recent relevant experience includes: Project Manager , Preparation of Energy Efficiency & Conservation effort enabled Airport Staff to effective ly plan for the integration of those Strategy Plan , Greenhouse Gas Em iss ions Inventory and Cl im ate Act ion technologies based on economic , techn ical and market cons iderations Plan , City of Del Rio -Texas . Mr . Guerra is currently managing the and in the optimum tim e frame . The ability to plan for renewab le energy preparation of the EECS Plan for the City. In addition , he is preparing sourcing will position the Airport to diversify its energy source portfolio , the greenhouse gas emissions inventory as well as the climate action hedge long term energy costs , meet strategic sustainability goals and plan as component of the EECS Plan . address potential carbon regulation . Solar , wind , geothermal & energy Project Manager , Pre-feas ibili ty Study -Gasificat ion of An imal Waste , Vendor Waste and Yard Trimm in g for Generat ion of On-site Power & Heat ,, City of Dallas -Zoo , Texas . Mr . Guerra managed a pre-feasibility study at the Dallas Zoo to examine ways of using this manure and solid waste biomass for energy production at the facility . The study included the collection and analys is of biomass systems , mapping of utility infrastructure , economic analysis , mass-balance analysis and energy load profiles . Project Manager, Evaluation of Renewable Energy Technology & Evaluation of Electrical System , URS , DFW International Airport , Texas. Mr . Guerra served as the project manager for the evaluation of the electrical system as well as to evaluate renewable energy resources at the DFW Internat ional Airport. Assisted in the assessment of technical , economic , and market potential for reducing fossil-fueled electricity use and peak demand at Airport. The electrical system was evaluated to etermine the potential needs and implications that future development have on the current electrical distribution system . Timing and regale demand issues were also evaluated . The assessment of potential renewable energy generation technologies screened available options to identify those suitable for potential application at DFW . This from waste (EFW) options were evaluated . Project Manager , Water Conservation & Grease Abatement Outreach Program , Dallas Water Ut ili ties , City of Dallas , Texas . Mr. Guerra managed both outreach programs for DWU . Implemented a grassroots social-based marketing approach to focus resources on areas with high water consumption and frequent sanitary sewer overflows . Transitioned Grease Abatement Program from "don 't pour cooking oil down the drain " to "recycle your cooking oil.· Implemented pilot programs with community centers , schools and churches. Pilot programs to serve as a proving ground to develop a City-wide recycled oil collection for ultimate use at a proposed biodiesel facility . Mr. Guerra assisted in the preparation of the draft grant application to obta in Department of Energy (DOE) funding . Project Manager , Greenhouse Gas Emissions Inventory , City of Dallas , Dallas , Texas. Mr . Guerra assisted in the preparation of a greenhouse gas emissions inventory for the City of Arlington . The tasks consisted of: 1. Inventory data collection for baseline year , 2. Determination and quantification of historic and existing measures ; identified existing and potential measures , and 3. Identification of a GHG emission target. In addition, a sustainability action plan was drafted . Joshua J. Marazzini, EIT Education Registration/Certifications Ii Affiliations !c' i' j, :--. L • B.S., Civil Engineering , • Engineer-in-Training • Society of American Military Engineers (SAME), Scholarship Committee Texas A&M University , (EIT), Texas (35464) 2006-2009 2004 2005 • American Public Works Association (APWA) • Texas Society of Professional Engineers (TSPE), E-Week Plann in g Committee 2007-2008 Background and Experience Mr . Marazzini has recently jo ined CP& Y's San Anton io office and brings with him four years of exper ience in planning , des ign ing , permitting and management of civil eng ineering projects . His work covers a broad spec tr um of public works , energy efficiency , water and wastewater projects includ ing program and project management , water treatment fa cil ities , wastewa ter collect ion stud ies , wastewater colle ction improvement evaluations , lift station evaluations and des igns , wastewater system field evaluation and data collect ion , waste wate r collect ion system modeling , stormwater pollution prevention plan (SW PPP ) ins pe ct ions , equ ipme nt evaluatio n and select ion , cons truc tion inspection s, br idg e and roadway design , geographic in format ion systems (GIS) database development, GIS data conversion and mapping , and permitting for domestic and industria l wastewater streams . With formal tra inin g in civil engineer ing , Mr . Marazzini has a wide range of experience in the field . His educat ional background has prov ided him with a solid fou ndation in the stud ies of civil eng ineering as a whole. Additionally , he has over three years of internship experience with a previous emp loyer working on a variety of proje cts within multiple civil disci plines . He has experien ce designing wa stewater facilities and roadways using both the AutoCAD and MicroStation platforms , as well as modeling wastewater collection systems usi ng lnfoWorks CS . Mr . Marazzini has been involved with applications in civil eng ineer ing and has experience using Ar cGIS 9.2. He also has exper ience in Micro soft su ite of software including MS Access abase des ign. Development of Energy Efficiency & Conservat ion Strategy , Greenhouse Gas Emissions Inventory and Climate Action Plan , City of Del Rio , Texas . Mr . Marazzini assisted with the development and review of the City 's energy efficiency and conservation strategy wh ich was designed to set and achieve goals in the following five metric areas : job creation /ret ention , energy savings on a per dollar invested basins , Page 9 of 10 -----·---·--·-·~--..-·-·- energy use reduction , reduction of greenhouse gas emissions , as well a plan for leveraging outs ide and interna l funding to create a tainable energy program. Energy Savings Performance Contract, City of Pasadena , Texas . Mr . Marazzini performed a technical energy audit on all City water and wastewater facilities to assess the current operation of the system and obtain an understanding of the equipment currently in use . With this information , Mr . Marazzini evaluated the potential energy and water savings the City could garner by improving energy and water efficiency through the use of more efficient and properly sized equipment coupled with changes to the operation of the overall treatment process . Resulting projects included replacement of exist ing dual speed controls with variable frequency drives on aerators and the replacement of existing blowers with new turbo blowers . SQQ -City of Fort Worth DEM10 -06 Greenhouse Gas Energy Savings Performance Contract , Bexar County , Texas . Mr. Marazzini performed a techn ica l energy audit on County facilities identified for EECDBG funding to assess the current operation of the building and obtain an understanding of the equipment currently in use . With this information , Mr . Marazzini evaluated the potential energy and water savings the City could garner by improving energy and water efficiency through the use of more efficient equipment , properly sized equipment and changes to the operation of the overall system . Additionally , rainwater harvesting , solar hot water and photovoltaic as well as wind power alternatives were evaluated . Result in g projects include the installation of a 50 ,000 gallon rain water collection and storage system coupled with a solar powered pump and drip irrigation system for use in the gardens at the San Antonio Food Bank . Also include d is the installation of 7.2 kV solar pv collection system and 2.4 kV wind turbine at the Greater Randolph Area Services Program. Sharon R. Price Education • B.S ., Agriculture, Texas A&M University , 1988 Registration/Certifications Affiliations Background and Experience Ms . Price recently joined CP& Y's Dallas office and brings with her over fifteen years of experience in business strategy planning , project management , public relations, and proposal development. She has experience managing a turnkey approach for providing a sustainable solution for energy strategies with energy demand profiling , energy resource analysis , identification of suitable technologies, integration with building/site energy s stems , permission & planning , identifying operational implications , financial analysis of cost/return on investment , identifying financial and ownership ·ons for capital investment, equipment procurement, installation/commission , and identifying solutions for operation and maintenance . A Cool ing and Heating Assessment Evaluation , IKEA -Worldwide. BSkyB Biomass Plant , London , England . The Perpetual Energy team During her tenure, Perpetual Energy was tasked with analyzing was commissioned by BSkyB to produce an outline design solution consumption patterns , and setting goals for energy and carbon capable of providing 20% carbon emission reduction. The CHP plant reduction . This resulted in a guidance manual for construction will consist of a biomass conversion technology and an electric managers enabling IKEA to understand the process of technology generator . Perpetual 's evaluation includes the identification of biomass selection and to procure cost efficient systems that met their fuel , fuel management system , biomass conversion technology , requirements . Out of this evaluation , 14 technology standards for IKEA electrical generator and an absorption chiller . Ms . Price worked directly were produced to be used for negotiations with technology with the equipment providers and technical directors to insure design manufacturers which provided a benchmark for installation standards solution met the required benchmarks identified in the Feasib ili ty Study . that enabled quality control systems to be put in place by construction and project managers . This assessment provided a baseline to begin the IKEA Solar PV Evaluation which is the largest solar photovoltaic test project in the world and consist of 2MW installations across stores in Germany , Belgium , Spain and US . Six manufacturers are represented in six 50kW arrays on each facility with the panels , film and inverters being analyzed with spectral thermal , wind and radiant meteorolog ical monitoring . Page 10 of 10 2 .5 INSURANCE CERTIFICATES 2.5.1 FOR PURPOSES OF THIS REQUEST FOR QUALIFICATIONS, PLEASE ATTACH A COPY OF YOUR CURRENT INSURANCE CERTIFICATE($) FOLLOWING THIS PAGE AND BOUND WITHIN THE QUALIFICATIONS PACKAGE. 2.5.2 The successful Prov ider will be required by the contract to have insurance coverage as detailed below . Prior to commencing work, the Provider shall deliver to Fort Worth certificates documenting this coverage. The C ity may elect to have the Provider subm it its entire policy for inspection . (a) Insurance coverage and limits : Provider shall provide to the City certificate(s) of insurance documenting policies of the following coverage at minimum limits that are to be in effect prior to commencement of work on the contract: 1. Commercial General Liability o $1,000 ,000 each occurrence o $2 ,000,000 aggregate 2. Automobile Liability o $1,000 ,000 each acc ident, or o $250 ,000 property damage / $500 ,000 bodily injury per person per accident A commercial business auto policy shall prov ide coverage on "any auto ," defined as autos owned , hired and non-owned during the course of t his project. 3. Worker's Compensation o Coverage A: statutory limits o Coverage B : $100,000 each accident 4 . Profess ional Liability $500 ,000 disease -policy limit $100 ,000 disease -each employee o $1 ,000 ,000 each claim o $2 ,000 ,000 aggregate Professional Liability Insurance shall be written on a project specific basis . The retroactive date shall be coincident with or prior to the date of this contract and the certificate of insurance shall state that the coverage is claims-mad e and th e ret roactive date . The insurance coverag e shall be maintained for th e duration of thi s contract and for fi ve (5) ye ars follo w in g com pletion of the contract (Tail Coverage ). An an nual certificate of insurance shall be submitted to the City for each year following completion of this contract. 2-6 (b) Certificates of insurance evidencing that the Provider has obtained all required insurance shall be delivered to the City prior to Provider proceeding with the contract . 1. Applicable policies shall be endorsed to name the City an Additional Insured thereon, as its interests may appear. The term City shall include its employees , officers, officials, agents, and volunteers as respects the contracted services . 2. Certificate(s) of insurance shall document that insurance coverage specified according to items in section (a) above are provided under applicable policies documented thereon . 3. Any failure on part of the City to request required insurance documentation shall not constitute a waiver of the insurance requirements. 4. A minimum of thirty (30) days notice of cancellation or material change in coverage shall be provided to the City. A ten (10) days notice shall be acceptable in the event of non-payment of premium. Such terms shall be endorsed onto Provider's insurance policies . Notice shall be sent to Brian Boemer, Director, Department of Environmental Management, City of Fort Worth, 1000 Throckmorton, Fort Worth, Texas 76102 . 5. Insurers for all policies must be authorized to do business in the state of Texas or be otherwise approved by the City; and , such insurers shall be acceptable to the City in terms of their financial strength and solvency . 6 . Deductible lim its, or self-insured retentions , affecting insurance required herein shall be acceptable to the City in its sole discretion ; and , in lieu of trad itional insurance, any alternative coverage maintained through insurance pools or-risk retention groups must be also approved . Dedicated financial resources or letters of credit may also be acceptable to the City . 7. Applicable policies shall each be endorsed with a wa iver of subrogation in favor of the City as respects the contract. 8. The City shall be entitled , upon its request and w ithout incurring expense , to re v ie w the Pro v ider's insurance policies including endorsem e nts the reto an d , at th e Ci ty's di sc re ti on , the Provide r may be requ ired to prov ide proof of insurance prem ium payments. 9. T he Co m me rci al General Li ab ility insu ranc e po li cy sha ll have no exclus ion s by endorsements un less t he City approves such excl us ions . 10. The City shall not be responsible for the direct payment of any insurance premiums required by the contract. It is understood that insurance cost is an allowable component of Provide r's overhead . 2-7 11 . All insurance required in section (a) above , except for the Professional Liability insurance policy , shall be written on an occurrence basis in order to be approved by the City. 12. Subcontractors to the Provider shall be required by the Provider to maintain the same or reasonably equivalent insurance coverage as required for the Provider. When subcontractors maintain insurance coverage , Provider shall provide City with documentation thereof on a certificate of insurance. Notwithstanding anything to the contrary contained herein , in the event a subcontractor's insurance coverage is canceled or terminated , such cancellation or termination shall not constitute a breach by Provider of the contract. 2-8 ACORD9 CERTIFICATE OF LIABILITY INSURANCE Page I DATE (MM/00/YYYY) ~ 1 of 3 09/02/2009 fjUCER 877-945-7378 THIS CERTIFICATE IS ISSUED AS A MATIER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Will i s of Pennsylvania, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND , EXTEND OR 26 Century Blvd . ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P . 0 . Box 305191 Nashville, TN 37230 -5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental• Infrastructure, Inc . INSURERA: Zurich American Insurance Companv 16535 -006 Shaw Bnvironmental, Inc. INSURER B: See Page 2 for List of Other Insureds 4171 Essen Lane INSURERC: Baton Rouge, LA 70809 INSURERD: I INSURERE : COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED . NOTWITHSTANDING ANY REQU IRE MENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERT IFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SU BJECT TO ALL THE TERMS, EXC LUSIONS AND CON DI TI ONS OF SUCH POLICIES . AGGREGATE LIMITS SHOWN MAY HAVE BEE N REDUCED BY PAID CLAIMS . INSR ii~1 TYPE OF INSURANCE LTR POLICY NUMBER b~i~11ifitit~, C2+~~~'tl&i~~ LIMITS A ~NERAL LIABILITY GL0386660704 9/1/2009 9/1/2010 EACH OCCURRENCE $ 2.000.000 ..x. COMMERCIAL GENERAL LIABILITY ~~~~~H?E~~~~cel $ 1-000-000 D CLAIMS MADE [iJ OCCUR MED EXP (Any one person) $ 25.000 ..x. Blanket Contractual PERSONAL & ADV INJURY s 2-000.000 ~ GEN ERAL AGGREGATE s 4-000.000 GEN 'L AGGRE GATE LIMIT APPLIES PER: n POLICY ixl rrg: n LOC PRODUCTS -COM P/OP AGG $ 4-000.000 A ~TOMOBILE LIABILITY AOS BAP386660404 9/1/2009 9/1/2010 COMBINED SING LE LIMIT $ 2,000,000 A ..x. ANY AUTO HI BAP386734802 9/1/2009 9/1/2010 (Ea accident) ..x. ALL OWNE D AUTOS BODILY INJURY ( Per person) $ SCHEDUL ED AUTOS ~ ..x. HIRED AUTOS BODILY INJURY Q (Per accident) $ ..x. NON-OWNED AUTOS ~ PROPERTY DAMAGE (Per accident) $ GARAGE LIABILITY AUTO ONLY · EA ACCIDENT s R ANYAUTO OTHER THAN EAACC $ AUTO ONLY: AGG $ excess/ UMBRELLA LIABILITY EACH OCCURRENCE $ D OCC UR D CLAIMS MADE AGGREGATE $ $ R DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSATION WC386700003 9/1/2009 9/1/2010 X I T"6~?It,,Ws I \OTH-A AND EMPLOYERS' LIABILITY ER YI N A ANY PROPRIETOR/PARTNER/EXECUTIVE D WC386660604 9/1/2009 9/1/2010 E.L. EACH ACCIDENT $ 1 000.000 OFFICER/MEMBER EXCLUDED? (Mandatory In NH) E.L. DISEASE· EA EMPLOYEE s 1.000.000 [~E~!"c~:~~~;NS below E.L. DISEASE· POLICY LIMIT $ 1.000.000 OTHER DESCRIPTION OF OPERATIONS/ LOC ATIONS / VEHICLES/ EXCLUSIONS ADDED BY ENDORSEMENT/ SPECIAL PROVISIO NS Evidence of Insurance Coverage CERTIFICATE HOLDER CANCELLATION Specimen Certificate -SE&IO SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF , THE ISSUING INSURER WILL ENDEAVOR TO MAIL ~ DAYS WRITTEN NOTICE TO THE CE RTIFICATE HOL DER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER, ITS AGENTS OR REPRESENTATIVES. ACORD 25 (2009/01) Coll: 27 97145 Tpl: 974474 Cert: 129617 62 © 1988-2009 ACORD CORPORATION. All rights reserved . The ACORD name and logo are registered marks of ACORD W1l11s CERTIFICATE OF LIABILITY INSURANCE Page 2 I DATE of 3 09/02/2009 t]UCER 877-945-7378 THIS CERTIFICATE IS ISSUED AS A MATIER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Willis of Pennsylvania, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND , EXTEND OR 26 Century Blvd. ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P . o. Box 305191 Nashville, TN 37230-5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental & Infrastructure, Inc. INSURER A: Zurich American Insurance Company 16535-006 Shaw Environmental , Inc. INSURER 8 : See Page 2 for List of Other Insureds 4171 Bssen Lane INSURERC : Baton Rouge, LA 70809 INSU RERD: I INSURERE : DESCRIPTION OF OPERA TIONS/LOCA TIONSNEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Named Insureds: The Shaw Group Inc.; Shaw International, Inc.; Stone & Webster, Inc.; Stone & Webster Construction, Inc.; B.F . Shaw, Inc.; Shaw Sunland Fabricators, Inc.; Shaw Global Energy Services, Inc.; Shaw SSS Fabricators, Inc.; Shaw Maintenance, Inc.; Shaw Constructors, Inc.; Shaw NAPTech, Inc.; Shaw Energy Delivery Services, Inc.; Shaw Field Services, Inc.; S&W Engineering NY, PC; Shaw Environmental, Inc.; Shaw Environmental and Infrastructure, Inc.; Shaw Coastal, Inc.; Shaw Beneco, Inc.; EMCON/OWT, Inc.; Shaw Infrastructure, Inc.; Stone & Webster Consultants, Limited; Stone & Webster Management Consultants, Inc. Shaw GBB, LLC., GBB Maintenance Company, Inc., GBB International, LLC; Shaw Tulsa Fabricators, Inc.; Shaw Global Offshore Services, Inc. The Shaw Group Inc. and its majority owned subsidiaries are Named Insureds under the insurance policies listed on this Certificate. The above list is a representative list of the major subsidiaries of The Shaw Group Inc. and should not be considered complete. Additional Insured Status: Commercial General Liability, Automobile Liability and Excess/Umbrella Liability policies lude a Blanket Additional Insured endorsement. This endorsement confers Additional Insured tus to persons and/or entities as specifically required by a written contract executed prior to loss and taking place during the policy period. The General Liability and Automobile Liability, and Excess Liability policies grant coverage to "Additional Insureds" on a Primary basis, subject to each policy's terms, conditions and exclusions, when required by contract executed prior to a loss. Waiver of Subrogation: The General Liability, Automobile Liability and Workers' Compensation policies, through blanket endorsements, automatically waive the rights of subrogation, where allowable by law, possessed by the insurer against any person and/or entity to the extent that the Insured had, prior to a claim, a written contract to waive such rights. Coll:2797145 Tpl:974474 Cert:12961762 Page 3 of 3 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed . A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy , certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER This Certificate of Insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon . ACORD 25 (2009/01) Coll:2797145 Tpl:974474 Cert:12961762 ACORD8 CERTIFICATE OF LIABILITY INSURANCE Page 1 of 3 I DATE (MM/DD/YYYY) '-......---' 09/02/2009 O UCER 87 7-945-7378 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Willis of Pennsylvania , Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 26 Century Blvd . ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P.O. Box 305191 Nashville, TN 37230-5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental & Infrastructure, Inc. INSURER A : Lexington Insurance Company 19437-002 Shaw Environmental, Inc . IN SURERS : See Page 2 for List of Other Insureds 4171 Essen Lane INSU RERC: Baton Rouge, LA 70809 IN SURERD: I INSURERE: COVERAGES THE POLICI ES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED . NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT O R OTHER DOCUMENT WITH RE SPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN , THE INSURANCE AFFOR DED BY THE POLICIES DES CRI BED HEREIN IS SUBJECT TO ALL THE TERM S , EXCLUSIONS AN D CONDITIONS OF SUCH POLICIES . AGGREGATE LIMIT S SHOWN MAY HAVE BEEN REDUCED BY PAID CLAI MS. INSR r.DD;i TYPE OF INSURANCE POLICY NUMBER ~2~~~~~5~1 62f~~~ft&~~~ LIMITS LTR NSR ~NERAL LIABILITY EACH OCCURRENCE $ COMMERCIAL GENERAL LIABILITY ~~~~~'H9E~~~ncel $ -D CLAIMS MADE D OCCUR MED EXP (Any one person) $ PERSONAL & ADV INJURY $ -GENERAL AGGREGATE $ -GEN.L AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/OP AGG $ n POLICY n jrg: n LOC ~TOMOBILE LIABILITY COMBINED SINGLE LIMIT $ ANY AUTO (Ea accidenl) -ALL OWNED AUTOS BODIL Y INJURY -$ SCHEDULE D AUTOS (Per person) -HIRED AUTOS BODILY INJURY CJ -$ NON-OWNED AUTOS (Per accident) --PROPERTY DAMAGE (Per accid ent) $ GARAGE LIABILITY AUTO ONLY -EA ACCIDENT $ Fl ANYAUTO OTHER THAN EAACC $ AUTO ONLY : AGG $ EXCESS/ UMBRELLA LIABILITY EA CH OCCURRENCE $ D OCCUR D CLA IMS MADE AGGREGATE $ $ Fl DEDUCTIBLE $ RETENTION $ $ WORKERS COMPENSATION I Ti~~rnJlh I IOTH-ER AND EMPLOYERS' LIABILITY Y/N AN Y PROPRIETOR/PARTNER/EXECUTIVE D E.L. EACH ACCI DENT $ OFF ICER/MEM BER EXCLUDED? E.L. DIS EASE -EA EMPLOYEE $ (Mandatory in NH) If yes, describe under SPECIAL PROVISIONS below E.L. DISEASE · POLICY LI MIT $ A OTHER 020562668 9/1/2009 9/1/201 0 Professional Liability $2 ,000,000 Per Occurrence Cla i ms Made $2,000,000 Ann .Aggregate DESCRIPTION OF OPERATIONS I LOC ATIONS I VEHICLES / EXCLUSIONS ADDED BY ENDORSEMENT / SPE CI AL PROVISIO NS Evidence of Insuranc e CERTIFICATE HOLDER Coverage CANCELLATION SHOULD ANY OF THE ABOVE DE SCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF , THE ISSUING INSURER WILL ENDEAVOR T O MAIL ~ DAYS WRITTEN NOTICE TO THE CE RTI FICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATION OR LI ABILITY OF ANY KI ND UPON THE INSURER, ITS AGENTS OR Specimen Certificate -SE&IProf2 REPRESENTATIVES. ACORD 25 (2009/01) Coll: 2797145 Tpl: 974 1 63 Cert: 12 963746 © 1988-2009 ACORD CORPORATION . All rights reserved. The ACORD name and logo are registered marks of ACORD I Willis CERTIFICATE OF LIABILITY INSURANCE Page 2 of 3 I DATE 09/02/2009 DDUCER 877-945-7378 THIS CERTIFICATE IS ISSUED AS A MATIER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE Willia of Pennsylvania, Inc. HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR 26 Century Blvd. ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. P.O. Box 305191 Nashville, TN 37230-5191 INSURERS AFFORDING COVERAGE NAIC# INSURED Shaw Environmental• Infrastructure, Inc. INSU RERA: Lexington Insurance Company 19437-002 Shaw Environmental, Inc. IN SURERB : See Page 2 for Liat of Other Insureds 4171 Eaaen Lane IN SURERC : Baton Rouge, LA 70809 IN SURERD : I INS URERE : DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Named Insureds: The Shaw Group Inc.; Shaw International, Inc.; Stone & Webster, Inc.; Stone & Webster Construction, Inc.; B.F. Shaw, Inc.; Shaw Sunland Fabricators, Inc.; Shaw Global Energy Services, Inc.; Shaw SSS Fabricators, Inc.; Shaw Maintenance, Inc.; Shaw Constructors, Inc.; Shaw NAPTech, Inc.; Shaw Energy Delivery Services, Inc.; Shaw Field Services, Inc.; S&W Engineering NY, PC; Shaw Environmental, Inc.; Shaw Environmental and Infrastructure, Inc., Shaw Coastal, Inc.; Shaw Beneco, Inc.; EMCON/OWT, Inc.; Shaw Infrastructure, Inc.; Stone & Webster Consultants, Limited, Stone & Webster Management Consultants, Inc. Shaw GBB, LLC., GBB Maintenance Company, Inc., GBB International, LLC; Shaw Tulsa Fabricators, Inc.; Shaw Global Offshore Services, Inc. The Shaw Group Inc. and its majority owned subsidiaries are Named Insureds under the insurance policies listed on this Certificate. The above list is a representative list of the major subsidiaries of The Shaw Group Inc. and should not be considered complete. Coll:2797145 Tpl:974163 Cert:12963746 IJ LI L Page 3 of 3 IMPORTANT If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed . A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). If SUBROGATION IS WAIVED , subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER This Certificate of Insurance does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon . ACORD 25 (2009/01) Coll:2797145 Tpl:974163 Cert:12963746 Cert ID 5953 ACORDT .. CERTIFICATE OF LIABILITY INSURANCE I DATE (MM/DD/YYYY) L 4/6/2010 PRODUCER THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION McLaughlin Brunson Insurance Agency , LLP ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE 6600 LBJ Freeway, Suite 220 HOLDER. THIS CERTIFICATE DOES NOT AMEND , EXTEND OR I ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. , as TX 75240 - l 503 -1212 (214) 503 -8899 INSURERS AFFORDING COVERAGE NAIC# • INSURED INSURER A . Travelers Lloyds Ins. Co. 41262 I CP&Y, Inc . INSU RER B: Hartford Fire Insurance Co . 19682 1820 Regal Row, Suite 200 INSURER C: XL Specialty Insurance Co . 37885 Dallas TX 75235 INSU RER D : Travelers Ind . Co. of Conn. 25682 r I INSURER E: St. Paul Fire & Marine Ins Co 24767 L COVERAGES THE POLIC IES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLI CY PERIOD INDICATED . NOTWITHSTANDING ANY REQU IREMEN T , TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH T HIS CE RT IFI CATE MAY BE ISSUED OR MAY PERTA IN, THE INSURANC E AFFORDED BY THE POLICIES DESCR IBED HERE IN IS SU BJECT TO ALL THE TERMS , EXCLUSIONS AND CON DITIONS O F SUCH POLIC IE S. AGGREGATE LIMITS SHOWN MAY HAVE BEE N REDU C ED BY PA ID CLAIMS . INSR 1'DD'l POLICY NUMBER POLICY EFFECTIVE Pg~l.f/ EXPl~!ION LTR '"""' TVP~ n~ ••• ... 11CIAUl"C n.O.TF LIMITS GENERAL LIABILITY EACH OCCURRENC E $ 1 000 00 0 -DAMAGE TO RENTEu 1,000,00 ~ A X COMMERCIAL GENE RAL LI ABI LI TY PACP1951L895 6/1/2009 6/1/2010 PREM ISES /Ea occuren ce ) $ -D CLAIMS MADE [iJ OCCUR -ME D EXP (Any one person) $ 10,000 PERSONAL & ADV INJURY $ 1,000,00 0 -2,000,oo L f-- GEN ERAL AGGREGATE $ GEN 'L AGG RE GATE LI MIT APPLIES PER: PRODUCTS -COMP/OP AGG $ 2,000,000 n POLICY ixl m~T n LOC AUTOMOBILE LIABILITY COM BINED SINGLE LIMIT f--$ D 2-ANY AUTO BA3865M855 6/1/2009 6/1/2010 (Ea accidenl) 1,000,000 ALL OWNE D AUTOS BODILY INJURY f--$ I SC HEDU LED AUTOS (Per person) -1 HIRED AUTOS BODILY INJUR Y f--$ NON -OWNED AUTOS (Per accident) -c, >----PROPE RTY DAMAGE (Pe r accident) $ LJ GARAGE LIABILITY AUTO ONLY · EA ACCIDENT $ l R ANY AUTO OTH ER THAN EAACC $ ,; I AUTO ONLY : I AGG $ EXCESS/UMBRELLA LI ABILITY EAC H OCCU RREN CE $ 10,000 ,0 00 E ~ OCC UR D CLA IMS MADE QK06502279 6/1/2009 6/1 /2010 AGG RE GATE $ 10,000,000 I $ 1 DE D UCTIBL E $ L RETENT IO N $ $ I B WORKERS COMPENSATION AND 46WECZI48 81 1/1/2010 1/1/2011 X I ~g JT~Jg;, I 10:~-I EMPLOYERS" LIABILITY 500, ooo l ANY PROPRIETOR/PARTNER/EXE CUTI VE E.L. EACH ACCIDENT $ OFFICER/MEMBER EXCLUDED ? E.L. DISEAS E · EA EM PLOY EE $ 500,000~ If yes, describe under E.L. DISEAS E • PO LI CY LI MIT $ 500,000 SPEC IAL PR OVI S IO NS below C OTHER Professional Liab. DPR 9684961 4 /1 /2010 4/1 /2011 $3,000,000 Per Claim/ , Annual Aggregate DESCRIPTION OF OPERATIONS I LOC ATIONS I VEHICLES I EXCLUSI ONS ADDED BY ENDORSEMENT I SPECIAL PROVISIONS ' The c laims ma d e pro fessional li ab i lity c overage is presented wi th i n the pol icy period and is sub j ect CERTIFICATE HOLDER er Certificate ACORD 25 (2001/08) t he t o tal aggregate limit for all c laims to a deductible . CANCELLATION SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EX PIRATION DATE THE REOF , TH E ISS UING IN SURER WIL L ENDEAVOR TO MAIL 10 DAYS WRITTEN NOTICE TO THE CERTIFICATE HOLDER NAME D TO TH E LEFT , BUT FAILURE TO DO SO SHALL IMPOSE NO OBLIGATI ON OR LIA BILITY OF ANY KIND UPON THE INS URER , ITS AGENTS OR REPRESENTATIVES . AUTHORIZED REPRESENTATIVE ~ © ACORD CORPORATION 1988 Page 1 o f 1 IMPORTANT If the certificate holder is an ADDITIONAL INSURED , the policy(ies) must be endorsed . A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s ). If SUBROGATION IS WAIVED , subject to the terms and conditions of the policy , certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). DISCLAIMER The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer , and the certificate holder , nor does it affirmatively or negatively amend , extend or alter the coverage afforded by the policies listed thereon . ACORD 25 (2001/08) Page 2 o f 2 4 /6/2010 2 .6 NONDISCRIMINATION All City contractors are required to comply with Chapter 17 , "Human Relations ," Art icle Ill, "Discrimination ," Division 3, "Employment Practices," of the Code of the City of Fort Worth , prohibiting discrimination in employment practices. Provider agrees that Provider, its employees, officers , agents , contractors or subcontractors , have fully complied with all provisions of such Ordinance, and that no employee, participant , applicant , contractor or subcontractor has been discriminated against according to the terms of such Ordinance by Provider , its employees, officers , agents, contractor or subcontractors herein . CONTRACTOR: Shaw Environmental and Infrastr ucture , Inc. Company Name 6330 Commerce, Su it e 190 Add ress Irving , TX 75063 City , State , Zip BY : Charles P . Gaddy (print or type name of signatory) Business Line Manager 2 -9 2.7 PROVIDER'S LEGAL AND COMPLIANCE HISTORY Provider's legal and compl iance history is a critical component of this Request For Qualifications . Read this section with care and respond accordingly . Failure of the Provider to provide all the information requested and to certify the report , will result in the Provider's submittal being declared non-responsive . Prov ider shall attach a written report of legal action brought against Provider, Provider's officers, Provider's employees , AND Provider's proposed subcontractors relating to the protection of the environment. The terms "legal action " and "relat ing to the protection of the environment" are defined below. The report shall include all legal action brought within five (5) years of the closing date of this Request for Qualifications . The report shall detail the substance , status , and outcome of such legal action. Th is includes without limitation the names of the agency and/or persons bringing the action, all relevant dates , and all fines , judgments, and/or settlements . Include the following information for each case at a minimum : • Style of Case ( X vs. Y ) • Settlement Information (as appropriate) • Cause Number • Names / Addresses of all parties named • Court • Counsel List and phone numbers • Date of Disposition • Judgment and Order of Judgment "LEGAL ACTION" means : ANY enforcement action by the United States Environmental Protection Agency , the Occupational Safety and Health Administration , any other federal agency , the Texas Comm ission on Environmental Quality (including its predecessor agency the Texas Natural Resource Conservation Commission), the Texas Department of State Health Services (including its predecessor agency the Texas Department of Health), and any other state agency, commission or department, whether in Texas or elsewhere , when such enforcement action is a result of violations, real or alleged, of any laws, licenses, permits, judicial orders, or administrative orders , relat ing to the protection of the environment. In this context , enforcement action shall include without limitation , written warnings , notices of violation , consent orders or agreements , compliance orders , administrative hearings , civil litigation and criminal prosecution. Legal action also means any civil litigation brought by any person relat ing to the protection of the environment. "RELATING TO THE PROTECTION OF THE ENVIRONMENT" means: requirements pertain ing to the manufacture , processing , distribution , use , hand li ng , sto rage , tran sportat ion , reportin g , reco rds keeping , perm itting , li censing , trea tmen t , d isposal , em iss io n, di scharge , spill , relea se , or threaten ed re lease of hazardous materials , hazardou s substances , hazardous wastes , tox ic substances , pe t rol e um , industrial wa ste , solid was te , pollutants or cont ami nants into or on t o the a ir , surface wa ter, d rinkin g w ater , groundwa te r, sto rm water, pub li cly owned treat ment work s , o r land . 2-10 THE REPORT SHALL BE SIGNED AND CERTIFIED by an authorized representative of the Provider, using the fo rm on the following page . The top portion of the form is to be completed if a report of legal action is attached . The bottom portion of the form is to be completed if Provider has no legal action to report . Make certain that the appropriate portion of the form is filled out and signed. AN AUTHORIZED REPRESENTATIVE OF THE PROVIDER shall mean : (1) if the Provider is a corporation : the president, secretary, or treasurer, or a v ice president of the corporation in charge of a principal business function, or any other person who performs similar policy or decision-making functions for the corporation ; (2) if the Provider is a partnership , a general partner; and (3) if the Provider is a sole proprietorship, the sole proprietor. INCLUDE A COPY OF THE REPORT OF LEGAL ACTION FOLLOWING THE CERTIFICATION PAGE AND BOUND WITHIN THE QUALIFICATIONS PACKAGE 2 -11 Certification of Provider's Legal and Compliance History Complete ONE of the Following Certifications : Certification of Legal Action Report I certify under penalty of law that the attached Legal Action Report detailing Provider's , Provider's officers , Provider's employees , and Provider's proposed subcontractors legal and compliance history relating to the protection of the environment was prepared under my direction or superv ision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted . Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information , the information submitted is, to the best of my knowledge and belief, true , accurate, and complete . I am aware that there are significant penalties for submitting false information , including the possibility of fine and imprisonment for knowing violations . PROVIDER: Shaw Env ironmen tal and Infrastructu re , Inc . BY : Jimmy Gibson (print or type name of signatory) i · fn · e__ r Certification of NO Legal Action I certify under penalty of law that the legal and compliance history of Provider, Provider's officers , Provider's employees , and Provider's proposed subcontractors was resea rched under my direction or supervis ion in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted . Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information , I hereby certify that no legal action relating to the protection of the environment was brought against Provider, Provider's officers , Provider's employees , or Provider's proposed subcontractors within the preceding five years . To the best of my knowledge and be lief, this statement is true , accurate , and complete . I am aware that there are significant penalties for submitting false information , including the possib ility of fine and imprisonment for knowing violations . PROVIDER: BY : -------------Company Name (print or typ e nam e of sign ato ry) (signature ) Title (print or type) Da te 2 -12 The Company has been and may from time to time be named as a defendant in legal actions claiming damages in connection with engineering and construction projects and other matters. These are typically actions that arise in the normal course of business , including employment- related claims, contractual disputes and claims for personal injury or property damage which occur in connection with services performed relating to project or construction sites. Such contractual disputes normally involve claims relating to the performance of equipment , design or other engineering services and project construction services provided by the Company's subsidiaries and affiliates. Although the outcome of lawsuits cannot be predicted, the Company's management believes that , based upon information currently available, none of the now pending lawsuits , if adversely determined , would have a material adverse effect on the Company's financial position or results of operations. (See http ://www.shawgrp.com/investor _relations_ sec_ filing.cfm) ontians full disclosure of all adverse actions. It is the responsibility of the end user to determine relevance. Current as of 5 Modification by anyone other than the Legal Dept. is prohibited Shaw Environmental & Infrastructure Inc. & subsidiaries NOVs # Shaw Enti~ Shaw 1 Environmental , Inc. Shaw 2 Environmental , Inc . Shaw Environmental 3 & Infrastructure , Inc . Violation Concerning Radioactive Materials License No . 22 00-2953 Radioactive Materials Licen se No . 3 183-4416 Rad ioa cti ve Materials License Issuing Authorit)l NY DOL Div of Safety and Health ; Radiological Health Unit NY Dept. of Health ; Bureau of Environ. Radiation Protection; Industrial Unit CO DPH&E Hazardous Mat. Waste Management Div Nature of alleged violation (brief desc) Violations made known through inspection letter: Two recordkeeping violations , Training not completed before work began Violation made known through inspection letter: non-compliance with 12 NYCRR 38 .5(a) -on 7 /2006 Shaw received Troxler gauges at office not authorized under this license Violations made known through inspection letter : Multiple recordkeeping violations, Signs not Issue Date 1/3/2003 4/12/2007 pos~ed , Survey 612712003 equipment not at access , Equipment lacked calibration requirements , Worker did not follow requirements Disposition (brief desc) Shaw paid no fine or penalty; violations were disputed . License was terminated by NY DOL because dispute unresolved . Shaw has obtained 2 new NY Rad licenses since license termination Shaw responded with letter outlining corrective actions ; letter notes that license was terminated by Shaw on 9/20/2006 . Shaw paid no fine or penalties . Shaw responded with 9/10/03 letter describing corrective actions taken ; as a result on 10/1/03 CO HMWMD dismissed all violations pursuant to C.R.S . sec. 25-11-107(5). Shaw paid no fine or penalty. A subsequent Compliance Inspection was performed on 4/27/06 ; report found no v iolations existed . Dis osition Shaw Date Attorne)l NYDOL letter terminating F . Danya license dated 9/9/2004 Shaw's response letter was F . Danya dated 5/10/2007 4/27/06 F . Danya ontians full disclosure of all adverse actions. It is the responsibility of the end user to determine relevance. Current as of 5 r:, 2010 Modification by anyone other than the Legal Dept. is prohibited Sha w CA Dept of Health Failure to conduct 4 Environm ental , Radioactive Materials Services, physical inventory and 7/14/2004 Violations recinded by OHS 9/10/2004 F . Danya Inc . License Radiolog ic Health annual review of RPP Letter Branch Shaw County of Did not obtain Settled under Consent 5 Enviro nment a l , Cou nty wells & pum ps Sacramento EMO , perm ission from WPD 7/10/2006 Agreement ; Shaw pa id 1/24/2007 B . Martin cod e Water Protection prior to grouting soil Inc. Division borings Shaw Failure to submit annual Environm en tal compliance certification & Pennsylvania for Title V Air Permit Settled under Consent 6 Infra stru ctu re , Adm inistrative Department of within specified time 2/2/2009 Assessment of Civil Mar, 2009 F . Danya viol ation : Air Pe rmit Environmental Penalty; Shaw agreed to Inc . d/b/a Shaw Protection frame (Title V Permit , pay $1 ,000 as civil penalty. Keyston e Sec B , Condition 24 and 25 Pa Code 127.444) Shaw Environmental & lnfrastructure 1 Inc. & subsidiaries NONs (Notice of Noncomeliance} # Shaw Enticy Violation Concerning Issuing Authorit)l Nature of alleged violation (brief desc} Violatin of SRPAR 1200- 2-10-.10(2)( C )8ii , that Shaw Tennesee licensee shall within 30 1 Environmental , Rad ioactive Mate rials Department of days of the transfer of a Licen se Environment and device , furnish a report Inc . Conservation to the Division containing information regarding the transfer. Shaw Environmental & Infrastructure # Shaw Enticy Nature of alleged Violation Concerning Issuing Authorit)l violation {brief desc} Issue Date Disposition {brief desc} Dis osition Shaw Date Attornel£ Shaw responded with a letter inform ing TDEC of 1/12/2010 corrective action taken . 4/7/2010 F . Danya TDEC acknowledged in a response letter on 4/7/10. No fines or penalties levied . Notice of Possible Violation Issue Date Disposition (brief desc} Dis osition Shaw Date Attorney This lis ontians full disclosure of all adverse actions . Current as of 5 010 It is the responsibility of the end user to determine relevance . Modification by anyone other than the Legal Dept. is prohibited Shaw 1 Und erg round Utiliti es Environm e ntal , Regs Inc . New Hampshire PUC Damaged underground service line Settled under Consent Agreement (a NOV was 6/29/2006 never filed) Shaw personnel 8/18/2006 attended safety train ing ; no fine paid . P . Smith Shaw Environmental & Infrastructure Inc. & subsidiaries Sto # Shaw Entity Shaw 1 Env ironmental , Inc . Nature of alleged Violation Concerning Issuing Authority violation (brief desc) All ege d v io la t io n of Rad iation Safety Prog ra m and corre spond ing Fe deral Reg ulati o ns Sandia Corporation on behalf of Sandia National Laboratories Sto p Work Order rec ieved a ll eg in g non -comp li ance wi th : 10 CFR 83 0 . I 22(b )(I), IO CFR 830. I 22(b )(2), 10 C FR 830. I 22(c)(I ), IO CF R 830. I 22(c)(2), I O C FR 830.122(c)(3), 10 C FR 830. I 22(c)(4), I O CFR 830.1 22(e)(l ), IO C FR 830. I 22(e)(2), IO CF R 830 .122(e)(4), 10 CF R 835 .1 03, IOCFR 835 .104 , IO C FR 835.40 1(a), 10 C FR 835.40 1(b), 10 C FR 835 .7 04(a), 10 C FR 835 .1 202(b), as describ ed in th e "Radi ati on Protecti on Assess ment o f Sh aw En viro nm enta l, inc . Issue Date Disposition (brief desc) 2/13/2006 Shaw submitted a corrective action plan that was accepted by Sandia Corporation . Resume Work Letter received from Sandia Corp. as of 10/4/06 Dis osition Shaw Date Attorney 10/4/2006 N/A This Ii ontains full disclosure of all adverse actions. It is the responsib i lity of the end user to determine relevance. Modification by anyone other than the Legal Dept. is prohibited Shaw Environmental & Infrastructure. Inc. & subsidiaries OSHA violations Shaw Entit)l Iss uing Issue Date Nature of Alleged Violation(s) (brief Disposition Shaw # Authorit)l desc) Disoosition {brief descl Date Attorne)l 29 CFR 1926 .95(a ) Personal protective equipment not provided ; 29 CFR 1926.416(a)(1) No protection against A!.!..counts VACATED by Shaw E nvironmental electric shock ; 29 CFR 1926.416(a)(3) No 1 & In frastructure , Inc. OSHA 6/25/2004 inquiry into electric power circuit ; 29 CFR OSHRC , Judge C . Rooney. No 5/2/2005 R . Waters 1926.417(a) Controls deactivated or penalty assessed for any count circuits not tagged ; 29 CFR 1926.417(c) No use of tags on circuits 29 CFR 1926 .651(g)(1)(ii) Inadequate 2 EMCO N/OWT , Inc. OSHA 7/30/2004 precautions to prevent exposure to 12/5/2005 R. Waters hazardous atmospheres . Vacated ; no penalty assessed 29 CFR 1926 .651 (g)(1 )(iv) Atmospheric 7/30/2004 testing was not conducted as often as 12/5/2005 necessary Vacated ; no penalty assessed Affirmed at trial level ; $6 ,300 penalty assessed . Circuit Court of Appeals for the 11th 7/30/2004 29 CFR 1926.651 (k)(1) Inspection not Circuit denied motion for N/A made by competent person . rehearing . Un ited States Supreme Court declined to hear the matter (denied Certiorari). This Ii ontains full d isclosu re of all adverse actions. It is the responsibility of the e nd user to determine relevance. Current as o Modification by anyone other than the Legal Dept. is prohibited 29 CFR 1910.146(d)(9). At Naval Air Shaw reached a settlement Station North Island , Shaw did not agreement with OSHA on Final develop and implement procedures for February 25 , 2008 . Settlement OSHRC Sh a w Environm ental resulted in : C itation classified Order 3 & Infrastru c ture , In c . OSHA 7/10/2007 employees that enter permit areas and as "Other-Than-Serious "; Shaw issued by R. Waters where Federal Fire Department does not to provide proof of abatement; Judge Laye : have a means to perform confined space Shaw required to pay $5 ,000 4/28/2008 rescue . penalty. Corrected during inspection . Shaw and the DOL entered into LFG Special ties , 29 CFR 1910.215(b)(9 ) The distance an informal settlement 4 between the abrasive wheel periphery(s) agreement. The citation was LLC ; Fi ndlay, OH and the adjustable column or the end of amended to "other than the safety guard peripheral member at the serious" and the penalty was OSHA 10 /0/2007 top exceeded 1/4 inch. reduced to $0.00 . 10/24/2007 N/A Reached formal settlement agreement for "other than 5 Shaw GBB 29 CFR 1910.305(g)(2)(iii) Flexible cord serious " violation . Alleged Mainte nance In c . to an electric heater did not provide condition corrected by plug Dutch Harbor, AK OSHA 3/16/2009 adequate strain relief . being repaired. 11 /12 /2009 R. Waters Reached formal settlement 6 agreement for "other t han Shaw G BB serious " violation . Alleged Mainte na nce In c . 29 CFR 1917.152(d)(1)(vii) Compressed condition corrected by returning Dutch Harbor, AK OSHA 3/16/2009 gas cylinders not secured . empty cylinders to vendor. 11/12/2009 R. Waters Reached formal settlement agreement for "other than 7 Shaw GBB 29 CFR 1917.151(9)(4) Work rest on serious" violation . Alleged Maintena nce In c . fixed grinding machine not adjusted condition corrected by adjusting Dutch Harbor, AK OSHA 3/16/2009 closely to wheel. work rest. 11 /12/2009 R. Waters This Ii ontains full disclosure of all adverse actions. It is the responsibility of the end user to determine relevance. Current as o Modification by anyone other than the Legal Dept. is prohibited 29 CFR 1910.22(a)(1 ): Platform walkway outside Oily Waste Holding Tank was not kept clear of tools , materials , or equipment (type of violation : Serious); 29 CFR 1910.147(c)(6)(i): failed to Total Proposed Penalties: Shaw Environment a l conduct annual inspections of energy $5500.00 8 & Infrastructure , Inc. OS HA 4/13/2010 control procedures where lockout/tagout ***THIS MATTER IS Contested R. Waters is performed (type of violation : Serious); CURRENTLY BEING 29 CFR 1910.305(g)(2)(iii): Strain releif CONTESTED*** connectors not connected on both ends of polymer mixing motor exposing employees to potential electric shock (type of violation : Serious) Certification of Provider's Legal and Compliance History Complete ONE of the Following Certifications : Certification of Legal Action Report I cert ify under penalty of law that the attached Legal Action Report detailing Prov ider's , Prov ider's officers , Provider's employees, and Provider's proposed subcontractors legal and compl iance history relat ing to the protection of the environment was prepared under my direction or superv ision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted . Based on my inqu iry of the person or persons who manage the system , or those persons d irectly responsible for gathering the information , the information submitted is , to the best of my knowledge and belief, true , accurate, and complete . I am aware that there are significant penalties for submitting false information , including the poss ibility of fine and imprisonment for knowing violations. PROVIDER: BY : -------------Company Name (print or type name of s ignatory) (s ignature) T itle (print or type) Date Certification of NO Legal Action I certify under penalty of law that the legal and compliance history of Provider , Provider's officers , Provider's employees , and Provider's proposed subcontractors was researched under my d irection or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information , I hereby certify that no legal action relating to the protection of the environment was brought against Provider, Provider's officers , Provider's employees, or Provider's proposed subcontractors within the preceding five years . To the best of my knowledge and belief, this statement is true , accurate , and complete . I am aware that there are significant penalties for submitting false information , including the possibility of fine and imprisonment for knowing v iolations . PROVIDER: CP&Y Inc. Company Name /7 ( /-, (signature) ~ -.._ May 13, 2010 Date BY : Freddie Guerra (print or type name of signatory) Vice President T itle (print or type) 2-12 2 .8 FINANCIAL STATEMENT Providers must provide a current certified or compilation financial statement within this section of the proposal. The financial statement shall be no more than six months old. INCLUDE A COPY OF THE STATEMENT FOLLOWING THIS PAGE BOUND WITHIN THE PROPOSAL PACKAGE 2-13 SHAW GROUP IN C (Form : I 0-Q , Received : 04 /07 /20 IO 17 :08:20) Table of Conte nts ~~========== UNITED ST A TES SECURITIES AND EXCHANGE COMMISSION Washington D.C. 20549 FORM 10-Q (Mark One) 0 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2010 or D TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ___ _ Commission File Number: 1-12227 The Shaw Group Inc. (Exact name of registrant as specified in its charter) Louisiana 72-1106167 (State or other jurisdiction of incorporation or organi za t ion) (1.R.S. Employer Identifica tion No .) 4171 Essen Lane, Baton Rouge, Louisiana 70809 (Add ress of principal executi ve offices) (Zip Code) 225 -932 -2500 (Regi strant 's telephone number, including area code) Indicate by check m a rk w heth e r the regi strant (I) has filed all reports required to be fi led by S ection 13 o r I S(d) of the Securities Ex change Act o f 1934 during th e preceding 12 m o nths (or for s uc h shorter period that the re g is trant was required to file s uc h re po rt s), a nd (2) has been subj ect to s uc h filin g requirements for th e past 90 d ays. Yes 0 No D In dicate by c heck m a rk w hether t he regist ra nt has s u bm itt ed e lect ro n ica ll y a nd posted o n it s corporate We b site, i f a ny , every In te ra ctive Data File requi red to be s ubmitted and po st ed pursua nt to Rul e 4 05 of Regu la ti o n S-T (§232.405 of t hi s c hapte r ) d ur ing the preced in g 12 mo nth s (o r for s uc h shorter peri od th a t th e regis tra nt was req uired to s ub m it a nd post s uc h fil es ). Yes D No D Indi cate by c hec k m a rk w he th er t he reg is tra nt is a larg e a ccele rated fil e r, a n acce lerate d fil er, a no n-acce lera ted fil e r o r a s m a ll e r re po rt ing co mpa ny . See the definiti o ns o f "la rg e a ccelerated filer ," ·'acce le rated fil e r" a nd ""sm a ll e r re po rtin g co mpa ny" in Rul e l 2b-2 of the Ex ch a ng e A ct. (Chec k o ne): La rge acce lerate d fil e r 0 Accelera ted fil e r D No n-acce le rated fil e r D (Do no t check ifa sm a ll e r re porting co mpa ny ) http ://in ves tin g.bu s in essweek.com /re search/stock s/financials/drawFiling.as p?formTy pe =l O-Q[5 /12/20 IO I :27 :55 PM] ma il e r reportin g co mpa ny D SHAW GROUP INC (Forni: I 0-Q , Received: 04 /07/2010 17 :08:20) In dicate by check mark whether the registrant is a shell company (as defined in Rule I 2b -2 of the Exchange Act). Yes D No 0 T he number of shares of registrant's common stock o utsta nd ing as of Apri l I , 20 I O was 84 ,324 ,689 shares. TABLE OF CONTENTS PART I -FINANCIAL INFORMATION It em L -Financial Statements Unaudited Consolidated Statements of Operations -For the Three and Six Months Ended February 28 20 JO and 2002 Consolidated Balance Sheets -February 28. 20 JO <Unaudited) and Au~ust 31 2002 Unaudited Condensed Consolidated Statements of Chan~es in Shareholders ' Equity -For the Six Months Ended February 28. 20 Io and 2009 Unaudited Consolidated Statements of Cas h flows -For the Six Months Ended February 28 , 20 IO and 2009 Notes to Consolidated financial Statements (Unaudited) Cautionary Stateme nt Re2ardin2 Forward-Lookin2 Statements It em 2. -Mana~ement 's Discussion and Analysis of Financial Condition and Results of Operations It em 3. -Quantitative and Qualitati ve Disclosures About Market Risk Item 4. -Con trol s and Procedures PART II -OTHER INF ORMATION Item IA, -Risk Factors It em 2 -Unr e2i ster ed Sates of Eci uitv Securi ti es and Use of Proc eeds It em 3. -Defa ult s Upon Se ni or Sec uriti es It em 4. -<Rem ov ed and Res er ved) Item 5 -Other Informati on Item 6. -Ex hibits SIG NATURES EXHIBIT INDEX http://investing.bu sinessweek.com/re search/stock s/financial s/drawFiling.asp?fo rmType =l O-Q[5 / 12/20 IO I :27 :55 PM] 3 4 5 6 7 29 31 55 55 56 56 56 56 56 57 58 64 ,HAW GROUP INC (Form: I 0-Q, Received : 04 /07 /20 IO 17 :08:20) Exhibit 10.46 Exhibit 10.47 Exhibi t 3 1 I Exhibi t 3 t .2 Ex hi bi t 32 I Exhibi t 32.2 Table of Contents 2 PART I -FINANCIAL INFORMATION ITEM I. -FINANCIAL STATEMENTS THE SHAW GROUP INC. AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED FEBRUARY 28, 2010 AND 2009 (In thousands , exce pt per share amo unt s) Three Months Ended Six Months Ended 2010 2009 2010 2009 Revenues $ 1,624,259 $ 1,6 67 ,517 $ 3,482 ,775 $ 3,567 ,950 Cost of revenu es 1,479 ,119 1,565 ,159 3,182 ,898 3 ,277 ,499 Gross profit 145 ,140 102 ,35 8 299 ,877 290,451 Se llin g, general a nd ad mini strat ive ex penses 72 ,3 19 70 ,405 148 ,09 7 143 ,511 Operating income 72 ,821 31 ,953 151 ,780 146,940 Interest expense (1 ,820) (1,102) (2 ,800) (2,84 7) Interest expense on Japanese Yen-denominated bonds including accretion and amortization (9,2 76) (10,858) (18,633) (2 0,720) Interest income 3,455 2,3 18 5,4 14 6,241 Eor.eign currenc.y.-translation gains (Josses)-on Japanese-----·-----·--· Yen-denominated bonds, net 39,388 30,941 (62 ,952) (130,261) Other fo re ign currenc y transaction ga in s, net 2,560 3,052 2,143 653 Other income (expense), net (2 ,294) (885) 2,752 (2,746) Income (loss) before income taxes and earnings from unconsolidated entities 104 ,834 55,419 77 ,704 (2 ,740) Pro vis ion (benefit) for income taxes 37,882 22 ,678 26,731 (2 0) Income (loss) before earnings from unconsolidated entities 66,95 2 32,741 50,973 (2 ,720) Income from 20% In vestment in We stinghouse, net of income tax es 2,826 5 ,455 2 ,458 6,998 Ea rn ings fro m un co nso lidated entiti es, net of in co me taxes 430 471 63 8 33 2 Net income 70 ,208 38,667 54 ,069 4,610 onco ntrolling interests in in co me o f co nso lidated subs idiarie s, net of tax 6,482 2,332 10 ,828 8,192 Net income (loss) attributable to Shaw $ 63,726 $ 36 ,335 $ 43,241 $ (3,582) Net income (loss) attributable to S haw per common share: Ba sic $ 0.76 $ 0.44 $ 0.52 $ (0 .04) http ://in ve sting .bu s in essweek .com/resea rch/stocks/financial s/drawFiling .as p?form Type= I 0-Q[ 5/ 12 /20 IO I :2 7:5 5 PM] SHAW GROU P INC (Fonn: 10-Q , Rece ive d: 04 /07 /20 10 17 :08:20) Diluted $ 0 .7 4 $ 0.43 $ 0.51 Weighted average shares outstanding: Bas ic 83 ,915 83,255 83 ,668 Diluted 85 ,636 84 ,138 85 ,448 The acco mp any ing no tes are an integral part of these co nso lid ated fin ancial state men ts. 3 Table of Contents THE SHAW GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS Current assets Cash and cash equivalents AS OF FEBRUARY 28, 2010 AND AUGUST 31, 2009 (In thousands, except s ha re a mo unts) ASSETS Re stricted and escrowed cash and cash equivalents Short-term investments Restricted short-term in vestments Accounts receivable, net Inventories Costs and estimated earnings in excess of billings on uncompleted contracts, including claims Deferred in co me taxes Investment in Westinghouse Prepaid expenses and other current assets ---Total c11rn11r-auetT · ------------- Investments in and adva nces to unconsolidated entities, joint ve ntures and limited partnerships Property and equipment, net of accumulated depreciation of$267,I 10 and $250,796, respectively Goodwill Intangible assets Deferred income taxes Other assets Total assets C urrent liabilities Accounts payable LlABILITIES AND EQUITY Accrued salaries , wages and benefits Other accrued liabilities Advanced billings and billin gs in excess of costs and es timated earni ngs on unc o mpl eted contrac ts Japanese Yen-denominated bonds secured by In vestment in Westinghouse Int erest rate swap contract o n Ja pane se Yen-denominated bonds Short-term debt and current m aturiti es of lo ng-term debt Total cu rrent liabilities February 28, 20 10 (Una udited) $ 585 ,634 46 ,769 768,749 251 ,400 751 ,147 253 ,932 628,031 289,238 977,916 65 ,308 --4;6-1&;-1 15 ,540 442,221 499,899 19,499 14 ,283 99,351 $ 5,708 ,9 17 $ 794,099 12 1,90 8 184,325 1,456,290 1,451 ,025 33 ,279 14,031 4,054,957 http ://in ves tin g.bu s in esswee k.com /resea rch/stock s/fi nan cials/drawFilin g.asp ?fo nn Type = I 0-Q[ 5/ 12 /20 IO I :27 : 55 PM] $ (0.04) 83 ,179 83 ,179 August 31, 2009 $ 1,029,138 81 ,925 342,219 80 ,000 815 ,862 262 ,284 ; 599,741 270,851 1,008,442 62 ,786 ,5,3;24S--- 21 ,295 385,606 501 ,305 20,957 74 ,763 $ 5,557 ,174 $ 859,753 175 ,750 187 ,020 1,308 ,32 5 1,387,954 3 1,369 15 ,399 3,965,5 70 'SHAW GROUP INC (Fonn: I 0-Q , Receiv e d : 04 /07/2010 17:08 :20) Long-term debt, less current maturities Deferred income taxes Other I iabilities Total li a bili ti es C ontin ge ncies and commitm e nts (Note 11) S haw sh are hold ers' eq uity Preferred stock, no par value, 20,000,000 shares authorized; no shares issued and outstanding Common stock , no par value , 200,000,000 shares authorized; 90,069,928 and 89,3 16 ,057 shares iss ued , respectivel y; and 84,315 ,863 and 83 ,606,808 shares outstanding, respectively Retained earnings Accumulated other comprehensive loss Treasury stock, 5,754,065 and 5,709,249 shares, respectively Tota l Shaw share hol de rs' eq ui ty Noncontrolli ng interests Total eq uity Total li abilities and equity $ 1,252 49,364 91,502 4 ,197 ,075 1,254,486 466,892 (129,438) (117,389) 1,474,551 3 7 ,291 1,511 ,842 5 ,7 08,917 The accompanying notes are an integral part of these consolidated financial statements. 4 Tab le of Contents T HE SHAW G RO UP INC. AN D SU BS IDI A RIES UNAUD ITE D CO ND ENSE D CO NS O LIDATED STATEMENTS OF CHANGES IN SHA R EHO L DERS' EQ UITY (In thousands) Acc umul ate d T r eas u ry Ot he r Total Com m o n S tock Compre he ns ive Reta in ed S haw Stock Amo unt A m ount In co m e (Loss) Ea rnin gs Eq ui ty Ba la nce, A ug ust 3 1, 2008 $ 1,204,914 $(1 14,951) $ (9,609) $409,376 $1 ,489,730 Net income (loss) (3 ,582) (3 ,582) Other comprehensive income (Joss): Foreign currency trans lation adjustments (19 ,903) (19 ,903) C hange in unrealized net gain (lo ss) on hedging activities, net of tax (ll ,513) (11 ,513) Equity in We stinghou se 's pre -tax o th e r co mpre he nsive inc o me , net o f tax (I O 1,3 79) (10 1,3 79) Pe nsion liability, not yet recognized in net periodic pension expense, net of tax (4,372) (4 ,372) Tota l compre hensive income (loss) (140,749) Exercise of options 181 181 Shares exchanged for taxe s on stock based compensation (242) (1 ,031) (1,273) ~ttp://inve sting .businessweek.com/re searc h/stock s/financi a ls/drawFiling.as p?fo nnTy pe= I O-Q[5 /l 2/20 IO I :27 :55 PM] No n co ntrollin g In terest s $ 29,082 8,192 8,192 $ 7,627 26,152 109,835 4 ,109,184 1,23 7 ,727 423,651 (121,966) {l 16 ,I l3) 1,423 ,299 24,691 1,447,990 5 ,557,I74 Total Eq u ity $1,518,812 4,610 (19 ,903) (11 ,513) (IO 1,3 79) (4,372) (132 ,557) 181 (1 ,273) SHAW GROUP INC (Form: I 0-Q, Re ce ived: 04 /07 /2010 17:08 :20) Tax benefits from stock based compensation (986) (986) Stock -based compensation 16,398 16 ,398 Distributions to noncontrolling interests (15 ,3 31) Balance, February 28 , 2009 $ 1,220 ,265 $(11 5,982) $ (146 ,776) $405,794 $1,363 ,301 $ 2 1,943 Balance, A ugust 31, 2009 $ 1,237 ,727 $(116,1 13) $ (121 ,966) $423,65 1 $1 ,4 23 ,299 $ 24,69 1 Net income (lo ss) 43 ,24 1 43 ,24 1 10,828 Othe r comprehensive income (loss): Foreign currency tran s lati o n adjustments (4 ,694) (4 ,694) Change in unrealized net loss on hedgi ng activities, net of tax (1,173) (1,173) Equ ity in Westinghou se's pre-tax other comprehensive income , net of Shaw 's tax (4 ,299) (4 ,299) Pension liability, not yet re cognized in net periodic pension expense, net of tax 1,635 1,635 Unrea lized gain (loss) on securities , net of tax 1,059 1,059 Total comprehensive income (loss) 35,769 10 ,828 Exercise of options 4,317 4 ,3 17 Shares exchanged for taxes on stock based co mpensatio n (6,108 ) (1 ,276) (7,384) Tax benefits from stock ba se d compensation 852 852 Stock-based co mpen sation 17 ,698 17 ,69 8 Acquisition of noncontrolling parties 10 ,027 (Distributions) contrib ut ions to noncontrolling parties, net (8,255) Balance, February 28, 2010 $ 1,2 54 ,486 $(117 ,389) $ (129 ,438) $466,892 $1 ,474 ,55 1 $ 37 ,291 T he accompanying notes are an integral part of these consolidated financial statements. 5 Table of Contents THE S HAW GROUP INC. AND SU BS IDIARIES UNAUDITE D CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE S IX MONTHS ENDE D FEBRUARY 28, 2010 AND 2009 (In th o u sand s) Cash nows from operating activities Net income Adj ustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization Benefit from deferred income taxes $ http ://in vestin g.bu sinesswe ek.com/research/stock s/fina nci a ls/drawFi ling .asp ?form Type= I 0-Q[ 5/ 12/20 IO I :27 : 55 PM] 2010 54 ,069 29,860 (15 ,438) $ (9 86) 16,398 (15 ,33 1) $ 1,385 ,244 $1,447 ,990 54 ,069 (4 ,694) (1,173) (4 ,299) 1,635 1,059 46,597 4,3 17 (7,3 84) 852 17 ,698 10 ,02 7 (8 ,255) $1 ,5 11 ,842 2009 4 ,6 10 26,65 1 (49,18 3) <;HAW GROUP INC (Form: 10-Q, Received : 04/07/2010 17:08:20) Stock-based compensation expense Earnings from unconsolidated entities, net of tax Distributions from unconsolidated entities Foreign currency transaction losses, net Other noncash items Changes in assets and liabilities, net of effects of acquisitions and consolidation of variable interest entities: (Increase) decrease in receivables Increase in costs and estimated earnings in excess of billings on uncompleted contracts, including claims (Increase) decrease in inventories Increase in other current assets Increase (decrease) in accounts payable Decrease in accrued liabilities Increase in advanced billings and billings in excess of costs and estimated earnings on uncompleted contracts Net change in other assets and liabilities Net cash provided by operating activities Cash flows from investing activities Purchases of property and equipment Proceeds from sale of businesses and assets, net of cash surrendered In ves tments in, advances to and return of equity from uncon so lidated entities and joint ventures Purchases of variable interest entity debt Cash withdrawn from restricted and escrowed cash Cash deposited into restricted and escrowed cash Purchases of short-term investments Proceeds from sale and redemption of short-term investments Purchases of restricted short-term investments Net cash used in investing activities Cash flows from financing activities Purchase of treasury stock Repayment of debt and capital leases Payment of deferred financing costs Issuance of common stock Excess tax benefits from exercise of stock options and vesting of restricted stock Distributions paid to noncontrolling interests Net cash used in financing activities Effec ts of foreign exchange rate changes on cash Net change in cash and cash equivalents Cas h and cash equivalents -beginning of year Cash and cash equivalents -end of period $ 17 ,698 (3 ,096) 13 ,804 60,809 4,776 60,663 (34,141) 8,323 (6,892) (55,011) (59,508) 153 ,186 (14,308) 214,794 (105,513) 21,569 14 ,4 26 (19,915) !08,990 (68,700) (842,083) 412,661 (148 ,110) (626,675) (1 ,276) (14 ,236) {9,719) 4 ,317 1,603 (8,255) (27,566) (4 ,057) (443,504) 1,029 ,138 585 ,634 The acco mpanying notes a re an integra l part of these co nso lidated financial statement s. 6 Table of Contents THE SHAW GROUP INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) h.t1p ://in ves tin g.busines sweek.corn/research/stocks/financials/drawFiling.asp?fonnType=l O-Q(S/12/20 IO I :27:55 PM] $ 16 ,398 (7,330) 28 ,746 129 ,608 4,195 (215,139) (79,910) (31 ,274) (7 ,390) 41 ,267 (5 ,207) 162 ,419 8,169 26,630 (56 ,698) 24,218 (22) 86 ,2 73 (90,596) (36,825) (1,030) (4,721) (2,748) 181 169 (15,331) (23,480) (6,136) (39,811) 927,756 887 ,945 SHA W G ROU P INC (Fo rm : 10-Q, Received : 04 /07/2 0 10 17:08:20) Note I -General Information T h e Sh aw Gro up In c . (a Loui s ia na corporat io n) a nd its who ll y -own ed and major ity-owned s ubs id ia r ies (collect ive ly refer red to h e re in as th e Company , S h aw, we, u s or o ur ) is a leadi ng g lo ba l prov ider of t echn o logy, engin eer ing , p roc ure m e nt , co nstr ucti o n , m a inte n a n ce, fa bri cati o n, m a nu fact uri ng , con sul ti ng, re med ia t io n and facil iti es m a nagement serv ices to a d iverse c li e nt base th a t includes multinati o n a l o il com p a n ie s a nd ind ust ria l corpo ra ti o ns , reg ul a ted e lectric utili ties , ind e pe nd e nt a nd m e rc h a nt powe r p rod ucers , governm e nt age nc ies and eq ui p m e nt m anu fac t ure rs . W e have deve lo ped a nd acqui red s ig nifi ca nt int e ll ec tu a l p rope rty , includin g d owns tream petroche mi ca l tec hn o lo g ie s, ind uc ti o n pipe bend in g t ec hn o logy a nd e nv iro nm e nta l d eco nt a min a t io n techn o logies. W e h ave eva lu a ted a ll e ve nt s and tra nsacti o ns occ urr ing after th e b a la nce s heet date b ut befo re th e fin a nc ia l statem e nt s we re iss u ed a nd have in c lude d th e appro pr iate di sc lo s ures in t h is Q uarterly Report on Fo rm I 0-Q . Basis of Presentation In th e opin io n of m a nagem en t , t he accompany in g ba la nce sh eets a nd re la ted inte rim statem e nt s ofoperat io ns , cash fl ows a nd c h a nges in sh a reholders' eq uity in c lu de a ll a dj us tm e nts, co n s ist in g o nl y o f no rm al rec urrin g ite m s n ecess ary fo r th ei r fa ir presenta ti o n in con fo rm ity w ith United States (U .S.) gene ra ll y acce pt ed acco untin g prin c ipl es (GAA P). Prepari n g fin a nc ia l s ta te m e nt s re qui res m anagem e nt to m ake e stim a tes a nd ass umpti o n s th at a ffec t th e repo rt ed a mo unt s o f asset s , li a biliti es , revenu es a nd ex p e n ses. Exampl es o f s uc h e stim ates a nd ass umpt io ns include th e p e rce ntage of co mpl e ti o n m eth o d of re ve nu e recogn iti o n , un a pproved c hange o rd e rs a nd c la im s , estim ates of loss contin ge nc ies, stoc k-based co m pensati o n fo r fe iture rates, th e po tenti a l o utcom e of future tax co n seque nces of event s th at h ave been recogni zed in o ur fi na nc ia l state m e nts o r t ax return s, est im ates of the fa ir valu e a nd/or goodw ill impa irme nt fo r o ur re po rtin g units a nd d ete rminin g w he n in vestm e nt impa irm e nts a re o th er-than- te mpo rary. Actua l results a nd o ut comes m ay d iffer fro m m a nagem e nt 's estim a tes a nd ass umpti o n s. Inte rim res ults a re no t n ecessaril y indi cati ve o fresults fo r a full yea r. T hese un a udited con so lid at ed fin a nc ia l sta te m e nt s sh o uld be read in conj un c ti o n w ith th e a ud ited fin an c ia l st ate m e nts a nd th e no tes th ereto include d in o ur A nnua l Re po rt o n Form I 0-K for th e fi scal y e ar e nd ed A u g ust 3 1, 2009 (2009 Fo rm I 0-K) fil ed w ith th e Securiti es a nd Exch ange Commi ssio n (SEC). Cash anti Cash Equivalents T h e Company c o n s ide r s a ll hi ghl y liquid in ves tm e nt s w ith o ri g in a l ma turiti es o f three mo nth s o r less to be cash equivalents . Marketable Securities W e c lass ify o ur m a rketa bl e sec uri t ies as eithe r tradin g sec uriti es o r avai la bl e-fo r-sa le . T hese in vestm e nts a re reco rded at fa ir valu e a nd a re class ifi e d as s h o rt-te rm in ves tm e nts in th e a ccompa nyi ng conso lid ated b a la nce sh eets . In vestme nts a re made based o n th e Compa ny 's in ve s tm e nt poli cy a nd restri ct io ns contai n ed in o ur C redit Fac ili ty , w h ic h s pec ifi es e li g ibl e in vestm e nts a nd c redit qua lity re qu ire me nts . T rading sec ur iti es con sist of in vestm e nts h e ld in tru st to sati sfy o bli gations und e r o ur d e ferr ed comp e nsation. plans. I he c h a ng e s in fa ir valu es o n trading secu r iti es a re re co rded as a compo nent o f net in com e in oth e r in co m e (ex pe n se), ne t. Ava il a bl e -for -sale securiti es cons ist of m o ney m a rke t mutua l fun ds, U .S. governm e nt a nd agency o bli gatio ns, corpo rate no tes a nd bo nds, fore ig n governm e nt a nd fo re ig n governm e nt g u a ra nt eed sec uriti es a nd certifi c ates of d eposit a t m aj o r ba nks . The c h a nges in fa ir va lu es, ne t of a p p li cab le taxes, o n avai la ble-for -s a le sec u r it ies a re record ed as unreali zed gain s (losses) as a com po n e nt of acc umul a te d o th e r c o mpre h e ns iv e in com e (lo ss) in stockho ld e rs ' eq u ity. W he n , in th e o p ini o n of m a nage me nt , a dec lin e in t he fai r v a lu e o f a n inv es tme nt be lo w it s cost o r a mo rti zed cost is co n s idered to be "o th e r-th an-te mporary ," th e in ves tm e nt's cost o r a morti zed cost is w ri tte n-down to it s fa ir val ue and t he a mo unt w ritten -do w n is reco rde d in th e sta tement o f o pe rati o n s in o th e r in co m e (ex pe nse), ne t. T he d ete rmin a ti o n ofoth e r-th an -te mpo rary dec line in cl ud es, in a dditi o n to o the r re levant fac to rs, a p res umptio n th at i f th e m a rk e t va lue is be low cost by a s igni fi cant a mount fo r a per io d of tim e, a w rit e -down m ay be necessary . T h e am ou nt o f a ny w rite -down is de te rmin ed by th e d iffere nce between cost o r a mo tti ze d cost of th e in vestm e nt a nd it s fa ir va lu e at th e t ime th e o th e r -th an-te m porary d eclin e is ident ifi ed . Du r in g th e three mon th s e nded Febru ary 2 8,20 10, no o th e r - th a n-te mpo rary impa irment was recogni zed . 7 Table of Co nt ent s htt p://in ves t ing.bu s iness week .co m/rese arch/slock s/fi nanc ia ls/drawF ilin g.as p?fo rm Ty pe=I O-Q [S/ 12/20 IO I :27 :55 PM] '";HAW GROUP IN C (Form: I 0-Q, Recei ve d : 04/07/20 IO 17:08 :2 0) 0 Foreign Currency Translation The majority of our s ubs idiaries outside the U.S. conduct business in their local currencies . Our financial statements repo rt results in U.S. dollars, which include the re s ults of these subsidiaries. Our accounting poli cy for foreign c urren cy tran s lati o n is different depending on whether the economy in which our foreign s ubsidiary operates has been designated as highly innation ary or not. Economies with a three-year cumulative in nation rate of more than 100 % are considered highl y innationary . Beginning December I, 2009, we designated Venezuela's economy as highly inflationary , a nd we consolidate our Venezuelan subsidiary 's results subsequent to that date using our accounting policy for s ubsidiaries operating in highly innationary eco nomies. Venezuela 's change in des ignation to highly inflationary had no material impact on our consolidated statement of operations or financial position , as our operations in Venezuela are immaterial to our worldwide operations. Recently Adopted Accounting Pronouncements In June 2009, the Financial Accounting Standards Board (FASB) is s ued the Accounting Standards Codification™ (ASC) as the sole so urce of authoritative nongovernmental GAAP. The ASC supersedes all non-grandfathered, non-S EC accounting literature but does not change how we account for transaction s or the na ture of related disclosures made. Instea d , when referrin g to guidance iss ued by the FASB , we refer to topics in the ASC rather than indi v idual pronouncements . This change affec ts financial statements issued for interim and annual periods ending after September 15 , 2009 and did not have a material effect on o ur consolidated fin a ncial statements. On September I , 2009, we adopted a uth oritative guidance for bu s ine ss combinations in acco rd a nce with ASC 805, "Bus iness Combinations." The guidance reta ins the fundamental requirements that the acquisition method of accounting (pre v iousl y referred to as the purch ase method of accounting) be used for all business combinations but introduced a number of changes, including the way assets and liabilities are valued, recognized and measured as a resu lt of business combinations. ASC 805 requires an acquisition date fair value measurement of assets acquired and liabilities assumed. It also requires the capitalization of in-process research and development at fair value and requires acquisition-related costs to be expensed as incurred. Adoption of ASC 805 did not have a material impact on our consolidated financial statements. On September I , 2009, we adopted authoritative guidance that changes the accounting and reporting for non-controlling interests in accordance with ASC 810, "Consolidation." Non-controlling interests are now reported as a component of equity separate from the parent 's equity, and purch ases or sales of equity interests that do not result in a change in control are to be accounted for as equity tran sactions. In addition, net income attributable to a non-controlling interest is now included in net income, and upon a loss of control , the interest sold, as well as any interest retained, is now recorded at fair value with any gain or loss recogni zed in net income . Adoption of ASC 810 did not have a material impact on our consolidated financial statements. On September I , 2009 , we adopted the authoritative guidance on fair value measurement for nonfinancial assets and liabilities , except for item s that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) in accordance with ASC 820, "Fai r Value Measurements and Di sc losures." Adoption of ASC 820 did not have a material impact on our consolidated financial statements. On September I , 2009 , we adopted Accounting Standards Update (ASU) 2009-05, "Meas uring Liabilities a t Fair Va lue ." This update pro vi des amendments to ASC Topic 820 , "Fair Value Measurements and Disclosure," for the fair value measurement of liabilities. Adoption of the ASU 2009-05 ha d no impact on our consolidated financial statements. On September I , 2009, we adopted authoritative guidance on share-based payments in accordance w ith ASC 260, "Earnings per Share." ASC 260 addresses whether in s truments granted in share-based payment transac ti o ns are participating sec urities prior to vesti ng and therefore, nee d to be included in the earnings a lloca ti o n in comp utin g earnings per s hare. Adoption of ASC 260 had no impact o n our co ns o lidated financial s tatements. On September I , 2009, we adopted a uth oritati ve g uidance o n accounting fo r nonrefundable maintenance deposits in accordance with ASC 840 , "Leases." ASC 840 requires a maintenance deposit paid by a le ssee under an arrangement accoun ted for as a lease that is refunded on ly if the le ssee performs specified maintenance ac ti vi ties to be accounted fo r as a deposi t asse t. Adoption of ASC 840 did not ha ve a mate rial impact o n our consolidated financial sta tement s . 8 Table of Contents htt p ://in ves ting .bus in essweek.com/research/stoc ks/fin a nci a ls/drawFi I in g .a s p?form Type= I 0-Q[ 5/ 12/20 IO I :27: 55 PM J SHAW G ROU P INC (Form : I 0-Q, Received: 04 /07 /20 IO 17:08:20) On Septe mbe r I , 2009, we a d opted a uth ori tati ve g ui dance fo r coll a borati ve arrangeme nt s in accord a nce wi th ASC 808 , "Co ll a borat ive A rra nge me nt s." ASC 808 a ppli es to pa rti c ip a nt s in coll a borat ive arrangem ents th a t a re co ndu cte d w ith o ut th e c reati o n of a separate lega l e ntity for th e arrangeme nt. Adopt io n of ASC 808 had no impact o n o ur conso lidate d fin a nc ial st atem e nts. O n Septembe r I , 2009, we a do pted a uth orit at ive g ui dance o n pen s io n disc losures in accorda nce ASC 715 , "Com pe n sat io n - R e ti re m e nt B e nefi ts ." ASC 71 5 p rov ides g ui dan ce o n a n e m p loyer 's d isc losures about pl an assets of a d e fin e d b e ne fit pe n sion o r o the r postre tire m e nt p la n . T he add iti o na l d isc los ure req u ire m e nt s in cl ud e expanded d isc los ure abo ut a n entity's in ves tm e nt po lic ies a nd strategies, th e catego ri es of p la n assets, concentrat io n s of c red it r isk a nd fa ir va lu e meas ure m e nt s of p la n assets . ASC 715 is effective fo r o u r fi scal year e ndi ng A ug ust 30, 20 I 0. We wi ll amend our di sclosures accord in g ly beginnin g w ith o ur co nso li dated fin a ncial state m e nt s in cl uded in o u r fisca l year 20 10 Form 10 -K . On Sept e mbe r I , 2009, we a do pted a uth o rit ati ve g uid a nce o n fai r va lu e d isc losures in accord a nce w ith ASC 82 5, "F in anc ia l In strum ents." ASC 825 req uires di sc los ures a bo ut fa ir va lu e of fin a nc ia l in strum ents in interim fin anc ia l st ate m ents as we ll as in a nnua l fin a nc ia l stateme nt s. Ado pti o n of ASC 825 di d no t have a m a te ri a l im pact o n o ur co nso li dated fi na nc ia l state me nt s. O n Febru ary I , 20 I 0, we ado pted ASU 20 I 0-02 , "Con so lid at io n (Topic 8 10) -Acco untin g a nd Reportin g fo r Dec reases in O w ne r s hi p o f a Su bs id iary -A Scope C la rifi cati o n ." ASU 20 I 0 -02 was iss ue d J a nu ary 20 I O a nd c la ri fies th e sco pe o f th e d ecrease in owne rship p rov is io ns o f S ubto pi c 8 10-10 a nd re la ted g ui dance. T he a m e ndm e nt s in ASU 20 10 -02 ex pa nd th e disc losure req ui re me nts a bo ut deconso lid ati o n of a s ub s id iary or d e recogniti o n of a group of asset s. ASU 20 I 0-02 is effecti ve b eginnin g in th e fi rst inte r im o r a nnu a l re po rtin g pe ri o d e nd ing o n or after Decembe r 15 , 2009, a nd sho uld be a ppli ed re t ros p ecti ve ly to th e fi rst pe ri o d th at a n e ntity a do pts FAS B Sta te m e nt No. 160, Nonco nt ro llin g Inte rests in Conso lida ted Fin a nc ia l S ta te m ent s -a n A m endme nt o f A RB 51 (now included in S ubto pi c 8 10-1 0). A do pti o n o f ASU 20 I 0-02 ha d no imp act o n o ur conso lid ated fin a nc ia l state m e nt s as we h av e h ad no s uc h d ecreases in owne rs hip o f o ur subs idi a ri es. On Feb ru ary 1, 20 10 , we a do pted ASU 20 10-01 , "Eq uity (Topi c 505)-Acco untin g fo r D is tributio ns t o S ha re ho ld e rs wi th Compo ne nt s of Stock a nd Cash ." ASU 20 I 0 -0 I was iss ue d Janu ary 20 I O a nd clari fies th at th e stock po rt io n o f a d ist ri butio n to sh a re ho ld e rs th at a ll ows th em to e lect to receive cash o r stock w ith a po te nti a l limitat io n o n th e to ta l a mo unt of cash th at a ll sh a r eh o ld e rs ca n e lect to receive in th e aggregate is co ns id e re d a sh a re issua nce th at is re fl ecte d in e arnin gs pe r sh a re p ros pecti ve ly a nd is no t a stock di v id e nd . A SU 20 10-0 I is e ffecti ve for inte rim a nd an nu a l pe ri ods e ndin g o n o r a ft e r Decembe r 15 , 2009 , a nd s ho uld be a p p li ed o n a retros p ect ive b as is . A do pti o n of ASU 20 I 0 -0 I ha d no impact o n o ur co nso l id ated fin a nc ia l sta te me nt s. Recent A ccounting Guidance Not Yet A dopted In O cto be r 2009, th e FA S B issue d ASU 2009 -13 , "Multipl e De li ve ra bl e R evenu e A rra nge me nts, a con sens us o f the FAS B E m e rg in g Iss ues Task Force." T hi s update p rov id es a m e ndme nt s to th e c rit e ria of ASC Topi c 605, "Revenu e Recogniti o n ," fo r sep a ratin g cons id e ra t io n in multi pl e -de li verabl e arra nge m e nt s . T he a m e ndm ent s to thi s upd ate esta bli sh a se ll ing pri ce hi e ra rc hy fo r d ete rm inin g th e sell ing pri ce of a d e livera bl e. ASU 2009-1 3 is effecti ve fo r fi n an cial state m e nt s issued fo r years beg innin g o n o r a ft e r June 15 , 20 I 0 . We a re c urrentl y evalu a t ing th e im pact th at th e a d o pti o n of ASU 2009-1 3 w ill h ave o n o ur con so lida ted financi a l sta te m e nts but do no t e.Kpect th e ado ption w ill h ave a mat eri a l impac t o n o ur con so lid at ed fin a ncial sta te m ents. In Jun e 2009, th e FAS B issue d SFAS No . 16 7, "Am e ndme nts to FAS B Int erpretati o n No. 46(R )," cod i fi ed as ASU 2009-17 . ASU 2009-17 a me nds FIN 46(R) a nd requ ires a co mpa ny to p e r fo rm a n a na lys is to de te rmin e w h eth e r it s va ri a bl e interests g ive it a contro llin g fi na ncial in te rest in a vari a bl e inte rest e nti ty. T hi s a na lys is re quires a compa ny to assess w het h e r it h as th e power to direct the ac ti v iti es of th e va r ia bl e in te rest e nt ity and i f it h as th e o bli gat io n to a b sorb losses o r th e ri g ht to rece ive b e ne fit s th at could pote nti a ll y be s ig nifi cant to the vari a bl e int erest e ntity. ASU 2009-17 req ui res a n o ngo in g reassess me nt of w hether a com pany is the primary beneficiary ofa va ri able in te rest e nt it y, e limi na tes the quantitat ive approach previo us ly req u ired fo r determining the primary beneficiary of a vari a bl e interest e ntity a nd signifi cantl y e nh a nces disclosures. ASU 2009-17 may be a ppl ie d re trospecti ve ly in previously issued fin a ncial statem e nts w ith a c umul a ti ve-effect adju stment to retai ned e arnin gs as of the beginning of the fir st year re stated. ASU-17 is effecti ve fo r fi scal years beginning after ovem be r 15 , 2009 . We are currently evaluating the impact th at th e ado pti o n of ASU 2009-17 w ill have o n ou r co nso lid ated financial statements. In Jan uary 20 I 0, th e FASB issue d ASU 20 I 0-06, "Improv ing Di sclos ure a bo ut Fair Value Meas urements." ASU 20 I 0-06 requires additional di sc los ure s rega rd ing fa ir value meas urements, amends di sc losures about po stretiremen t be nefit plan assets and provides clarificat ion regarding the leve l of di saggregat ion of fair va lue di sclos ures by in vestment class . The ASU is effective for in te r im a nd ann ua l repo rt ing periods beg inning after Decem ber 15, 2009, except for certa in Leve l 3 act iv ity disclos u re re quirement s th a t wi ll be effect ive for reporting pe r iod s beginning a fter December 15. 20 I 0 . We are curren tl y eva luatin g the impact t hat the adopt io n o f ASU 20 10-06 will have on our conso lid ated fin a ncial statements. 9 http://in vest ing .bus ine ss week .com /resea rch/stocks/fina ncia ls/drawF il ing.as p?fo rm Type= I 0-Q [ 5/ 12/20 IO I :2 7: 55 PM] ',HAW GROUP INC (Fo nn : I 0-Q, Rece ived: 04 /07/20 IO I 7:0 8:2 0) R e c/assific atio11 s Cert a in pri o r year ba la nces have been reclass ifi e d to con fo rm to th e c urre nt year's prese nt a ti o n. S uc h reclass ifi cati o ns di d no t affect total revenu es, o peratin g in co me o r ne t inco me. Note 2 -Cas h, Cash Eq uiva lents a nd S hort -te rm Inves tments O ur m ajo r catego ri es of investm e nt s a re as fo ll ows: Money m a rket mutua l fu nds -We invest in mo ney ma rk et fu nd s th a t seek to mai nt ai n a stab le net asset va lu e of$ I pe r s ha re , wh il e lim itin g overa ll expos ure to c red it, ma rke t a nd liq uid ity ri sks. Cert ifi cates of d e pos it -Cert ifi cates of de pos it a re s ho rt-t e rm inte rest-bearin g d e bt instrum ent s iss ued by vario us fin a ncia l in s t ituti o ns w ith w hic h we have a n es ta bl is hed bank ing re la ti o ns hip. U .S. governm e nt a nd agency sec ur iti es -We in vest in U.S. governm e nt sec ured deb t in s trum e nt s th at are pu b li c ly t raded a nd valu ed . Fo re ig n governm e nt a nd fo re ig n govern me nt g ua ranteed sec uriti es -We in ves t in securit ies th at a re publ icl y t raded a nd valu e d . Losses in th is category a re prim a ril y due to ma rk e t liquidi ty a nd inte res t rate in c reases. Corpo rate not es a nd bo nd s -We evaluate o ur corpo rate de bt sec uriti es based o n a va ri e ty of fac to rs incl udin g , but not limite d to, th e c redit ratin g of th e iss ue r. O n t he dat e of sett le m ent , o ur corp orate d e bt sec uriti es are ra ted a t least "A" as establi s hed by Sta ndard & Poors a nd have m aturiti es no t exceedin g two years. Losses in thi s catego ry a re du e prim aril y to ma rk e t liquidity a nd inte rest rate increases. A t Fe bru ary 28, 20 I 0 , th e co mpo ne nt s of o ur cas h, cas h e qu iva le nt s a nd s ho rt-te rm in vestm e nts were as fo ll ows (in th o usand s): C a sh Mo ney ma rk e t mutu a l fund s Certifi cates of de posit Avai la bl e -fo r-sale d ebt sec ur iti es: U.S. government and ag ency securiti es Foreign government and fore ign government guaranteed securities Corporate notes and bonds Tota l Cost Bas is $ 299,142 2 56,399 3 17,3 43 3 7,23 0 102 ,3 60 340,849 $1 ,353,323 Unrealized Ga in $ $ 111 308 1,188 1,6 07 Un realized (Loss) $ $ (35) (512) (547) Recorded Basis $ 299,142 2 56 ,399 3 17,343 3 7,34 1 102 ,633 341,525 $1,354 ,383 Balance Sheet Classificatio n Cas h and Cash Equiva lents $ 299,142 256,399 30,093 $ 585 ,634 S hort-term Investments $ $ 287,250 37,34 1 102 ,633 341 ,525 768 ,749 Gross realized gains and los ses fr o m sales of available-for -sale sec urit ies a re determined us ing the specific identification m et ho d a nd a re i nc lu de d in "other income (expense), net." During th e three a nd six mo nths e nded Febru ary 28, 20 10, th e proceeds a nd rea lized gains and losses were as fo ll ows (in tho usands): Proceeds Reali zed ga in s T hree Month s Ended $ 41 ,081 $ 84 nttp ://inves tin g .b us ine ss week.com /research/s tocks/fi nancia ls/drawFi ling .asp?for mTy pe= l O-Q [5 /l 2/20 l O I :2 7:55 PM J S ix Months Ended $ 49,2 88 $ 8 7 SHAW G ROU P INC (Fo rm : 10 -Q, Rece ive d : 04 /07 /20 10 17 :08:20) Reali zed lo sse s Table of Content s $ $ 10 T here were no trans fe rs of sec uriti es fro m the avail ab le -fo r-sale category to a no th e r category d ur in g th e three a nd s ix mo nth s e nd ed Fe bru ary 28 , 20 I 0. We evalu ate whe th er un rea li ze d losses o n in vestm e nts in sec uri ties a re o th er-tha n-te mporary , and if we be li eve th e unrea li ze d losses a re other-than -temporary, we record a n impa irm e nt c ha rge. No other-th a n -te m porary im pairm ent losses were recogni zed during th e three a nd s ix mo nth s e nded Febru ary 28 , 20 I 0. G ro ss unrealize d losses o n in ves tm e nt sec uriti es a nd th e fa ir va lu e o f th ose sec urit ies th a t have been in a co nt inuo us loss positi o n fo r w hi ch we have no t recog ni zed a n impa irm e nt c ha rge at Fe bru ary 2 8, 20 IO were as fo ll ows (in th o usand s): Available -for-sale: Fo re ig n g o vernm e nt g ua ranteed sec uriti es Corporate notes and bo nds $ $ Less t ha n 12 Months Fa ir Un rea li zed Va lu e Loss 3 5,307 $ (35) 41 ,129 (476) 76 ,4 36 $ (5 11) At Februa ry 28 , 20 I 0 , maturiti es o f d e bt sec urit ies c la ss ifi ed as avai la bl e-fo r-sale we re as fo ll ows (in th o usands): Cost Estim a ted Bas is Fa ir Va lu e Due in one y ear or less $ 51 ,274 $ 51 ,423 Due in o ne to two years 429,165 430 ,076 $ 480 ,439 $ 481 ,499 See Note 3 fo r in fo rmati o n o n o ur restri c ted a nd escrowed cash a nd equi valents a nd restri c ted s ho rt -t e rm in vestm e nt s . Note 3 -Re st ric ted and Esc rowed Cas h a nd Equ iva len ts a nd Res tricted S ho rt-term In ves tm e nts At Fe bru ary 2 8, 20 I 0, th e co mpo ne nts o f o ur restri c ted a nd escrowed cash a nd restri cted s ho rt -te rm in vestm e nt s were as fo ll ows (in th o usand s): Ba lan c e S heet C lassificatio n Re s t ric ted a nd Holding Es crowed Ca s h Re s tricted Record ed Period a nd Cas h S hort-term Ba s is (Lo ss) Equi v alents In ves tments Cash $ 13,709 $ $ 13 ,709 $ Money market mutual funds 33 ,060 33 ,060 Cert ifi cates of depos it 228,10 8 22 8,108 Tradi ng securities : Stock a nd bo nd mutua l fund s 5,930 (777 ) 5,930 U.S . go ve rnm e nt age ncy a nd corpo ration securities 4,425 (52) 4,42 5 Corporate bond s an d notes 12,93 7 (10 8) 12 ,937 Total $ 298 ,169 $ (937) $ 46 ,769 $ 25 1,400 A t Fe bru ary 28, 20 IO and A ug ust 3 1, 2009 , o ur res tri c ted a nd esc rowed cash a nd e qui va lent s a nd restri c ted sho rt-t e rm in vestm e nts we re restri c ted fo r th e fo ll owin g (in milli o ns): http :! /in vesti ng. bus inesswee k.com/research/s tocks/fi nancia ls/drawF ilin g.asp?fo rm Type = I 0-Q [ 5/ 12/20 IO I :2 7:5 5 PM] SHAW G RO UP IN C (Fo nn : I 0-Q , Received : 04 /07 /20 I O 17 :08:20) C ontractually re quired by proj ects Vo lunta ril y used to sec ure lett ers of credit Secure contingent oblig ations in lieu of le tters o f credit He ld in tru st to sati sfy obli gati o ns und e r cert ai n d efe rre d co mpe nsati o n pl ans Other 11 Table of Content s February 28, 2010 August 3 1, 2009 $ 12.1 $ 23.l 228 .1 138.1 2 8 .2 28.2 1.6 0.7 $ 298.2 $ 16 1.9 W e a re a bl e to a ccess cas h we poste d to sec ure lette rs o f c redit by d e liverin g to th e third pa rty new lette rs o f c red it ava il a bl e und e r o ur C re dit Fac il ity . Note 4 -A ccou nts Receivab le, Con ce n tratio ns o f Credit Risk and Inventories Accounts Receivable Our acco unts rece ivabl e , ne t of a ll owance fo r do ubtful acco unts , were as fo ll ows (i n th o usands): T rade accounts receivable , net Unbi ll ed account s re cei va bl e Retainage Acco unts rece ivabl e, net Februa ry 28 , 2010 $ 564,389 2 6 ,4 49 160 ,309 $ 75 1,147 Ana lys is of the c ha nge in th e a ll owance fo r do ubtful acco unt s follo ws (i n th o usand s): Beginning balance, Augu st 31 , 2009 Pro v ision Write offs Othe r Enclmg bal ance; February ZS~ zu rc,------ A ugus t 31, 2009 $ 671 ,3 24 11 ,3 82 133 ,156 $ $ 8 15,862 28 ,269 5,709 (3,515) 1,177 In c lude d in o ur trade acco unt s receivable , ne t a t Fe bruary 2 8, 20 IO a nd A ug us t 3 1, 2009, were a ppro x im ate ly $9.0 milli o n of o ut sta ndin g in vo ices du e fr o m a local go ve rnm e nt e ntity res ultin g fro m revenu e s earn ed in pro v iding di sast er re li ef, e me rgency re spo nse a nd recov ery serv ices . T he local governm e nt e ntity has c ha ll e nged th e appro pri a te ness of o ur in vo iced amo unt s , and we a re c urrentl y in liti gati o n wit h the gove rnm en t e ntit y . T he a mo unt s we ultim ate ly co ll ect co uld di ffe r m ate ri a ll y fr o m amo unt s c urre ntl y reco rded . Co ncentrations of Credit Amo unts due from U.S . govern me nt agenc ies or re lated ent itie s we re $79.7 m ill ion a nd $11 0.3 mi ll io n a t February 28, 20 10 and A ug us t 3 1, 2009, res pective ly. Costs a nd estim a ted earnin gs in excess of billin gs o n un co mpl e ted contracts inc lu des $26 8 .0 m ill io n a nd $217 .1 m i ll io n at February 28 , 20 IO a nd Aug us t 3 1, 2009 , res pect ively , re la t ed to U.S. governm e nt agenc ies o r re lated e nt iti es . In ve ntories Maj o r com po ne nts o f in ve nto ries we re as fo ll o w s (in th o usa nd s): Feb ru ary 28, 2010 A ugu st 31 , 2009 Weighted Weighted j ttp ://inves ti ng .bus in ess wee k .com /re se a rch/s toc ks/fin ancia ls/drawF il ing .as p?fo nn Ty pe= I 0-Q [ 5/ 12/20 I O I :27 :5 5 PM ] SHAW GROUP IN C (Form: I 0-Q , Received: 04 /07 /20 IO 17:08 :20) Average FIFO Total Average FIFO Total Raw Materials $ 12 ,847 $ 108,512 $ 121 ,359 $ 13 ,940 $ 110,469 $ 124,409 Work in Process 2,523 39,141 41 ,664 2 ,778 40,923 43 ,701 Finished Goods 90,909 90,909 94,174 94,174 $ 106 ,279 $ 147 ,6 53 $ 253,932 $ 110 ,892 $ 151 ,392 $ 262 ,284 12 Table of Contents Note 5 -Equity Method Investments We exec ute certain contracts with third parties through joint ve nture s, limited partnerships and limited li a bility companies. If a joint venture is determined to be a va ri a ble intere st entity (VIE) as defin ed by ASC 810 and we are the primary beneficiary , the joint venture is consolidated in accordance with ASC 810. If consolidation of the VIE or joint venture is no t required, we generally account for these joint ve ntures us in g the e quity method of accounting with our s hare of th e earnings (lo sses) from these inves tments re flected on one lin e in th e consolidated statement of operations. Our significant uncon so lid ated s ub s idiary that is accounted for using the equity method of accounting is our investment in Westinghouse (Investment in Westinghou se). On October 16 , 2006, we acquired a 20% equity interest (Westinghouse Equity) in two companies, which, together with their s ubsidiaries , are collectively referred to as the We stinghouse Group (Westinghouse) for approximately $I.I billion . We fin anced this investment partially through our subsidiary Nuclear Energy Holdings, LLC (NEH), issuing limited recourse to us (except N EH) Japanese Yen (JPY)-denominated bonds (Westinghouse Bonds) for U.S Dollar (USD) equivalent of approximately $1.0 billion . The various agreements are desc ribed in Note 6 of our 2009 Form I 0-K. In connection with our Inve stment in Westinghouse, we entered into JPY -denominated Put Option Agreements (Put Option) with Toshiba Corporation (Toshiba), pro viding us the option to sell to Toshiba a ll or part of our We stinghouse Equity during a defined "Exercise Period ." Per th e Put Option, the Exercise Period commenced upon the occurrence of a '·Toshiba Event" which is caused by, a mong other things , certain Toshiba financial metrics . Toshiba notified us on May 11 , 2009, that it experienced a Toshiba Eve nt as of May 8, 2009, because it failed to maintain a minimum consolidated net worth, as defined in the Put Option , of JPY 800 billion. Due to the Toshiba Event , the Westinghouse Bond holders, who maintain a security intere st in the Put Option, now have the opportunity to direct us to exercise the Put Option . Under GAAP, the Put Option is not considered a freestanding financial in strument or a deri vative in strument and, consequently , is not separated. from our equity investment in Westinghouse . Therefore, neither the Put Option nor its_ foreign currency component is revalued at current exchange rates . However, the JPY-denominated Westinghouse Bonds must be revalued at each quarte r's end to USD a t current exchange rates . See No te 7 -Debt and Re vo lving Lines of Credit for additional informatio n regarding o ur In vestment in Westinghouse, the Put Option a nd the Toshiba Event. Westinghouse mai nt ai ns its acco untin g record s fo r report ing to it s majority owner, Toshiba, a nd us o n a calend ar quarter bas is w ith a March 3 1 fiscal year end. Consequen tl y , we record our 20% interest of th e equity earni ngs (loss) a nd o th er comprehen s ive income (loss) reported to us by We sti ngh o use two month s in arrears ofour current periods. Unde r thi s po licy , We stingh o use's operating re s ults for the three and s ix months ended December 3 1, 2009 and 2008 a re included in ou r financi a l re s ults for the three a nd six months ended February 28 , 20 10 a nd 2009 , re s pectively . Summarized unaudited income statement information for We stinghou se, before a ppl yi ng our We s tingh o use Equity Interest, was as follows (i n th o usa nds): Three Months Ended Six Months Ended Decem her 3 I , December 31, December 31, December 31, 2009 2008 2009 2008 (unaudited) (unaudited) (unaudited) (unaudited) Revenues $ 875 ,3 08 $ 695,484 $ 1,984,746 $ 1,438 504 Gross profit 215 ,663 142 ,589 389,08 7 307,688 Income before income taxes 41 ,058 10,726 37,095 28 ,297 http://in vest in g.busi nessweek.com/research/stocks/fi nancial s/drawFiling.as p?formType = I O-Q[5 / 12 /20 IO I :2 7:55 PM] ';HA W GROU P INC (Fo rm : 10-Q, Rece ived: 04 /07/20 10 17 :0 8:2 0) Net in co me (l oss) 23 ,0 14 (1,166) 20,0 14 11 ,498 As pa rt of o ur In vestm e nt in Wes tin g ho use , we e nte re d into s hare ho ld er agreeme nt s o n O c tober 4 , 2006 th a t set a ta rgeted minimum d iv id e nd o f approx im a te ly $2 4 .0 m illi on a nnu a ll y fo r th e fir st s ix year s we ho ld our Wes tin g ho use Equity . Unde r th e ha re ho lde r ag reement s, th e s ha re ho ld e rs a re du e to rece ive as d ivid e nds agreed percent ages of no less th a n 6 5%, but no t to exceed 100%, of Wes tin g ho use 's ne t in co me . If th e share ho ld e rs re ce ive less th an th e target minimum di vid e nd a mo unt in a ny year d urin g th e fir st s ix years , th ey re ta in th e ri g ht to rece ive thi s s ho rt fa ll to th e exte nt Westin g ho use earn s ne t in co me in th e future . Our ri g ht to rece ive a ny shortfall s be tw ee n th e ta rget minimum d iv id e nd a mo unt a nd th e di v id e nd s actu a ll y pa id by Wes tin g ho use durin g th e fir st s ix years o f o ur in ves tm e nt (o r s uc h sho rt e r pe ri o d in th e event of earli er te rmin a ti o n) s urv ives th e sale of o ur Wes tin g ho use Equity , a lth o ug h thi s ri g ht is d e pend e nt upo n Westing ho use earnin g ne t inco me a t some future tim e . Durin g th e mo nth of Fe bru ary 20 10 , we rece ived a di v ide nd of$2 7 .5 milli o n fr o m Wes tin g ho use a nd have rece ived to ta l di v idend s to d a te of $59 .9 milli o n . At Fe bruary 2 8, 20 I 0 , th e di v id end sho rt fa ll to taled $12 .1 m i lli o n . 13 Tab le of Contents O ur in ves tm e nts in a nd a dvances to un conso lid ate d e ntiti es , j o int ventures a nd limited pa rtn e rship s a nd o ur overall pe rcentage owne rs hip of th ose ve ntures th at a re acco unt ed fo r under th e e quity me th o d (in th o usand s, exce pt pe rcent ages) were as fo ll o ws : In vestment in Westinghouse Othe r Total investments in and advances to unconsolidated entities, joint ventures and limited partnerships Ownership Percentage 20% 23 %-50% February 28, 2010 $ 977,916 15 ,540 $ 993,456 August 31, 2009 $ 1,008,442 21 ,295 $ 1,029,737 Earnin gs fr o m un co nso lid a ted e ntiti es, ne t of income taxes, fo r th e three mo nths a nd si x mo nth s e nd ed February 2 8 , 2 0 IO a nd Fe bru a ry 2 8, 2009 , a re s umm a ri zed as fo ll ows (in th o usand s): Investment in Westing house, net of income taxes o f $1 ,777, ($5 ,688), $1 ,545 , and ($4 ,698), respecti vely Othe r un conso lid at ed e ntiti es, ne t o f in co me tax es o f $270, $302 , $40 I , and $214 , res pect ive ly T ota l earnings from uncon solidated entities, net of income taxes $ $ Th ree Months Ended 2010 2009 2 ,826 4 3 0 3 ,256 $ $ 5,455 471 5,926 $ $ Six Months Ended 2010 2009 2,458 6 3 8 3 ,096 $ $ 6 ,998 3 32 7,330 In Decembe r 2 009, we purc hased a loan fr o m a thi rd party fo r $19 .9 milli o n th at was due fr o m a VIE acco unt ed fo r und e r th e eq ui ty met hod. T he purc hase of th e loan res u lte d in a n additi o na l varia bl e inte rest in th e e ntity , a nd we co nso li dat ed th e e ntity effec tive December 2009. Note 6 -G oodwill and Other Int a ng ible Assets T he foll o wing ta ble refl e cts the c han g e s in the c arryin g va lue o f goodwill by segment fr o m A ug ust 3 1, 2009 to Fe bruary 28 , 20 10 (in thou sand s): Fo ss il , Renewables & Nuclear Maintenance E&I E&C F&M Total Balan ce a t A ug ust 31 , 2009 $ 139,177 $ 42 ,02 7 $ 18 9,80 8 $ 112 ,57 5 $ 17 ,718 $ 50 1,305 Curre ncy t ra n s la ti o n adjus tmen ts (768) (638) (1,406) Ba la nce a t Fe bru ary 2 8, 20 JO $ 139,177 $ 42,027 $ 189,808 $ 111 ,807 $ 17 ,0 80 $ 499,899 We had tax -de du ctibl e goo dw ill o f a pp rox im ate ly $84 .6 milli o n a nd $9 2 .1 milli o n a t Fe bru ary 2 8 , 20 IO a nd Aug ust 3 1, 2009 , htt p ://in ve st ing .bu sin ess wee k.co m/re sea rch/stoc ks/fin ancia ls/drawFi ling.as p?formTy pe=I O-Q [S /12/20 IO I :2 7:55 PM] SHAW G ROU P INC (Form : I 0-Q, Rece ived: 04 /07 /20 IO 17 :08:20) re s pecti ve ly . The difference be tw ee n th e carryi ng valu e of goodw ill a nd the amount d ed uctibl e for taxes is prim ari ly due to the a morti zati on of goodwi ll a ll owable fo r t ax purposes. T he gross carryi ng valu es and accu mul a ted amortizati on of a mo rti zable inta ngib le assets are presented below (i n thousands): Proprietary Technologies, Patents and Tradenames C ustomer Relation ship s Gross Carry ing Acc umulated Gro ss Carrying Acc umulated Amount Amort iza tion A mount A morti zation Balance at August 31 , 2009 $ 43 ,9 54 $ (23,534) $ 2,0 16 $ (1,4 79 ) Adjustme nt s 3 1 Amortization (1,389) (100) Bala nce at February 28, 20 10 $ 43,954 $ (24 ,892) $ 2,016 $ (1,579) 14 Table of Contents The fo ll owin g tabl e presents the schedul e d future a nnu a l a mortizati o n for o ur customer rel at io ns hip s and intang ibl e assets (in th ousands): Remainder of fiscal 2010 201 l 2012 20 13 2014 Thereafter Total Note 7 -Debt and Revolving Lines of Credit Proprietary Technologies, Patents and Tradenames $ $ 1,386 2 ,772 2,770 2 ,766 2,766 6 ,602 19,062 Customer Relationships $ 101 202 134 $ 437 Our debt (inc lu ding capital lease obli gations) as of Fe bru ary 28 , 20 I O a nd A ug_ust 3 1, 2009, cons isted of th e following@_ t ho usand s): February 28 , 2010 August 31 , 2009 S hort-term Long-term Short-term Long-term Notes payable on purch ases of equipment; 0% to 1.3% interest; payments discounted at imputed rate of 5.9% interest; due September 20 lO through April 201 1 $ l l ,732 $ 81 $ 10,610 $ 2,146 N o tes pay able o n purc hases of equipment; 5.2 % to 6.0% inte res t ; due Jun e 201 1 th ro ug h July 2012 , a nd paid in full O c to ber 2009 1,188 1,824 Other notes payable 1,671 2,805 2,277 Ca pital lease o bli ga ti o ns 62 8 1,171 796 1,380 S ubtotal 14 ,031 1,252 15 ,399 7,627 Westin ghou se Bonds (see desc ription below) 1,45 1,025 1,387 ,954 Total $ 1,465,056 $ 1,2 52 $ 1,403,3 53 $ 7,627 Westinghouse Bonds To partially finance o ur Investment in Westinghouse, in the first q uarter of fiscal year 2007 , o ur s ub sidiary NE H iss ued JPY- denominated Westin g ho use Bonds for USO eq ui va le nt net proceeds of approxi mate ly $1.0 bi ll ion . T he Westinghouse Bonds a re http ://investing.businessweek.com/research/stock s/financials /drawFiling.asp?forrnType = I O-Q(S /12 /20 IO I :27:55 PM] '>HAW G ROU P IN C (Fo rm : I 0-Q , Rece ive d: 04 /07 /20 IO 17:08 :20) limite d reco urse to us (exce pt NEH) a nd a re coll a terali zed prim a ril y by th e W es tin g ho use Equity a nd th e Put Opt io n d esc rib ed bel ow. A t th e sa me tim e , w e e nt e red into th e JPY-de no min ate d Put Opti o n w hi c h, if e xe rc ised , requires Toshiba to p ay us a t least JPY 124 .7 billi o n (approx im ate ly 97% of o ur o ri g in a l JPY-e qui va lent purchase pri ce), a nd und e r certai n c ir c um sta nces, up to JPY 129 .0 billi o n, w hi c h mu st be used to re pay th e Westin g ho use Bo nd s . As di sc ussed in No te 5 -Equity M e th o d In v e stm e nt s, Toshiba fa il e d to m a inta in a minimum co n so lid a ted ne t wo rth o f JPY 800 billi o n , w hi c h was a "Tos hiba Event " under th e Put Opti o n a nd tri ggered th e Exerc ise Pe ri o d , a ll owin g us to exerc ise th e Put Opti o n a t a ny tim e th ro ug h Fe bruary 2 8, 2013 . A Toshiba Eve nt is no t a n "event o f d efault " o r o th e r v io lati o n of th e Bo nd T ru s t De ed o r th e Put O pti o n , but du e to th e Toshiba Ev ent, th e Wes tin g ho use Bo nd ho ld e rs now h ave th e o ppo rtunity to direct u s to exerc ise th e Put O pti o n . To d o so , a s upe rmaj o rity o f th e ho ld e rs re presenting a m aj o r ity of no t less th an a n aggre gate 75 % of the p rin c ipa l a mo unt o ut st and in g mu st pass a reso luti o n in stru ctin g th e bond tru st ee to direct us to exerci se th e Put O pti on . S pec ifi call y, in o rde r fo r th e bo nd tru s tee to direct us to exerc ise th e Put O pti o n , th e W est ing ho use Bo nd ho ld e rs mu st con vene a m eeting with a quo rum of ho ld e rs re presenting no less th a n 75 % o f th e W estin g ho use Bo nd s ' pr in c ipa l am o unt o ut sta ndin g during whi c h a 75% maj o rity o f th e re qu ire d qu o rum a pp roves a reso luti o n in stru ctin g th e bo nd tru stee to tak e s uc h acti o n . A lt e rn ati ve ly , a writte n reso luti o n in stru c tin g th e bo nd tru st ee to direct us to exerc ise th e Put Opti o n a nd s ig ned by ho ld ers re pre se ntin g no less th a n 75 % o f th e Wes tin g ho use Bo nd princ ip a l a mo un t o ut sta ndin g sh a ll have th e sam e e ffect (co ll ecti vely , a n Ex traordin ary Reso luti o n). If w e d ec id e to exerc ise th e Put O pti o n o r a n Ex trao rdin ary Reso luti o n directs us to exerc ise th e Put O pti o n , Toshib a is required to pay u s a pprox im a te ly JPY 12 9 .0 billi o n (equa l to 100% o f th e face valu e of th e W est ing ho use Bo nd s c urrentl y o ut sta ndin g). Ho w ever, ifwe exerc ise th e Put Opti o n und e r oth er prov is io ns o f the Put Opti o n , we would b e re quired to fund th e estim a te d 3% di ffe re nce (equ a l to JPY 4 .3 billi o n , o r a ppro x im a te ly $47 .9 mini o n u s in g excha nge ra te s at Fe bru ary 28 , 20 I 0) be tween th e a nti c ip ated Put Option proceed s a nd th e prin c ip a l a mo unt owed o n the Westin g ho use Bo nd s. If th e Put Opt io n ex pires un exerc ised o n February 2 8 , 20 13 , we w ill be require d to re pay the W esting ho use Bo nd s us in g som e comb ina ti o n o f int ern a ll y gen erate d cash fl ows, a dditi o na l or new bo rrow in gs o r proceed s fr o m th e iss ua nce o f e quity. We may no t be a bl e to o bta in credit in th e futur e o n te rm s simila r to th e te rm s re fl ecte d in th e Wes tin g hou se Bo nd s s ho uld w e e lect to pursue s uc h fin a nc ing. 15 In c o nn ecti o n and co nc urre nt w ith th e acqui s ition o f o ur In ves tm ent in Westin g ho u se , w e a lso execute d a Co mm e rc ia l Rel a ti o n s h ip Agreeme nt (C RA ) w ith Toshiba th at prov ides us w ith certa in ex clus ive o ppo rtuniti es t o bid o n proj ect s wh e re w e would pe r fo rm e ng in eerin g , p roc ure m e nt a nd con stru cti o n serv ic e s o n future Westin g ho use a d vanced passive A P I 0 00 TM nucl ear power pl a nt s , a lo ng w ith o th er co mm e rc ia l o ppo rtuniti es , s uch as the supply o f pipin g fo r th ose units. Ne ith e r o ur no r Toshiba 's obli g atio ns unde r the C RA w ill be affected s hould we exerc ise th e Put Optio n a t the directi o n o f a n Extrao rdin a ry Reso luti o n throu g h its ex pira ti o n in 2013. T he W es tin g ho use Bo nd s a re as fo ll ows (in th o usand s): Westing h o use Bonds, face v a l ue JPY 50.98 billion due Marc h 15 , 2013 ; inte rest only p aym e nts ; co upon ra te of2.20% Westin g ho use Bo nd s, fa ce va lu e JPY 78 billi o n due M a rc h 15, 20 13 ; inte rest o nl y paym e nts; cou po n ra te o f0 .70% a bove the s ix -mo nth JPY LIBOR rate (0.45 % a nd 0.60 % at Fe bru a ry 2 8 , 20 IO and Aug us t 3 I , 2009, respecti vel y) In c rease in deb t d ue to foreign currency t ran s la tio n adj us tm e nts s ince d ate of issua nce Total Westin g ho use debt February 28, 2010 $ 426,875 6 5 3 ,12 5 37 1,025 $ 1,45 1,025 August 31, 2009 $ 426 875 6 53,125 307,954 $ 1,3 87 ,9 54 O n October 16 , 2006, we e nt ere d in to a n in te rest rate swa p agree m ent th ro ug h Marc h 15 , 2013 in th e aggregate no ti o na l a mo unt of J PY 7 8 b illi o n . We d es ig nated th e swap as a h edge again st c ha nges in cash fl ows a ttribu ta bl e to c ha nges in th e be nchm a rk inte re st rate. U nde r th e ag reem e nt , we m a ke fixed in terest pay men ts a t a ra te o f 2 .398%, a nd we rece ive a va ri a bl e int erest pay ment eq ua l to th e s ix -mon th J P Y Lo ndon Interbank Offered Rate (LIBOR) pl u s a fixe d m a rg in of0.7%, effect ive ly fi x in g o ur in te rest ra te o n t he fl oatin g ra te porti on of th e JPY 78 billi on Westin g ho use Bond s a t 2 .398%. A t Fe bru ary 28 , 20 10 and A ug u st 3 1, 2009, th e fa ir v a lu e of th e swa p to ta led a pp roxi m ate ly $33.3 milli o n a nd $3 1.4 milli o n, re s pec ti ve ly , a nd is in cl uded as a c urre nt li a bility a nd in acc umul a ted o th e r co mpre he ns ive loss, ne t o f de fe rr ed taxes, in th e acco mpa ny in g co n so lidated b a la nce http ://in ves tin g.bus in esswee k.co m/resea rch/stoc ks/ftn ancia ls/d rawFi ling.asp?fo rmTy pe= I O-Q [5 /l 2/2 0 I O I :27:55 PM] SHAW G RO UP IN C (Form: 10-Q, Rec e ived : 04 /0 7/2010 17 :08 :20) sh eets . The re was no m ate ri a l in effecti veness ofour inte rest ra te sw a p fo r th e pe ri od e nd ed Fe bru ary 2 8, 20 I 0 . Credit Facility On A pr il 25 , 200 5, we e nt e re d into a fi ve year $4 50 .0 milli o n Seni o r Sec ure d C red it Fac ility (F ac ility), w hi c h we ha ve s ubseq u e ntl y a me nd ed o n a numbe r of occasion s in response to o ur evo lv in g c red it need s. Fro m th e e ffecti ve d a te , th e Fac ili ty has b een avail a ble fo r iss uing p!!r fo rm a nce le tt e rs of c redit a nd fin a nc ia l le tt e rs of c red it as we ll as revo lv in g c red it loans. The te rm s "perfo rm a nce lette r o f c redit" a nd "fin a nc ia l le tte r o f c redit" h a ve m eanin gs c usto mary fo r fin a nc in gs of thi s ty pe. On Septembe r 24 , 2009 , we e nte re d in to th e A m e nded a nd Restated C redit Agreem e nt (Resta te d Agreeme nt ) w ith a g roup o f le nde rs th at p rov id ed new a nd exte nd ed le nde r commitm e nts of $1,2 14 .0 millio n , a ll of w h ic h is avail a bl e fo r th e iss ua nce of p e rform a nce a nd fin anc ia l le tt e rs of c redit a nd/o r bo rrowin gs fo r wo rkin g capita l n eed s a nd general corpo rate p urposes. A mo unt s o ut sta nding as pe rfo rm a nce a nd fin a nc ia l le tte rs of c redit reduce th e a m o unt o th e r.v ise avai labl e fo r bo rro win g under the Fac ili ty . T h e Restate d Agree m e nt included new le nd e rs to the Facility as we ll as c e rt a in existing le nd e rs w ho w ill ex it th e Fac ility in 20 IO or 20 11 , fo ll owin g th e ex pi rati o n of th ei r ex is tin g commitm e nt. Acco rdin g ly, th e Resta ted Agreem e nt co nte mpl ates three gro ups o f le nde rs , th e "20 10 Lenders ," th e "20 11 Lend e rs" a nd th e "2012 Le nd e rs ," w ith th e Fac ili ty te rmin atin g w ith re s pect to such le nde rs o n A pril 2 5, 20 I 0, A pril 25, 20 11 a nd Octob er 25, 201 2 , respecti ve ly. T h e Resta ted Agree me nt m akes ava il able $1,2 14 .0 m illi o n in commitm e nts th ro ug h A pril 2 5, 20 10 (up fr o m $1,0 53 .0 milli o n), $1,09 5.0 milli o n fr o m April 26 , 20!0 th ro ug h A pril 25, 20 11 , a nd $1,000 .0 milli o n fr o m A pril 26 , 2011 throug h O ctober 25, 201 2 . T h e Fac ili ty is avail a bl e for workin g capita l need s to fund fi xed asset purc hases, acqui s iti o n s , in ves tm e nts in j o int ventures a nd gene ral co rpo rate purposes . See Note 8 of o ur 2009 Fo rm IO- K fo r additio na l in fo rm ati o n o n th e Restate d Agreement. T h e fo ll owin g ta bl e presents th e o ut sta ndin g a nd a vail a bl e a mo unt s unde r o ur Fac ility at Februa ry 28 , 20 IO (in milli o ns): Total Facility Less: outsta ndin g pe r fo rm a n ce lett e rs o f c redit Less: outstanding finan c ial letters of credit Less: outstandin g revolv in g c red it loans Remaining a vail a bility under the Facility Table of Content s 16 $ $ 1,214.0 (301.7 ) (68.9) 843.4 A t Februa ry 28, 20 I 0 , th e po rti o n o f th e Facility a v ail a bl e fo r financial lette rs o f cr e dit and/or revolv in g credilloans w as _ $843.4 milli o n , re presentin g th e to ta l Fa cility ($1,214 .0 m illi o n at Fe bruary 2 8, 2010) less outstanding lett ers of c redit ($370.6 m illi o n at Fe bru ary 28, 20 I 0). T o ta l fees assoc iated w ith th ese le tte rs of credit under th e Fac ility were a pproxim ate ly $3 .1 millio n a nd $6 .3 m illi o n for th e t hree a nd s ix m o nth s e nd ed February 2 8, 20 10, res pecti vely , as com pare d to $3 .2 milli o n a nd $6.4 milli o n fo r th e three a nd s ix m o nth s e nded February 2 8, 2009 , re s pecti ve ly . U nd e r th e Restate d Ag reeme nt inte re st is co mputed , a t o u r o pti o n fo r each re vo lv in g c re dit loan , us in g th e de fin ed base ra te o r th e d e fin ed LIB O R ra te , p lu s a m a rg in . T he te rm s "base rate " a nd "LIB O R rate " h ave m eanin gs c usto m ary fo r fin a nc in gs o f thi s ty pe. T h e m a rg in is adju s ted ba sed o n t he rati ng s o f the Fac ility by Standa rd a nd Poor 's (S&P) Rating Servi ces o r M oody's In ve sto rs Service o r, i f t he Faci li ty is no t rated, th e m a rg in is based o n o ur leverage rati o as d e fin ed in th e agreem e nt. T h e m a rgi ns fo r re vo lving c red it loans un der th e Fac ility m ay be in a ra nge of: ( 1) LIB O R plu s 1.5 0% to 3 .00% fo r th e 20 10 Le nders a nd th e 20 11 Le nd e rs a nd LIB O R p lu s 2 .5% to 4 .2 5% fo r the 20 12 Le nde rs ; o r (2) th e de fin ed ba se ra te p lu s 0.00% to 0 .50% fo r the 20 10 Le nders a nd th e 20 11 Le nd e rs a nd 1.0% to 2 .75 % fo r th e 20 12 Le nd e rs. A ltho ug h th e re were no bo rro w in gs at Fe brua ry 2 8, 20 10 , t he interest ra te th at w o u ld have a ppli e d to a ny base rate bo rrowin gs unde r th e Fac ili ty was 4 .5%. For th e t hree a nd s ix m o n t hs e nded Fe b r u ary 28 , 20 I 0 , w e recogn ized $1.4 m illi on a nd $2 .2 mi llio n, res pecti vely , o f interest expen se a ssoci ated w ith th e a m o rti zati o n of fi na nc in g fee s re lated lo o ur Fa ci lity, a s compa red to $0 .7 milli o n a nd $1.5 milli o n , re s pect ive ly , fo r th e three m o nth s a nd six mo nth s end ed Febr ua ry 28 , 2009. At Fe br uary 28 , 20 10 a nd A ug ust 3 1, 2009 , u n a mo rt ized defe rred fi n a nc in g fee s re lated to o ur Fac ili ty were a pprox im a tel y $12. 7 mil lio n and $5 .0 mi ll io n re s pect ive ly . A t Febru ary 28 , 20 I 0 , we were in co m p l ia nce w it h the fi n anc ia l coven a nt s contai ned in th e Fac ili ty . Other Revolving lines of Cr edit htt p://in ve stin g .b us iness wee k.com/resea rch/stoc ks/fi nancia ls/drawF ilin g .a s p?fo rm Ty pe= I 0-Q [ 5/ 12/20 IO I :27 :55 PM ] -1-IAW GROUP INC (Form: 10-Q , Received : 04 /07 /2010 17:08:20) Shaw Nass , a conso lidated V IE located in Bahrain, has a n a vai lab le credit facility with a total c a pacity of 3 .0 million Bahraini Dinars (BHD) or approx im ate ly $8.0 million , of which BHD 1.5 million is available fo r bank guarantees and letters of credit. At February 28 , 20 I 0 , Shaw Nass had no borrowings under its re vo lving line of credit and approxim a tely $0 .4 million in outstanding bank guaran tees under the faci lity. The interest rate a pplicable to any borrowings is a variable rate ( 1.31 % at February 28 , 20 I 0) plus 2.25% per ann um . We have provided a 50% guarantee related to thi s credit faci lit y . We have an un committed, unsecured standby letter of credit faci lit y with a bank. Fees und e r this faci lity are paid quarterly. A t February 28 , 20 IO and A ug u st 3 1, 2009, there were $24. 7 million a nd $24 .8 million of le tters of credi t ou tstand in g unde r thi s faci lity , respectively. A bank has extended to us a $50 .0 million uncommitted, un secured bilateral line of credit for iss uing performance letters of credit in Saudi Arabia. Fees under this facility are paid quarterly . At February 28, 20 I O a nd August 3 1, 2009 , there were $29.8 million of letters of credit outstanding under this facil ity. Note 8 -Income Taxes Our consolidated effective tax rate for the three a nd six months ended February 28 , 2010 was 36% and 34%, respectively. In determining the quarterly provision fo r in come taxes, we use a n est imated a nnu a l effective tax rate based on forecast ed a nnua l pre- tax income and permanent it e m s, statutory tax rates and tax planning opportunities in th e various jurisdictions in w hich we operate. The impact of s ignificant discrete items is separate ly recognized in the quarter in which they occur. We recognize foreig n currency gains and losses o n th e Japanese Yen-denominated Westinghouse Bonds as discrete items in e ac h reporting period due to their volatility and the difficulty in estimating such gai ns and losses reliably . We expect the fisca l 2010 annual effective tax rate, excluding discrete items , applicable to forecasted pre-tax income to be a pproximately 3 7%. Signifi cant factor s that could impact the a nnu a l effecti ve tax rate include management 's assessment of certai n tax matters, the location and amou nt of o ur taxable earnings, c han ges in certain non-deductible expenses and expected credits . We adopted the provisions of ASC 740-10, "Income Taxes," effective September I, 2007. Under ASC 740-10, we provide for un certai n tax positions and the related interest and adj ust unrecogni zed tax benefits and accrued interest accordingly. We recognize potential interest and penalties related to unrecognized t ax benefits in income tax expense. During the second quarter of fiscal 2010, unrecognized tax benefits decreased $7.1 million relating to the reevaluation of temporary positions , one w hi c h is hi g hl y certain as to deductibility but un certain as to timing. The reversal of the unrecogni zed tax benefit was offset by a red1,1ction in a corresponding deferred tax asset in the same a mo unt. For the six months of fiscal 20 I 0 , unrecogni zed tax benefits decreased $7.1 million due to th e reevaluation of temporary positions and $1.0 million due to a settlement with a state tax authority a nd in creased by additional tax provision of $0.4 million and acc ru ed interest of $0.1 million. As of February 28 , 20 I 0 , o ur unrecognized ta'< benefits were $44.7 million , of which $34.1 million would , if recog nized, affect our effective tax rate. 17 Table of Contents Our s ubs idi aries fil e incom e ta'< re turn s in numero us tax j uri s d ic ti o ns , in c luding U .S. fe d e ra l, m ost U.S . s ta tes a nd cert a in fo re ig n jurisd ictio ns . Tax re turn s a re a lso fil e d in cert ai n j ur isd ic ti o ns wh ere o ur su b si di aries execu te project -re la ted wo rk . T he sta tut e of limita ti o ns va rie s by the va ri o us juri sdi cti o n s in w hi c h we o perate , thus, wi th re w excepti o n s , we a re no lo nger s ubject to U.S . (in c lud ing fed eral, sta te a nd loca l) o r foreign in come tax examin ati o ns by tax a uth o riti es fo r years befo re fi scal year 2 0 02. Altho ug h we be lie ve our calc ulati o ns for o ur lax re turn s are correct and the position s ta ke n th e reo n a re reason a ble, th e o utco me o f ta'< a udits co uld be m ateri a lly diffe rent fr o m the re solution we currently a nti c ip ate, and th ose diffe ren c e s could re s ult in significant costs o r be nefits lo us . C erta in tax yea rs are unde r a udit by re le vant tax a uth o riti es in c ludin g a n examinati o n ofour U.S. fed era l tax returns for fi sc a l years 2006-2008 by the Intern a l Re venue Serv ice (IRS). We have exte nded the sta tute of limitati o n s o n o ur U.S. federal return s for the 20 04 a nd 2005 fiscal y ears in vo lved in an IR S appeal (see Note 11 -C o ntin g encies and Commitments ). In addition , many U .S . st a te s s u s pend the state statute of limitations for any y ear for w hi c h the U .S. federal s tatute has been extended. http ://in vesting .bu s in es sweek.com/re search/stocks/financials /drawFiling.asp ?formType = I O-Q[5 / 12 /20 IO I :27 :55 PM j SHAW GROUP IN C (Fo rm: 10-Q , Received: 04 /07 /2010 17:08:20) While the IRS appeal o f fi scal years 2004 and 2005 may be concluded in th e foreseeable fut ure , a nd po tenti a ll y in fi scal 20 I 0 , it is not possibl e at thi s tim e to estimate th e impac t of changes in unrecogni zed tax benefits over the next 12 m o nth s . No te 9 -Acc umul ated Othe r Comprehe ns ive In co m e (Loss) The after-tax components of acc umul ated o ther comprehensive inco me (loss) a re as follows for the quarterly peri o d s prese nted below (in th o u sands ): Equity in \Vest in gho use's Pre-tax ot her Change in Acc u m ul ated Foreign Comprehensive Unrealized Net Other Currency Income (Loss), Loss On Pen s io n Unrea li zed Compre he nsive Translation Net of Hedging Liabil ity Gain (Loss) Income Adju stme nts Shaw's tax Activities Adjustments on Sec uri ties (Loss) Ba lance at August 31 , 2008 $ 4 17 $ 26,060 $ (5,360) $ (30,726) $ $ (9 ,609) Three month s end ed November 30 , 2008 (15 ,258) (27 ,210) (7 ,27 3) 579 (49 ,162) Balance at November 30, 2008 $ (14 ,841) $ (1,150) $ (12 ,633) $ (30,147) $ $ (58,771) Three month s end ed Fe bruary 28 , 2009 (4 ,645) (74 ,169) (4,240) (4 ,951) (8 8,005 ) Balance at February 28 , 2009 $ (19,486) $ (75 ,319) $ (16,873) $ (35,098) $ $ (146 ,776) Ba lance at August 31, 2009 $ (9 ,922) $ (54,65 7) $ (19,217) $ (38 ,170) $ $ (121 ,966) Three months ended November 30 , 2009 2,444 (3,061) (41) 982 242 566 Ba lance at November 30, 2009 $ (7,478) $ (57 ,718) $ (19,258) $ (37 ,188) $ 242 $ (12 1,400) Three mont hs ended February 28 , 2010 (7,138) (1 ,238) (1,132) 653 817 (8,038) Balance at February 28 , 20 I 0 $ (14 ,616) $ (58 ,956) $ (20 ,390) $ (36 ,535) $ 1,059 $ (129 ,438) The translation adjustments re late primarily to changes in the value of the USD in relation to other currencies such as the Briti sh Pounds Sterling (GBP), Mexica n Pesos , Canadian Dollars and the Euro . No te JO-Sha re -Based Co mpe nsatio n Restricted stock units totaling 561 ,9 56 shares were granted during the six months ended February 28 , 20 I 0 , a t a weighted- average per share price of$27.95 vesting over approximately four years. Restricted stock units tota ling 2,374,632 shares were granted during the six months ended February 28, 2009, at a weighted-average per share price of $17.96 , vesting over approximately three to four years. Of these grants, approximately 1,270,000 restricted stock units were classified as liabi lity awards at November 30, 2008, due to the limited availability of shares under our share-based compensation plans . As a result of shareholder approval of the 2008 Omnibus Incentive Plan on January 29, 2009, these liability awards were modified for accounting p urposes to be equity awards. O n January 28, 2009, the price used to re-measure t he liability awards was our cl osing stock price of $29.39, and the mo dified equ ity awards have a weighted-average price per share of$29.39. During the six months ended February 28, 20 IO and February 28, 2009, options for the purchase of 820; 173 shares at a weighted-average price of $2 7 .89 per share and I , 184,709 shares at a weighted-average p rice of $18.10 per share, respectively , were awarded, with ves ting over approximately four years. The contractual liv es of the awards during the s ix months ended February 28, 2010 are consistent with those of prior years. There were no significant changes in the assumptions or estimates u sed in the va lu a tion of o ptions awarded s ubsequent to our year -end August 31, 2009. 18 Table of Co ntent s During the six months e nded February 28, 20 IO a nd February 28 , 2009, opti o ns were exercised for the purchase of 214,025 sh ares at a wei g hted-average exerc ise price of $20.17 per s hare a nd 20,38 1 sha res a t a we ig hted-average exercise price of $8 .89 per s ha re, respective ly. For addi ti o nal in form atio n related to th ese s ha re -based compensatio n pl a ns, see Note 11 -S ha re -Ba sed Compensation of o ur consolidated fin anc ia l sta te ments in our 2009 Form 10-K. Note 11 -Con tingenc ies a nd Co mm itm ents http ://in ves tin g.bu s in es sweek.co m/research/stocks/fi nancia ls/draw Filing .as p?fo rm Ty pe= I O-Q[5 / I 2/20 IO I :2 7: 5 5 PM] 5HA W GROUP INC (Form: I 0-Q , Received: 04 /07/20 IO 17 :0 8 :20) Tax Matters In connection with the IRS examination of o ur U.S. federal tax returns for the 2004 and 2005 fiscal years, we have protested to the Appeals level our disagreement with adjustments covering approximately $13 .0 million of additional federal and state income taxes for which the interest would begin running from fiscal 2007. Tax and interest accrual provisions have been made in our financial statements for the agreed adjustments in the IRS audit covering the 2004 a nd 2005 fiscal years and for uncerta in tax provi s ion s as discussed in Note 8 -Inco me Taxes. While management cannot predict the ultimate outcome of the above matters , provi s ion s have been made in our fin anc ial statements where appropriate. The matters, if decided adversely to us or settled by us , individuall y or in the aggregate, could have a material adverse effect on our financial statements. In a separate matter, certain cases concerning Louisiana franchise tax matters for fiscal years 200 I through 2009 have been ordered dismis sed by reason of joint requests made by the Louisiana Department of Re ven ue and Shaw. Liabilities Related to Contracts Our contracts often contain provisions relating to the following matters: • warranties, requiring achievement of acceptance and performance testing levels; liquidated damages, if the project does not meet predetermined completion dates ; and penalties or liquidated damages for failure to meet other cost or project performance measures. We attempt to limit our exposure under the penalty or liqu idated damage provisions and attempt to pass certain cost exposure for craft labor and/or commodity-pricing risk to customers. We also have claims from customers as well as vendors, subcontractors and others that are subject to negotiation or the contractual dispute resolution processes defined in the contracts (see Note 15 - Long-Term Construction Accounting for Revenue and Profit/Loss Recognition Including Claims, Unapproved Change Orders and Incentives for further discussion). Guarantees Our lenders issue letters of credit on our behalf to customers or sureties in connection with our contract performance and, in limited circumstances, on certain other obligations of third parties. We are required to reimburse the issuers of these letters of credit for any payments that they make pursuant to these letters of credit. The aggregate amount of outstanding financial and performance letters of credit (including foreign and domestic, secured and unsecured and cash collateralized) was $639.5 million and $790.3 million at February 28, 20 IO and August 31, 2009, respectively . Of the amount of outstanding letters of credit at February 28, 2010, $494 .8 million are performance letters of credit issued to our customers. Of the $494.8 million , five customers held $328.5 million or 66.4% of the outstanding letters of credit. The largest letter of credit issued to a single customer on a single project is $117.5 million. Our borrowing capacity under our Facility is reduced by the aggregate amount ofour outstanding letters of credit. 19 Table of Contents In the ord in ary course of business, we enter into vario us agreement s prov iding financial or performance ass urances to c ustomers o n behalf of certa in unc o nso lid ated partnerships, joint ve nture s, consort ium s o r oth e r jointly executed con tracts. These agreements are e nt e red into primarily to s upport the project exec uti o n commitments o f the se entities a nd a re generall y a guaranty of o ur own performance. These assurances have various expiration dates ranging fr o m mechanical completion o f the facil iti es being co nstructed to a period extending beyond contract completion. The maximum potential payment amo unt of an outstanding performance guarant ee is the remaining cost of work to be performed by o r on beh a lf of third parties under engineering and co nstruction co nt racts. Amo unts th at may be required to be paid in excess ofour e stimated cost to complete co ntracts in progress a re not estimable . For cost reimbursable contracts , amo unt s that may become payable pursuant to guarantee pro v is io ns a re normally re coverable from the client for work performed under the contract. For fixed price contracts , thi s amount is the co st to complete the contracted work le ss amounts remaining to be billed to the client under the contract. Re maining billable amounts http://inve stin g .bu s ine ssweek.com/research/stocks/financials/drawFiling.asp?form Type= I 0-Q[S / 12 /20 IO I :27 :55 PM] SHAW GROUP IN C (Form: I 0-Q, Rece ived: 04 /07/2 010 17 :08:20) could be greater or le s s than the cost to complete. In those cases where cost exceeds the re maining amoun ts payable under the contract, we may have recourse to third parties such as owners, co-venturers, s ubcontractors or vendors. legal Proceedings We had pending before the American Arbitration Association (AAA) the case of Stone & Webster, Inc. (S&W) v. Mit s ubishi Heavy Industries, Ltd. and Mitsubishi Power Systems, Inc. (collectively , Mitsubishi). In that matter, S&W sought approximately $38.0 million in liquidated damages from Mitsubishi . Mitsubishi denied liability and as serted a counte rclaim totaling approximately $29 .0 million. On November 16 , 2007 , a majority of the AAA Tribunal transmitted a "Partial Final Award" granting certain relief to S& W contingent upon further proceedings with the Tribunal. Mitsubishi filed in U.S. District Court for the Southern District of New York (S.D .N .Y .) a petition to vacate the award. On November 14 , 2008 , S&W filed with the S.D.N.Y. a petition and motion to confirm the Tribunal 's Pa rtial Final Award. The Di strict Court dismissed Mitsubishi's petition to vacate and S&W's petition and motion to confirm without prejudice. The parties have now settled this matter, which concludes the arbitration. The settlement did not have a material adverse effect on our financial statements. In connection with a services contract s igned in 2000 for the construction of two nuclear power plants in Asia, we asserted claims against our customer before the host country's arbitration association . In that arbitration , we so ught an approximate $49.6 million increase in the contract target price that, if awarded , would eliminate potential penalties associated with cost incentive/pe na lty provisions set forth in the contract. If the arbitration association failed to award the target cost increase or it awarded an increase less than the requested amount, we faced an assessment of up to approximately $13 .6 million in such penalties . Further, we sought from the customer approximately $22.2 million for reimbursement of severance and pension payments, unpaid invoices, increased overhead and outstanding fi xed fee amounts. The client presented a counterclaim asserting $4.3 million in damages relating to alleged defective work and an additional $23.6 million for completion damages, though the contract limits such damages to $20.0 million . The customer has further so ught to keep $7.2 million in cash drawn on a previously issued letter of credit against the claims asserted. On September 3 , 2008 , the arbitration association rendered an award granting most of our claims and dismissing all of the customer's counterclaims. We have initiated proceedings to enforce the award in both the host country and in the U.S . District Court for the Middle District of Louisiana. The proceedings in the U.S. District Court ended when the Court declined jurisdiction based on a finding of forum non conveniens . The customer has initiated proceedings in the host country to contest the award 's validity, oppose our enforcement actions and overturn the award. In the first ruling by the host country 's court addressing the validity of the arbitration award, the court denied the customer's petition to nullify the award and that ruling has been appealed. We have made provisions in our financial statements based on management's judgment about the probable outcome of this case. If the customer prevails on its counterclaim for defective work and completion damages and/or its challenge of the existing award to us to increase the target contract price and other claims for compensation , the individual or combined rulings could have a material adverse effect on our financial statements. In connection with an international fixed price contract executed by our Fossil, Renewables & Nuclear segment that is subject to a schedule of rates for changes and where our services include fabrication , erection and construction, we filed a Request for Arbitration with the London Court of International Arbitration (LCIA). In the request, as amended in a January 20 IO filing with the LCIA, we currently seek claims of approximately $27 .3 million in additional compensation from our client, the prime contractor on the project, related to delay and disruption, loss of profit on descoped areas and changed labor practices. In addition, we have requested additi o nal compensation relative to remeasurements of quantities and scope variations from our client of approximately $13.3 million . On February 5 , 2009 , the client, who holds a $2.0 million performance letter of credit from us , filed a response that denied our claims and stated it had counterclaims totaling approximately $60.4 million related to certain alleged costs associated with completing work that the c lient rem oved from our scope and damages s uffered because of our alleged failure to complete work in a timely mann er. On A ugu st 12 , 2009 , the client filed a Statement of Defense and Counterclaim with the LCIA wherein counterclaims were reduced to $24.0 milli o n. Within this counterclaim , the client also s pecified $18.8 million it was owed for descopes of work, but agreed in prin c ipal to c han ge orders for remeasurements a nd variatio ns va lu ed at $11 .5 million . We evaluated o ur cla im s an d o ur c li ent's counte rc la ims a nd made provisions in o ur fin anc ia l st a te me nt s based o n manageme nt's judgment abo ut the probable outcome of th is a rbitrati o n. While we expect a favorable resolution to th ese ma tt e rs, the dispute resolution process could be len gthy , a nd if the c li ent were to prevail com pl ete ly o r substantially in this matter, the outcome co ul d have a materi a l adverse effect o n our statements of operat ions an d cash flows . T he USO va lue of the claims and our letter of credi t st ated herein fluctuate due to changes in the exchange rate of th e GBP. 20 Table of Contents http:! /inv esting. bu s in esswee k.com/resea rch/s tocks/fi nancial s/drawFi ling.asp?fo rm Type = I O-Q[5/ 12/20 IO I :27 :55 PM] '>HAW G ROUP I NC (Fo nn : 10-Q, Received: 04/07/2010 17 :08:20) Our subs idi ary, S&W, is nearing compl e tion of work fo r Xcel En ergy (d/b/a Public Serv ice of Co lorado) o n Xce l's Co m a nche project in Colorad o . T he re are m aterial c laim s by S&W against Xcel for contra c t c h a nges relating to coordin ati o n of th e work , delays a nd resulting impact s o n our ability to perfo rm . T he resulting change o rd e r reques t s ubmitte d by S&W was denied. As a result, S& W fi led a laws uit , 2009-CV-69 I 3 , in th e Di stri ct Court , C ity a nd County of Denver, Colo rado, again st Xcel on July 14 , 2009, seeki ng damages in excess of$71.0 milli o n . We anticipate that claim wi ll ultimately exceed $100 .0 million. Xcel cou ntercla im ed , a ll egin g nea rly $56.0 million in damages or set -offs agai nst S&W. We ha ve eva lu ated our position and be li eve we a re entitl ed to a mo unts in excess of th e July 14 , 2009 filed c la im s. While we expect a favorab le resolution to these m atters , the dispute reso luti o n proces s could be len g thy , a nd if th e c li e nt were to prevai l co mpl et e ly o r sub sta nti a ll y in thi s m a tt er, th e o ut come could h ave a m ate r ia l adverse effect o n o ur financial statement s. In co nnection w ith a co nt ract execut ed by o ur Fossi l, Renewables & N ucl ea r segm en t fo r th e e ng in eering, procurement and constructi o n ofa 600 MW steam turbin e e lectrical generat io n pl a nt in th e U.S., we have commenced a n arbit ration proceeding wit h o ur eq uipm e nt a nd services s uppli e r o n th at project. We cont e nd th at one of o ur s uppli e rs fa il ed to co mpl y w ith certain con trac tu a l o bl iga ti o ns. T hi s fai lure disrupted a nd delayed o ur work, s ig nifi cantl y in c reased o ur costs and exposed us to th e imposi ti o n of liquidated damages by the owner. On December 30, 2009, we presented claims to our suppli er in a preliminary Notice of Claim . Our s upplier did not respond to this Notice of C la im and in stead filed a Demand fo r Arbitratio n dated January 13 , 20 10, w hi c h requests dec laratory relief, injunctive relief a nd damages in a n a mount to be determined. We served o ur own Demand for A rbitrati o n o n Ja nu ary 18 , 2010, w hi c h asserts that claims are expecte d to exceed $50.0 milli o n. We have eva lu ated our clai m s a nd o ur s uppli e r 's co untercl a im s and m ade provisions in o ur financial s ta te m e nts based o n m anagem e nt 's judgment abou t the probable o ut come of thi s arbitration. While we expect a favorable resoluti o n to th ese matters, the dispute resolution process cou ld be le ngt hy, a nd if our s uppli er were to prevail co mpl e te ly or s ubs ta nti a ll y in thi s m atter, th e o utco m e co uld have a m ateria l adverse effect on o ur co nsolidated sta tement of operati ons. See Note 15 -Long-Term Constru c ti o n Accountin g for Revenue and Profit/Los s Recogniti on Includin g C la im s, Unap proved C ha n ge Orders a nd Inc e nti ves for addition a l information related to o ur claims o n m ajo r projec ts . Environmental liabilities LandBank , a s ubsi di ary of o ur Environmenta l and Infras tructure (E&I) segment, acquires a nd remediates e n v ironm e nta ll y impaired real estate. The real estate is recorded a t cost, w hich ty picall y refl ects some d eg re e of discount due to e nv ironm ental issues related to the real estate . As remediation efforts a re expended, the book valu e of the real estate is increased to reflect improvem en t s made to the asset. We had $52.7 million a nd $17.7 million of s u c h real estate assets reco rd ed in o th e r assets o n the accompany in g ba la nce s heets a t Fe bru ary 28, 2010 and A ug ust 3 I , 2009, respecti vely . T h e increase of$35.0 millio n relates to th e conso lid ati o n in the current period ofa V IE fo rm erly acco unted for under the equity metho d . Additionally , LandBank records a liability for est im ated remediation costs for real estate that is sold , but for which the environmental obligation is retained. W e a lso record an e nv ironmental liability for properties held by LandBank if funds are received from tra nsaction s separate from the original pu rc hase to pay for environmental remediation costs. At February 28, 20 I 0, our E &I segment had $4.5 million of environmental li a biliti es recorded in othe r li a biliti es in th e accompa ny ing ba la nce shee ts as compared to $5 .0 million at August 31 , 2009 . Note 12 -Supplemental Disclosure to Earnings (Loss) Per Common Share Weighted average s ha res o ut standing for the three a nd s ix month s ended February 28, 20 l O a nd February 28 , 2009 were as follows (i n thousands): Basic Stock opti ons Restricted stock Three Months Ended 2010 2009 83 ,9 15 83 ,255 1,003 567 718 3 16 85 ,636 84 ,13 8 2 1 Six Months Ended 2010 2009 83 ,668 83,179 955 825 85 ,448 83,17 9 T he fol lowi ng table includes weighted-average shares excluded from the calc ul atio n of diluted in come pe r share for the three a nd six month s e nd ed February 28 , 20 10 a nd February 28 , 2009 because th ey we re a nti-dilu tive (in th ou sa nd s): http://in vest in g.b usine ss wee k.co m/research/stocks/fi nanci a ls/drawFiling .asp ?fonn Type= I 0-Q[ 5/ 12/20 IO I :27 :55 PM] SHAW G RO UP IN C (Fo rm: 10-Q , Rece ived : 04 /07/2 0 10 17 :08 :20) Stock o pti o n s R e st ricted stock Note 13 -Emp loy ee Benefit Plan s Three Month s Ended 2010 2009 1,351 2 ,422 96 6 11 Six Month s Ended 2010 2009 1,23 0 3 ,860 126 1,4 7 8 T he fo ll owin g tab le set s fort h th e ne t per io dic pe n s io n ex pe nse for t he th ree foreig n de fin ed be ne fi t p la n s we s po nso r fo r th e th ree a nd six mon th s e nded Febr ua ry 28 , 20 I O and February 28 , 2009 (i n th o usa nds): Three Month s Ended Six Month s Ended 2010 2009 2010 2009 Service cost $ 3 3 $ 4 53 $ 68 $ 973 Inte rest cost 2 ,020 1,892 4 ,109 4 ,05 1 Expect ed return o n plan asset s (1,809 ) {1,608 ) (3 ,678) (3 ,440) A m orti zati o n of net loss 826 50 1 1,684 1,0 77 C urta ilm e nt gain (2 ,725 ) (2 ,92 9) O th e r 9 9 18 18 Total net pe ns io n expens e (credit) $ 1,079 $ (1,478 ) $ 2 ,201 $ (250) We e xpect to contr ib ut e $12.6 mill io n to o ur p e nsion p la ns in fi scal y ear 20 10 . As of Febru ary 28 , 20 10 , we contrib ut ed $10 .5 mill io n to th e se p lan s, inc luding a n $8.3 milli o n vo lun tary c as h cont rib utio n to o ur un derfunded pens io n pl a n in th e Uni ted Kin gdom . Multi-employer Plan s We partic ip ate in vari o us multi-e m p loyer p en s io n pl a ns unde r uni on a nd indu st ry -w id e agreem e nts. Generall y, these pl a ns p rov id e d e fin ed ben e fit s t o s ubsta nti a ll y a ll e mpl oyees covere d by co ll ect ive ba rgainin g ag reem e nts. U nd e r th e E mpl oyee R e tire m e nt In come Sec urity Act (ERI SA), a contributo r to a multi-e mpl oyer pl a n m ay be li a bl e , upo n t ermin ati o n o r w ith d rawal fr o m a p la n , fo r it s proporti o na te sha re ofa pl a n 's un funde d vested li a bility. Note 14 -Related Party Transactions In Ja nu ary 2003 , o ur s ubs id iary, S&W , was award e d a s u bcontract to perform e ngi n ee rin g serv ices by _B e mha rd M ech ani cal Contracto rs, In c . (B MC) fo r a cogenerati o n pl ant o n Loui s ia na State U n ive rsity 's (LSU) campus . O ur C hai rm a n , Presid e nt a nd C hi ef Exec ut ive Officer 's b ro th e r is a n executi ve officer a nd a s ig n i fi cant own e r of B MC . T he to ta l con si d erati o n fo r th e e n g ineerin g services prov ided was ap proxi m ately $2 .0 m illi o n . In conn ect io n w ith th e e ng in eerin g serv ices, we e nte red into a n assign a bl e g uaranty ag ree m e nt (G uara nty) w ith BM C unde r w hi c h we agreed , s ubject to severa l condi tio n s preced e nt , to g ua ra ntee possi bl e B MC o bli gatio ns th at could be owed by BMC to LSU purs ua nt to a se parate per fo rm a nce-ba sed e ne rgy e ffi c ie ncy serv ices a nd equipm e nt co nt rac t (E SA). Un til recentl y , BM C a nd LSU we re e ngaged in p ro tract ed liti gati o n (BM C/LSU Di s pute) regardin g v ario us issues re lat ing to th e ESA . O n Ma rc h 15 , 201 0 , LSU a nd BMC exec uted , a mo ng oth e r th ings, a Terminati o n a nd Re lease Ag reem e nt reso lv in g th e BMC/LSU D is pute , in c luding th o se obli gat io n s th at cou ld tri gger th e G ua ra nty . Furth e r, o n Jun e 29 , 2009, BMC a nd th e Com pany a m e nded a n In demni fica t io n a nd Fee Agreeme nt (IFA A m e ndm e nt) w hi c h req uires BMC a nd th e Com pany to terminate th e G uaranty in th e e vent LSU a nd BMC exec ute a bi ndi ng s ett lement agreem e nt. On Decem be r 23 , 2009, BMC til ed a t h ird party la wsui t again st S& W for co nt ri b ut io n and indemnificati o n in th e eve nt BMC is fou nd liabl e fo r a ny dam age s re lat in g to t he t urbin e d es ign , plans o r spe cifi cation s S& W may hav e prov id ed und e r the e n g ineering serv ices. A lso o n Decembe r 23 , 2009, BMC fi le d an a rbitra ti o n d e m a nd aga in st S&W asserting th e sa m e c la im s. As a re s ult of the te rm s o f t he BM C/LSU Dis pute resolutio n a nd the te rm s o f th e IFA A me nd ment, a ny G u a ranty o bli gat io ns th e Compa ny may have h ad to L SU a nd/o r BM C were te rm ina te d . Addi ti onall y . B MC h as subm itte d pa pe rs to d ism iss bo th its th ird party laws u it a nd arbi t ra ti on dem a nd aga in st S&W , w hi c h ,v iii resu lt in th e termi n ati o n of th ose p roceedings. O ur s ig nifi cant un co nso li dated s ubs idi ary th at is a cco unted fo r us in g th e eq uity m eth od o f acco untin g is o ur In ves tm e nt in Wes tin gh o use (see Note 5 -Equi ty Met ho d In v estments). 22 htt p://investin g.bu s in es swe ek.com/researc h/s tock s/ftna ncia ls/drawFi lin g.a sp?for mTy pe = I O-Q[5/ 12/20 IO I :2 7 :55 PM ] -I-IA W G RO UP INC (Fo rm : I 0-Q, Received: 04 /07 /20 10 17:08:20) Table of Contents Note 15-Long-Term Construction Accounting for Revenue and ProfiULoss Recognition Including Claims, Unapproved Change Orders and Incentives C la im s include a mo unt s in excess of the o ri gi na l contract price (as it may be adjusted for approved change orders) that we seek to collect from o ur c usto mers for delays, errors in speci fi cation s a nd designs, contra c t terminations, cha nge orders in di s pute or unapproved as to both scope and price o r o th er causes of un a nti c ipated a dditi o na l costs a nd a re included in estimated revenues when recovery of th e a mounts is probable a nd th e cos ts can be reasonably estim a ted. Backcharges a nd c laims against ve ndo rs , s ubcontractors and o th ers a re included in o ur cost esti mates as a red uct io n in total estim ated costs w he n recovery of th e amounts is probable and th e costs can be reasonably estim ated. As a result, the recording of c la im s increases gross profit or reduces gros s loss o n the related projects in the periods th e c la im s are recorded . However, profit recognition o n th e individual claim is deferred until th e change o rd e r has be en a pproved or the disputed a mounts have been settl ed. C lai m s rece ivable are included in costs and estim a te d earnings in excess of billings o n uncompleted co ntracts , including cl a ims o n th e acco mpa ny in g consolidated balance s heets . We e nt er into cost-reimbursable arrangement s in w hi c h th e final o ut co m e or overall estimate at comple ti o n may be materially different from th e o riginal contra ct va lu e . While the term s of s uc h contrac ts indi cate costs a re to be re imbursed by o ur c ustomers, we ty pi call y process change no tice req uests to document agreement as to scope a nd price. Due to the na ture of th ese it e m s, we have not classified a nd disclosed th e a m o unts as un appro ved c han ge orders . While we have no hi story of signifi cant losses o n thi s type of work , potential exposure exists re lati ve to costs in curred in excess of agreed upo n contrac t valu e. Unapproved Change Orders and Claims Our conso lidated reve nu es include a m o unts for unapproved change o rde rs a nd claims o n proj ec ts recorded o n a percentage- of-compl etio n basis. For th e three a nd six mo nth s e nd ed Febru ary 28 , 20 I 0 , un approved c hange o rd e rs a nd c la im s included in revenues in creased by approxi m ate ly $12.4 million a nd $5.2 milli o n, respectively, as compared to $2 .1 milli o n and $20.2 million , re s pecti ve ly, fo r the three a nd s ix m o nth s ended February 28, 2009. T he ta ble below (in million s) s ummari zes infonn ati o n re lated to our s ignificant un a pproved change orders a nd c lai m s from project owners th at we hav e recorded o n a to tal project basis at February 28 , 20 JO a nd February 28 , 2009, re s pecti vely, a nd excl ud es a ll unrecorded am o unt s a nd no n-sign ifi cant un ap proved c han ge orders and c la im s . Amounts included in project estimates-at-completion at September 1 C hanges in estimates-at-completion Approved by customer A m o unts in c luded in project estim ates-at-compl e ti o n at Febru ary 28 Amounts accrued in revenues on a total project basis at February 28 Fisca l Year 2010 $ 222 .9 67 .0 (33.0) $ 256.9 $ 92.1 Fiscal Yea r 2-009 $ 63.6 53.6 (32.6) $ 84.6 $ 64 .3 Included in o ur project estimates-a t-compl eti o n (EAC) a t Fe bruary 28, 20 IO a nd shown in th e ta ble above a re expected cost recoveries associated wi th a c la im of ap proximate ly $ I 00 .0 milli o n for price adj ustm ents on a new co nstru cti o n project for w hi c h o ur contract in c lud es escala ti o n prov isio n s . We have reac hed a n agreement w ith o ur c li e nt to replace certain ind ex-based adj us tm e nt s w ith fi xed a nnu a l escalati on p e rce nt ages. The re s ultin g amendment is s ubj ect to approval by the state Publ ic Serv ic e Commi ss ion . A lso included in our project EAC for thi s new constru c ti on project are expected cost recoveries as sociated with ch a ng e requ es ts o f a pproximatel y $50 .0 milli o n . To da te , we ha ve reco rd ed less th a n $5 .0 milli o n in re ve nue in o ur fin a nci a l sta te m e nt s re la ted to th es e two ite m s . In add iti o n, we have in corpo rated in o ur proj ect EAC a t Fe bruary 28 , 20 10 a pprox im ate ly $4 7.5 m illi o n re lated to un a pproved c h a nge o rd e rs assoc iated w ith pe rmittin g d e lays o n a coal-pl a nt co nstru c ti o n proj ect. O f thi s a mo unt , w e have reco rd e d a pprox im a te ly $22 .2 milli o n based on percentage co mpl e ti o n ac co untin g , whi c h is include d in the "A m o unts acc ru e d in revenues" a t Fe bruary 28 , 20 IO in the a bo ve ta ble . Not in c luded in am o unts di sclos ed above a re a ss um ed reco veries in o ur EAC o f a pprox im atel y $2 1.0 million for cost e scalation on commodities where the a pplica ble e scalati o n percentage ha s been a greed to in principa l and fo r w hi ch we have e ntitl ement under the exi sting tenn s of the co nt ract. The diffe re nce between the a mounts included in project EAC used in determinin g co ntract pro fit or loss a nd the a mo unt s rec o rded in re ve nu e s (o r reductions to co ntract cost s) on unco mpleted c o ntracts a re th e forec a sted costs for wo rk which has no t y et been incurred (i.e. remaining percentage-of-completion re ve nu e to be recogni zed o n th e rel ate d project). http ://investing .bu sine ss week.com/resea rc h/s tocks/financials /drawFiling.asp?formType =I O-Q[5 / 12/2 0 IO I :27 :55 PM] SHA W G ROU P INC (Fo nn : I 0-Q, Rece ived: 04 /07 /20 10 17:08 :20) 23 Table of Content s lf we co ll ect amo unt s d iffe re nt th a n th e a mo unt s th at we have recorded as un a p proved c ha nge o rd e rs/cl a im s receiva bl e , th at d iffe re nce w ill be re fl ec ted in th e EAC used in d ete rmin ing cont rac t pro fit or loss . T im ing of cl ai m co ll ec t io n s is un cert a in a nd d e pe nd s o n negoti ated settl e m en ts , tr ia l d a te sched ulin g a nd o th e r d is pute reso luti o n processes pu rs uan t to th e contrac ts. {\s a res ult, we m ay no t co ll ect o ur un a p p roved c ha nge o rd e rs/cl aims receivab le w ithin the next t we lve m o nth s. A lso in c lud ed in un a pproved c han ge o rd e rs a nd c la im s are two m atte rs c urre ntl y in a rbitrati o n or liti gat io n . See Note 11 - Contin ge nc ie s a nd Commitm e nts fo r a dditi o n a l in fo rm a t io n . In add iti o n to th e un approved cha nge orders a nd c la im s disc ussed above, we have record ed as a red ucti o n to cost s at February 28 , 20 I O a pp rox im a te ly $26 .6 milli o n in expected recove ri es fo r bac k c harges, li q uid a te d dam ages a nd o th e r cost ex posures resultin g fro m s uppli e r or s ubcontracto r caused impedim e nts to o ur wo rk . S uch impedim ent s m ay b e caused by th e fa ilure of s uppl iers o r subcontrac to rs to p rov ide serv ices, m a te ri a ls o r equipm e nt compliant w ith p rov is io n s ofour agreem e nt s, resultin g in d e lays to o ur work o r a dditi o n a l cost s to re m e dy . See N o te 11 -Contin genc ies a nd Comm itm e nts fo r in fo rm ati o n w ith resp ect to vendo r bac kc h a rges. S ho uld we no t prevail in th ese m atte rs , th e o utcom e could h ave a n ad verse e ffect o n o ur state m e nt o f o perati o ns a nd s ta te me nt of c as h fl ows . Project /11 ce11tives Our co nt rac ts cont a in cert a in in centi ve a nd award fees th at prov id e fo r in c reasin g o r decreasin g o ur revenu e based o n som e measure of co ntrac t pe rfo rm a nce in re la ti o n to ag reed upo n perfo rm a nce t argets . T he recogniti o n o f revenu es o n contracts c o nta inin g p rov is io n s for in centi ve a nd a w a rd fees prov id es th at a ll co mpo nent s of contrac t revenu e s , in c luding probable incenti ve p ay m e nt s suc h as perform a nce in centi ves a nd award fees , sh o uld be con s id ere d in d e te rminin g to ta l estim a ted revenu es. Our revenu e EACs in c lu de a n estim a te o f a mo unts th at we expect to earn i fwe ac hi eve a numbe r of agreed upon c rite ri a. A t Febru ary 28 , 20 I O a nd A ug u st 3 1, 2009, o ur proj ect estim a tes include d $39.8 milli o n a nd $32 .9 m illi o n, respecti ve ly, re lat ed to e stima ted ac hi evem e nt o f th ese c riteria. On a pe rce ntage -of-co mpl et io n bas is, we have reco rd e d $2 6 .4 milli o n a nd $29.4 milli o n of these estim ated a mo unts in revenu es fo r th e re lated co nt rac ts a nd equa l a m ount s in c osts and estimated earnin gs in excess of billings o n un co mpl eted contracts in th e acco mpany in g conso lid ated ba la nce s heets b ase d o n o ur prog ress as of Fe bruary 2 8 , 20 I 0 , a nd A ug ust 3 I , 2009, respecti vely . I f we do no t achi eve th e c rit eri a a t th e a mo unts we have estim ated , proj ect reve nues a nd profit may b e m ate ri a ll y redu ced . T h ese in centi ve revenu es a re recogni zed u s in g th e pe rcent age -of-compl eti o n m eth od of acco untin g. Note 16-Business Segments O ur re po rta bl e segm e nts a re Fossil , Re newables & N ucl ear; Ma inte n a nce; En v iro nm e nta l & In fras tru c ture (E&I ); Ene rgy a nd C h e m icals (E&C); Fabr icati o n a nd Ma nu fa cturing (F&M); In vestm e nt in Westin g ho use a nd Cor porate . T h e Foss il , Re newabl es & N u c lear segm e nt prov id es a ra nge o f proj ect-re lated services, in cl udin g desig n, e ng in eerin g , con stru ct io n , procure me nt, tec hn o logy a nd co ns ul ti ng services, prim a ril y to th e g lo ba l foss il , re newable a nd nu c lear power gen era tion indu stri es . T h e Maintenance segment performs ro utin e a nd o utage/turn arou nd m a int e na nc e, predi c t ive a nd preve ntative maintenan ce, as well as co nstru cti on and major m o dificati o n se rv ic es, to customers' facil iti es in the indu stri a l m arket s prima ril y in No rth America. The E&l segm e nt provides integra te d engineering. design a nd construct io n services and exec utes re medi ation so luti o ns , includin g th e identification of contam in a nts in so il, ai r a nd water for government a nd pri vate-sector clients wor ldwide . T h e E&C segment prov ides a range of project-re lated services, including design , e ng in eeri ng , constructi o n , procurement , techn o logy a nd co ns ultin g services, pr im a ril y to th e oi l a nd gas, refi nery, pe trochemical a nd c h emi cal in d u st r ies. The F&M segmen t prov id es integrated pipi ng systems a nd services for new construct io n , s ite expansion a nd retro fit projects fo r energy a nd c hemical p la nt s . We operate several pipe fabr icati on faci lit ies in t he U.S. a nd abroad. We a lso operate two manu facturing fac il it ies t hat provide prod ucts for o ur pipe fab r ica ti o n serv ices ope ra ti o ns, as we ll as to thi rd pa rti es . In add it io n , we o perat e severa l dis tribu tio n cent e rs in th e U.S ., w hi c h di st r ib ut e o ur p rod u cts to o ur c usto me rs. htt p://in vest ing .bu sinessweek.com/resea rch/stock s/fin anc ials/drawF ilin g.a sp?fo nn Ty pe = I 0-Q [ 5/ 12 /20 IO I :27 :55 PM] i HA W G RO UP INC (Form: I 0-Q , Rece ived: 04 /07/20 10 17 :0 8 :20) 24 • Table of Contents T he In vestm e nt in Westinghouse segment includes our Westinghouse Equity and th e Westin gho use Bonds. Westinghouse se rves th e d o m estic a nd international nucl ear e lectri c power indu stry by s uppl y in g advan ced nucl ear plant designs a nd equ ipm e nt , fuel a nd a wide range of o th er products a nd services to th e owners a nd operators of nuclear power p lants. Please see Notes 5 and 7 fo r addi ti onal information wi th respect to th e circ um stances in w hi ch th e Westinghouse Bond ho lders may direct us to exercise th e Put Option a nd se ll th e Westinghouse Eq uity to Toshiba. T he Corporate segment in cl udes corporate m anageme nt a nd expe n ses associated w ith ma nagi ng the overall company. These expen ses include compe nsati on a nd bene fit s of corporate management a nd staff: legal a nd profess iona l fees a nd ad mini st rati ve and general expenses th at are not allocated to th e bus iness units . Our Corporate assets primarily include cash a nd cash equivale nts he ld by the corporate entities, property a nd equipm e nt related to th e corporate faci lity a nd certain information techn o logy costs. Our segment s' revenues, gross profit a nd in com e (loss) before income taxes and earn in gs from un consolidated e ntiti es for the three and s ix m o nths e nded February 28 , 20 IO a nd February 28 , 2009 were as follows: (In millions, except percentages) Revenues: Fossil , Ren ewables & Nuclear Maintenance E&I E &C F&M Corporate Total revenues Gross profit: Fossil , Ren ewable s & Nuclear Maintenance E&I E&C F&M Corporate Total gross profit Gross profit percentage: Fossil , Renewables & Nuclear Maintenance E&I E&C F&M Corporate Total gross profit percentage Income (loss) before income taxes and earnings (losses) from unconsolidated entities: Fossi l, Renewables & N uclea r Maintenance E&I E&C F&M $ $ $ $ $ Three Months Ended 2010 2009 551.6 177.2 488.3 287.2 120 .0 1,624.3 18 .7 8.4 45.3 46.8 24 .1 1.8 145.1 3.4% 4 .7 9 .3 16.3 20 .1 NM 8.9% 4.7 6.2 28 .1 35.5 16 .5 $ $ $ $ $ 552 .0 172.7 449.9 331.2 16 1.2 0 .5 1,667.5 (3 1.1 ) (1.5) 40.3 60.6 33 .7 0.4 102.4 (5.6)% (0.9) 9 .0 18.3 20 .9 NM 6.1% (4 5 .7 ) (4. l) 25.1 53.l 26.1 $ $ $ $ $ http ://in vesti ng.b us ine sswee k.com/resea rch/stocks/financial s/drawFiling.asp?fo rm Type= I 0-Q[ 5/ 12 /20 IO I :27 :5 5 PM] Six Months Ended 2010 2009 I , 13 1.2 470.6 1,016.5 626.5 237.9 0.1 3,482.8 51.7 28.6 92.8 81.2 44.7 0.9 299.9 4 .6% 6.1 9 .1 13 .0 18 .8 NM 8.6% 23 .1 23.8 58.4 57.8 29.1 $ $ $ 1,228 .6 506.8 851.3 653.0 325.9 2 .4 3 ,568.0 20.7 10.2 74 .8 -------- 113.1 69.3 2.4 $ 290.5 1.7 % 2 .0 8.8 17 .3 21.3 NM 8 .1% $ (9 .8) 4.3 43.7 94.9 56.4 SHA W G ROUP INC (Form: 10-Q , Received: 04 /07 /20 10 17 :08:20) Investment in Westinghouse Corporate Total income before income taxes and earnings 30.l ( 16.3) (losses) from unconsolidated entities $ 104.8 ===== NM -No t Meaningful 25 Table of Contents Our segme nt s' assets were as follows : $ 2 0 .0 ( 19.1) 55.4 $ (81. 7) (3 2 .8) 77.7 $ (151.1) (41.1) (2.7) (In millions) February 28, 2010 August 31, 2009 Assets Fo ssil , Renewab le s & Nuclear Maintenance E&I E&C F&M Investment in Westinghouse Corporate Total segment assets E liminatio n of investment in conso lida ted subsid iaries E limination of intercompany receivables Income taxes not allocated to segments Tot.al consolidated assets Major Customers $ $ 1,845.1 193 .8 1,069.1 788.7 693.0 1,1 83.2 786 .1 6 ,559.0 (4 12 .1) (438.4) 0.4 5 ,708.9 $ $ Re ve nu es re lated to U.S. governme nt agenc ies or e ntities owned by the U.S. gove rnm e nt were $40 7 . 7 milli o n a nd 1,629.9 180.7 1,002.8 853.4 698.0 1,171.2 846 .9 6,382.9 (4 12 .1) (414.0) 0.4 5,557 .2 $872.8 million , respectivel y, for th e three and s ix mo nth s e nded February 28 , 20 I 0, representing approximately 25% of our total revenue s for each period . Fo r th e three a nd six month s e nd ed February 28, 2009 we recorded revenu es re lat ed to the U.S. government of ap proximate ly $377 .8 million a nd $702.4 million , re s pectively, re pre sent in g approximatel y 23 % a nd 20%, respecti ve ly, ofour total revenu es for each period . T hese re venu es were primarily rel a t ed to work performed in o ur E&I segme nt. Note 17-Fair Value Measurements We fo ll ow th e authoritati ve g uid ance fo r fair va lu e measurem ent s rel a tin g to fina ncial a nd no n fin anci a l assets a nd liabilities, includin g presentation of requ ire d discl osures in o ur condensed conso lidated fin ancial state ments . T h is guidance defines fa ir val ue as th e price that would be received to sell an asset or paid to transfer a liabi lity (an exi t price) in a n orderly t ransaction between m arket participants at the measurement date. The guidance also establishes a fair va lue hierarc hy, which requires maximizing the use of observab le inputs when measuring fai r value. The three levels of inputs th at may be used are : Level I : Quoted market prices in acti ve markets for identi cal assets o r li abi lities. Leve l 2: Observa ble market based inputs o r unobservable inputs th a t a re corrobo ra te d by market data. Leve l 3: Significant unob serva ble inputs tha t a re no t corroborated by market data. T here have been no materi a l c ha nges to the va lu a ti o ns techniques utili zed in the fa ir va lu e meas urement of assets and li abi litie s presen ted on the Compa ny's bal a nce sheet as co mp are d to th ose di sc lo sed in o ur 2009 Form 10-K. http://in ves tin g.bu sin esswee k.com/re sea rch /stoc ks/finan cia ls/drawFilin g.as p?formType =l O-Q[5 / 12/20 IO I :2 7:55 PM] ,HAW G ROU P INC (Form : I 0-Q , Rece ive d : 04/0 7/20 IO 17 :08:20) 26 • Tab le of Contents A ssets and liab ilities Measured at Fair Va lu e on a Recu rring Bas is Th e ta bl e be lo w presents in fo rm a ti o n a t Fe bru a ry 28 , 20 I 0 , a bo ut o ur fin a nc ia l as sets a nd fin anc ia l lia bi liti es th at a re meas ured a t fa ir valu e o n a recurring basis a nd indi cates th e fa ir va lu e hi e ra rc hy o f th e va lu a ti o n tec hniqu es utili zed to d e termin e s uc h fa ir va lu e (in th o usa nd s): Assets: S ho rt-te rm and Res tric te d Sho rt -te rm In ves tm ents Certifi cates of deposit Stock a nd bo nd mutu a l fund s U.S. government agency and corporation se c urities Fo re ig n gove rnm ent a nd fo re ig n go ve rnm e nt gua ra nteed sec uriti es Corporate notes and bonds Total Li abilities : Interest ra te swa p co ntract De riv atives Not Des ignated as Hedgi ng Inst rumen ts: O th e r C u rre nt Ass ets Foreign currency forward assets Oth e r A ccru ed Lia bili tie s Foreign currency forward liabilities $ $ $ $ $ Fa ir Va lue 5I5,358 $ 5 ,930 4 1,766 10 2 ,633 354,462 1,020 ,149 $ 3 3 ,2 79 $ 766 $ 77 $ Fa ir Va lu e Meas ureme nts Us in g (L eve l I ) 5 ,930 5 ,9 30 $ $ $ $ $ (Level 2) (Level 3) 515 ,3 58 $ 41 ,766 102 ,633 354,462 1,0 14 ,2 19 $ 33 ,279 $ 766 $ 77 $ We value the intere st rate swap li a bi lity utili z ing a di scounted cash tlo w mo de l that takes into cons iderati o n forward inte re st rates o bserv a bl e in th e market and th e co unte r pa rty 's c redit ri s k. Our co unte rp arty to thi s in strument is a maj o r U .S. ba nk . As di scussed in No te 7 -De bt and Revo lv ing Lin es o f C redit, we des ign ated th e swap as a he dge agains t c hanges in cash !l ows attributa bl e to c ha nge s in th e ben c hmark inte rest rate re la ted to o ur Wes tin g ho use Bo nds. We ma nage o ur c urrency ex pos ures w ith fo re ig n c urre ncy d e ri va ti ve in strum e nts d e nomina te d in o ur maj o r c urrenc ies , w hi c h a re ge nera ll y the c urre nc ies o f th e co untr ies in whi c h we co ndu ct th e maj o rit y o f o ur int e rn ati o na l bu s in ess . We utili ze d e ri vati ve in strum e nt s to ma nage th e fo rei gn c urre ncy ex posures re la ted to s peci fi c a s sets a nd li a bilit ies th at a re de no min a ted in fo re ig n c urre nc ies a nd to ma nage fo recaste d c as h !l ows de no min a te d in fo re ig n c urre nc ies genera ll y re lated to e ng in eering a nd co nstru cti on projects. O ur co unte rp arti es to th es e in strum ents are m aj o r U .S. banks. T hese c urre ncy de ri vat ive in st rum e nts a re carr ied o n th e consolidated ba la nc e sheet a t fair va lue a nd a re ba sed upo n marke t o bserva bl e forw a rd exch a nge rat es a nd fo rward in te res t ra tes. We va lue derivat ive assets by d isco untin g future cas h !l ows based o n c urre ncy forwa rd ra tes. The d iscount ra te used fo r va luin g de ri vati ve ass et s in co rp orates co unte rp a rt)' credi t ri s k, as we ll as o ur cost of capit a l. De ri vative li a biliti es a re valu ed us in g a di scount ra te th at inco rp o ra te s o ur c redit ri sk . Assets and liabilities Meas u red at Fair Valu e on a Nonrecurring Ba sis E ffec ti ve Se ptembe r I , 2009 , we ad o pte d th e fa ir va lu e meas ure me nt g uidance for a ll no nfi na ncial asset s and li abi liti es recogni zed or di scl o sed at fai r va lue in th e fi na nc ia l sta te m e nt s o n a no nre c urring basis. T hese assets a nd li a bi litie s incl ude ite ms s uc h a s good w ill a nd lo ng li ve d assets th at a re m easu re d at fai r va lu e res ult ing fr o m impa irm e nt , i f d ee med necessary . During th e second qu a rt e r of fi scal year 20 I 0 , we d id no t record a ny fa ir marke t va lu e adjustm e nts to th ose fi na ncial a nd no n fin anc ia l asse ts a nd liab iliti es meas ur ed a t fa ir va lu e o n a no nr ec urrin g bas is . http ://in ve stin g .bu s in e ss wee k.com/re searc h/stocks/fin anc ia ls/drawF il in g .as p?fom1 Ty pe=l O-Q [5/12/20 10 I :27:55 PMl SHAW G ROUP I NC (Form : 10-Q , Rece ived: 04/07/20 10 17 :08 :20) 2 7 Table of Contents Effects of Derivati ve Instrume11ts on In come and Oth er Co mpreh ensive In come A mount of Gain (Loss) Recognized in Income on Derivatives Three Months E nded S ix M onths E nded Location of Gain (Loss) Recog nized in Income on Derivatives February 28, February 28, February 28 , February 28 , (in milli o n s) 2010 2009 2010 2009 Duivativcs Designated as Hedging Instruments: Interest rate swa p contrac t O th e r Compre he ns ive In come (Loss) $ Derivatives Not Designated as Hedging Instruments: Fore ig n curre ncy fo rwa rd cont rac ts O th e r fo re ig n c urre ncy tra nsactio ns gain s (losses), ne t Note 18-Supplemental Cash Flow Information $ (I.I ) $ (0 .6) $ (4 2) $ (12) $ ( 11 .5) 1.7 $ 0 .2 $ (15 ) Six Months Ended February 28, February 28 , Non-cash in vesting and finan c ing acti v ities (in thousands): Additi o ns to pro perty , pl a nt a nd equipm e nt Interest rate swap contract on Japanese Yen-denominated bonds, net of deferred tax of $737 and $7,392 , res pectiv ely Equity in Westin gho use's accumul ated o th er co mpre he ns ive in co m e , net of d e fe rr ed tax of $(2 ,702) a nd $(6 5,089), res pecti vely 2 8 Ta ble of Co nt ent s 2010 $ 12 ,840 $ 1,173 $ (4 ,299) CA UTION A RY STATE MENT REGARD ! G FORWARD-LOOK ING STATE MENTS 2009 $ $ 11 ,513 $ (10 1,379) Certain sta tements a nd informatio n in thi s Form 10-Q m ay co nstitute "forward-look ing statements" within the meaning of the Priva te Securities Litigation Act o f 1995 . T he words "believe," '·expect," "anticipate," "plan ," '·i ntend ," "foresee,' "should," "wou ld," "coul d" o r othe r s imil a r expressio ns a re int e nded to ident ify fo rward-lookin g state me nt s, w hic h a re genera ll y no t hi sto ri cal in nat ure. However, th e abse nce of th ese wo rds does no t mean th at th e s tatement s a re not forward-l ook in g. T hese forward -looking statemen ts are based o n o ur curre nt expectations and be l iefs conce rn i ng future d eve lopm e n ts a nd th e ir po tential e ffect o n us. Wh ile ma nage me nt be lieves th at th ese forward -looking s tatement s a re reasonable as and wh en made, th e re can be no assura nce th a t future develo pm e nts affec t ing us w ill be th ose th a t we anti c ipa te . A ll comm e nts co ncern in g o ur ex pec ta ti o ns for future revenu es a nd operating result s are based on o ur fo recasts fo r ou r ex is tin g operati o ns a nd do no t in cl ude th e po te nti a l impact o f a ny future acq ui si t ions. O ur fo rward -look in g state ments in volve s ig nifi cant ri sks a nd un cert a inti es (so me of w hi c h a re beyond o ur co nt ro l) a nd ass umpti o ns th a t co uld cause ac tu a l res ult s to diffe r m ate ri a ll y fro m o ur his to ri cal ex peri ence a nd fr o m present http ://in vesting.bu s in esswee k .co m/research/stoc ks/!inanc ia ls/drawFi lin g .as p?form Ty pe= I O-Q [5/ 12/2 0 I O I :2 7 :55 PM] -H A W GROUP INC (Fo nn : I 0-Q , Rece ived : 04/07 /20 IO 17:0 8:20 ) ex pectat io ns o r proj ecti o ns. Impo rt a nt fac to rs th at co uld cause ac tu a l results to diffe r m ate r ia ll y fr o m th o se in th e fo rw ard -l ookin g state m e nt s inclu de , but a re no t limited to : co ntinu e d d e pressed g lo b al econo mi c cond iti o ns ; c ha nges in d em a nd fo r o ur pro ducts a nd serv ices; o ur a bility to o bta in ne w co nt rac ts fo r large-sca le do mesti c a nd inte rn a ti o na l p roj ect s a nd th e timin g of th e pe r for m a nce o f th ese co nt rac ts; c ha nges in th e na ture o f th e indi v idu a l m a rk e ts in whi c h o ur custome rs o perate ; proj ec t m a nage ment ri sk s, includ ing a ddit io na l costs , re du c ti o n s in revenu es, c la im s , d is put es and th e pay m e nt o f liquida te d dam ages ; the na ture ofour co ntracts , pa rti c ul a rl y fi xed-pri ce contra cts, a nd th e impact of poss ibl e mi ses tim ates a nd/or cost esc a lati o ns assoc iate d w ith o ur cont rac ts ; a bility of o ur c usto m e rs to unil a tera ll y t ermin ate o ur co nt rac ts ; o ur a bili ty to coll ect funds o n work p e r fo rme d fo r do mesti c a nd forei g n go vernme nt agenc ies a nd pri vate secto r c usto me rs th at are fa ci ng fin a n c ial ch a ll enges; d e lays a nd/or d e fault s in custo m e r pay me nt s ; un ex pected adjustm e nt s a nd cancell ati o ns to o ur b ackl og as a res ult of current e co nomi c conditio ns o r o th e rw ise; • th e fa ilure to mee t schedule o r performa nce require m ent s o f o ur co ntracts; our d e pe nden ce o n one o r a few s ignifi cant c usto m e rs, pa rtn e rs , s ubcont rac to rs a nd equipment m anu fac ture rs ; po te nti a l co nt ractu a l a nd o perati o n a l cost s re la ted to o ur e n v ironm e nt a l a nd infrastruc ture o p erati o n s; ri s ks a ssoc iate d with o ur inte g rated e nv ironm e nt a l so luti o n s bus in esses; re puta ti o n a nd finan c ia l e x posure du e to the fa ilure o f our pa rtn e rs to pe rform th e ir contrac tu a l o bliga ti o ns ; • th e pres ence of compe titors w ith grea te r finan c ia l re so urces a nd the impact o f co mpe titi ve techn o logy, p ro du c ts , serv ices a nd pri c ing ; • weakn ess in o ur stock pri ce mi g ht indi cate a de cline in o ur fa ir value requiring us to furth e r e va lu a te w hether o ur good w ill h as b een impaired; th e in a bility to attract a nd re ta in qua lifi ed pe rsonn e l, includin g key m e mbe rs ofour m a nage me nt ; 29 Tab le of Content s wo rk sto ppages a nd o th e r la bo r problem s in c luding uni o n contracts up fo r coll ec ti ve ba rgainin g; po tent ia l p rofess io na l lia bility , prod uc t liabi lit y , warra nty a nd o th e r po te nti a l c la im s, w hi c h may no t be covered by insura nce; unavo idab le de lay s in o u r project e xecu t io n d ue to w eather co ndit ion s . includin g hu rri can es a nd o t h er na tu ra l d isaste rs; c hanges in env iro nm e nt a l fac to rs a nd laws a nd regul ati o ns th at co uld in c rease o ur co st s a nd li abiliti es a nd a ffect the de ma nd fo r o ur se rvi ces; htt p ://inve stin g .bu sin es swee k.com/resea rch/stock s/fin anc ials/dra wFilin g .asp?formT y pe= I O-Q[5 /l 2/20 IO I :27 :55 PM] SHA W G ROU P INC (Fo rm : I 0-Q, Rece ived: 04 /07/20 IO 17:08:20) th e limita ti o n or m od ifi cat io n of th e Price -A nd e rson Act 's in dem nifi cati on a ut ho rity; o ur de pe nd e nce o n tec hn o logy in o ur o p erati o n s a nd th e poss ib le im pac t o f syste m a nd in fo rm a ti o n tec hn o logy interru pti o ns; co mpli a nce w ith laws a nd reg ul a ti o n s re la t ing to o ur g lobal operation s a nd o ur tec hn o logies; • protec ti o n a nd va lidity of pate nt s a nd o th e r inte ll ectu a l p ro perty ri g ht s; r isk s related to o ur In vestm en t in Wes ting ho use; c ha nges in th e esti m ates a nd ass um p t io ns we u se to prepare o ur fin anc ia l sta te me nt s; o ur use of th e p e rcent age -o f-compl e ti o n acco unting m eth o d ; c ha nges in o ur liqu id ity pos iti o n a nd/or o ur a bility to m a int a in o r in c rease o ur lette rs of c redit a nd s ure ty bo nds o r o th e r m ea ns o f c redit s uppo rt o f p roj ec t s; o ur a bil ity to obta in wa ivers o r a me ndm e nt s w ith o ur le nd e rs o r s ureti es o r to co ll a te ra li ze le tt e rs of c redit o r s urety bo nd s upo n no n-co mpli an ce w ith covena nts in o ur c redit fac ility o r s ure ty ind e mni ty ag reem ent s; covena nt s in o ur Restate d C re dit Agree me nt that restri ct o ur a bility to purs ue o ur bu s in ess stra tegies; our ind e bte dn ess, w hi ch could a dversely affect o ur fin a nc ia l cond iti o n a nd im p ai rour a b ili ty to fulfill o ur o bli gati o ns unde r o ur cred it fac il ity; o utcom es of pe ndin g a nd future liti gati o n ; impact of recently passed leg is la ti o n o r o utcom es of p e nding a nd future reg ul a to ry acti o n s; downg rades o f o ur d e bt sec urities by ratin g agenci es; • fo re ig n curre ncy flu ctu a tion s; o ur a bili ty to s uc cess full y ide ntify, integrate a nd co mpl e te acqui sitio n s; li a bilities a ri s ing fr o m multi-employer plans ente re d into by a ny ofour s ub s idiari es; a d ete rmin ati o n to w rite -o ff a s ig nifi cant a mo unt of inta ng ibl e asset s o r lo ng -li ved assets; c ha nges in th e po liti cal a nd econo mi c conditi o n s o f th e fore ig n co untri es w h e re w e o p e rate; s ig nifica nt c ha nges in th e m ark et pri ce of o ur equity securiti es; p ro v ision s in o ur articl es of in co rp orati o n , by -l aw s a nd sha re ho ld e r ri g hts agreement th a t could m a ke it mo re difficult to acquire us a nd m ay reduce th e m a rk e t pri ce o f o ur co mm o n stock ; 30 Ta ble of Conten ts the abi l ity of our custo m ers to obtain fi na nc in g to fund th eir projects; the abi li ty of o ur c ustomers to receive o r th e poss ibi lity of our c usto m e rs be in g de layed in rece iving t he app li cabl e regu latory and environmental ap provals, particu la rl y with projec ts in our Fossi l, Renewables & Nuclear segment ; and th e U .S. a dmin is tra t io n·s s uppo rt of th e nu c lear power o pti o n a nd loan g uarantee program . O th e r fac tors th at co uld cause o ur actu a l res ults to diffe r fro m o ur proj ected results a re d escribe d in (I) Pa rt 11 , It e m I A a nd htt p://in ves tin g .bu s in esswee k.co m/research/stoc ks/fi nancia ls/dra wFilin g.as p?fo rmTy pe=l O-Q[5 /l 2/20 IO I :2 7:55 PM] ';HAW GROUP INC (Form: 10-Q , Recei ved: 04 /07 /2010 17 :08 :20) e lsewhere in thi s Form 10-Q, (2) our 2009 Form 10-K , (3) our reports and registration sta tements fil ed and furnished from time to time with the SEC a nd (4) other a nn o uncements we m ake from time to time . Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of th e date hereof. We undertake no obligation to publicly update or rev ise any forward-loo king statements after the d a te they are made, whether as a re su lt of new in formation, future events or otherwise. ITEM 2. -MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following section di sc us ses our finan c ial pos ition a t February 28, 20 I 0, a nd the re s ult s of o ur operations for the three and s ix months ended February 28, 20 I O and Febru ary 28 , 2009, and shou ld be read in conjunction with: (I ) the unaudited consolidated fin a nc ia l statements and notes contained herein , a nd (2) the consolidated finan c ial statem e nt s a nd accompanying notes to our 2009 Form 10-K . We report our fin anc ia l results us ing August 31 st as our fisca l year end. Accordingly, o ur fi scal quarter end dates are as follows : First Quarter Second Quarter • Third Quarter • Fourth Quarter General Overview November 30th February 28th May 31st August 3 1 st We are a leading g lobal provider of technology , engineerin g, procurement, construction, maintenance, fabrication, manufacturing, consu ltin g, remediation and faci liti es management services. We provide our services to government and private sector clients in the energy, chemicals, environmental, infrastructure and emergency response markets. Our clients include regulated electric utilities, independent and me rchant power producers, multi-national oil companies and industrial corporations, government agencies and equipment manufacturers. Through organic growth and a series of strategic acqui sitions, we have significantly expanded and diversified our expertise and service portfolio . We are organized under the following repo rt a ble segments : • Fossil , Renewables & Nuclear • Maintenance • Environmental & Infrastructure (E&I) E nergy & Chemicals (E&C) Fabrication & Manufacturing (F&M) In vestment in Westinghouse Corporate Fossil, Renewab /es & Nuclea r Segment Our Fossil , Renewa bl es & N uclear segm e nt pro v ides a ran ge o f serv ices , in cl uding d es ign , e ngineering, constructi o n , p ro cure ment, tec hn o lo gy a nd con s ultin g se rv ices. primarily to the fo ss il , ren ewabl es a nd nu c lear power g ene ra ti o n indu stries. 3 1 Nuclear Power Generation. Approximately 20% of the electric power generated in th e U.S. is from nucl ear power pl a nt s. We prov ide a wide range of technical services to meet the demands of thi s growing sector, including engineering, d esig n, procurement, 1tt p://inve stin g .bu sin ess week.com /research/stock s/financial s/drawFiling.asp?formType= I O-Q[S/12/20 IO I :2 7:55 PM] SHAW GROU P INC (Form: I 0-Q , Receive d : 04 /07/2 0 I O 17:08:20) con struc ti o n and p rojec t m an agem e nt th a t s up port th e do m esti c a nd int e rn a ti o na l nu c lear power m ark e ts. We h ave b een award ed a t ec hn ica l se rv ices cont rac t fo r fo ur A P I 000 nu c lear power unit s in th e Peo pl e's Re publi c of C hin a (Chin a) a nd three E PC contracts to b u ild s ix dom es ti c A PI OOO units -t wo eac h fo r Georgia Power, So uth Carolina E lectri c & Gas a nd Progress E nergy. We recentl y reache d severa l inte rn ati o na l mil esto nes incl ud ing s upervis in g th e pl aceme nt of th e fir st n uc lear conc re te a nd m ajo r stru c t ura l m odul es at th e world 's fir st A P I 000 nu c lear power pl a nt s a t t he San m e n a nd Ha i yang nu c lear power pl a nt s in C hin a 's Z h eji a ng and S ha nd o ng p rov in ces . In additi o n to th e contrac ts we h ave b een awa rd ed in th e a rea of n ew pl a nt co n stru c ti o n, we are recogni zed in th e power indu stry fo r im prov in g th e effic ie ncy , capacity o utpu t a nd re liab ility of existin g nu clear p la nts th ro ug h uprate proj ects . T hese upra te p rojec ts a re carbon ne ut ra l a nd re present a com pet it ive cost a lt e rn ati ve to n ew pl a nt co nstru cti o n a nd w ill continu e to be a n important com po ne nt in th e expansion of d o m estic powe r gene ration . Whil e it is uncl ea r w ha t impac t c urre nt econo mi c cond iti o n s m ig ht h ave o n th e timin g o r fin a nc in g of s uc h proj ec t s, th e February 20 10 a nn o un ce m ent th at th e De partm e nt of E ne rgy (DOE) h as o ffe red conditi o na l loan g uarant ees fo r th e con stru cti o n of th e t wo new A PI OOO nucl ear reacto rs fo r Georg ia Power re present s a cont inu a ti o n of th e cu rrent U.S. admini strati o n 's s uppo rt fo r restarti ng the do mesti c nu clear indust ry . W h ile it is too earl y to projec t w he th e r a nd w hen add iti o na l loan g uarant ees mi g ht be issue d , we beli eve th at th e O ba m a Admin istrat io n 's s u ppo rt of nu c lear d evelo pm ent com b ined w ith o ur existing b ase of nu c lear se rv ices work a nd o ur coll aborati o n w ith W estin g ho use sho ul d positi o n u s to cap ita li ze on w ha t we be li eve to be th e lo ng-te rm growth pros pects fo r thi s indu stry. Clea n Coa l-Fired Ge nerati on . A pproxi m ate ly 45 % of e lectri c power generate d in th e U .S . is fro m coal-fi red power pl a nt s, a nd th e U.S. has s ig n ificant coal reserves. E lectri c power com pa ni es in th e U.S. h ave hi sto ri call y purs ued con stru cti o n of new coal- fire d power pl a nt s, because, a ltho ug h coal-fired capacity is cap ita l inte ns ive to build , it genera ll y has re la ti ve ly lower o pe ra tin g costs as compa red to oth e r foss il fu e ls. Recentl y, however, unc erta inty s urro unding po te nti a l regul a ti o n s ta rgetin g carbo n e mi ss io ns, as well as the g lo ba l econo mi c d ownturn a nd low na tu ra l gas pri ces, have caused th e deve lo pm e nt o f coal a nd o th e r solid fue l-fired power pl a nt s t o s low s ig nifi cantl y. N eve rth e less, we b e lieve th at coal w ill continu e to be a s ig nifi cant compo ne nt o f futur e do m estic e nergy gene rati o n , a nd we inte nd to continue positi o n ing o ur reso urces to ca pture a s ig nifi cant m a rk et sha re o f a ny new build , re tro fit o r ex p a nsion p roject s. A ir Quali ty Co ntr ol (AQC) . O ur A Q C bu s in ess in c lud es d o m esti c and inte rn ati o na l ma rk e ts fo r flu e gas d esulfuri zati o n (FG D) ret ro fit s, in sta ll ati o n of m e rc u ry e mi ss io n contro ls , fin e -pa rti c le po lluti o n co ntrol , car bo n capture a nd se lecti ve cata ly ti c re duc ti o n (SC R ) p rocesses used a t ex ist in g coal-fired e lectri c power pl a nt s. We be lie ve we a re th e m a rke t lead e r fo r do m esti c E PC FG D p rojects . Vo lum e in o ur A Q C bu s in ess is heav il y d e pe nd e nt o n po lluti o n-cont ro l regul a ti o n a nd m any o f o ur c urrent A QC cli e nts have compl e ted , o r wi ll soo n co mpl ete, projects th at w ill e na bl e t he m to m eet c urre nt a ir qu a lity sta ndards. As th ese proj ect s are compl e te d , we are expe ri e nc in g a de lay before utilit ies m ove forwa rd w ith projects a s a res ult o f th e pe nd in g regul ati o n di sc ussed b e low. Ex is tin g U .S. governm e nt a nd sta te e nv iro nm e nta l A Q C regul ati o n s h ave dri ven th e need to retro fit ex is tin g q>a l-fired power pl a nts w ith m odem po lluti o n-control equipm e nt. In Jul y 2 0 0 8 , th e D .C . Ci rcuit Court o f A ppeals iss ued a n o pini o n in No rth Caro lin a v. E nv iro nm enta l Prot ecti o n Agency (EPA), vacatin g a nd re m a ndin g th e C lean A ir Inte rs ta te Rul e (CA IR), a po lluti o n re ducti o n p rogram d es ig n ed to re du ce power p lant e mi ss io ns th ro ug h vari o us ai r qua lity sta nd ards. As a res ult o f t he Court 's d ecis io n, th e c urrent CA IR st a nda rd s re m a in in p lace un t il th e E PA m akes mo difi cati o ns . T h ese rulin gs p rovi de som e tem po rary stabili ty to th e e mi ss io n standards. A lth ough th e EPA is req ui re d to revise th e c urre nt CA IR rul e a nd th e sta tu s of a ny new e m iss io ns legislati o n re m ai n s und ec ided, we a nti c ip a te th at th e rev ised CA IR rul e a nd a ny future CA IR-re la ted leg is la ti o n w ill con ti nu e to im pose strin gen t req uire m e nt s o n a ir emi ssio ns, w hi c h is expected to have a posi t ive effect o n fut u re d e ma nd fo r o ur AQC servi ces. Mercury emission controls and the SCR process for nitrogen oxi de e mi ssio n controls and A Q C serv ices a re in continued dem an d . We believe th e domestic market for bo th th ese serv ices could in c rease if the cu rrent federal and sta te gove rnment trends towa rd in creased regul at io n continue, a nd we be lieve there will be se lec t intern a tional m a rket s fo r purs uin g the SCR a nd fin e particle co ntrol work . 32 Table of Co nt en ts http ://in ves tin g.b usinessweek.com/research/stocks/financia ls/drawF ilin g .as p?fo rm Ty pe= I O-Q [5/ 12/20 I O I :2 7:5 5 PM) ';HAW G ROU P INC (Fo rm : I 0-Q, Rece ived: 04 /0 7/20 I O 17:08:20) Gas -Fired Ge nerati on . A pprox im at e ly 23% o f th e e lectri c po w e r gen erated in th e U.S . is ge nera ted fro m natura l gas-fi re d po w er pl ant s. We continu e to o bserve re ne w ed inte re st in gas -fired e lectri c generati o n as e lectr ic ut iliti es a nd independ e nt power producers look to d ivers ify th e ir opt io ns. In many states, recent initi at ives to red uce car bon diox ide a nd o th er g reenho use gas emi ss io ns a nd imme di ate de m a nd fo r a dditi o na l e lectri c power generati o n ca pac ity have stimul a ted re ne we d d e ma nd fo r gas-fire d power pl a nt s. Gas -fired p lants genera ll y a re less expe ns ive to construc t than coal-fired a nd nu c lear power pl a nts but te nd to have co mpa ra ti ve ly h ig her a nd po te nti a ll y mo re vo latil e o peratin g costs. In additi o n, gas-fir ed generati o n has th e potent ia l to compl e m e nt w in d, so lar a nd o th e r a lt e rn ati ve ge nerati o n faci liti es because gas-fi red faci lit ies can be bro ug ht o n-line qui c kl y to sm ooth th e inhe re ntl y vari a bl e generati o n of th ese a lte rn ati ve e n ergy sources. We ex pect power pro ducers to in crease capita l spendin g o n gas-fired power p la nts to ta k e a d vantage of recent lower na tural gas pri ces a nd th e pros pect th a t th ese pr ices m ay re ma in low fo r some tim e because o f gas fi e ld develo pme nt p rojec ts in th e U.S. as we ll as po te nti a l lique fi ed na tura l gas (LNG) impo rt s. A lth o ug h th e e ffect o f c urre nt econo mi c conditio ns o n th e timing o r fin a nc in g of s uc h proj ect s is un c le a r, we expect th at gas -fi red power pl ants w ill continu e to be a n impo rta nt compo ne nt in th e develo pment of lo ng -term power gene rati o n in th e U .S. a nd int e rn ationall y. We be li eve o ur capabi lit ies a nd expe rti se positi o n u s we ll to capi ta li ze o n o ppo rtuniti es in thi s m a rk et. Re newable Energy Ge nerati on . A pprox im ate ly 4 % of th e e lectri c po w e r generated in th e U.S is fr o m re newabl e so urces s uc h as bi o m ass, geoth e rm a l, sola r , w ind . W e a re acti vely purs uin g intern a ti o n a l a nd d o m esti c projects us in g a varie ty o f re newable e ne rgy techn o logies, in c ludin g geoth e rm a l, bi o m ass a nd solar. A lth o ug h th e c urre nt econo mi c c lim ate a nd un cert ai nty o f c lim ate - cont ro l leg is la ti o n have s lowed d evelo pm ent of m any o f th ese p roj ects, we be li eve re newabl e e n e rgy p rojects w ill li ke ly be a s ig n i fi cant pa rt of th e e ne rgy m ark e t in th e n ea r futur e. Maintenance Segment O u r M a inte na nce segm e nt is a m a rk e t lead e r, prov iding a full ra nge o f integrated asset life cycle capa bil iti es th at compl e me nt o ur power a nd process indus tri a l E PC serv ices. We p rovi de cli e nts w ith re li a bili ty e ngi neerin g , pl a nt e ng in eer ing, turn aroun d m a inte na nce, re fu e lin g o utage m a inte na nce, ro utin e mainte na nce, m o d ifi c a ti o ns, capita l construc ti o n, off-s it e m o dul a ri zati o n , offsho re fabri cat io n , s uppo rt a nd s pecia lty services. W e p e r fo rm serv ices to res to re, re build , re pa ir, re novate a nd m o di fy indu strial fa c iliti es, a s well as offer p redi c t ive and prevent a ti ve m ai nte na nce. W e o ffe r compreh e ns ive serv ices to cli e nts in combin ati o ns th at in c rease capac ity , re duce exp e nd itures a nd o ptimi ze c ost to e na bl e th e hi g h est re turn o n c riti cal p ro duc ti o n assets w ithin th e ir fa c iliti es. M a inte na n ce segm e nt serv ices a re p rov id ed at c li e nt wo rk s ites lo cated prim aril y in North America. Nuclear Plant Maintena nce and Mo dificati ons. The re a re curre ntl y 104 o perating nuc lear reacto rs in th e U.S. re qui r in g e ngi neerin g, m a inte na nce, a nd m od ifi cati o n serv ices to s uppo rt o pe rati o n s, pl ant refue lin g o ut ages, exte nd life/li cen se, upg ra d e m a te ri a ls, in c rease c apac it y uprates and improve pe rform a nce. We prov ide syste m-w ide m ai nte na nce a nd m o difi cati o n serv ices to 36 o f th e I 04 o pe ratin g d o m esti c nucl ear reacto rs. We concentrate o n compl icated , no n-commodity p roj ects in w hi c h o ur hi sto ri cal ex pe rt ise a nd proj ect managem e nt skill s a dd valu e . In a dditi o n to s uppo rtin g ope ra ti o ns a nd improv in g pe rform ance at e x istin g comm e rc ia l nuc lear power pl ants , w e be li eve we can further ex pand in pl ant resta rts , u p rat e -related modifi cati o ns a nd n ew pl a nt constru cti o n . Foss il Plant Mainte nance a nd Modificati ons . We offer foss il pl a nt m a inte na nce serv ices fo r e ne rgy gene ra ti o n fac iliti es in North Am e ri ca. O ur nu c lear re fu e lin g o utage ex perti se , pa ire d w ith o ur constru cti o n pl annin g a nd executi o n skill s, g ive us th e a bili ty to ex p and in to thi s m a rk et as e ne rgy d e ma nd in c reases. Chemi cal Plant/Refinery Ma intenance and Capital Co ns truction. W e h ave a continuo us presence in vario u s U.S. fi e ld locati o ns serv in g a lt e rn ati ve e ne rgy, pe troche mi cals, specialty c hemi cals, o il a nd gas, m anu fac turing a nd re finin g m ark e ts. O ur Mai nte n a nce segm e nt a lso in c lu des a cap ita l con stru cti o n compo ne nt serv ing a varie ty of c usto mers in var io us ind u stri es, incl udi ng exist ing che m icals a nd petroc h e mi cals c lie nts as well as power c ustomers. O ur construct ion scope inc lu des const ructa b ili ty reviews , c ivi l and concrete work, s tructu ral s tee l erection , e lectrical and inst rumentat io n, mechani cal and pip ing sys tem e rection. In addi ti o n to ou r varied s pectrum of maintenance and construction work, we have a strong resume of subs tantial rebuild proj ects. We s uccess fully mobili ze resources under demanding clie nt deadlines to rebuild and re store faci lities damaged by natural disasters o r catastrophes . Our s uccessfu l project completions include m ajo r petroc hemicals, nuclear power, natural gas processi ng and refining facilities in the Gulf Coast re gio n. 33 ttp ://in vest in g.b usi nesswee k.com/resea rch/s toc ks/fi na nc ials/drawF ili ng .as p?fo rm Ty pe= I O-Q [S/12/20 I O I :27:55 PM J SHA W G ROUP INC (For m: 10-Q, Rece ive d : 04 /0 7/20 10 17:08 :2 0) E&I Segment O ur E&I segm ent p rov id es engin eerin g , des ig n a nd co nstru cti o n , constru cti on m a nage me nt , regul atory , sc ie ntifi c , logisti cs s u p po rt , o perati o ns a nd m a inte na nce a nd program m an age m e nt se rv ices to bo th comm e rc ia l c li e nts a nd U .S . fed era l, sta te a nd loca l governm e nt cli e nt s. O ur sta ff is strat egicall y pos iti o ne d th ro u gho ut th e U.S . a nd a b road to prov id e full-serv ice so luti o ns to c li e nt s fac in g com p lex e nviro nm e nt a l a nd in fr as tru cture c h a ll enges. Pr ogram Ma nage ment . W e oversee la rge U.S . fe d era l, sta te a nd local governm e nt prog ra m s including capit a l improve m e nt , e m e rge ncy respo nse a nd di sast er recovery projects a nd program s, as we ll as pri vate secto r comme rcial p rogram s . In do in g so, we impl e m e nt th e necessary pl a nning, m a nageme nt and o rgani za ti o na l acti v iti es a nd tec hni cal serv ices, w ith qua lity a nd sa fe ty in mind . W e ty pi ca ll y staff p roj ect s w ith a full com pl e m e nt of ex pe ri e nced professio na ls, p rov id e o ur c li e nt s w ith a s in g le po int of cont ac t a nd m a nage a ll admini stra t ive duti es re qui red fo r each job . Our int egrate d bu s in ess t eam s wo rk togeth er to p rov id e ex pert ise across a ll bu s in ess lin es a nd cons ist e ncy th ro ug ho ut eac h prog ra m. Des ig n-Build. We execute a ll d esig n-build ph ases us in g o ur profi c ie nc ies in e ngi neerin g , d es ig n , o pe rati o n s, con struc ti o n a nd constru cti o n m anage me nt fo r la rge infras tru c ture proj ects. Our c urrent hurr icane protecti o n p roj ect in New Orl e ans, Lo u is ia na, is th e la rgest d esign-build do m esti c civ il wo rk s p roj ect ever unde rt a ke n by th e U.S. A rm y Corps of Eng in eers (US A CE). A lso, th e U.S. DOE cont racte d u s, throug h o ur j o int ve nture Sh aw A reva Mox Serv ices, LLC, to des ig n , li cense a nd co n stru ct th e Mi xed O x id e (MO X) Fue l Fabri cat io n Fac ili ty in A ik e n, So uth Carolin a , a fir st-of-a-kind fac ili ty in th e U.S . to p rocess wea po n s -grade pluto nium into nu c lear fue l. As p a rt of o ur s us tai na bility effort s, we h e lp o ur c li e nts achi eve Lead e rs hip in E ne rgy a nd E n v iro nm e nta l Des ign certifi cati o n fo r fac iliti es by us in g g reen buildin g p racti ces. W e continu e to d eve lo p e ng in eerin g , des ig n a nd constru cti o n st ra teg ies to prom o te th e use of s usta in a bl e d evelo pme nt t ec hn iques. Some of th ose strateg ies include ret ro fitt ing buildin gs fo r e nergy e ffi c ie ncy a nd weath er izin g stru ctures, w ith th e goal of p rov idin g a re turn o n in ves tm e nt fo r o ur c li e nts. Environm ental Remediati on . W e h ave e xte ns ive expe ri e nce in e nv iro nm e ntal re m edi ati o n fo r bo th governm e nt a nd pri vate- secto r c li e nts, including th ose in the c he mi cal, e ne rgy , real e s tate, m a nu fa cturing a nd tran s po rt a ti o n fi e ld s . W e h av e exec uted m a ny compl e x re m edi ation a nd resto ra ti o n projects for the U.S. governm e nt, in c luding re m e di ating military bases wi th un ex pl o ded o rdn an ce exposure a nd residu a l fu e l a nd c hemi cal co nta mina t io n , as well as fo rm e r nu c lear weapo ns p ro ducti o n a nd ato mic testin g s ites. Our t echno logical capa bilities s uch as laboratory assessm e nts , fi e ld-tes tin g a nd a na lys is s uppo rt a wide ran g e o f c li e nt need s, includin g but not limited to g roundwate r m o de lin g, co nta mina nt tran s po rt a nd so il washin g . W e ho ld p ate nt ed tec hnol ogies in th e bi oaug m e ntati o n fi e ld , impleme ntin g microbi a l c ulture techniques to re med iate cont a min at ed groundwat er , a nd s pearh eadin g the us e of ozone, a comm o n e le ment in th e earth 's a tm osph e re, to e limin a te o rga ni c conta min a nt s . Coas tal, Mar itim e and Na tural Reso urce Des ign and Res torati on . W e prov id e e ngi neerin g a nd d esign servi ces, including nav ig ati o n, se dim e nt m ana g e m e nt, po rt and wate rway d evelo pm e nt, coasta l e ng inee rin g , en v ironmenta l se rvi ce s, levee d evel o pm e nt a nd co n stru c ti o n , sho re lin e protecti o n a nd restorati o n a nd m a rin e security. We pe r fo rm wetl a nd co n stru ction , miti gati o n , resto rati o n a nd re late d work fo r cli e nt s aro und th e wo rld. We a re in vo lved in proj ects gen erated by the C o asta l W etl and s Pl a nn ing Pro tecti o n a nd Restorati o n A ct, w hi c h p rov id es fe de ral fund s to resto re a nd conse rve coasta l wetl a nd s and ba rri e r is la nds. Tr ansp ort ati on and Ge neral Infrastru ctu re. W e o ffe r p rogram m a nage m e nt fo r infras tru c ture proj ects re la t ed to t ra ns po rta ti o n, water and wastewate r syste m s. W e offer a full ra nge of t echni cal a nd m a nagem e nt serv ices to d esig n , plan , eng ine e r, constru ct , re novate, o pe ra te a nd m a int a in hi g hways, ra il ways, tran s it syste m s, wate rways a nd a irpo rt s. We prov ide a irpo rt-re lat ed serv ices fo r run ways, tax iways, apron s, t e rmin a ls a nd co nco urses. B ri dge a nd road work , t ra ns it a nd hi g hway tunnel s, p a rkin g struc tu res a nd ve h ic le m a int e na nce fac iliti es a re a lso in cl ude d in o ur b road scope of serv ices. Large U.S . muni ci pa l agenc ies s uc h as th e New Y o rk C ity De pa rtm e nt of En v iro nm e nt a l Pro tecti o n a nd th e San Fra n c isco Publi c Utiliti es Commi ss io n have e ngaged u s fo r m ajo r water infrastruct u re needs, w h ich in c lud e water system improvem ent s a nd wastewate r serv ices suc h as pl a nni ng, coll ection and treatment, as well as p lant con struction services . Additionall y, we execute ur ban planning projects and provide clients with a lo ng-term v is ion th a t supports v iable growth opportunities for th e ir region . Other Federa l Senic es . We offe r program management, o peration s, engineering des ig n, construction, consu lting a nd techn o logy -based so luti o ns to help va ri o us U.S . gove rnment clients including DOE, USA CE , the Depa rtment of Defen se (DoD), the E PA , Federal Tran s it Administration (FTA) a nd Federal Emergency Management Agency (FEMA) meet goals and manage c h a ll enges associated wi th t he operat io n of large federa l faci lit ies and programs . Our core se rv ices incl ude e nv iro n men ta l remed iat io n and restorat io n , regul a tory com p lia nce, fac il iti es ma nagement and operations a nd emergency res po n se services. E n viro n menta l restorat io n acti vi ti es sup po rt c lien t compli a nce w ith govern men t requ ire m ent s suc h as t he Com p re he ns ive E nvironmenta l Respo nse Compensat io n and Liability Act, a lso k nown as the Superfund law, a nd th e Re so u rce Conservatio n and Recovery Act. Addit io nal ly, we s upport o ur clients' efforts to comply with Clean Water Act , C lean A ir Act a nd Toxic S u bs ta nces Cont ro l Act req uire me nt s. We a re a s ig n i fi cant service provider fo r U.S. gove rnm e nt operati o ns a t th e EPA Test a nd Eva lu a t io n fac ility and o th er Nat io na l Ri sk Ma nagem e nt Researc h Labo ratory fac il iti es , w he re we prov ide operati o na l s up po rt a nd researc h serv ices . htt p://in ves tin g .busin esswee k.co m/resea rch/stoc ks/fi na nc ials/draw Filin g.as p?fo rm Ty pe=l 0-Q [5 / 12 /20 IO I :2 7:55 PM] ~HAW G RO U P IN C (Form: I 0-Q , Rece ive d : 04 /07 /20 10 17 :0 8:20) 34 • Table of Contents E&C Segment Our E&C segment prov ides a full range of project-related services including proprietary techn o logy , project m a nage ment, engineering, procurement, construction, commissioning/start-up and consulting to the oil a nd gas, refining, a nd petrochemical industries globally. Our a bility to deve lop, de s ign , commercialize and integrate a wide range of process techn o logies a nd perform projects th at ra nge from s m a ll consulting studies to large E PC projects differe ntiate us from many of o ur competitors. From o ur m a in offices in Houston , Texas; Baton Ro uge , Louisiana ; Cambridge, M assachu setts ; Toronto, Canada; Mumbai , India and Milton Keynes, Eng la nd , we d e li ver services through fi ve maj o r bu s in ess lines : ethylene, petrochemicals, refi nin g , upstrea m and co ns ultin g. While the current global economic climate has impacted E &C segment 's pros pects in th e short-term , as the economy reco ve rs, we a nticipate that ex penditures by our m ajo r o il and petroc hemical clients will begin to return to prior leve ls. Ethylene. One of Shaw's core proprietary technol ogie s is eth y len e process technology . Eth y lene is an o le fin that serves as a base chemical of the petrochemical indu stry. Since our fir st ethylene plant was built in 1941 , we have design ed and/or built mo re than 120 grassroots units , which prov ide a s ignific ant portion of the world 's ethylene supply. Produced by the steam cracking of hydrocarbo n fe ed stocks, ethylene and its co-product, propylene, are key building blocks for other petrochemicals and pol y mers. T he economic s lowdown and the large amount of ethylene currently entering the market from recentl y c o mplete d projects have contributed to reduced de m a nd and the delay of many planned projects . Exception s are in the Middle Eas t, where economic projects a re generally proceeding becau se of the availability of low-cost feed stock , a nd C hina, which seems to be affected less by the slowdown than other regions. W e believe the delay in new, grassroots project activity will be somewhat offset by opportunities to revamp existing facilities as owners seek to maximize producti v ity . We anticipate that debottleneck and revamp projects a nd technol ogy upgrades may result in additional opportunities over the next several years. Petro chemicals. The economic downturn has resulted in a decrease in global demand for dura ble goods made from petrochemica ls a nd a corres po nding decline in production a nd new con struction . Ho wever, we ex pect that Middle Eastern a nd Chinese cli e nts may continue to focus on strategic plans and in vestments . In the rest of Asia, we anticipate that in vestments m ay ramp up as the economy recovers. We also ex pect that the Middle East 's dema nd for pol y me rs may increase, especially for specialty commodities and e ngineering plastics . With our portfolio of technol ogies in pol ysty rene, acrylonitrile butad ie ne styrene (A BS), intermediate polycarbo nates and others, Shaw is well positioned to participate in the ex pected economic upturn . Additional opportunities may arise as m ajo r oil and petrochemical companies look for ways to integra te their refining and petrochemica l facilities to improve profitability. We have exte nsive expertise in the de s ig n and construction of e th y lene and downstream deri vati ve pl a nt s, which provi d e the so urce of m a ny higher va lue c hemical products used to produce packaging, pipe, polyeste r, antifreeze, electronics a nd tires -a ll v ital produc ts in today 's market. Refining. Demand for technology and se rv ices in th e petroleum refi nin g indust ry h as been driven primarily by our c li e nts' requirements to proc ess heav ier, poorer quality feed stocks into a variety o f li g hter, clea ner pro du c ts . Ada ptability a nd inc reased fle x ibility a re key as refin e rs around the wo rld co ns ider ex pa nding beyond th e ir tra diti o n a l fuel s m a rket by inte g rating th e ir fa c iliti es wit h petrochemica l o pe ra ti o ns . In the las t y ear, the refining sector s lowed with the e cono mic downturn, a nd s hrinking m a rg ins led to reduced inv estments. The Middle East appea rs to be the strongest regi o n for future growth , where o il producers a re s triving to own more of the s upply chain by al so exporting fini s hed oi l products a nd even petrochemicals. In th e U.S., refinery utili zation is decreasing, but reconfigura ti on of refin e ri es to produce c leaner fuels a nd m eet env ironm e nt a l legis la ti on may create n ew opportun it ies for our serv ic es. In E urope , we expect strong diesel demand to drive in ves tm e nt d ecis io ns . Shaw's lluid cata lyt ic cracking (FCC) techno logy, jointl y lice nsed w ith our in ternati o na l partner, remains a key technology in new refineries being built arou nd the wo rld , primarily due to th e FCC's abi lity to boost production of gaso lin e and polymer-grade p ro py lene . This sa m e tec hn o logy is being used to enhance th e pe rforma nce of existin g assets th ro ug h it s ab ility to process poorer qu a lity feedstocks, increase capacity and improve product y ields , qu a lity a nd energy efficiency. Modifications, or revamps , of http://investing.bu s in ess week.com /research/stock s/fi nanci als/drawFiling.asp?form Type= I 0-Q[ 5/ 12/20 IO I :27 :55 PM] SHA W GROUP IN C (Form: 10-Q, Re ce ived : 04 /07/2010 17:08 :20 ) existing FCCs to incre ase refin ery profit marg in s may res ult in o ppo rtuniti es in the U.S. a nd Europe, where most of th e world 's catalytic crac kers are located . 35 Table of Contents In addition to FCC, Shaw offers related technol ogies including dee p catalytic cracking (DCC) and catalytic pyrolysis process (CPP), which boost production of ethylene and propylene. The recent popularity of these technologies is driven by the growing global trend towa rd integra ting refineries and petrochemical facilities. Ups tream . Our up stre a m di v is ion bu s iness has bee n s uccessful in winning project ma nage me nt consultancy (PMC) work in the offshore sector a nd is currently purs uin g additional onshore o pportuniti es in the Middle Eas t. In respon se to the rising global demand for liquefied petrol e um gas (LPG), production is forecast to increase dramatically by 2012 , primarily in the Middle Ea st and North Africa. We are active in this market, with recent awards for front-end engineering design (FEED) and detailed engineering services for a n LPG project in Algeria. Syngas (short for sy nthes is gas), a clean gas that can be used for power generation or converted to s ub stitute natural gas (SNG) or high value clean fuels has characteristics which make it an attractive future fuel source. Syngas can be produced through a number of processes including coal gasification and steam reforming of natural gas or liquid hydrocarbons . Syngas production may grow with rising demand for electricity and the pu sh for reductions in greenhouse gas emissions, especially carbon dioxide, and we believe we a re well pos itioned to participate in this growth. Co nsulting. We offer con s ulting services to the energy , power, process, petrochemical , refining and government market segments, as well as to the broader investment and financial community. Previously known as Stone & Webster Management Consultants, the business name was changed to Shaw Consultants Interna tional in 2009 . It originally was founded in Boston more than I 00 years ago. The global economic downturn has slowed the pace of new consulting engagements, as operating companies and the fin a ncial community experienced uncertainty regarding project finance availability and hy drocarbon a nd energy pricing. F&M Segment We believe our F&M segment is among the largest worldwide suppliers of fabricated piping systems. Demand for our F&M segment's products is ty pically driven by capital projects in the electric power, chemical and refinery industries. We provide support and work for both external clients and our internal business units. F&M provides pipe and structural steel fabrication for projects such as the E&I segment's DOE work a nd several of the Fossil , Renewables & Nuclear segment's power projects, as well as the E&C segment's largest current project. Our F&M segment is nearing completion on a new facility that will assemble mo dules for the construction of nuclear power plants. Pipe Fabrication . We fabricate fully integrated piping systems for heavy industrial clients around the world. We believe our ex pe rti se an d proven capabilities in furnishing complete piping system s to a g lobal ma rket have po s iti o ned us among the la rgest s uppliers of fab ri cated piping systems for power ge ne ra ti o n faci lities in th e U.S. an d wo rld w ide . Pipin g sys te m s are normally o n th e criti cal path sc hed ule for he avy industrial plants that convert raw o r feedstock materials to products and piping system int egrati o n accou nt s fo r a s ig nifi can t porti o n o f the tota l man -ho ur s associate d with constru c ting power generation, c he mi cal an d o th e r processing facilit ies . We fab ri cate complex piping system s using carb on s teel, stai nl ess, nickel , titanium and a luminum pipe . We fab ri cate t he pipe by cutting it to s pecified len g ths , welding fittings , flan ges o r other compo nents o n the pipe and/o r bendi ng t he pipe to preci se c lient s pecification s us in g o ur uniqu e pipe-bending technology . We be lie ve o ur S haw Cojafex indu c ti o n pipe -bending technol ogy is the most advanced , sophi st ic a ted a nd e ffi c ient pipe bending technology of it s kind. We utili ze th e Cojafex tec hn o logy a nd related equipment to bend carbo n steel a nd a ll oy pip e for indu s trial , co mmerc ia l a nd a rchitec tural a pplic ati o ns . De li ve rin g pipe bent to c lient s pecifications ca n pro v ide s ignificant sav in gs in labor. time a nd m ate ri a l costs compared to fi e ld fabr ic a ti o n a nd greate r strength than pipes a nd fittings welded togeth e r. Additionally , we implemented a robotics program th a t we believe re s ult s in increased productivity a nd qu a lity leve ls. By utili z ing robotics , as well as automated and se mi-automated welding processes and producti o n technology, we are able to pro v ide http ://in vestin g.business week .com/re se a rch/stoc k s/finan c ia ls/drawF ilin g.as p?formType=I O-Q[5/l 2/2 0 IO I :27:55 PM] ,HAW GROUP INC (Form : I 0-Q, Received: 04 /0 7/2010 17:08 :20) o ur c li e nts a compl e te range of fabrication serv ices. 36 Table of Contents We operate pipe fab ri cation facilities in Louisiana, A rkansas, South Carolin a , Uta h, Mexico a nd Venezuela a nd throu g h a joi nt venture in Bahrain . Our South Carolin a fac ility is certifi ed to fab ric a te pipin g for nucl ear e n e rgy pl ant s and m a intai n s a nu c lear piping America n Society of Mechanical Engin eers certifi catio n. Through s tru ctu ral st ee l fabrication, we produce custom fabricated steel components a nd stru c tures used in the a rchit ectural a nd indu stri a l markets. T hese stee l fabr icati o ns a re used fo r s uppo rting piping a nd equipm ent in buildings, c he mi cal plants , refineries a nd power generati o n facilities. Our fa bricati o n lin es utili ze sta nd ard mill-produced steel sh apes th at a re c ut, drilled, punched and welded into th e s pec ifi cati o ns requested by o ur c lients . We have structural stee l fabrication facilities in Louisiana a nd Mexico, which is o ur newest facility offering th e late st in advanced technology a nd efficiency for stru c tural st ee l fab ri cati o n . Ma nufac turing and Dis tribution. We o perate pipe fitting man ufac turing facilities in Louisiana a nd New Jersey. Products from these faci liti es ultimate ly are so ld to third-party operating pl a nts, e ngineering a nd construction firm s, as well as to our other business segm e nt s within the company. We m ai nta in an in ve ntory of pipe a nd pipe fittings enablin g us to reali ze greate r effic ie ncies in the purchase of raw materia ls, red uces overa ll lead tim es a nd lo wers total costs. We o perate di stributi o n centers in Louisiana, Texas, Georgi a a nd New Jersey that di stribute o ur products a nd produ c ts m an u factu red by third parties. Module Fac ility. We a re constructing and expect to begin o pe rations ofa m o dul a r fac ility in Lake C ha rles, Louisiana in the second half of the year. The S ha w Modular Solutions facility is be li eved to be th e first of its kind in the U.S . a nd will build m odul es for th e co nstru ctio n of domestic A P I 000 nu c lear power plants. T he new faci lity wil l utili ze o ur indu stry -l eading t echn o logies and o ur proprietary o perati o ns m a nagement system s . We h ave re ce ived o rders for the first s ix nucl ear reactors to be built do mestic a ll y in mo re th a n 30 years, all of which a re des igned to use APIOOO techno logy a nd w ill include m odul es fabricated in o ur Lake C h a rl es fac ility. Investment in Westinghouse Segment Our In vestme nt in Westinghouse segm ent includes a 20% equity interest in Westinghouse. We financed o ur Westinghouse Eq uity purchase from Toshiba parti a ll y throug h o ur s ubs idiary NE H issuing limited recourse to us (except NEH) JPY-deno min ated bo nd s. Westinghouse serves the domestic a nd international nuclear electric power indu stry by s upplyi n g adva nced nuclea r pl a nt designs, licensing, e ngin eerin g services, equipment, fu e l a nd a wide range of o th er produc ts a nd services to owners a nd o pe rato rs of nuclear power. We believe th a t Westinghouse products a nd serv ices are being used in approxi mate ly h a lf of the world 's o perating nu clear plants, including 60% of those in th e U.S. Int ern a ti o n a ll y , Westinghouse technology is being used fo r s ix reactors und e r construction in So uth Korea, a nd fo ur reactors und e r con stru c ti o n in C hina a nd is und er consideratio n for num ero u s n ew nu c lear reactors in multipl e cou ntri es. In co nn ectio n with o ur In vestment in Westingho use, we en tered in to JPY-de nominated Put Option Agreements with Toshiba (Put Option), providing u s the o ption to se ll a ll or part of ou r Westinghouse Equity to Toshiba during a defined "Exercise Period ." The Exerci se Peri o d commences upon the earlier o f M a rch 3 1, 20 I 0, o r the occurre nce of a "Toshiba Event " which is ca used by , am o ng other th ings, Toshiba fai ling to m a intain certain fin ancial m et ric s. T oshiba notified us o n May 11 , 2009. th at it experienced a Toshiba Event as of May 8, 2009, because it fai led to maintain a minimum co nso lidated net wo rth as defined in the Put Opti o n o f JPY 800 billion . Beca use of the Toshiba Event , the Wes tin g ho use Bond holders who fund ed o ur In vestment in Westinghou se currently have the opportunity, under certain circumstances, to direct us to exercise the Put Optio n . As of the date of thi s report, th e bo ndh o lders have not directed us to exerc ise the Put Opti on, and the compa ny has no knowledge of any intent to do so in the future . T he bondhold ers' direction to exerc ise the Put Option wou ld not affect Tosh iba's o r our obli gati o ns under the Westinghouse CRA , which provides us with certain exclusive opportuniti es to bid on projects where the company would provide E PC services o n future Westinghouse AP I 000 nuclear power plants and other co mmercial o pponunities such as s uppl y ing piping fo r those units . In Ju ne 2009 , Toshiba reported th at it raised approximatel y $3 .0 b illi o n in equity , w h ic h increased Toshiba 's net worth to an amo unt exceedi ng the minimum thres ho ld . Westin g ho use m a inta in s its accou nting record s for reporting to it s m aj o rity owne r, Toshiba, o n a calendar quarter basis wi th a http ://in vest in g.businessweek.com/re search/stocks/finan cia ls/drawFi l ing .asp?form Type= I 0-Q[ 5/ 12/20 IO I :2 7: 55 PM] SHA W G ROU P INC (Fo rm : 10-Q, Rece ive d : 04/07/20 IO 17 :0 8:2 0) M a rc h 3 1 fi sca l year e nd . F in a nc ia l in fo rm a ti o n a bo ut West ing ho u se's o perati o ns is ava il ab le to us fo r W estin g ho use's ca le nd a r qu a rt er pe ri o d s. 37 Table of Contents T h e Westin gho use segm e nt fin a nc ia l res ults co ntinu e to ex perien ce s ig nifi cant vo latility as a resul t o f th e e ffect o f fo re ig n currency exchange rate flu ctu a ti o ns o n th e va lu e o f th e W estin g ho use Bo nd s. The Westin g ho use Bo nd s a re JPY-de no min ated , limited reco urse to us (exce pt NE H) a nd , unde r GAA P, a re revalued for fin an c ia l re po rtin g purposes to US O a t th e excha nge ra te in effect o n th e last d ay o f th e qu a rt e r. Our o pti o n to sell th e W estin g h o u se Equity to T oshib a fo r a minimum a m o unt of JPY prov id es us w ith a na tura l he d ge again st flu c tu at io n s in th e excha nge rate assoc iated w ith th e Wes tin g ho use Bo nds. However, unlike th e Westin g ho use Bo nd s, th e Put O pti o n is no t revalu e d to c urrent exch a nge rates und e r GAA P . Conseque ntl y, at each qua rt e r e nd we recogni ze, for finan c ia l re po rtin g purposes, a loss o r gain o n th e revalu a ti o n o f th e W estin g ho u se Bo nd s base d up o n th e JPY/US D excha nge ra te th e n in e ffe ct but do no t recogni ze wh at wo uld be th e offsettin g gain o r loss o n th e revalu a ti o n o f th e Put O pti o n . As a result , o ur sta te m ent of o pe rati o ns fr e que ntl y conta in s s ig nifi cant earnin gs vo latility. Fo r a dditi o na l in fo rm a ti o n , see Note 5 -Equity Me th o d In vestm e nts and N ote 7 -De bt a nd Revo lv in g Lin es of C re dit included in Pa rt I, It e m I . -F in a nc ia l Sta te m e nt s and in "Liquidity" b e lo w . Corporate Segment Our Corp orate segm e nt in c lu des o ur corpo rate m a n age m e nt a nd ex pe nses assoc iated w ith m an aging o ur compa ny as a w ho le. These ex p e nses include co mpe nsati o n a nd be ne fit s o f corpo rate managem e nt a nd sta ff, lega l a nd profess io na l fees a nd admini strati ve a nd gene ral expe n ses th at a re no t allo c ate d to othe r segm e nts. Our Corpo rate segm e nt 's as se ts prim a r ily in c lud e cash and cash equi va le nts he ld by the c o rpo rate e ntities, prope rty a nd e quipm e nt re la ted to o ur co rpo rate head q u a rt e rs a nd c e rt a in in fo rm ati o n tec hn o logy costs. Overview of Results and Outlook We generated strong o pe ratin g inco m e a nd cas h fl o w during the second qu a rter o f fi scal y ea r 20 IO w ith earnings bein g dri ven prima ril y by th e o pe ratin g pe rfo rm ance of o ur E&C a nd E&I segm ent s. Our E&I segm e nt co ntinu e d to foc us on its e xecutio n of m ajo r U.S. Governm ent contracts, w hile o ur E&C segme nt a nd to a le sser ext e nt F&M segm e nt continued th e ir s uccess ful e xecuti o n of existin g co ntrac ts in b ackl og. Earnin gs improved in o ur Fossi l, Re n ewabl es &. N ucl ear a nd M a inte n a nce segm e nt s compa red to th e second qua rte r o f fiscal year 20 09 wh e n w e reco rded c ha rges o n two co ntr ac ts . Our se cond qua rter re po rt e d earnin gs a lso be ne fit ed fr o m th e stre ngth e nin g o f the U S O co mpa re d to th e JPY, a nd o ur results include a $3 9.4 milli o n no n- o p e ratin g, no n-cas h , fo re ig n exch a nge t ra ns la ti o n gain in o ur In vestm e nt in Westin g ho u se segm e nt resultin g fr o m trans latin g th e Westin g ho use Bo nd s fr o m JPY to US O fo r fin anc ia l re po rtin g purposes. T he JPY/ US O exc ha nge rate was 8 8 .9 a t Fe bruary 2 8 , 2 010 vers us 86.6 a t Novembe r 30, 2009 . New bookin gs o fn o n-U.S. Gove rnm ent re lated wo rk cont inu es at red uced level s . W e be li eve th e g lo b a l econo mi c s lowdown d e layed or a lt e red cl ie nt in vestm e nt d ec is ions du rin g fi scal yea r 2009 a nd th e fir st ha lf o f fi scal year 20 IO fo r n ew re fin ery , petroche mi cal a nd c hem ical projec ts . W h ile t he mark ets served by o ur E&I segm en t re mai n stro ng, back log has dec lin ed fr o m year-e nd in m ost of o ur business segments. Our Fo ss il , Renewables & uclear segment's financial resu lts refl ect th e com pl etion of severa l domestic AQC projects a nd continued exec ution of a number of E PC projects for new coal a nd gas-fired powe r pl ant s. Our re s ults also re fl ect continued work u nder a serv ices contract fo r four new AP I 000 reactors in China as we ll as the in creasing vol ume of activity on two do mesti c AP I 000 nucl ear power projects. Our Mai nt e na nce segm e n t 's im proved result s in th e second q u a rt e r fisca l year 20 IO we re d ri ven by projects for nu c lear refue ling o utages for new and exis tin g c ustomers. Ty pi call y th e fi rst a nd t hird qu a rt e rs of o ur fi scal year gene ra te th e hi g hest vo lu mes of work in the powe r sec tor, as thi s is w hen m a ny power generati o n faci liti es are sh u t down fo r sch eduled m ai nt e na nce. Som e work begu n in the firs t quarter ex tended into th e second qu a rt e r of fi sca l 20 10. O ur E&I segm e nt generated s tron g re ve nu e a nd earnin gs, p rim a ril y d ri ve n by in c rease d vo lum es a nd so lid exec uti o n in o ur U.S. Governm e nt bu sin ess ac ti v iti es . Constru c ti o n ac t ivi ty o n a hurri cane pro tecti o n p roj ect fo r th e USACE in so uth eas t Lo ui s ia n a a nd o ur MOX projec t fo r th e DO E in So uth Caro lin a continu e to dri ve E&l 's earnin gs . U.S. go ve rnm e nt s pe ndin g re ma in s s tro n g htt p://in ves t ing .businesswee k.com/resea rch/stoc ks/fin anc ia ls/dra wFi lin g .asp ?fo rm Ty pe= I O-Q [5 / 12/20 IO I :2 7 :55 PM) -;HA W G ROU P IN C (Fo rm : I 0-Q, Rece ive d : 04/0 7/2 0 IO 17 :08 :20) a nd th e E&l segment is we ll pos iti o ned to co mpe te fo r m any la rg e U .S . g o ve rnment o ppo rtuniti es , as re fl ecte d by several recent award s a nd scope in crea ses fr o m o ur U.S. fe d e ra l, st ate a nd local gove rnm e nt c li e nt s. Our E&C segme nt 's res ults , w hil e still st ro ng, d ec lin ed fr o m th e record leve ls seen in fi scal year 2009 , re fl ecting th e impact f lower bookin gs durin g th e pas t 18 mo nth s. Whil e E&C continu es to s uccess full y exec ut e p roj ec ts in it s backl og, a maj ority o f th e h ig h-m a rg in e ng in eerin g services co ntracts th at dro ve record earnin gs in fi scal 2009 have now been compl e ted . We have a s ig nifi cant numbe r o f pro posa ls o ut standin g , but it is diffi c ult to pre di ct th e timin g a nd qu an tity of c li e nts' inves tm e nt dec isions th at dri ve bookin gs fo r thi s segment. 3 8 Table of Content s O ur F &M segme nt 's res ults co ntinu ed to be s tro ng but a lso d eclin ed fr o m th e record leve ls ex pe ri e nced in fi scal year 2009. Ma rg in pri c in g press ure c o ntinu es a nd th e segme nt has seen a redu c ti o n in ne w bookin gs th ro ug ho ut 2009 a nd th e fir st ha l f o f fi scal 20 10 (exc ludin g nucl ear mo dul a r a nd fa bri catio n sco pe trans fe rre d fr o m o ur Fossil , Re newabl es & N uclear segme nt ). Co nstru cti o n of o ur new sta te -of-th e -a rt modul e fac ility in Lake C ha rl es, Lo ui s ia na continues to prog ress toward compl e ti o n a nd o ur nu c lear fa bri catio n wo rk is ex pec te d to beg in o pe rati o ns in th e second ha lf of th e year. During th e qua rt e r, we generated $106.8 m illi o n in o peratin g cash fl ow, dri ven pr im a ril y by earnin gs led by o ur E&C a nd E&I se g ments. Consolidated Results of Operations Cons olidated Revenues: (do ll a rs in m illi o ns) Three months ended Si x mo nth s e nded February 28, 2010 $ $ 1,624.3 3,4 82 .8 February 28, 2009 $ $ 1,667.5 3 ,56 8 .0 $ $ $ Change (43.2) (85 .2 ) %Change (2.6)% (2.4 )% Co nso lid ated re ve nu es de clined s lightly durin g th e three a nd s ix mo nth s e nd ed Fe bru ary 28 , 20 10 as compa re d to th e pri o r fi scal y e ar. Revenu es in o ur E&I a nd Mainte na nce segme nt s increased in th e three mo nth s e nd ed Febru ary 28 , 20 IO as co mpa red to th e same pe ri o d in th e pri o r fi scal year, whil e revenu es in o ur E&C a nd F &M o peratin g segme nts we re lower as compa red to th e sam e pe ri o d in th e pri o r year. Fo r th e s ix mo nth e nd ed Fe bru ary 2 8, 2010, revenu es in c reased in o ur E&I segme nt w hile d ecreas ing in o ur o ther seg me nts co mpared to th e same pe ri o d in th e pri o r fi scal year. Consolidated Gro ss Profit: (do ll a rs in milli o ns) T hree month s ende d S ix month s en d ed February 28, 2010 $ $ 145.l 299 .9 February 28, 2009 $ $ 102.4 290 .5 $ $ $ Change 4 2 .7 9.4 % Change 41.7% 3.2 % Conso lid ated g ro ss profit in c reased fo r th e t hree a nd s ix mo nth s e nd ed Fe bru ary 2 8, 20 10 co mpa re d to th e prio r fi sca l year d ue prima ril y to be tter exec uti o n ofour E PC co nt rac ts fo r fo ss il fue l -fi red power projects in o ur Fo ss il , Re newabl es & Nuc lear segm ent. Our Ma inten ance seg me nt a lso e x pe rien ced a n in crease in gross p ro fit compa red to th e pri o r fi sc al year . Co nsolidated Selling, General & A dministrative Exp enses (S G&A ): (do ll ars in mi lli o ns ) T hree mo nths ended Six mo nth s ended February 28, 2010 $ $ 72.3 148 .1 February 28 , 2009 $ $ 70.4 143 .5 $ $ $ Change 1.9 4.6 %Change 2 .7 % 3.2 % C o nsol idated se ll ing , ge nera l a nd ad mini strat ive expens es in c reased s l ig htl y for th e th ree and s ix mo nth s e nded Febru ary 2 8 , 20 1 O as co mpa re d to th e sam e pe ri o d in th e pri o r fi sca l year du e prim aril y to inc reases in bus in es s develo pm e nt a nd proposa l cost s, http ://inve s tin g.bu s in essweek.com/re search/stocks/fin anc ia ls/drawF i lin g .as p?fo rm Ty pe= I 0-Q [ 5/ 12/20 IO I :27 :55 PM) S IIA W GROU P INC (Fo rm : I 0-Q , Rec e ive d : 04 /07 /20 10 17:08:20) partially offset by lower no n-in com e re lated tax expen se a nd reduced a m o unts of cont ract labo r as compared to the pri or year period. Consolidated Interest Expense: (dollars in milli o n s) Three months ended S ix m o nth s e nded Table of Contents February 28, 2010 $ $ 11.1 21.4 39 February 28 , 2009 $ $ 12.0 23.6 $ $ $ Change (0.9) (2.2) 0/o Change (7.5)% (9 .3)% Consolidated inte rest ex pen se fo r the three a nd s ix m onth s e nded February 28, 20 IO decreased primarily due to lo"ve r interest expen se o n our Japanese Yen-denominated bonds due to o ur expens in g o f th e b a la nce of th e deferred financing costs a nd the original issuance bond discount in fiscal year 2009. Consolidated Income Taxes: (d o ll a rs in milli o n s) Three months ended Six month s e nd ed February 28, 2010 $ $ 37.9 26 .7 February 28, 2009 $ $ 22.7 $ $ $ Change 15.2 26.7 % Change 67.0% NM Our consolidated t ax rate, based o n income before income taxes, no nco ntro lling interest a nd earnings from uncon solidated e ntiti es, for the three and six months e nded February 28, 20!0 was 36% and 34%, respectively. In compa ri son , our consolidated tax ra te fo r the three a nd six month s ended February 28 , 2009 was a prov is io n of 41 % a nd a benefit of I %, res pecti ve ly. We treat unreali zed foreign currency gains a nd losses on the JPY-de no minate d Westinghouse Bonds as di sc rete in each reporting pe riod due to their vo latility a nd th e difficulty in reliabl y estim ati ng s uch gains a nd losses. For th e three m o nth s e nd ed February 28, 20 IO and 2009, we recorded a (b e nefit) or provision for o ther discrete items totaling ($0.5) million an d $3.2 millio n , res pecti vely , prim aril y for uncerta in tax positions a nd other identifi e d adjustments . T h e s ix month s e nde d February 28, 2009 includes net other di scre te ite m s of$5.6 millio n re lating to provisions for uncertai n Lax positions as well as a ben efit fo r th e retroactive effect of th e re newal of th e Work Opportunity Tax C redit. Our effecti ve tax rate is dependent o n th e locatio n and amo unt of o ur taxable earnin gs. C hanges in_ th e effective tax rate a re due primari ly to unrealized fore ign currency gains or lo sses, the mix and amount of earnings in various tax jurisdictions, changes in certain no n-deduc tible ex pe nses a nd th e pro v is io n fo r uncertain tax pos itions. We expect our fi scal 2010 a nnu a l effecti ve lax rate , excluding discrete items, to be approxim ate ly 37%. Consolidated Earnings from Unconsolidated Entities, net of income f<L'l:es: (do ll a rs in milli o ns) T hree months ended Six month s ended February 28, 2010 $ $ 3 .3 3.1 February 28, 2009 $ $ 5.9 7 .3 $ $ $ Change (2.6) (4 .2) % Change (44.1 )% (5 7 .5)% The decrease in earnings from unconsolidated entities fo r the three and s ix m o nth s e nded Febru ary 28, 20 10 , as compa red to the same period in the prio r fi scal year, was prima ril y due lo lower earnings from o ur In vestment in West in g ho u se segment. Cons olidated Ne t In co me (loss): (d o ll a rs in millio ns) T hree months e nd ed Six mo nth s e nded February 28, 2010 $ $ 70.2 54.1 February 28, 2009 $ $ 38.7 4.6 $ $ $ Change 3 1.5 49.5 %Change 81.4 % 1,076.1% T h e increase in consolid a ted ne t inco me for the three m onths ended February 28 , 20 10, as compare d to th e pri o r fi scal y ear was due t o better exec uti o n in o ur Fossi l, Re newabl es & Nuclear a nd Maint ena nce segm e nt s a nd a no n-c ash fo re ign exch a nge http://inv estin g.bu sin ess we ek.com /research/stock s/ti nanci als/drawFiling .as p?formT y pe = I O-Q[5 / 12/20 IO I :27:55 PM) :HAW GRO UP IN C (Form: I 0-Q , Rece ive d : 04 /07/20 10 17:0 8:20) translation gain of$39.4 milli o n resulting from the limited reco ur se Japan ese Yen-den o minated d e bt associated with our Westinghouse Equity . The increase in consolidated ne t inco me for the six month s ended February 28 , 20 I 0, as compared to the prior fi scal year was du e to better execution in our Fossil , Renewables & Nuclear, Maintenance and E&I segments and a reduction in the no n-cash foreign exchange tran s lat ion loss associated with o ur limit ed recourse Japanese Yen-denominated debt to $(63 .0) mi ll ion from $(130.3) million in the pri o r fisc a l year. 40 Table of Conte nts Segme nt Res ul ts of O pera ti o ns The following comments and tables compare selected summary financial informatio n related to our segments for the three a nd s ix months ended February 28, 20 IO and February 28, 2009 (dollars in mil lions). Thre e Mo nths Ende d 2010 2009 $ C hange %Change Re v enu es: Fossil, Renewables & Nuclear $ 55 1.6 $ 552 .0 $ (0.4) (0 .1)% Maintenance 177 .2 172.7 4 .5 2 .6 E&I 488.3 449.9 38.4 8 .5 E&C 287 .2 331.2 (44.0) (13.3) F&M 120.0 161.2 ( 4 1.2) (25.6) Corporate 0.5 (0.5) NM Total rev e nues $ 1,624.3 $ 1,667.5 $ (43.2) (2 .6)% Gross pro fi t: Fossil, Renewables & Nuc lear $ 18 .7 $ (31.1) $ 49.8 160.1 % Maintenance 8.4 (1.5) 9.9 660.0 E&I 45.3 40 .3 5.0 12.4 E&C 46.8 60.6 (13.8) (22.8) F&M 24.1 33 .7 (9.6) (28.5) Corporate l.8 0.4 l.4 NM Tota l g ro ss pro fit $ 145.1 $ 102.4 $ 42.7 41.7% G ro ss profit pe rcenta ge: Fossil , Renewables & Nuclear 3.4% (5.6)% Maintenance 4.7 (0 .9) E&I 9.3 9.0 E&C 16 .3 18.3 F&M 20.1 20 .9 Corporate NM NM Total gross profit percentage 8 .9 % 6.1% Income (loss) before income taxes and earnings from unconsoli dated entities: Fossi l, Renewabl es & Nuclear $ 4 .7 $ (45.7) $ 50 .4 110.3 % Maintenance 6.2 (4.1) 10 .3 251.2 E&I 28 .1 25.1 3.0 12 .0 E&C 35 .5 53.1 (17.6) (33.1) F&M 16 .S 26.1 (9.6) (36 .8) Investment in Westinghouse 30.1 20 .0 10.1 50.5 Corporate ( 16 .3) ( 19 .1) 2 .8 NM Total incom e (lo ss) befor e inco me tax es and http://inv es ting .bu sin esswee k.com /research/stocks/financi a ls/drawFiling.asp?form Type= I 0-Q[ 5/ 12 /20 IO I :27 :55 PM J SHAW G ROU P INC (Fo rm: I 0-Q, Received: 04/07/20 IO I 7:08:20) earnings from unconsolidated entities $ 104.8 $ 55.4 $ 49.4 89 .2% NM -Not Meaningful. 41 Table of Contents Six Months Ended 2010 2009 $ Change %Change Revenues: Fossil , Renewa bles & Nuclear $ I , 13 1.2 $ 1,228.6 $ (97.4) (7.9)% Maintenance 470.6 506.8 (36.2) (7.1) E&l 1,0 16.5 851.3 165 .2 19 .4 E&C 626.5 653.0 (26.5) (4.1) F&M 237.9 325.9 (88 .0) (27.0) Corporate 0.1 2.4 (2 .3) NM Total revenues $ 3,482.8 $ 3,568.0 $ (85.2) (2.4)% Gross profit: Fossil, Renewables & Nuclear $ 51.7 $ 20.7 $ 31.0 149 .8% Maintenance 28 .6 10.2 18.4 180.4 E&I 92.8 74 .8 18.0 24.1 E&C 81.2 113 .1 (31.9) (28.2) F&M 44.7 69.3 (24.6) (35.5) Corporate 0.9 2.4 (1.5) NM Total gross profit $ 299.9 $ 290.5 $ 9.4 3.2% Gross profit percentage: Fossil, Renewa bles & Nuclear 4.6% 1.7 % Maintenance 6 .1 E&I 9.1 8.8 E&C 13 .0 17.3 F&M 18 .8 21.3 Corporate NM NM Total gross profit percentage 8.6% 8.1% Income (loss) before income taxes and earnings from unconsolidated entities: Fo ssil , Renewa bles & Nuclear $ 23 .1 $ (9 .8) $ 32 .9 335.7 % Maintenance 23 .8 4 .3 19.5 453 .5 E&I 58.4 43 .7 14 .7 33 .6 E&C 57 .8 94 .9 (3 7.1) (39 .1 ) F&M 29 .1 56.4 (27.3) ( 48.4) Investment in Westinghouse (81.7) (151.1) 69.4 45.9 Corpo ra te (32.8) (4 1.1 ) 8.3 NM Total income (loss) before income taxes and earnings from unconsolidated entities $ 77 .7 $ (2.7) $ 80.4 2,977.8% NM -Not Meaningful http://in vestin g .busine ss week .com/research/s tocks/financials/drawFi I ing.asp?form Type= I 0-Q[ 5/ I 2/20 IO I :27:55 PM] -;HAW GROU P INC (Fo rm : 10-Q, Rece ive d : 04/07 /2010 17 :0 8:2 0) T he fo ll owin g ta bl e presents o ur revenues by g eogra phi c reg ion genera ll y based o n th e s it e locati o n o f th e project fo r th e three a nd s ix mo nth s e nd ed Fe bruary 2 8 , 20 IO a nd Fe bruary 2 8, 2009. Three Months Ended Six Months Ended 2010 2009 2010 2009 (In Millions) O/o (In Millions) O/o (In Millions) O/o (In Millions) O/o United State s $ 1,263.4 78% $ 1,290.3 78% $ 2,718.8 78% $ 2,815.4 80% As ia/Pac ifi c Rim 2 51 .5 16 193.7 12 520.4 15 398.5 11 Middle East 70.3 4 122 .4 7 163.1 5 229.5 6 Canad a 3 .6 6 .4 7 .2 12 .3 E urope 11.8 31.9 2 36.9 67.1 2 So uth A m e ri ca a nd M exico 3 .0 15 .0 6 .6 31.6 Other 20.7 7.8 2 9 .8 13.6 Tota l revenu es $ 1,624 .3 100% $ 1,6 67 .5 10 0% $ 3,4 82.8 100% $ 3,56 8 .0 10 0% 42 Table of Contents Business Segment Analysis Fossil, Renewab/es & Nuclear Segment Our Foss il , Re newabl es & Nuclea r segm e nt co ntinue d to exec ute major el e ctric po we r generation a nd a ir e mi ss io n re ducti o n projec t s ac ro ss th e globe . Reduced de m a nd for e lectricity in th e U.S . and the de cline in th e stock pri ces fo r e lectri c utiliti es throug hout mu c h o f2009 co ntinue to impact e lectric utiliti es' in vestm e nt deci s io ns. However, th e segme nt 's E PC w ork o n tw o contracts for new A P I 000 nucl ear power reacto rs in th e U.S . co ntinues to ra mp up. In a dditi o n , work continues o n our se rv ices contract for four ne w A PIOOO nuclear power reactors in C hin a. Re ve nu es <2nd Qu art er) Revenues o f $55 I .6 milli o n for th e three m_o nth s ended Fe bruary 28, 20 IO were re lati vel y fl at w hen co mpare d to revenu es o f $552.0 milli o n gen erated in th e prior year pe ri od. However, th e mi x of proj ects generatin g th e revenu es som ewhat differe d a s re flect ed be low : Several do mesti c e mi ss io ns control p roj ects th at expe rie n ced high le ve ls o f acti vi ty in th e compa rable p e ri o d o f th e pri o r y ea r hav e been compl e ted a nd durin g th e three m o nth s e nd ed F e bruary 2 8 , 20 I O ge nerated a pp rox im ate ly $15 0 .0 milli o n less revenu e th an in th e p ri o r year p erio d. O ffsettin g th e d ecline in e mi ss io n re lated proj ects was a n a pprox im a te $150.0 m illi o n in crease in revenu es fro m new build power p la nts incl ud in g two new gas -fired power p la nts a nd o ur E PC work on two co nt rac ts fo r fo ur A PI OOO n uclear power reac tors in Georgia an d South Carolina . Gross profit and iilross profit percentaiile <2nd Quarter) Gross profit increased $49.8 milli o n, or 160.1 %, to $18 . 7 million for the three month s ended February 28 , 20 IO from $(31.1) milli o n in the same period o f the prior fi scal y ear. Our gross profit percentage increased to 3.4% fo r the three month s ended Feb ru ary 28, 20 10 from (5.6) % in the same period of t he prior fiscal year. T he increase in our gross profi t a nd gross profi t pe rcentage was p rim aril y d ue to th e fo ll owin g: During th e compa ra b le pe ri od of th e pri o r year, we exper ie nced a n in c rease of a pp rox im ate ly $73 .9 milli o n in estimated costs at completio n on a coal -fire d p lant. This project ha s been completed and was tra n sferred to t he c lien t in Febru ary 20 I 0 . • P rog ress o n o ur new buil d po w er pl a nt s in c lu d in g o ur two d o m esti c E PC co ntrac ts fo r fo ur new A P I 000 nucl ear power reac to rs in th e U .S. a nd th e serv ices pe r for m ed o n fo ur new A PI OOO nu c lear po we r reac to rs in C hina h ave begun to he lp http ://in ves tin g.bu s in esswee k.com/resea rch/stoc ks/fin anc ia ls/drawF ilin g.as p'.?formT y pe= I O-Q [5 / 12/20 IO I :27 :55 PM] SHAW GROUP INC (Fo rm : I 0-Q , Received: 04 /07 /2010 17 :08:20) in c rease thi s segment 's marg in s . However, wea th e r delays and cost in creases assoc ia ted with work pe rform ed during th e quarter o n o ne new build coal-fired co nt rac t, completi o n act ivities o n a no th e r E PC coal-fired contract , a nd th e close o ut of th e project noted above continue to ne gati vely impac t m a rgi n s . We expect th at m a rg in s fo r thi s segm e nt s ho uld in c rease as th e work prog resses o n the nucl ear power project s a nd th e o ld er coal-fired power co ntra cts are co mpl e ted. Settl ement o f th e Mitsubishi m a tt er as discu ssed in o te 11 -Contin genc ies a nd Commi tm e nts . In come Clo ss ) before income tax es an d earnini:s <l osses ) fro m unconsolidated entiti es (2nd Quart er) In com e (loss) before in com e t ax e s and earnings (losses) fro m unco n so lid at ed e ntiti es increased $50.4 milli o n, or 110 .3%, to $4.7 milli o n for the three m o nth s ended Febru ary 28 , 20 I 0 , fr o m $(45. 7) milli o n in th e same perio d of the pri o r fi scal yea r, prim aril y a ttributabl e to the in c rease in g ro ss profit and gross profit percentage described a bo ve . 43 Table of Contents Revenues <Ye ar to Date) Re ve nu es decreased $97.4 milli o n , or 7 .9%, to $1 ,131.2 milli o n for the s ix mo nth s e nd ed February 28 , 20 IO from $1 ,228 .6 milli o n in the same period of the pri o r fi scal year. This dec rease in revenues was primarily a ttributable to the following: • The d ecl in e in revenues re flects completion of several domes tic emissions control projec ts th at experienced hi g h le ve ls of acti v ity in the comparable period of the prior year . During the s ix months ended February 28 , 2010, these proj ects generated approximately $325.0 million less re ve nue than the same p e riod of the prior year. • T his decrease in revenues was pa rti a ll y offset by an increase in re venues of approximately $290.0 million related to continued prog re ss on the segment 's EPC work o n t wo contracts for four new AP I 000 nuclear power reactors in Georgia and South Carolina and two new gas-fired power plants. • In the sam e perio d of th e prior fisc a l year, we experienced a decrease in re ve nue s of ap prox imatel y $36.5 million as a result of an increase in estimated costs at completion on a coal-fired pl a nt. Gross profit and i:ross profit percent ai:e (Year to Date) Gross profit increased $31.0 million , or 149 .8%, to $51. 7 million for the six months ended February 28, 2010 from $20.7 million in the same period of th e prior fi scal year. Our gross profit percentage increase d to 4.6% for the six months ended February 28 , 2010 from 1.7 % in the same period of the pri o r fiscal year. In each case, thi s increase was primarily attributable to the following factors: During the co mp arab le period o f th e pri or year, we experienced a n increase of approximately $73 .9 million in estimated costs at completion o n a coal-fired plant. The positi ve variance desc ribe d a bove was e nh anced by th e earl y progress o n two domes ti c EPC co ntrac ts for fo ur new AP I 000 nu c lear power reactors in th e U.S. as we l I as o ur serv ic e s co ntract for fo ur new A P I 000 nuclear power reacto rs in China a nd execution on two new gas-fir ed power pl a nt s. T he in c reases noted a bove were partia ll y offset by th e completion of several hi gher margin e mi ss ion s contro l proj ects coupled wi th cost increases and sche dule de la ys at o ne coal fired EPC project. In come (l oss ) before income ta xes and earnini:s (l osses ) from uncon so lidated entities (Year to Date) In come (loss) before income t axes a nd e arnings (losses) from un conso lid a ted e ntit ies in creased $32.9 million , o r 335.7%, to $23 .1 milli o n for th e s ix m o nth s ended February 28 , 20 I 0 , fr o m $(9 .8) million in the same peri o d of the prio r fi scal year, primaril y a ttributa ble to th e in cre ase in gross profit d esc ribed above. Maintenance Segment Our Maintenance segment experienced s ig nific a ntl y improve d p e rformance durin g the second quarter of fi scal 20 IO as http://in vestin g.bu sin esswee k.co m/resea rch/stoc ks/financial s/drawFiling .as p?fo rm Ty pe = I O-Q[5 /l 2/20 IO I :2 7:55 PM] 5 HA W GROUP IN C (Fonn: I 0-Q, Received : 04 /07 /20 IO 17 :0 8:20) compared to the same period of fiscal 2009 with re ve nues and profits being dri ve n primarily by execution of new and existing nuclear maintenance contracts. During the same period of fiscal 2009, we reached a settlement w ith an owner over disputes on a major domestic fossil-fired power projec t resulting in a pre-tax loss of$3.9 milli o n associated with the project. Re venues (2nd Quarter) Revenues of$ I 77 .2 milli o n for th e three mo nth s ended February 28 , 2010 were o nl y slightly higher when compared to $172.7 million in the same period in the prior fiscal year. However, the mix of projects generating the revenues somewhat differed as described below: Table of Contents Our power and process maintenance related services partly attributable to refueling outages and turnarounds at new and existing customer loca tions increased by approximately $54.1 million. Our construction sector declin ed due to the slowdown in overall construction s pending and significant competition for small construction projects. 44 Gross profit and ~ross profit percenta~e (2nd Quarter) Gross profit increased $9.9 million to $8.4 million for the three months ended February 28 , 20 I 0, from $( 1.5) million in the same period in the prior fiscal year. Gross profit percentage increased to 4. 7% for the three months ended February 28, 20 I 0 , from (0.9) % in the same period in the prior fiscal year. The increase in our gross profit and gross profit percentage was primarily due to the following factors: A change in the mix of services for the three months ended February 28 , 20 IO where margins have increased based on strong project execution that in turn results in incentive awards from our clients . In the three months ended February 28 , 2009, we reached a settlement with an owner over disputes on a major domestic fossil-fired power project that resulted in a pre-tax loss of$3.9 million associated with the project. Income (loss) before income taxes and eamin~s (losses) from unconsolidated entities (2nd Quarter) Income (loss) before income taxes and earnings (losses) from unconsolidated entities increased $10.3 million , or 251.2%, to $6.2 million for the three months ended February 28, 20 I 0 , from $(4.1) million in the same period in the prior fiscal year, primarily attributable to the increase in gross profit and gross profit percentage described above as well as a reduction in selling, general and administrative expenses. Revenues CYear to Date) Re ve nue s de creased $36.2 milli o n, o r 7.1 %, to $4 70.6 milli o n for th e s ix m on th s ended February 28 , 20 I 0 , from $506.8 million in the same peri o d in the prior fi scal year . This decrease in reve nu es was primarily attributable to the following factors: Decrease of ap proximatel y $42.8 million in the construction sector due to the s lowdown in overall construction s pending and sig nificant competition for s mall constru ction projects. In c rea se of approximately $32.3 milli on in o ur power and process sectors partly att ribu tab le to refuelin g outages a nd turnarounds at new a nd existing c u sto mer locati o n s. Gross profit a nd ~ross profit percenta~e CYear to Date) Gross profit incre ased $18.4 million , o r 180.4%, to $28.6 million fo r th e six month s ended February 28 , 20 I 0 , from $ I 0.2 million in the sa m e period in the prior fi scal year. Gross profit percentage increased to 6.1 % for the six m o nth s ended Fe bruary 28 , 20 I 0 , from 2.0% in the same period in the prior fi scal year. The increase in o ur gross profit a nd gross profit percentage was primarily due to the following factors: http://inv es tin g.busin esswee k.com /research/stocks/financi a ls/drawF i I in g.as p?fo rm Type= I 0-Q[S / 12/20 IO I :27: 5 5 PM] S HAW G RO U P INC (Form : 10-Q, Rece ived: 04 /07/20 10 17:0 8 :20) C ha nge in th e mi x of se rvice s fo r th e pe ri o d co m pa re d to th e sa me pe ri o d in th e prio r fi sca l yea r a nd im proved exec uti o n res ultin g in hi g he r m a rg in s. Offset by a settl e me nt w ith an o wn e r o e r di s put e s o n a m aj o r do mes ti c fos s il -fir ed powe r p roj ect res ultin g in a pre-tax loss o f ap prox im a te ly $5 .3 mill io n in th e sa m e pe ri o d in th e prio r fi sca l year. In come <l oss) befo re in com e t axes a nd earnin~s <losses) fro m unco nso lidated e ntiti es CYear to P atel In co me (lo s s) before inco me tax es a nd e a rnin g s (losses) fr o m unco nso li d a ted e ntiti es in c reased $19.5 mill io n, o r 4 5 3.5%, to $23.8 m illi o n fo r th e s ix mo nth s e nd ed Fe bru ary 28 , 20 I 0 , fro m $4 .3 milli o n in th e same pe ri o d in th e prio r fi scal year, prim a ril y a ttributa bl e to th e in crease in gro ss profi t a nd gro ss pro fit pe rcent age d esc rib e d a bove as well as re du cti o ns in sellin g, genera l a nd a dmini stra ti ve expenses. £&/Segment T he fin a nc ia l re sult s of o ur E&I seg me nt re fl ect stro ng p roj ect exec uti o n w ith revenu es a nd earn ings be in g dri ve n prima ril y by exec uti o n ofour two la rgest projec ts ; th e hurrica ne pro tec tio n project fo r th e U.S. Army Corps of Eng in eers in south east Lo ui s ia na and exec ut io n of our MOX project fo r th e DO E in So uth Caro lina. 45 Table of Content s Revenu es (2 nd Qua rte r) E&l revenu es in c reased $38.4 milli o n, o r 8.5%, to $488 .3 milli o n fo r th e three mo nth s en d ed Fe bru ary 28 , 2 0 IO fr o m $449 .9 milli o n fo r th e sam e pe ri o d in th e pri o r fi sca l year. T hi s in c rease was prima ril y a ttributa bl e to acti v ity o n o ur MOX a nd Pa du cah co nso lidated joint ventures fo r th e DO E o ffset by decreased ac ti v ity o n a hurri cane protecti o n project w ith th e US ACE in south east Lo ui s ia na a nd pri o r year hurri cane recovery acti vi ty in th e g ul f reg io n o f th e U.S . Gross profit a nd 2 ro ss profit percenta2e C2 nd Qua rt e r) E&I gross pro fit in creased $5 .0 milli o n, o r 12 .4 %, to $45 .3 milli o n fo r th e three mo nth s e nded Fe bru a ry 28 , 2010 , fro m $40.3 milli o n fo r th e same pe ri o d in th e pri o r fi scal year . G ross profit pe rcent age in c reased to 9.3% fo r th e three mo nth s e nde d Fe bru ary 28 , 20 I 0 , fro m 9.0 % in th e same pe ri o d in th e pri o r fi sca l year. T he in crease in gross pro fit was prim a ril y attributa bl e to increased acti v it y o n o ur MOX j o int venture fo r th e DOE a nd a c hange in estim ate o n a fi xed pri ce proj ec t in th e Middl e East compl e te d in 2008 for whi c h th e costs were in c urre d a nd ex pe nsed in pri o r pe ri o d s. In co me (l o ss) be fore income taxes and earnin 2s Oosses) from un conso lida ted entiti es (2 nd Qua rt e r) In come (lo ss) befo re in co me taxes a nd earni ngs (losses) fro m un co nso lid ated e nti t ies in c reased $3 .0 milli o n, o r 12 .0%, to $28.1 m illi o n fo r the three mo nth s e nded Fe bru ary 28 , 20 10 , fro m $25.1 milli o n in th e same pe ri o d in th e pri o r fi sca l year, pri m a ril y att ri butab le to the in crease in g ro s s profit de scribed a bo ve part ia ll y offse t by a n inc rease in s elli ng , ge neral a nd a dmi nis trati ve ex pe nses re la ted prim aril y to in c reased proposal acti vi ti es. R evenues <Yea r to Date) E&I revenu es inc reased $165.2 mill io n, or 19.4%, to $1.0 16 .5 milli o n fo r the s ix mo nth s e nd ed Febru a ry 2 8 , 20 10 fr o m $85 1.3 mill io n fo r th e sam e perio d in th e pri or fi sca l year. T hi s in crease was pr imaril y a ttributa ble to o ur wo rk o n a hurri cane protecti o n project w ith the USA CE in so ut heast Loui s ia na a nd inc reased ac ti vity o n o ur MOX and Pad ucah co nso lid ated jo int ventu re s fo r the DO E. T he i nc rease in re ve nu e s was pa rt ia ll y o ffse t by pr io r y ear serv ices re la te d to hu rr icane recovery acti v ity in th e g ul f reg io n o f t he U.S . Gross profit a nd 2ro ss profit perce nta 2e CYear to P atel E&I gross pro fit in creased $18 .0 milli o n, or 2 4 .1 %, to $92.8 milli o n fo r th e s ix mo nth s e nded Fe bru ary 2 8 , 20 I O, fr o m $74 .8 m illi o n fo r th e sa me pe ri o d in th e pri o r fi scal year. Gross pro fi t pe rcent age in c reased to 9 .1 % fo r th e s ix mo nt hs e nd ed Fe bru ary 28 , 20 I 0 , fro m 8 .8% in th e sa me perio d in th e pri or fi scal yea r. T he in c rease in gross pro fit was prim a ril y a ttributab le to http ://in ve stin g .bu s in essweek .co m/resea rch/sto ck s/fi nanc ia ls/dra wFilin g.as p?fo rmTy pe=l O-Q [5 /l 2/2 0 I O I :27:5 5 PM] SHAW GROUP INC (Form: I 0-Q , Recei ve d: 04 /07 /20 IO 17:08 :20) increased activity on U.S. Government contracts including the hurricane protection project with the USACE in southeast Louisiana and our MOX joint venture for the DO E. The increase in gross profit was parti a lly offset by emergency response services performed in fiscal year 2009 related to hurricane recovery activity in the gulf region of the U.S. The increase in gross profit percentage was primarily attributable to lower overhead costs as a percentage of revenue as compared to the prior year , as wel I as a change in estimate on the above-mentioned contract completed in 2008 for which the costs were incurred and expensed in prior periods. Income Closs) before income taxes and earnin~s (losses} from unconsolidated entities <Year to Date} Incom e (loss) before income taxes and earnings (losses) from unconsolidated e ntities increased $14.7 million , or 33.6%, to $58.4 million for the six months ended February 28, 2010, from $43.7 million in the same period in the prior fiscal year, prim arily attributable to the increase in gross profit described above. E&C Segment E&C continued to perform well with strong project execution across it s portfolio of projects. Revenues for E&C decreased from 2009 primarily due to redu ced vo lumes of customer furnished materials a nd reimbursable costs which are invoiced to clients without profit, as well as from reduced volumes of engineering services. E&C continued experiencing th e expected decline in profits during the first two quarters of fi scal 20 IO from record levels experienced in the prior fi scal year as a result of the completion ofa number of high-margin engineering services contracts and a decrease in bookings of new work . We are beginning to see signs of renewed client interest in the early phases of m ajor capital investments such as studies and front-end engineering and design contracts, which precede the engineering, procurement and construction phase of major projects, but it remains uncertain when these projects will be awarded. As a result, we expect E&C 's vo lume of business and earnings to decline during the second half of fiscal year 20 I 0. 46 Revenues (2nd Quarter) E&C's revenues decreased $44.0 million , or 13.3 %, to $287.2 million for the three months ended February 28, 2010, from $331.2 million for the sa me period in the prior fiscal year. Included in these revenues were customer furnished material and pass through revenues of $58.1 million and $99.6 million for the three months ended February 28, 2010 and February 28, 2009, respectivel y, for which we recognize no gross profit or loss. Excluding pass through revenues, E&C's re ve nue was relatively flat when compared to the prior fiscal year. Gross profit and ~ross profit percenta~e <2nd Quarter) Gross profit decreased $13.8 million , or 22.8%, to $46.8 million for the three months ended February 28, 20 I 0 , from $60.6 million in the same period in the prior fi scal year . Gross profit percentage decreased to 16 .3% for the three month s ended February 28, 20 IO from 18 .3% in the same period in the prior fiscal year. The decrease in gross profit a nd gross profit percentage was primaril y due to th e work-off of several hi g h-marg in engineering serv ice s contra cts th at contributed to record performance in the prior fiscal year. Income Ooss) before income taxes and eamin~s Cl osses } from unconsolidated entities <2nd Quarter} Income (loss) before income taxes and earnings (losses) from unconsolidated entities decreased $17 .6 million , o r 33.1 %, to $35.5 million for the three months ended February 28, 20 10, from $53.1 million in the same period in the pri o r fi scal yea r , primarily as a result of the decrease in gross profit and gross profit percentage described above along with an increase in selling. ge neral and ad mini strati ve ex pen ses related to increased bu si ness development and proposal activ ities. Re ve nue s {Year to Pate) E&C's revenues decreased $26.5 milli o n, or 4 .1%, to $626 .5 million for the six m o nth s e nd ed February 28 , 2010, from $653.0 milli o n fo r the sa me period in the prior fiscal year. Included in these re ve nues were customer furnished material a nd pass through revenues of$l57.2 milli o n a nd $202.8 million for the six months ended February 28 , 2010 an d February 28 , 2009 , re s pec tivel y, for which we recogni ze no gross profit or lo ss. Exc luding pass through revenues, E&C's revenue increased htt p://in ves ting .bu s ine sswee k.com /research/stocks/financi als/drawFi lin g.as p?fo rm Type= I 0-Q[ 5/ 12 /20 IO I :2 7: 55 PM) SHAW GROUP INC (Form: I 0-Q , Received: 04 /07 /20 IO 17:08:20) $19.1 milli on or 4.2%, to $469.3 milli o n for the s ix m o nth s e nd e d February 28, 20 10 , from $450.2 milli o n fo r the same period in the p rior fiscal year. This increase in revenu es was due to increased acti v it y o n a major internati o n a l E PC e th y le ne proj ect offset by lower vo lum e of e ng inee rin g services co ntracts in th e current year as compared to th e same period in th e pri o r fi sca l year. Gross profit a nd ~ross profi t percen ta~e CY ear to D a te} Gross profi t decreased $3 1.9 million , or 28.2%, to $8 1.2 million for the six mo nths ended Febru ary 28 , 20 I 0, from $ I 13.1 milli o n in th e same period in th e prior fiscal year. Gross profit percentage decreased to 13.0% fo r th e s ix m o nth s ended February 28 , 20 IO from 17 .3% in the same period in th e prior fiscal year. The decrease in gross profit a nd gross profit p e rc e nt age was d ue to lower vo lum es of e ngi neeri ng services a nd procurement contrac ts in the c urre nt year compared to the same period in the prior fi seal year. In come Cl oss} before income taxes and eamin~s Oosses} from un consolid a ted entities CYear to D a te} Inc o me (loss) before in com e taxes a nd earnin gs (losses) fr o m un consolid ated e ntiti es decreased $3 7.1 milli o n, o r 39 .1 %, to $5 7 .8 milli o n fo r th e s ix m o nth s end ed February 28, 2010 , fr o m $94 .9 milli o n in th e sam e period in th e prior fi scal year, primarily as a res ult of th e decrease in gross profit a nd gross profit percentage described above a lo ng w ith a n in crease in selling, ge neral a nd ad mini st rati ve expen ses re la ted to increased business development a nd proposal acti vi ties . 47 Table of Contents F&M Segment Our F&M segment continued to perform well but ex peri e nced an expected dec lin e in vo lume a nd profits for th e second quarter of fiscal year 20 IO as a res ult of reduced bookings of process indu stry a nd no n-nuc lear power re lated work . T he reduced vo lum es of bu s ine ss results in lower plant utili zatio n and increased pricing pressure in the m arketpl ace. We expect thi s downturn in vo lume and profits to improve to the extent th at the modular assembly and pipe fabrication work associated with th e AP I 000 w ork subco ntracted from ou r Fossi l, Re newables & Nu c lea r segment commences in th e second half o f fi scal year 20 I 0. Reven ues (2nd Quarter} Revenu es decreased $41.2 million , or 25.6%, to $120.0 milli o n for the three mo nth s e nded Fe bruary 28, 20 I 0, fr o m $161.2 milli on in the sa me period in the pri o r fiscal year. This decrease was due to lower vo lum es across th e m ajori ty ofour U.S. operations as a result of g lo bal economic conditions partiall y offset by hi g her revenu es in o ur Mexican operations. Gross profit a nd ~ross profit percenta~e (2 nd Qua rter} Gross profit decreased $9 .6 milli o n, o r 28.5%, to $24.1 milli o n fo r the three month s e nded February 28 , 20 I 0, from $33.7 milli o n in th e sa m e period in the pri o r fi scal year. Gross profit p e rcentage decreased to 20.1 % for the three months ended Fe bruary 28, 20 I 0, from 20 .9% in th e sam e period in the prior fi scal year. T he decreases in gross profit a nd g ross profit percentage were primarily due to reduced c li ent demand fo r pipe fabricatio n serv ices overall a nd a mo re competitive pricing e nviro nm e nt. Income Closs} before income taxes and eamin~s Oosses} from unconsolidated entities C2nd Quarter} Income (loss) before income taxe s and earnings (losses) from unco n so lidated entities decreased $9.6 million , or 36 .8%, to $16.5 million for the three month s ended February 28 , 20 I 0 , from $26.1 million in th e same period in th e prior fisca l year, prima rily attributab le to the decre ase in gross profit and g ross profit percentage described above offset by the reduction in selling, general and administrati ve expenses. R evenues (Year to Date} Re venu es decreased $88.0 million , o r 2 7.0 %, to $23 7.9 mi lli o n for th e six months ended February 28 , 20 I 0 , fr o m $325 .9 milli o n in the same period in th e prior fi sca l year for the reaso n s d esc ribed above. Gross Profit and Gross Profit P ercenta~e <Year to Date} G ross profit decreased $24.6 milli o n , o r 35.5%, to $44.7 milli on for th e s ix m o nth s e nded Feb ru ary 28 , 20 I 0 , from http ://in ves tin g.b usin ess week.com /re sea rch/s tock s/li na nc ia ls/drawFi lin g.asp?fo rm Ty pe= I 0-Q[ 5/ 12/20 IO I :2 7: 55 PM] ,HAW GRO UP INC (Form: 10-Q , Re ce ived: 04 /07 /2010 17 :0 8:20) $69.3 milli o n in the sam e period in the pri o r fi sca l year. Gross profit pe rcent age decreased to 18 .8 % for the s ix m o nth s e nd ed Fe bruary 28, 20 I 0, from 21.3% in the same period in the prior fi scal year. These decreases were attributab le to the reaso n s described above. Income Cl oss ) before in co me taxes and eamin~s (losses} from unconsolidated entities CYear to Dat e} In come (loss) before income taxes a nd earnings (losses) from un consolidat ed entities decreased $27.3 milli o n, or 48.4%, to $29.1 million for the s ix months ended February 28, 20 I 0 , from $56.4 million in the same period in the prior fi scal year, primarily attributable to the decrease in gross profit and gross profit percentage described above. Investment in Westinghouse Segment Wes tinghouse maintains its accounting records for reporting to its majority owner, Toshiba, on a calendar quarter basis . Financial information reported to us by Westinghouse related to Westinghouse 's operations is available to us ba sed upon Westinghouse's calendar quarter periods . As a res ult, we reco rd our earnings (loss) a nd other comprehensive income (lo ss) on our Westingho use Eq uity based upon We stinghou se 's calendar qu a rterl y repo11ing periods, or two months in a rrears of our current periods . Under thi s policy , Wes tinghouse 's operations for the three and six month s ended Dece mber 31, 2009, a re reflected in our re s ults ofo peratio ns for the three a nd six months ended February 28, 20 I 0. 48 Table of Contents The impact of the Investment in Westinghouse segment on our income (loss) before income taxes, for the three and six months ended February 28, 20 I 0, was $30.1 million and $(81.7) million, respectively, compared to $20.0 million and$( 151.1) million , respectively , in the three and six months ended February 28, 2009. Results for the three and six months ended February 28, 20 IO and February 28, 2009 included the following: Three Months Ended Six Months Ended (dollars in millions) 2010 2009 2010 2009 Interest expense on Japanese Yen-denominated bonds including accretion and amortization Foreign currency translation gains (losses) on Japanese Yen-denominated bonds, net Gen.era! a~ administrative expenses Income (loss) before income taxes $ $ (9.3) 39.4 30.1 $ $ (10.9) 30.9 20.0 $ $ (18.6) (63.0) (0.1) (81.7) $ $ Additionally, our net income (los s) for the three a nd six m o nths ended February 28 , 2010 in c ludes net income from our Westinghouse Equity interest of$2.8 million and $2.5 million, respectivel y, com pared to net income of$5.5 million and $7.0 million for the three and s ix month s ended February 28, 2009. (20.7) (130.3) (0.1) (151.1) We enter into foreign c urren cy forwa rd contracts from time-to-time to hed ge the impact of exc han ge rate c ha nges o n o ur JPY interest payments on th e Westinghouse Bonds. Please see our di sclosure under "Liquidity" below as well as in Notes 5 and 7 in the accompanying financia l statements wit h respect to the circum stances in which we may be required to put the We stinghouse Equity to Tos hiba a nd re pay the Westin g hou se Bo nd s. Corporate Segment Sellini: ~enera l and administrative expenses SG&A for the th ree months e nded Fe bru ary 28, 20 IO was comparable to th e same period in the pri o r fisc a l year increasing $0.1 milli o n , o r 0.5%, to $19 .7 milli o n , from $19.6 million. For the s ix m o nth s ended February 28, 20 I 0. SG&A decreased $1.7 million, o r 3.9%, to $4 1.4 million from $43 .1 million in th e prior year. This decrease was primarily due to lower professional fees a nd a reduction in th e amount of contractors as compared to the same period in the prior fiscal year. partially offset by a n increase in severance costs. In add iti o n , the prior year 's result s include d $5.0 milli o n of no n-in co me rel ated tax expense. Related Party Transactions http ://investing.bu s ine sswee k.com /re sea rch/stock s/fin anci a ls/drawFiling.asp?formType=l O-Q[5 /l 2/20 IO I :27 :55 PM] SHA W G ROU P INC {For m: I 0-Q, Rece ive d : 04 /07 /20 IO 17 :08 :20 ) fro m tim e to time, we pe r fo rm wo rk for re la ted p a rti es. See Pa rt I, It e m I-F in a nc ia l Sta te m e nt s , Note 14 fo r a ddi ti o na l det a ils re la tin g to th ese acti v iti es. Liquidity and Capital Resources liquidity A t Fe bruary 28 , 20 I 0 , o ur restri c te d a nd un res tri c ted cash a nd c as h equi va le nt s, esc rowed cash a nd restri c te d a nd un restricted sho rt-te rm in ve stm e nt s in c reased $11 9.3 milli o n, o r 7 .8%, to $1,6 52 .6 milli o n fr o m $1,533.3 millio n a t A ug ust 3 1, 2009. In ad dit io n to o ur restri ct ed a nd unrestri c ted cash a nd cash equi vale nt s, escrowed cas h a nd restri c te d a nd unrest r ic ted sho rt-te rm in vestm e nt s , we had $84 3 .4 milli o n o f revolv in g c red it avail a bl e fo r bo rrowin gs und er o ur C redit Fa cility a t Febru ary 28 , 20 10 . W e generated pos iti ve o pe ratin g cash fl ow during th e second qua rt e r of fi scal year 20 IO fr o m a ll of o ur o p e ratin g segm e nt s except fo r o ur M a inte na n ce, Corporate a nd In vestm e nt in Westin g ho use segm ent s . T he cash fl ow was ge nerated prim a ril y by earnin gs in each seg m e nt , th e receipt o f a pp rox im ate ly $2 7.5 milli o n in di v id e nd s fr o m o ur in vestm e nt in W estin g ho use a nd po s iti ve w o rkin g ca pit a l m ov em e nts . Our prim a ry so urce o f o pe ratin g cash infl o w s is fr o m coll ecti o n s o f our a ccount s rece ivabl e, w hi c h a re generall y in vo iced based upo n achi ev in g pe r fo rm a nce mil esto ne prescribed in o ur cont rac ts. Our o ut sta ndin g acco unts rece ivable a nd costs a nd estim a te d earnin gs in excess o f billin gs (C IE) a re rev iewed m o nthl y a nd tend to be due fr o m hi g h qu a lity c redit clients suc h as regul a ted utiliti es, ind e p e nde nt a nd m e rc ha nt po w e r produ cers, multin a ti o na l o il co mpa ni es a nd indu stri a l co rpo rati o ns , governm e nt agenc ies a nd o th er e quipm e nt m anufac ture rs. 49 Table of Contents W e co ntinu e to in ves t a porti on o four e x cess cas h to support th e g rowth o f o ur bu s in ess lines . In the second quarte r of fiscal y e a r 20 I 0 , we in ves te d a pprox im a te ly $40.9 million fo r prope rty a nd equipme nt , including c a pita l co n stru cti o n costs re la ted to F&M 's n ew mo dul e asse mbl y fa c il ity in Lake C harles, Lo ui s iana. During th e second quarte r of fi sca l year 2 0 10 , we co mmitted to con stru ct with a third party an additi o na l pipe fabrication fa cil ity in a n inte rnati o n a l locati o n. O ve r th e past three years, w e have g e ne ra ted s ig nifi cant operatin g cas h fl ow a nd c urrentl y h av e in exce ss of $1.6 billi o n of c as h a nd sho rt-term m a rk e ta ble sec uriti e s . Our excess cash is ge nerall y in ves te d in (I ) mo ney m a rket funds governed unde r rule 2a-7 of th e U .S. In vestment Co mpany Act of 1940 a nd ra te d A A A/A aa by S& P a nd/or Moody 's In vesto rs Se rv ic e , resp ective ly, (2 ) inte rest bearing d e posit a cco unts w ith comm erci a l ba nk s rate d a t least A /A 2 o r bette r by S&P and/o r Moo dy's In ve st o rs Se rvi ce , res pe cti ve ly , o r (3) publicly traded debt rated a t le ast A/A2 o r better by S&P a nd/o r M oody's In ve stors Service , respect iv el y , at the tim e o f purc h ase w ith m a turities up to two years. At Fe bru ary 28 , 20 I 0 , th e a mo unt s shown as restri c ted cash a nd restri c ted sho rt-term in vestm e nts in the accompany ing b a la nce s heet in c lude d a pprox im atel y $2 28 .1 milli o n used to volunta ril y sec ure lette rs o f c redit a nd a pprox im a te ly $29 .0 milli o n to secure in s ura nce re lated co ntin gent o bli gati o n s in lieu of a letter o f c redit. In Marc h 20 I 0 , s ubs eque nt to the cl ose o f th e second qu a rt e r , we pl edged a n additi o na l $40.8 milli o n in cash to coll ate ra li ze ex is tin g lette rs of c redit. We expect to continu e to vo lunta ril y cas h co ll ate ra lize cert a in le tt ers of c red it in 20 I O i f th e ba nk fees av o id ed o n th ose le tte rs of c re dit exce ed th e re turn o n o th er in ve s tm en t o ppo rtunit ies. In ovembe r 2009, we m ade a £5 .0 milli o n (a pprox im a te ly $8 .3 milli o n) vo lunta ry cas h contributio n to o ur und e rfund ed p e n sion pl an in th e Unit ed Kin g do m . In Marc h 20 09, we a lso m ade a vo luntary co ntribu t io n o f £8 .0 m illio n (approx im ate ly $1 1.4 milli o n ) to the sa m e pensi o n pl a n in the United Kin g do m. Approx im ate ly $16 9 .0 milli o n, o r I 0%, of o ur c as h a nd cas h e qui valen ts, sho rt -te rm in ves tm e nts a nd re stricted cas h a nd s ho rt -term in vestments a t Febru a ry 28 , 20 IO was h eld by o ur in te rn a t ional opera tions . We h a ve th e abi lity to re turn cert ai n a mo unts of o ur ove rseas fund s to th e U .S. b ut m ay in c ur in c re m e nt a l t ax e s und e r ce rt a in c irc um sta nces. We expec t to fun d o ur operati o ns for the next twe lv e mo nth s with cas h g enerated fro m o peratio n s a nd ex ist in g cash ba la n ces . Ho wev e r, th ere can be no ass u ra nce th a t we wi ll ac hi eve o u r forecas ted cas h flow , w hi c h cou ld re s ult in new bo rrow in gs un der ex istin g or future c redit fac iliti es. We ex pec t to co ntinu e to rei n ve s t a po rti o n of o ur excess cash to s up po rt th e growth o f o ur b us in ess line s, inc ludin g , but no t limited to , th e purc h ase of equip ment th at we ha ve hi sto ri ca ll y lease d . In a dditi o n, we continue to evalu ate th e poss ibility of co nstru c t ing a dditi o na l fab ri catio n fac ilit ies o ut s ide th e U.S . a nd m ay seek pa rtn e rs to s ha re in th e http ://in ve stin g.bu sin ess wee k.co m/resea rch/stoc ks/fin anci als/draw Filin g.as p?fonn Ty pe = I O-Q [5 /l 2/2 0 IO I :2 7:55 PM] r llA W Ci ROUP INC (Fnnn: I 0-Q. Rcc e i,ed: 04 /07 /20 IO 17 :08:20) ownershir and funding of any s uch faci lities. Our strong cash position , combined with the glohal economic slowdown , has created opportunities for u s to obtain market discounts and provide protection from potential future price escalation for o ur EPC project s by und e rtaking an early procurement rogram. Accordingly. we have begun to procure certa in commodities. subcontract s and con st ru cti o n equi pm e nt early in the life cyc le of major projects. lf suecessful, thi s s trategy will provide price and schedule certainty but may require u s to expend o ur cash earlier than o ri ginal ly requ ired under such contracts. We are currently evaluating early procurement opportunities th at would re s ult in cash outflows of up to $150.0 million during fi scal year 20 I 0. It is o ur intent to balance any potential cancellation exposure assoc iated wi th early procurements with our t ermination ri g ht s and obligations unde r th e respective prime contracts with ou r c li e nts and to he lp protect ourselves from s uppliers failing to perform by requiring fin a ncial security in struments to support their performance . However. we can provide no ass urance th a t our intent to manage our cancell ati o n exposure wi ll be s uccessful. In a dditi o n , while we c urrentl y intend to purs ue procurem e nts of thi s m agnitude over th e remainder of fi scal 20 I 0 , our ability to complete such purc h ases is subject to o ur abili ty to execute definitive purc h ase con trac ts as we ll as o ur ability to t e rmin ate thi s strategy sho uld we identify o th er o pport uniti e s or need s that we d e te rmin e are in o ur best interests to purs ue . Credit Facility As o ur revenues have grown. so have our require m e nt s to issue letters of c red it to our c li en ts . Our ability to continue o ur revenue growth may be dependent o n our ability to increase our letter of credit and s urety bonding capacity , our ability to achieve timely rel ease of existing letters of credit and s urety bonds and/or our ability to obtain more favorable terms from our c lients reducing letter of credit and surety requirements on new \vo rk . Our need for letter of credit capacity may increase as we begin executing future nuclear construction projects. Increases in outstanding performance letters of credit reduce the avai I able borrowing capacity under our Facility. 50 On September 24, 2009, we entered into the Restated Credit Agreement with a group of lenders that provides new and extended lender commitments of $1,214 .0 million , all of which is available for the issuance of performance and financial letters of credit and/or borrowings for working capital needs and general corporate purposes. The Restated Credit Agreement includes new lenders to the Facility as well as certain existing lenders who will exit the Facility in 2010 or 2011 , following the expiration of their existing commitment. Accordingly, the Restated Credit Agreement contemplates three groups of lenders, the "20 IO Lenders," the ·'2011 Lenders'· and the ··2012 Lenders;· with the Facility terminating with respect to such lenders on April 25, 2010, April 25 , 2011 and October 25 , 2012, respecti vely. Commitments available under The Restated Credit Agreement expire as follows : Commitment Expiration Total Commitments as of February 28, 2010 Commitments expiring April 25 , 20 I 0 Commitments as of April 25, 20 I 0 Commitments expiring April 25 , 2011 Commitments April 25, 2011 through October 25 , 2012 (dollars in millions) $ 1,214.0 (119.0) $ 1,095.0 (95.0) 1,000.0 T h e Re stated Credit Agreement a llows us to seek new o r increased lender commitments under thi s Faci lity s u bject to the con se nt o f the Admini s trati ve Agen t and. in some in stances. th o se lenders who iss ue letters o f c redit under the Facility on our he h al f a nd/or seek o ther s upplemental c redit facilities o n a r a ri pass u basis with the Facil it y. ofup to an agg regate o f$400 .0 milli o n . Additiona ll y. we may pledge up to $300 .0 milli on o f ou r unrestri c ted cash on ha nd to sec ure addi ti o nal letters o f cred it incremental to a m o unts avai lab le under the Facility. prov ided that we h ave unrestri c ted cas h and cash e quiv a lents o fat least $500 .0 million avai labl e immediately following the pledge. The borrowin g base re stri c ti o n s th at were set forth in the o ri gi nal c redit agreemen t are no t included in th e Restated C redit Agreement. The Re stated C red it Agreement contain s a re v ised pricing schedule with re srect to letter of credit fee s a nd interest rates payable by us. T he Restated C redi t Agreement co nt ai n s c u stomary financial covenants and o th e r restrictions . The co\·enants set fort h in the Resta ted Credi t Agreemen t generally conform to the cm c nan t s set forth in the original c redit agreement. except that the Re stat ed Credit Agreement. a m o ng o ther things (I) repl aces th e consolidated fixed charge coverage rati o covenant of the origina l c redit agreement with a debt service coverage ratio covenant. and l2) increases certain maximum allowable amounts and certain thresho ld ://inve stin g .bu s inc ss weck.com /resca rch/stock s/fin ancial s/drawriling .as p?formT y pe = I 0-Ql 5/ 12 /20 IO I :27:55 PM I SI IA W G R OU P IN C (Fonn : I 0-Q. Recei ved : 04 /07 /20 IO 17 :08 :20) trig gers and adds cert a in additional excepti ons with re s pect to the di vidend. inn:stment. in d ebtedness . li en. asset sale. le tter of credit. a cqui s iti o n. lease and additional co llateral co,enants. thu s pro v idin g the company with g re ater fin a ncial ll ex ihility in business de c is io n s a nd strategies. T he Restated C red it Agreement cont a in s defa ultin g lend er p rovision s . T h e Re stated C redi t Ag reement limits o ur abi lit y to declare o r pay di v idends or m ake any di stributi o ns of capi ta l stock (other th a n stock sp lits or di v idends payable in our own capit al stock) o r redeem . repurc ha se o r otherwise acquire or ret ire any of our capital stock . If unrestricted cas h and cas h equivalen ts. after giving effect to a ny divid e nd or s tock repu rc hase. is at lea st $500.0 milli on , we are limited to aggregate dividend payments a nd/o r s tock repurchases during th e life of the Restated C re di t Agreem en t to $250.0 mill ion . In si tu ati o ns where our unre s tri c ted cash and cash equiva lents is less th a n $500.0 milli on, our ability to pay dividends or repurchase o u r s hares is limited to $25 .0 million per fi sca l year. The Restated C red it Agreement is secu red by , among o ther thin gs : (I) a fir st priority securi ty interest in a ll of the Company" s t angible and in tangible assets (inc luding. with o ut lim itation , equipment, real estate a nd intellectual property) and a pledge of all o f th e capital stock of the Company's m at erial d o mes ti c subsi diaries; (2) guarantees by the Company's mat erial domesti c subsidiaries ; and (3) a pledge o f 66% of th e capi tal stock of cert ain of the Company 's foreign subsidiaries. The R estated Credit Agreement pem1its the release of s uch liens if(a) the Company obtain s a corporate credit rating ofat least BBB-from S&P and Baa3 from Moody·s In ves tm e nt Services, (b) a ll l ie ns sec urin g a ny supplem e nt a l credit faci lit ies are relea se d , a nd (c) o th e r conditi ons s p ecified in th e Restat e d C redit Agreement are sati s fied. During the second quarter of fiscal 20 I 0, no borrowings were m ad e und e r th e credit facility ; however , we h ad outstanding letters of credit of approximately $3 70 .6 million as of February 28 , 20 I 0 , and th ose letters o f c redit reduce what is otherwise available for borrowing unde r our Facility. At February 28 , 2010, we were in compliance with the covenants contained in our Restated Credit Agreement. See No te 7 -Debt and Re vo lv ing Lines of C redit included in o ur consolidated financial statements for a description of: (I) the term s a nd interest rates related to our Facility and revol v ing lines of credit; (2) amounts available and outstanding for performance letters of credit, financial letters of credit and re vo lvi ng loan s under o ur Facility ; and (3) a description of our Facility 's financial covenants and m atters related to our compliance with those covenants during the second quarter of fiscal 20 I 0 . 51 Table of Contents Other Debt As more full y d escribed in Note 7 -Debt and Revolv ing Lines of Credit in c luded in o ur consolidated financial statements, our In vestment in Westinghou se was financed primarily through the iss uance of JPY-denominated Wes tinghouse Bonds of approximately $1.0 billion . If we decide to repay o r refinance th e Westingh o use Bonds, we may use some of our ex isting cash and/or seek to ra ise capital fr o m th e debt and/or equity m arkets . There can be no assurance that should we wish to repay or refina nce the Westinghouse Bo nds we will be able to raise suffi cie nt capital , o r if s ufli cient capit a l will be available to u s, o n terms acceptable to u s. In additio n, we have vari o u s short-term (committed a nd un com mitted) rcrn lving c redit fa c ilities fr o m several financial in s tituti o ns that are avai lab le fo r letters o f c redit a nd , to a le sse r ex tent , working capit a l loan s . Off Balan ce Sh ee t A rrangements On a limit ed bas is . performan ce ass ura nc es a re ex te nded to c usto mers in th e fo rm o f letters of c redit, s u re ty bonds and/o r p a rent company guarantees th at gu a rant ee certain performance obli gati o n ofa proj ect. If performance ass urances are extended to custo mers. ge nera ll y o ur maximum po tenti a l expos ure is limit ed in the co nt ract with o ur c u sto m e rs. We frequently o btain s imilar performance ass ur ances from third pa rty \'endo rs a nd s ubco ntrac tors for wo rk performed in th e o rdin ary course of co ntra ct execution . As a re s ult. th e to tal costs of the projec t cou ld exceed ou r orig in a l cost est imates a nd w e could experience red uced gross profit or possi bl) a loss for th at projec t. In so me ca~es , \\here we fai l to meet cert a in per for m a nce standa rd s, we may be s ubje c t to contra c tu a l I i4uid atcd damages. Commercial Commitments http://inve s tin g .bu s inc:sswc:ck .co m/rescarch/stuck s/lin anc ia ls/drawFiling.asp?formType= I 0-QI 5/12/20 I O I :2 7 :55 PM I ,I-I A W G ROUP INC (Form: I 0-Q, Rece ive d : 04/07/2 0 IO I 7 :08 :20) O ur le nders issue lette rs o f c redit o n o ur be h a lf to c li e nt s , s ure tie s a nd to sec ure o th e r fin an c ia l o bli gati o ns in co nn ecti o n with o ur co nt rac t pe r fo rm a nce a nd in limit ed c ir c um sta nces o n c e11a in o th e r o bli gati o ns o f third pa rti es. Ir d rawn , we a re req uire d to re im burse o ur le nders fo r pay me nts o n th ese lett e rs o f c re dit. We a lso have pe r fo rm a nce lette rs of c red it th at a re ca s h co ll a tera li zed . Fo r additi o na l in fo rm a ti o n o n o ur c as h co ll a tera li zed le tt e rs o f cre dit , see Pa rt I, It em I. -Fin a nc ia l Sta te m e nts, N o te 3. A t Fe bruary 2 8, 20 I 0 , we h ad bo th lett e r of credit co mmitm e nt s a nd s urety bo nd in g obli gati o ns, whi c h w e re genera ll y is s ued to sec ure pe rform a nce a nd fin a nc ia l o bli gati o ns o n cert a in o f o ur co n stru cti o n contrac ts , w hi c h exp ire as fo ll ows (in milli o ns): Less Than Commercial Commitments (I) Total I Year l-3Years 3 -5 Years Afte r 5 Years Letters of Credit -Domestic and Foreign $ 639.5 $ 559.9 $ 79.6 $ $ S urety bo nd s 72 6 .6 6 20.5 77.3 28 .8 Total Commercial Commitments $ 1,366.1 $ 1,180 .4 $ 156.9 $ 28 .8 $ (I) Comme rc ia l C ommitme nt s a bove exclude a ny le tt ers of c redit or s urety bo ndin g o bi iga ti o n s associated w ith o uts tandin g bids o r p ro posals o r o th er wo rk no t awarded pri o r to Marc h I , 20 I 0 . Of th e a mo unt o f o utsta ndin g lette rs o f c redit a t Fe bruary 28 , 20 I 0 , $4 9 4 .8 milli o n were iss ue d to cu st o me rs in co nn ec ti o n wi th co nt racts (p e rfo rm a n ce letters of c redit). O f th e $4 94 .8 milli o n , fi ve cu stom e rs he ld $328 .5 milli o n , or 66.4 %, of th e o ut sta ndin g lette rs of credit. T he la rgest am o unt o f lette rs o f c redit iss ued to a s in g le c usto me r o n a s in g le projec t was $117 .5 milli o n . A t Fe bruary 28 , 20 IO a nd Aug ust 3 1, 2009, w e had to ta l s urety bo nd s of$72 6 .6 milli o n a nd $72 9 .7 milli o n , res pecti vely . However, based o n our p e rcentag e -o f-compl etion o n contracts covered by th es e s urety bonds, o ur estimated pote ntial li a bility a t Febru a ry 28 , 2010 and Aug us t 3 1, 20 0 9 was $272.3 million and $282 .1 milli o n , respecti vel y. Fe es re lated to th ese comme rci a l commitm e nt s we re $3 .7 million a nd $8.2 milli o n, fo r th e three a nd s ix month s e nd ed Febru a ry 28 , 2010 , respecti vel y , compa red to $3 .4 milli o n a nd $7.4 million for th e three a nd s ix m o nth s e nded Fe brua ry 28 , 2009 , resp ec ti ve ly. See N o te 7 -De bt a nd Revo lv ing L ines of C redit to o ur co nsolidated fin a nc ial state m e nts in Part I , Item I of th is Fo rm 10-Q for a di sc u ssion o f lon g -te rm debt and Note 11 -Contingencies a nd Commitments to o ur co nso lidated fin anci a l statements in Part I , Item I o f thi s re port fo r a di scu ssio n of co ntin genci e s and commitme nt s. 52 Table of Contents Critical Accounting Policies It e m 7 o f Pa rt 11 of o ur 2 009 Fo rm I 0-K a ddresses the acco untin g po li cies a nd re lated estim a te s t hat we be lieve a re th e most c ri t ica l to und e rsta ndin g o u r con so lid ated fin a ncial sta te m e nts, fin a nc ia l condi ti o n a nd results o f o perati o ns an d those th at req ui re m anage me nt judg m e nt a nd ass umptio n s , o r invo lve un cert a inti es. Backlog of Unfilled Orders General . O ur back log re present s m a nagem e nt's estim ate of th e a mo unt of award s th at we e x pect to re s ult in fut ure revenues . Backl og is based o n lega ll y bindin g agreem e nts fo r proj ect s th at m anagem e nt be li eves a re probab le to proceed . Awards a re ev a lua ted by our m an agem e nt o n a proj ec t-by-p roj ect bas is a nd a re re po rt ed fo r eac h pe ri od s hown ba sed u po n t h e nat ure of t he u nde r ly ing c o nt rac t, co m mitm e nt a nd o th er facto rs, inc luding th e eco no mic, fin anc ia l a nd reg ul ato ry v ia bi lity o f th e proj ect a nd the li ke lih ood of th e cont rac t proceed ing . New bookin gs a nd ultimate ly th e a mo unt o f bac kl og o f unfill ed o rde rs is la rge ly a re fl ecti o n o f th e b roa d g lo ba l econo mi c trend s. T he vo lume a nd timin g o f e xec utin g th e wo rk in o ur backl o g is impo rt a nt to us in anti c ip atin g o ur o p erati o na l need s . http://in vestin g.bu s in e ssweek.com/rese arch/stoc ks/fin a ncia ls/drawF ilin g .as p?fo rm Ty pe= I 0-Q[ 5/ 12/2 0 IO I :2 7 :55 PM] S HAW GROU P INC (Form: 10-Q, Received: 04 /07 /20 10 17:08:20) Back log is not a measu re d e fin e d in GAA P, and our methodology fo r determin ing back log may no t be co m pa ra bl e to th e m e th o d o logy used by o th e r co mpa ni es in determ inin g t he ir back log. We cann o t ass ure yo u th a t revenu es proj ec ted in o ur back log w ill be rea li zed, o r i f rea li ze d , w ill result in pro fit s. A ll contrac ts co nta in cl ie nt te rmin a tio n fo r co nve nie nce cl a uses a nd m any of th e co ntrac ts in backl og prov id e fo r cancell a ti o n fees in th e event c li e nt s cancel projects . T hese cancell a tio n fees us ua ll y provide for rei m b ur semen t of o ur o ut-of-pocke t costs , reven ues associated wi th wo rk pe rfo rm ed prior to cance ll at io n a nd , to vary in g degrees, a perce ntage o f th e p ro fit s we wo uld have realized had th e co nt rac t been com ple te d . T he process to add new awards to backlog is genera ll y co ns is te nt a mong o ur segme nt s a nd is based o n us rece ivin g a lega ll y bindin g ag ree me nt w ith c li e nts plu s m a nageme nt 's assessme nt th at th e projec t w ill like ly proceed . A ddi ti o na l deta il s re la tin g to each segme nt 's bookin g p rocess fo ll ows: Foss il, Renewab /es & N uclear and E&C Segments. We de fin e o ur bac kl og in o ur Foss il , Renewabl es & N uc lear a nd E&C segme nts to in c lu de proj ec ts fo r w hic h we have rece ived legall y bind ing commitm e nts fro m o ur cl ie nt s a nd o ur pro ra ta s ha re of proj ects fo r wh ic h o ur co n so lid at ed j o int ventu re e ntiti es h ave rece ived legall y b indin g co mmitm e nt s. T hese commitm e nts typ ica ll y take th e fo rm of a w ritte n contract fo r a specific proj ec t or a pur c hase o rde r and so me tim es require th a t we es tim ate a nti c ipate d future revenu es , often based on e ng in eerin g a nd design speci fi cati o ns th a t have no t been fin a li ze d a nd may be rev ised over tim e. T he va lu e o f work s ub contrac ted to o ur F&M segme nt is re moved fro m th e bac kl og of th e Foss il , Renewa bl es & Nu c lear a nd E&C segme nts a nd is shown in th e backl og of o ur F&M segme nt. £&/ Segment . Our E&I segment's backl og includes th e va lu e o f award ed co nt racts includ ing th e estim a te d valu e of fund ed a nd un funded wo rk a nd a nti c ipa ted revenu e of co nso lid a ted j o int venture e ntiti es. T he un fund e d bac kl og gene ra ll y re present s U.S. governm e nt project award s fo r w hi c h th e projec t fundin g has been pa rti a ll y a uth o ri zed o r a warded by th e re lev ant government a uth o riti es (e.g., a uth o ri zati o n o r a n award has bee n prov id ed for o nl y th e in iti a l year ofa multi-year proj ect o r a n inde finit e d e li very, ind e fi nite qu a ntity co ntrac t is awarded w ith te rm s d efi nin g poss ibl e future tas k o rd e r awa rd s w ithin th e sco pe of the contract). Because of a ppro pri ati o n limita tion s in th e U .S. governm e nt budget processes, fi rm fundin g is us ua ll y m ade fo r o nl y o ne year a t a tim e a nd , in some cases, fo r perio d s less th a n o ne yea r. So me contra cts may co nt a in a numbe r o f o ne -year o pti o ns. Amo unt s in cl ud e d in backl og a re based o n th e contra ct's to ta l award ed value a nd o ur est im a tes regardin g th e a mo unt of th e award that will ultim ate ly res ult in th e recognit io n o f revenu es. T hese estimates m ay be base d o n indi cati o ns o f future va lues prov id e d by o ur c lie nt s, o ur estim ates o f th e work re qu ire d to co mplete th e co ntra ct, o ur ex pe ri e nce w ith s imil a r awa rd s and s imil a r cli e nts a nd o u r k nowled ge a nd ex pectati o ns re latin g to th e g iven award . G enerall y, th e un funde d compo ne nt of ne w co nt rac t award s is added to bac kl og at 75 % of o ur c o ntract valu e. T he prog ram s a re mo nit o red , estim ates a re rev iewed pe ri o di call y a nd a dju stm e nts a re m ad e to th e a mo unt s in cl uded in backl og a nd in un exerc ised co ntrac t o pti o ns to prope rl y re fl ect o ur est im a te of to tal co ntra ct revenu e in th e E&I seg m e nt bac kl o g . Our E &I segment backl o g does no t gene ra ll y include a ny a wa rd s (funded o r unfunde d ) fo r work ex pected to be pe rfo rm e d mo re th a n fi ve years a ft e r the d ate o f o ur fin anci a l sta te ment s . Th e ex ecuted a me ndm e nt to th e MO X cont ract s ig ned in th e th ird q ua rt e r o f fi scal 2 0 0 8 ex te nd s beyo nd fi ve years but has de fin ed contrac t valu es that di ffe r fr o m m a ny o th e r co ntracts w ith gove rnm e nt agenc ies. Acco rdin g ly , we include d th e e ntire valu e o f th e MOX co nt ra ct no t yet executed in o ur back log of unfill e d o rd e rs. T he val ue of work s ubco ntrac te d to o ur F &M seg me nt is re moved fro m th e backl og of o ur E&I segm ent a nd is shown in th e bac kl og of our F &M segm ent. 53 Ta ble of Con tents Ma intenance Segment . We d efine our backlog in th e Maintenance segment to include proj ec t s tha t are based o n lega ll y binding contracts fr o m o ur clients a nd ou r pro rata sha re of conso l idated j o int venture e ntities. These commitments ty pically t ake the fo rm ofa written contract or a s pecific proj ect purc hase o rd er and can co ve r peri od s ranging from three to five years. Ma ny o f these contracts cov er reimb ursable work to be de s ig nated and exec ut ed over th e term of th e agreeme nt. Accord ing ly , certain of the back log a mo unts a re based on the unde rl yi ng co nt racts /p urc hase o rd ers, o ur cl ie nt s ' hi sto ri c mai nte na nce requ ire me nt s as well as our fut ure cost estim ates based o n the c lie nt's in dications of future pl a nt ou tages . Ou r Mainte na nce segme nt back log does not include a ny awards fo r wo rk expected to be perform ed more th a n fi ve years after th e d ate of o ur fin a nc ia l sta te me nt s. F&M Seg ment. We define our backlog in the F&M segm ent to include projects for wh ic h we have rece ived a lega ll y b in di ng co mm itm e nt fro m o ur c li e nt s. T hese co mmi tm e nts ty pi call y t ake th e fo rm ofa w ritt e n co ntract fo r a s peci fi c project , a purchase o rd e r o r a spec ifi c indicat io n of th e amou nt of t ime o r mate ri a l we need to ma ke avai la bl e fo r cl ie nts ' a nt ic ip ated projec ts und e r a lli a nce type agreemen ts. A s ig nifi ca nt a mo unt of o ur F&M segme nt 's backl og result s fr o m int e r-comp a ny award s rece ived fr o m http ://in vesting .b usi nesswee k .com/research/stocks/fi na nc ia ls/drawF i I in g .as p?form Type= I O-Q[5/ 12/2 0 IO I :2 7: 55 PM] ,HAW GROU P INC (Form : I 0-Q , Rece ive d : 04 /07 /2010 17 :08 :2 0) o ur Foss il , Re newabl es & Nuclear, E&I a nd E&C seg me nts. In such cases, we include the va lue of the subcontracted work o ur F&M segme nt's backlog and exclude it fr o m th e co rr es ponding affiliate segment. At February 28, 2 0 IO and August 31 , 2009, o ur bac klog was as follows: By Segment Fossil, Ren ewables & Nuclear Maintenance E&I E&C F&M Total backlog By Industry E&I Power Generation Chemical Other Total backlog By Geograp hic Region Domestic International Total backlog Feb ru ary 28, 20 10 (In Millions) % $ 11 ,948.5 1,620.1 5,2 74.5 927 .9 1,498.1 $ 21 ,269.1 Feb ru a r y 28, 2010 (In Mi lli o n s) O/o $ 5 ,274.5 14 ,6 29 .8 1,352.1 12 .7 $ 21,269.1 Feb ru ary 28, 20 10 (In Mill ions) o;o $ 20,008.4 1,260.7 $ 21 ,269.1 August 31, 2009 (In Mi lli ons) % 56 $ 12 ,795.1 56 8 1,808.1 8 25 5,439.0 2 4 4 1,298.6 6 7 1,374.8 6 100 % $ 22,715 .6 100 % August 31, 2009 (In Millions) O/o 24 $ 5,439.0 24 69 15 ,478.1 6 8 6 1,761.1 7 37.4 100% $ 22 ,715.6 100% A ugust 31, 2009 (In Millions) O/o 94 $ 20 ,978.2 92 6 1,737.4 8 100% $ 22 ,715 .6 100% The decrease in backlog as compared to August 31, 2009 was dri ven primarily by slow bookings during the fir st half of fi scal year 20 I 0 . New booki ngs during the first ha lf of fi scal year 20 IO were led by E&I , which continues to ben e fit from awards from U.S. government entities. Included in backlog is our share of the full E PC contracts for two new AP I 000 nuclear reactors to be located in Georgia and two new APIOOO nuclear reactors to be loca ted in Florida. Not included in our backlog is the majority of the work to be performed on a n EPC contract for t wo new APIOOO nuclea r reactors to be located in South Caro lin a for w hich the contract has been awarded and work is progressing but for which certain cli e nt authorizations had not been receiv ed at February 28 , 20 I 0. 54 Table of Contents Durin g the fisca l quarter ending May 3 1, 2009, we received no tice from ou r client of a n adjustm en t in th e construction schedule fo r the aforementioned two new J\P I 000 nuclear reactors to be located in Florida re la tin g to early constructi o n act iv ities. At that time , o ur clie nt a dvi sed us that the se activities wou ld not be performed for the se units until th e combin ed operati ng license (COL) is iss ued by the Nuclear Regu latory Comm issio n fo r the plant. As a result , the orig in a l schedu le fo r commercia l o peration d a te s for th ese two units have been extended by a t least 20 to 36 mo nth s. Our c li e nt continues to co ns ider it s o pti o ns regardin g the proj ect's sc hedu le and upd a ted cost est im ates a nd pl a ns to file additional project information w ith th e Florid a Publi c Service Com mi ss io n by May I , 20 I 0 . T hi s filing is expected to cont a in proj ect projection s fo r cale nd a r years 20 IO a nd 20 11 and o th er information relating to th e project 's lo ng -term feas ibility. T he c lient filing a nd s ub sequ e nt rev iew by the F lo rid a public service co mmi ss io n may provide a dditi o na l c la rity as to the future fo r thi s projec t. In t he interim , we continue to perform lim ited engineering a nd field support serv ices a nd have no t rem oved or a lt ered th e co rresponding co ntrac t va lu e from o ur backl og as o ur contract with thi s c lie nt re m a in s in effect. T he amo unt of re ve nues a nd co ntrac t profit ex pected to be generated from thi s project during fi scal years 20 IO a nd 2011 a re likel y to be imm a terial when considered in re lati o n to o ur consolidated operations. We expect to reco ve r any future adverse cost impacts associated w ith the current sc hed ule delay . I f o ur client were to cancel the http ://inve stin g.b usine ss week.com /resea rch/stoc ks/fi nancial s/drawFiling.as p?form Typ e= I 0-Q[S / 12/20 IO I :2 7 :5 5 PM] S HAW GROUP IN C (Form: 10-Q, Received: 04 /07 /20 10 17:08:20) proj ect , we would be entitled to retai n a ll proceeds collected to date, collect a ny receiva bles that may be out standi n g a t th at tim e and be e ntitl ed to invoice addit ional amounts as prescribed under our contract. Recently Adopted Accounting Pronouncements For a discussion of recentl y adopted acco unting pronouncements, refer to Note I -General Inform ati o n o f o ur con so lid a ted finan c ia l statem e nt s in Part I, Item I . -Financial Statem ents. Recent Accounting Pronouncements For a discussion of rece nt accounting pronouncements a nd the effect th ey could have o n o ur financi a l state ments, refer to Note I -Gene ral Inform at ion of o ur conso lid at ed fin anc ia l sta tem ents in Part I , Item I . -Financial S ta tem ents. ITEM 3. -QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We do n ot enter into d erivati ve financial in strume nts for trading, specul atio n o r o ther purposes that wo uld ex pose us to market risk. In th e norm a l course o f business, we have ex pos ure to both interes t rate risk a nd fo reign currency exchange rate ri sk . For quantitative a nd qualitative di sclosures about o ur m a rk et risk , see It e m 7A -Qua ntitati ve a nd Qualitative Disclos ures a bo ut Market Ri sk of our 2009 Form I 0-K. Our exposures to m a rk e t ri sk have no t c ha nged mate riall y s ince August 31 , 2009. ITEM 4. -CONTROLS AND PROCEDURES Management's Quarterly Evaluation of Disclosure Controls and Procedures Disclosure controls a nd procedures (as defined in Rules l 3a-l 5(e) and l 5d-l 5(e) under the Exchange Act) are des ig ned to ensure that information required to be di sclosed in our re ports filed unde r th e Exchange Act is recorded , processed , s ummari zed a nd reported within the time periods specifi e d in the SEC's rul es a nd forms. T hi s information is accumul a ted a nd communicated to o ur managem e nt, including our C hief Executive Officer and C hief Financial Officer, as a ppropriate, to allow timely decis ions regarding required di sclos ure. Our m a nage ment, under th e s uperv isio n a nd with th e partici patio n of our C hief Executi ve Officer a nd C hief Financial Officer, evaluated the effecti veness of the des ig n a nd operation of o ur disclos ure controls and proce dures at February 28 , 2010 . Based on that evaluation, our Chief Executi ve Officer and C hi ef Financial Officer concluded th at our di sclo s ure controls a nd procedures were effective at February 28 , 20 I 0. Changes in Internal Control over Financial Reporting There were no changes in o ur internal control over finan cial repo rting during the three months e nded February 28 , 20 IO th at have materially affected , or are reaso nably likely to materiall y affect , our inte rnal control over financial reporting. 55 Table of Contents PART II -OTHER INFORMATION ITEM I. -LEGAL PROCEE DI NGS We have been and may from time to time be named as a defendant in legal actions claiming damages in connection wi th e ngineering and construction projects, technology licen ses and ot her matters. These are typica ll y claims that a ri se in th e ordi nary course of business, including employment-re lated c la im s a nd contractua l di s putes o r c la im s for person a l injury o r property dam age th at occur in connectio n wi th serv ices performed rel at in g to project or con struc ti o n s it es. Contractu al di sputes normally in vo lve c la im s relating to the tim e ly compl etion of p rojec ts , pe rform a nce of equipment or techno logies, d es ig n o r othe r engineerin g services o r p roject constru ction services provi d ed by o ur s ubs idi a rie s. See Not e 11 -Contin genci e s a nd Commitment s of our consolid ated fin an cial statements in Pa rt I, It e m I . -Fin a ncia l S tatements fo r information abo ut our material pe nding lega l proceedings. ITEM IA. -RISK FACTORS T he risk fac tor di sc ussed below upd ate s the risk fac to rs prev io us ly disclosed in ou r Annual Repo rt o n Form 10-K for the year http ://in vestin g.b us in essweek .com /re se arch/stocks/li nanci a ls/drawFilin g.as p?formType=l O-Q[5 /l 2/20 IO I :27 :55 PM] <;HA W G ROU P INC (Fo nn : 10-Q, Rece ive d : 04 /0 7/2 010 17:0 8:2 0 ) e nded A ugu st 3 1, 2009, til ed with th e SEC o n Octo be r 29, 2009. Climate change legislation and regulation s restricting emissions of "greenhouse gases" co uld s ig nificantly impa ct demand for our services. On Decembe r 15 , 200 9 , th e E PA pu b li shed it s findin gs th a t e mi ss io ns o f carb on d iox id e, me th a ne a nd o th e r '·gree nh o use gases" present a n e nd angerm e nt to publi c hea lth a nd th e e nv iro nm e nt beca use e mi ss io ns o f suc h gases a re, accord ing to th e EPA , co nt ributin g to warmin g o f th e earth 's a tm os ph e re a nd o th e r clim a ti c c ha nges. T hese fin d in gs a ll ow th e EPA to ado pt and impl e me nt regul a ti o ns th a t wo ul d restri c t e m issio ns of greenh o use gases un der ex istin g pro vis io n s of th e fe d era l C lea n A ir Ac t. Acco rdin g ly , th e EPA has pro posed reg ul a ti o ns th at wo uld re quire a re du c tio n in e mi ss io ns o f greenh o use gases fro m moto r ve hicl es a nd co uld tri gge r pe rmit rev iew fo r greenh o use gas e mi ss io ns fr o m ce rt a in stati o nary so urces . In ad diti o n, on Oc to be r 30, 2009, th e EPA publi s hed a fin a l rul e requiring th e re po rtin g of greenh o use gas e mi ss io ns fr o m s pec ifi e d la rge greenh o use gas e mi ssion so urces in th e United Sta tes , includin g so ur ces e mittin g m o re th a n 2 5,000 to ns o f greenh o use gases on a n a nnu a l bas is, begi nnin g in 20 11 fo r e m iss io ns occurrin g in 20 10 . T he a doption a nd impl e ment ati o n of regul a ti o ns impo s in g re po rt ing o bli gati o ns o n, o r limiting e mi ss io ns o f g reenh o use gases fr o m, o ur cu sto m e rs ' e quipm e nt a nd o perati o ns co uld s ig n ifi ca ntl y impac t de mand fo r o ur servi ces, pa rti c ul a rl y a mo ng o ur c usto me rs for coal a nd gas -fire d genera ti o n fac iliti es as we ll as o ur c ustome rs in th e pe troc he mi cals bu s in ess. A ny s ig nifi cant re du cti o n in d e ma nd fo r o ur se rv ices as a res ult o f th e a do pti o n o f th ese o r s imil a r pro posals could have a s ig nifi cant adve rse impac t o n o ur res ult s of o perat io ns. ITEM 2. -UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS N o ne. ITEM 3. -DEFAULTS UPON SENIOR SECURITIES N o ne . ITEM 4. -(REMOVED AND RESERVED) 56 C,--------------- Table of Contents ITEM 5. -OTHER INFORMATION On Ja nu ary 26 , 20 I 0 , we held o ur 20 IO A nnu a l Meetin g of Shareh o ld e rs (A nnu a l Meetin g). Th e reco rd d ate fo r th e A nnu a l Me eting w as De c e mbe r 3 , 2009 , a nd , o n th e reco rd date, there we re 89 ,3 13 ,883 s ha res o ut standing a nd e ntitl e d to vo te a t th e A nnu a l Meetin g he ld by a pp rox im ate ly 30 6 ho ld ers of reco rd . A rticl e Ill o f o ur by-l aws prov id es for th e e lec ti o n o f direc tors by a plura lity o f th e vo tes cas t. T he refo re, th e e ight no min ees rece iv in g th e hi g hest numbe r of affi rma ti ve vo tes of th e s hares present in pe rso n or re present ed by prox y a t th e A nnu a l Mee tin g a nd e ntitl ed to vo te were e lecte d as membe rs of o ur Board o f Directo rs . T he fo ll owing matt ers we re sub m itted to a vo te of o ur secu ri ty ho ld ers at th e A nnu a l Mee tin g . (I ) Electi o n o f e ig ht membe rs to ou r Board o f Directo rs, each fo r a o ne-year te rm ; Number o f S hares Direc tor V otes For Withheld J . M. Bernhard , Jr. James F . Barker T hos. E. Capps Da ni e l A. Ho ffl e r Dav id W . Hoy le M ich a e l J . Manc uso A lbert D. McAli ster Ste ph e n R. T ritc h 53 ,920,405 6,621 ,86 7 56,929,466 3 ,6 12,806 59,829,207 71 3,065 56,894 ,8 14 3 ,6 47 ,45 8 59,448 ,379 1,093 ,893 5 7,139 ,48 7 3 ,402 ,78 5 56,500,342 4,041 ,930 60 ,035 ,596 506 ,6 76 1tt p ://inve stin g .bu s in esswee k .co m/re sea rch/stocks/fin a nc ia ls/drawF iling .as p?fo nnTy pe= I O-Q [5/l 2/20 I O I :2 7 :55 PM] SHA W G ROU P INC (Fonn: I 0-Q, Rece ived: 04 /07/20 I O 17:08:20) (2) A p roposa l was passed by th e req uired s hareho lder vo te ra ti fyi ng th e A udit Committ ee's appoi ntm e nt of KP MG LL P as o ur in de pe ndent registe red publi c acco unt ing lirm for th e ti scal yea r e nd in g A ug ust 3 1, 20 I O; For Aga in st Abstai n Table of Content s ITEM 6. -EXH IB ITS 5 7 Numbe r o f S hares 69 ,996,600 1,042 ,2 74 78,271 T h e exhibits m a rk ed w ith th e cross sy mbo l (t) are fil e d o r furn is h ed (in th e case o f Ex hi b it s 32.1 a nd 32 .2) w it h thi s Fo rm I 0- Q . T he ex hibits m ark ed w ith th e asteri sk sy m bo l (*) a re m an agem e nt cont rac t s o r co mpe nsatory pl a ns o r a r ra ngem e nt s fil e d purs ua nt to It em 601 (b)(I O)(iii ) of Regul a ti o n S-K . SEC Fil e o r Ex hi bit Ex h ib it Report or Registratio n Re gistratio n or Othe r Number Doc um en t Des cr ipt ion Stateme nt Nu mber Refere nce 2 .1 In vestm e nt A g reem e nt , d ated as o f T he Sh aw G ro up Inc . C urre nt Re po rt 1-1222 7 2.0 1 Octo be r 4 , 2006, by and a mo ng o n Form 8 -K fil e d o n O cto be r 18, Toshiba, Toshiba Nuc lear Ene rgy 200 6 Ho ldin gs Corpora ti o n (US) In c., a De laware corporati o n (th e "US Compa ny"), T he Sh aw Group Inc . (th e "Compa ny ") a nd Nuclear En ergy Ho ldin gs, L .L.C. ("N EH") 2 .2 In ves tm e nt Agreem e nt , da te d as of T he Sh aw Gro up In c. C u rre nt R e po rt 1-1 222 7 2.02 O c to be r 4 , 2 006, by a nd a mo ng o n Form 8-K ft le d o n Octobe r 18, T osh iba, T osh ib a Nucl ea r E ne rgy 2006 Ho ld ings (U K) L im ited , a compa ny reg istered in Eng la nd with reg iste re d num ber 5929672 (th e '·U K Company "), th e Compa ny a nd NE H 3.1 A me nd me nt to a nd Re stateme nt of T he Shaw Gro u p In c. A nnu a l Re po rt 1-1222 7 3 .1 the Articles of In corpo ration of the o n Form 10-K/A (Amendment No . I ) Company dated February 23, 2007 for the fi scal year ended August 3 1, 2006 3.2 Amended and Restated By -Laws of The S ha w Group Inc. Annual Report 1-12227 3.2 the Company dated as of January 30, o n Form 10 -K/A (Amendmen t No. I ) 2007 for the fi sca l year ended August 3 1, 2006 4 .1 Specimen Common Stock Certificate The Shaw Group Inc . Annua l Report 1-12227 4.1 o n Form 10-K fo r the fiscal year e nded Augus t 3 I , 2007 4.2 R igh ts Agreement , d ated as of J ul y 9 , T he Shaw Gro up In c . Reg ist ra ti o n 1-1222 7 99.1 http ://in ves ting .bu s inessweek.co m/re Search/stock s/tin a nc ia ls/drawF ilin g.as p?fo nnTy pe=l O-Q(S /12/2 0 IO I :2 7:55 P M] ';HAW GROUP INC (Form: I 0-Q, Received: 04/07/20 IO 17:08:20) 200 I , between the Company and First Union National Bank , as Rights Agent, including the Form o f Articles of Amendment to the Re statem e nt of the Articles of Incorporation of the Company as Exh ibit A, th e form of Ri g ht s Certificate as Exhibit B and the form of the Summary of Rights lo Purch ase Preferred Shares as Exhibit C (Exhibit A-I and A-2) 4.3 The Shaw Group Inc . hereby agrees to furnish copies of in strum e nts de fining the rights of holders of lo ng- term debt of The Shaw Group Inc. and it s consolidated subsidiaries to the Commission upon request. Tab le of Contents Ex hi bit Numb e r Docum en t Desc ri ption *10.1 The Shaw Group Inc . 2008 Omnibus Incentive Plan *10.2 Form of Section 16 Officer Restricted Stock Unit Award Agreement under The Shaw Group Inc . 2008 Omnibus Incentive Plan * 10 .3 Form of Employee Incentive Stock Option A ward under The Shaw Group Inc . 2008 Omnibus In centi ve Plan * I 0.4 Form of Emplo yee Nonqualified Stock Option Award Agreement under T he Shaw Group In c. 2008 O mnibu s In centi ve Pl a n * 10.5 Form o f E mpl oyee Restricted Stock Unit Award Agreement under The S haw Group In c. 2008 Omnibus Incenti ve Plan * 10 .6 Form of Ca nadi a n Empl oyee Incenti ve Stock Option Agreement under The Shaw Group In c. 2008 Omnibus Incentive Plan Statement on Form 8-A Jiled o n July 30, 200 I 58 Re po rt or Regist ratio n Stateme nt The Shaw Group Inc . on Quarterly Report on Form I 0-Q for the period February 28, 2009 The Shaw Group Inc . on Quarterly Report on Form I 0-Q for the period No vember 30, 2009 The Shaw Group Inc . on Quarterly Report on Form I 0-Q for the period November 30 , 2009 T h e Sh aw Group Inc . o n Quarterly Report o n Fo rm I 0-Q fo r th e period No vember 30 , 2009 The Sha w Group Inc . on Quarterly Report on Fo rm I 0-Q fo r th e period November 30 , 2009 The S haw Group Inc. on Quarterly Repo rt o n Fo rm 10-Q for the period November 30 , 2009 SEC File o r Regist ration Num ber 1-12227 1-12227 1-12227 1-1 222 7 1-1 2227 1-12227 http://in vestin g.bu s in esswee k.com/research/stock s/tin a ncial s/drawFiling.as p?fo rmTy pe =l O-Q[5 /l 2/20 IO I :27 :55 PM] Ex hibit o r Other Re fe re nce 10 .8 10 .66 10 .67 10.68 10.69 10.70 SHAW G ROU P INC (Form: I 0-Q, Rece ived: 04 /07/20 IO 17:08 :20) * 10 .7 * 10.8 * 10 .9 * 10 .10 *IO.I I T h e Shaw Gro up In c. Stone & Webster Acqui sitio n Stock Option Plan T he Shaw Gro up In c. 1993 Emp loyee S tock Option Plan , amended a n d restated through October 8, 200 I T he Shaw Group In c. 2005 Non- Employee Directo r S tock In centi ve Plan , a me nd e d a nd re stated through Novembe r 2 , 200 7 Written d escripti o n of th e Compa ny 's compe nsati on policies a nd programs for n o n-e mpl oyee directors Flex ible Perqui s ite s Prog ra m fo r cert a in executive officers Table of Contents Ex hi bit Number Doc ument Description *10.12 Written d escripti o n of th e Company 's incenti ve compensation policies prog ra m s for exec uti ve officers, includin g performance targets for fi scal year end 2009 *10 .13 Amended and Resta ted Employ ment Agreement dated as o f December 3 1, 2008 , by a nd be tw ee n the Company a nd J.M . Be rnh ard , Jr. * 10 .14 /\m e nded and Restate d Empl oy m e nt Agreement dated as of Dec ember 22, 2008 by and between the Company and Gary P . Graphia * 10.15 Empl oy ee Indemnity Agreement dated as of July 12 , 2007 between th e Company and Brian K. Ferraio li * 10 .16 Amended a nd Restated Empl oy m en t T h e S haw Grou p Inc . Re g is tration Sta tement o n Form S -8 filed on Jun e 12 , 200 I T he Shaw Gro up In c. An nu a l Report on Form 10-K for the fi scal year e nded A u g ust 3 I , 200 I T he Shaw Gro up In c. Quarterl y Repo rt on Form I 0-Q fo r the quarter ended November 30, 200 7 The Shaw Group Inc. Proxy State m ent fo r the 2009 Annua l Meeting of Sh a re ho ld e rs con tai ned in T he Sh aw Group ln c.'s Schedule 14A filed o n December 24 , 2008 The Shaw Group Inc . C urrent Report o n Fo rm 8-K fil ed o n November I , 2004 59 Report or Registration Statement The Shaw Group Inc . Proxy Statement fo r the 2009 An nu a l Meeting of Shareholders contai ned in T he Shaw Group lnc .'s Sche dul e 14A filed o n Decembe r 17 , 2009 T he S h aw G ro up In c. Curren t Report o n Fo rm 8 -K filed on Janu a ry 7, 2009 T he Sh a w Group Inc . C urrent Repo rt o n Form 8-K filed on December 24, 2008 The Shaw Group In c. Annual Report o n Form I 0 -K fo r th e fiscal year ended Aug u st 3 I , 2007 T he Sh aw Group In c. C urrent Re po rt 333 -62856 1-1222 7 1-12227 1-1222 7 1-12 22 7 SEC Fil e or Registration Numbe r 1-12227 1-1 222 7 1-12227 1-1 222 7 1-1222 7 http ://investing .bu s inessweek.com/re sea rch/stock s/financia ls/drawFiling .asp ?form Type = I O-Q[5 / 12/2 0 IO I :2 7: 55 PM) 4 .6 IO.I 10 .5 (Co nt ai ned at pages 12 to 15 in th e 2009 Proxy Sta te m e nt ) Descripti o n conta ined under It em 1.01 of th e referenced Fo rm 8-K Exhibit or Other Reference (Contained at pages 23 to 64 in the 20 I 0 Proxy Statement) IQ.I IO .I 10.34 10 .2 <;HA W GROUP IN C (Form: 10-Q , Received: 04 /07 /20 IO 17 :08:20) Agreement dated as of Decembe r 31, on Form 8-K tiled on January 7, 2009 2008 between the Company a nd Brian K. Ferraioli 10.17 Amended a nd Restated Employment The Shaw Group Inc . Quarterly 1-12227 Agreement dated as of December 31, Report on Form I 0-Q for the quarter 2008 by a nd between the Company ended February 28, 2009 a nd George P. Bevan *10 .18 Amended a nd Restated Employment The Shaw Group Inc. Quarterly 1-12227 Agreement dated as of March 23 , Report on Form I 0-Q for the quarter 2009 by a nd between the Co mpany ended May 31 , 2009 a nd Frederick W. Buckman * 10 .19 Employ ment Agreement of David L. The Shaw Group Inc. Current Repo rt 1-12227 Chapman, Sr. dated April 6, 2002 on Form 8-K filed December 24, 2003 *10 .20 Amendment to Employment The Shaw Group Inc . Current Report 1-12227 Agreement of D av id L . Chapman, on Form 8-K ti led on Ja nuary 12 , Sr., dated November 29 , 2004 (with 2005 a n effective date of April I , 2005) *10 .21 Letter Agreement between the The Shaw Group Inc . Current Report 1-12227 Company and David L. Chapman, Sr. on Form 8-K filed on M a rch 17 , 2008 dated as of March 12 , 2008 *10.22 Offer Letter dated as of August 3 I , The Shaw Group Inc . Current Repo rt 1-12227 2007, by and between the Company on Form 8-K filed on December 21, and Michael J. Kershaw 2007 *10.23 Amended and Restated Employment The Shaw Group Inc . Quarterly 1-12227 Agreement dated as of December 31, Report on Form I 0-Q for the quarter 2008 by and between the Company ended February 28, 2009 and Lou Pucher 60 Table of Contents SEC File or Exhibit Report or Registration Registration Number Document Description Statement Number *10.24 Amended and Restated Em pl oyment The Sh aw Group Inc . Quarterly 1-12 22 7 Agreemen t dated as of Dec e mbe r 17 , Repo rt o n Form I 0-Q for the qu a rter 2009 by and between the Company ended November 30, 2009 and John Donofrio *10.25 The Shaw Group In c. 401(k ) Pl a n The Shaw Group In c. Registrat ion 333 -115155 Sta tem en t on Form S -8 filed on May 4 , 2004 * 10 .26 The Shaw Group Inc . 401(k) Plan for The Shaw Group Inc . Regi strati o n 333-115155 http://investing.businessweek .com/re sea rch/stock s/financial s/drawFiling.asp?formType= I O-Q[S /12/20 IO I :27:55 PM] 10.13 10 .20 99.1 IO .I IO.I IO.I 10.16 Exhibit or Other Reference 10 .6 5 4 .6 4.6 SHAW G ROUP INC (Fo rm : I 0-Q, Rece ive d : 04 /07 /20 IO 17:08:20) Cert ai n Ho url y Em p loyees Sta te me nt o n Fo rm S-8 til ed o n May 4 , 2004 *10.2 7 T he S haw Gro up Deferred T he S haw Gro u p In c. Qu a rt erly 1-1 222 7 10 .10 Compe nsati o n Pl a n Re po rt o n Fo rm 10 -Q fo r th e q uarte r e nd ed Fe bru ary 2 8 , 2009 *10.28 T he S haw Gro up De fe rr ed T he S haw Gro up In c. Q ua rt e rl y 1-1 222 7 10.11 Compensati on Pla n Form of Repo rt o n Fo rm I 0 -Q for th e q uarte r A do pti o n ended Febru ary 28 , 2009 *10.29 T ru st Agree me nt , dated as of T he Shaw Grou p In c. Q ua rt e rl y 1-1 222 7 10.6 J a nu ary 2, 2007 by a nd between th e Repo rt o n Fo rm I 0 -Q fo r th e q ua rt e r Co mpany a nd Fid e lity Ma nageme nt e nd ed Fe bru ary 2 8, 2007 T ru st Compa ny fo r T he S haw G ro up Deferred Com pe nsati o n Pl a n Trust 10.3 0 Asset Pu rc hase Agreeme nt, d a ted as T he S haw Gro up In c. C ur re nt Repo rt 1-1 222 7 2 .1 o f Jul y 14 , 2000, a mo ng Sto ne & o n Fo rm 8-K fil ed on Jul y 28 , 2000 We bste r, In corpo ra ted , cert a in s ubsid ia ri es o f Sto ne & Webste r, In corpo rat ed a nd th e Compa ny 10 .3 1 Compos it e Asset Pu rc hase T he S haw Group In c. C urre nt Re po rt 1-1 222 7 2.1 Agreeme nt , d a te d as of Ja nu ary 2 3, o n Fo rm 8 -K fil e d o n May 16 , 2002 2002 , by a nd a mo ng t he Compa ny , T he IT Gro up , In c. a nd cert a in s ub s idi a ri es o f T he IT Gro up , In c., inclu d in g t he fo ll owin g a me ndm ent s:(i) A m e ndm e nt No . I , d ate d Janu a ry 24 , 200 2 , to Asset Purc hase Agreeme nt, (ii ) A me ndm e nt No. 2 , d ated January 29, 200 2 , to Asset Purc hase Agreeme nt , a nd (iii ) a le tt er agreeme nt a me nding Secti o n 8 .04(a)(ii ) o f th e Asset Purc hase Agreeme nt , d a te d as of A pril 30, 2002, be tween T he IT Group , In c . a nd th e Co mpa ny 10.3 2 Amen dm e nt No. 3, dated May 2 , T he S haw Gro up In c. C urre nt Re po rt 1-1 22 2 7 2.2 2002, to Asse t Purc hase Ag reeme nt o n Fo rm 8 -K fil e d o n May 16 , 2002 by a nd a mo ng th e Company, T he IT Gro up, In c . a nd certai n subs id ia ri es of T he IT Gro up, Inc. 10 .33 Amendment o. 4 , dated May 3, The Sh aw Group Inc. Curre nt Report 1-12227 2.3 2002, to Asset Purchase Ag reem en t o n Form 8-K filed o n May 16 , 2002 by and among th e Compan y, The IT Gro up , In c. and certai n s ub sidiari es of the IT Group, Inc . 6 1 Table of Contents http ://inve sti ng .bu sin esswee k.com/resea rch/stoc ks/fin ancia ls/drawFi ling .as p?fo rm Type = I 0-Q[ 5/ 12/20 IO I :27:5 5 PM] ~I-IA W GROUP IN C (Form: I 0-Q , Rece ived: 04 /07 /2010 17:08:20) SEC Fil e o r Exh ibit Re po rt or Regist rat io n Regis tra ti o n or Other u mb e r Doc um e nt Desc ri ptio n Sta te men t Num be r Reference 10 .34 Put Option Agreement, dated as of The Shaw Group Inc . C urrent Report 1-12227 10 .2 October 13 , 2006, between NEI-I and o n Form 8-K filed on October 18 , Toshiba related to sha re s in th e US 2006 acqui s ition company 10 .3 5 Put Option Agreement, date d as of The Shaw Group Inc . Current Report 1-12227 10.3 October 13 , 2006, between N E I-I and on Form 8-K fil ed on October 18 , Toshiba rel ated to sha re s in the U K 2006 acq ui s ition co mpany 10 .36 Shareholders Agreement, dated as of The Shaw Group Inc. Current Report 1-1 2227 10.4 October 4, 2006, by a nd among on Form 8-K filed on O c tob e r 18, Toshiba, Toshiba Nuclear En e rgy 2006 Holdings (US) Inc . the US Company, NEH , TSB Nuclear Energy In vestment US Inc ., a Delaware corporation and a wholly owned s ub s idiary of Toshiba and Ishikawajima-Harima Heavy Industries Co., Ltd ., a corporation organized under the laws of Japan ("IHI ") 10.37 Shareholders Agreement, dated as of The Shaw Group Inc . Current Report 1-12227 10.5 October 4 , 2006, by and among on Form 8-K fi led on October 18 , Toshiba, Toshiba Nuclear Energy 2006 Holdings (UK) Inc., the UK Company, NEH , IHI and TSB Nuclear Energy Investment UK Limited , a company registered in E ngland with registered number 5929658 10.38 Bond Trust Deed, dated October 13 , The Shaw Gro u p Inc. Current Report 1-12227 10.6 2006, between NEH and The Bank of on Form 8-K filed on October 18 , New York , as trustee 2006 10 .39 Parent Pledge Agreement, dated The Shaw Group In c. Current Report 1-1222 7 10.7 October 13, 2006, between the on Form 8-K filed on October 18 , Company and The Bank of New 2006 York 10.40 Issuer Pledge Agreement, dated The Sh aw Group Inc . C urrent Report 1-1222 7 10 .8 Octo ber 13, 2006, between NEH and o n Form 8-K filed o n Octo be r 18 , T he Ba nk of ew Yo rk 2006 10.4 1 Deed of C harge, dated Oc tober 13 , T h e S haw Gro up In c . C urre nt Repo rt 1-12227 10 .9 2006 , a m ong N E H, The B a nk of New o n Form 8-K fil e d o n October 18 , Yo rk , as tru stee , a nd Morgan Stanley 2006 Capital Services Inc., as swap co unterparty 10 .42 Trans ferab le Irre voca ble Direct Pa y T he S haw Group Inc . Cu rre nt Repo rt 1-12227 10 .10 Letter of Credit (Principal Letter of o n Form 8-K filed o n October 18 , Credit) effective October 13 , 2006 of 2006 http ://inv es tin g .bu sinessweek.com/re search/sto cks/financia ls/drawFiling.as p?formType = I O-Q[5 / 12/20 IO I :27:55 PM] SHAW GROUP INC (Fo rm : I 0-Q , Rece ive d : 04 /07 /20 I O 17:08:20) Bank of America in fa vo r ofN E H 10.43 Transferable Irrevocable Direct Pay Letter of Credi t (Int erest Lette r of Credi t) effective October 13 , 2006 of Bank of America in favo r ofNEH Table of Contents Exhibit Number Document Description I 0.44 Reimburse ment Ag reement d ated as of October 13 , 2006, between the Company and Tosh iba I 0.45 Amended and Restated Credit Agreeme nt, dated as of Septembe r 24, 2009, among the Company, as borrower; the Company's s ubsidiaries signatories there to, as g u arantors; BNP Paribas, as admi ni strative agent; an d the other agent s lend e rs s ig natory thereto. t* I 0.46 Form ofNonemployee Director Nonqua lifi ed Stock Option Award Agreem e nt under T h e S haw Gro up Inc. 2008 Omnibus In centive Pl a n t* 10.4 7 Form ofNonemployee Director Rest ric ted Stock Unit A ward Agreement under T he S haw Group Inc . 2008 Omnibus Ince nti ve Plan t3 1.1 Certi Ii cation pursuant to Section 302 of th e Sarbanes-Oxley Act of2002 t3 I .2 Certifi cati o n pu rs ua nt to Sectio n 302 of the Sarbanes-Oxley Act o f2002 t32.I Certification purs uant to 18 U.S.C. Secti o n 13 50, as Adopted Purs uant to Section 906 of th e Sarbanes -Oxley Act of2002 t32.2 Certificati o n purs uant to 18 U.S.C. Secti on 1350, a s A dopted Purs uant to Sectio n 906 of th e Sar ba ne s -Ox ley Ac t of2002 The Shaw Group In c. Current Report o n Form 8-K Ii led on October 18, 2006 62 Report or Regis tration Statement T he Sh aw Group In c. C urre nt Repo rt o n Form 8-K filed on October 18, 2006 The S haw Group In c. C urrent Report on Form 8-K fi led o n September 25, 2009 1-1 222 7 SEC File or Registration Number 1-1 222 7 1-122 2 7 1-12227 1-12227 http ://in ves tin g .bu s ine sswee k.com /re se arch/stoc ks/fin anci a ls/drawFiling .as p?form Type= I O-Q(5 / 12 /20 IO I :27: 55 PM] 10.11 Exhibit or Other Reference 10.12 10 .1 '3 HA W GROU P INC (Fo rm : I 0-Q, Rece ive d : 04 /07/20 I O 17:08:20) 63 •------------ Tabl e of Content s SIG NAT U RE Purs ua nt to th e require m e nt s of th e Securiti es Exc ha nge Act of 1934, th e registra nt has d ul y caused thi s report to be signed o n it s beh a l f by th e und ers ig n ed th ereunto dul y a uth o ri zed. Da ted : April 7, 20 10 T H E S HA W G R OU P INC. Isl Bri a n K . Ferraio li Bri a n K. Ferra io li C hi e f Fin a n c ia l O ffi cer (D uly A uthori:::ed Office r and Principal Fin ancial Officer) 64 NON-EMPLOYEE DIRECTOR NONOUALIFIED STOCK OPTION AWARD AGREEMENT 1 The Shaw Group Inc. 2008 Omnibus Incentive Plan Exhibit 10.46 T hi s N o nqua lifi ed Stock Opti o n Award Agr eeme nt (" Agreement ") d ated as of I Insert Grant Date! 2 (th e "Grant Date ") is e nte re d into be tween T he Sh aw Gro u p In c . (th e " Company ") a nd (Insert Recipient's Name! (th e " Recipient ") pu rs ua nt to th e T he Sha w Group In c . 2008 Omnibus In centi ve Pl a n (as th e sam e may he reafter be a me nded , s uppl e me nted o r o th erw ise mo d ified , th e " Plan "). THE PARTIES HERETO AGREE AS FOLLOWS: I . Incorporation of Plan Provisions . T he O ptio n ev idenced h e re by is m ad e unde r a nd pu rs ua nt to t h e Pl a n, a co py of w hi c h is avai lab le fr o m th e Company 's Sec re tary a nd in corpo ra ted h ere in by re fere nce, a nd the O pt io n is s ubject to a ll of the provis io n s th ereof. Capit a li zed te rm s used h e re in w ith o ut d efi niti o n sh a ll have the sam e m ea nin gs g ive n s uc h te rm s in th e Pl a n . T he Recipi ent re present s a nd warrants th at he o r s he has read th e Pl a n and is full y fa m il ia r w it h a ll th e te rm s and cond it io ns of th e Pla n a nd agrees to be bou nd th ereby . 2. G rant o[Optj o n . In cons ideratio n o f the Reci pi ent 's se rvice o n th e Board of D irectors (the '· Board ") of the Co mpa ny, th e Company hereby gran ts to th e Recipient a n o pti o n (the " Opti o n ") under th e Pl an to purch as e a tota l of !In se rt # Optio ns I sh a re s of the Com p a ny's no par va lu e common stock (the " S ha res "), subject to t he fo ll owi ng terms a nd condi t ions: (a) T h e Option is a nonqualified stock o ption o r NQSO (as defined in the Pl a n) th a t is no t intended to be gove rned b y Section 422 of the Int ernal Revenue Code, as a mended (the " C ode "). (b) T h e Exercise Pri ce of t he Opt io n is I In s ert $ Pricej 3 pe r Sh are. 3. Exe rci se of Op t ion . (a) Subject to earlier forfeiture of th e Option as se t fort h below and in the Pl a n, the Opt ion sha ll fu ll y ve st o n th e fir st a nn iversary of th e Grant Date a n d may be exerc ised by th e Rec ip ie nt a l a ny ti m e a nd fr o m time to t im e th e reafter. http://inves ting.busin essweek.com/resea rch/stocks/fina ncia ls/drawF il ing.asp?fo rm Ty pe= I 0-Q [ 5/ 12/20 IO I :2 7: 55 PM] SHAW GROUP IN C (Form : I 0-Q , Received : 04 /07 /2010 17 :08:20) (b) In the event th at the Recipie nt ceases to be a member of th e Board prior to th e vestin g of th e Opti o n, th e Option s hall be forfe ited. (c) Notwith sta ndin g a ny o ther provision of thi s Ag reement or the Plan , th e Option may not be exercised unless , at the date of exercise. (i) a registration statement under the Sec uriti es Act of 1933 , a s amended , re lati ng to the S h ares covered by th e Option sh a ll be in effect or (ii) an exemption from reg istrati on is app li cable to th e Sha res in th e o pini o n of co un sel fo r th e C o mpany . 4 . Termination of Option . Except as o th erwise provided herein. the Option shall terminate upon th e expirati on of IO years from th e Grant Date. T hi s form is for non-employee Directors on ly. 2 The date on which th e Option ev idenced hereby was granted. 3 T he Fair Market Va lue per sha re o n th e Grant Da te. 5. Rights Prior to Exercise of Option . The Recipi e nt s ha ll h ave no rights as a stockho lder with respect to the Shares subject to the Option until the exercise of hi s or her rights hereunder and the issuance and delivery to R ecip ie nt ofa certificate o r certificates evidencing such Shares. 6. Miscellaneous . (a) No Representation s or Warranties . Neither th e Company nor the Committee nor any of th ei r representatives or agents has m ade any re presentation s or warranti es to th e Recipient with respect to the in co m e tax or other consequences of the transac tion s contemplated by this Agreement, and the Recipient is in no m a nn er relying o n th e Company , the Committee or any of their representati ves o r agent s fo r an assessment of such tax or other consequences. (b) In vestment . The Recipient hereby agrees and represents that th e Option a nd any purc hase of the Shares under the Option is for the Recipi e nt 's own accou nt for investment purposes only and not with a v iew of re sa le or di s tributi o n unless such Shares acquired purs ua nt to the Option are regis tere d unde r the Securities Act of 1933 , as a m e nded. (c) Stock Iss uance . The exercise by the Reci pi e nt of the Option granted herein will not b ecome final nor will S hares be issued purs ua nt thereto unless s uc h exerc ise fully complies with the require ments of th e Plan a nd all applicab le Federal , state and local laws. (d ) Necessary Acts. T he Rec ipi en t a nd the Compa ny he reby ag ree to perform a ny further acts a nd to execut e a nd deliver any documents that may be reason a bly necessary to carry out th e provisions of this Agreem e nt. (e ) No Tran s fer . The Opti o n m ay no t be ass igned , encumbered o r tran s ferred , ex ce pt by will o r the laws of descent a nd di stributi o n in th e event o f death o f th e Recipi e nt o r purs ua nt to a qua lifi ed do m esti c re la ti o ns o rder pursu a nt to the Code or the Empl oyee Ret ire ment Sec urity Ac t of 19 74 . as a me nded . (t) Severabjljty . The prov is io ns o f thi s A gree ment a re s e ve rabl e and i f any o ne o r m o re prov is io n s m ay be d e te rmin e d to b e ille ga l o r o therwi s e un e nforceable, in wh o le or in pa rt , the re m a inin g pro v is io ns, a nd a ny partiall y enforcea bl e provis ion to the e xtent enforceable in a ny juri sdi cti o n , sha ll ne verth e le ss be binding and enforceable. (g) ~-T he waiver by the Company of a brea c h of any provision of thi s Agree men t by th e Re c ipi ent sha ll not o perate or be co nstrued a s a w a iv er o f a ny s ub sequent breach by th e Recipient. (h) Bjndin~ E ffect: Applicable Law. This A g reement s hall bind and inure to the benefit of the Company and its successors and as signs, a nd the Recipient and a ny heir, legatee, lega l representative o r o ther permitted assignee of th e Recipient. T hi s Agreement sha ll be interpreted under, governed by a nd con strued in accordance wit h the laws of th e State of Louisiana. htt p://inve stin g.bu sine ss week .com/research/stock s/financia ls/drawFil ing.asp?forrnType= I O-Q[5 / 12 /20 IO I :27: 55 PM] SHAW G RO U P INC (Form: I 0-Q, Received : 04 /07/20 10 17 :08:20) (i) Administration. The a uth ori ty to m anage a nd control th e operation a nd admini strati o n of thi s Agreement s ha ll be vested in th e Committee, a nd the Committee sh a ll h ave all powers wi th respect to thi s Agreem ent as it has with respect to the Pl a n . Any inte rpret ati o n of the Agreeme nt by the Committee and any deci s io n made by it with respect to th e Agreement a re final a nd binding. U) Amendment. This Agreem e nt m ay be amended by written agreement of th e Re ci pi e nt a nd the Company, w ith o ut th e con se nt of a ny o th e r person . -2 - IN WITNESS WHEREOF , the parties to thi s Agreement have executed thi s Agreement e ffecti ve as of the date fir st a bove written. COMPANY: THE SHAW GROUP INC. Isl Dirk J. Wild Dirk J. Wild Senior Vice Pres ident a nd C hief Human Reso urces Officer RECIPIENT: (Insert Recipient's Name) -3 - NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT 1 The Shaw Group Inc. 2008 Omnibus Incentive Plan Exhibit 10.47 T hi s Restricted Stock Un it Award Agreement (th e "Agreement ") dated as of (Insert Grant Date( 2 (the "Grant Date ") is e nt e red into between T he Shaw Gro u p In c. (th e " Company ") a nd (Insert Recipient's Name( (th e" Recipient ") purs ua nt to T h e Sha w Group In c . 2008 Omnibus Incentive Pl a n (as the same may hereafter be amended, supplemented o r o therwi se modified , the " Plan "). THE PA RTIE S HER ET O AG REE AS FOLLOWS: 1. Incorporation of Plan Prov is ions . The Award ev id enced hereby is made under a nd pursuant to the Pl a n , a copy of w hi c h is avail able fr o m the Company 's Secretary a nd incorporated here in by referen ce , and the Award is s ubject to all of the provisio ns th ereof. Capi ta lized term s used he rein wit ho ut de finition sh a ll have th e same mea nings g ive n s uc h terms in th e Plan . The Recip ient represents and warra nt s th a t he o r she has read th e Plan and is full y familiar with a ll th e terms a nd conditi ons of th e Plan a nd agrees to be bound th ereby. 2. Award of Re s tricted Stock U nits . In consideration of t he Recipient's serv ice o n th e Board of Directors (th e --Board ") of the Com pany , th e Company hereby awa rd s to the Rec ipi e nt unde r the Plan a to tal of (Insert#( Restri c ted Stock Units (th e "Award '') s ubj ect to th e term s a nd conditi ons se t fort h in thi s Ag ree m e nt and th e Plan . http ://investing.bus ine ssweek.com/resea rch/stoc ks/ti nanc ia ls/drawF il ing .asp?form Ty pe= l O-Q[5 / l 2/20 l O I :27 :55 PM] SHA W G ROU P INC (Fonn: I 0-Q, Rece ive d : 04 /07 /20 IO 17 :0 8:20) 3. Vesting of Restricted Stock Unit s. (a) T he Restri c ted Stock Un its s ha ll vest accord in g to th e fo ll owin g schedul e (each da te o n w hi c h vestin g occurs s ha ll be refere nced he re in as a " Vesting Date "): On or after each of the following dates !Insert 1 st Vesting Date) !Insert 2 nd Ve s ting Date! !Insert 3rd Vesting Date! Cumulative Percentage of Restricted Stock Units Vested 33 1/3 % 66 2 /3% 100% (b) Not wi th stan din g th e forego in g, (i) in th e event th at th e Directo r ceases to be a membe r of th e Board pri o r to th e earli e r to occur o f (x) th e o ne year a nni versary o f th e Gra nt Dat e a nd (y) th e Comp a ny's A nnu a l Meetin g o f S hare ho ld e rs in th e cale nd a r year fo ll owi ng th e Grant Da te, th e A ward s ha ll be a uto ma ti call y fo rfei ted, a nd (ii ) in th e event th at th e Directo r ceases to be a me m be r of th e Boa rd at a ny t ime a ft e r th e o ne year a nni ve rsary of th e Grant Da te, th e vestin g of th e Award (o r a ppli cabl e un ves ted po rti o n th e reof) sha ll be a uto mati call y acce le ra te d. 4 . Re stricted Stock Units are Non-Transferable . T he Restric ted Stock Unit s award ed he re by may no t be so ld , ass ig ne d , tran sferre d , pl edged or o th e rwise di sposed of, ei th e r vo lunta ril y or invo lunt aril y , pri o r to pay m e nt. T hi s fo rm is for no n-e m ployee Directo rs o nl y. 2 T he d a te o n whi ch th e Restri cted Stock Units ev id e nced he re by were grant ed . 5 . Payment upon Ve sting of Restricted Stock Units . S ubj ect to th e te rm s a nd co nditi o ns o f th e Pl a n, th e Co mpa ny s ha ll , as soon as prac ti cabl e fo ll owi ng each Vestin g D a te, ei th e r: (a) deli ve r to yo u a numbe r of S ha res equa l to th e aggregate numbe r o f Restri cted Sto c k Unit s th a t became vested o n t he a ppli cabl e V estin g Date; (b ) m ake a cash pay me nt to yo u e qu a l to th e Fair M a rk e t Va lu e of a Sha re o n th e Vestin g Da te multipli ed by th e numbe r of Restri c t ed Stock Units th at became vested on th e Vestin g Da te ; o r (c) use any co mbin ati o n of(a) o r (b), in th e so le di sc reti o n of th e Compa ny. Upo n p ay me nt by th e Compa ny , t he respecti ve Restri c ted S tock Unit s s ha ll th e rew ith be cancele d . 6. No Dividend or Voting Right s . The Recipient acknow ledges th at he or she sha ll be e ntit led to no di v idend o r voti ng rig ht s w it h re s pect to the Re stricted Stock Unit s. 7 . Wit hh olding Taxes; Sec tion 83l b} Elec ti on. (a) No Shares or cash will be payable upon the ves ting of a Re stricted Stock Unit unless and until the Recipient satisfies a ny Federal , s tate or loca l withholdi ng tax o bligati o n required by law to be wi thheld in respect of this Award. The Reci p ient ack nowle d ges a nd agrees th at to satisfy a ny suc h tax obliga tion t he Company may d ed uct a nd re ta in from th e cas h and/or Shares payab le upo n vest in g of Restri c ted Stock Uni ts s uc h cash and/or s uc h num ber of Shares as is equal in value to th e Co m pa ny's m inimum sta tu tory w ithh o ld ing obligat ions wi th respect to th e income recog ni zed by the Recipient upo n s uc h vest ing (based o n m inimu m statu tory wi thh oldi ng rates fo r Federal and state tax purposes, including pa y ro ll taxes, that are a pplicab le to s uch income). T he number of such Shares to be deducted and re tained s ha ll be based o n the clos ing price of th e S ha res o n th e app li cab le Vestin g Da te . (b) T he Reci pi ent ac kn owled ge s th at no e lecti o n under Sec ti o n 83(b) of th e Int e rn a l Revenu e Cod e of 19 86 m ay be fil e d w ith http ://in vestin g.bu s in essweek.com/research/stoc ks/fin anc ia ls/drawFi ling.as p?fo rm Ty pe= I O-Q [5 /l 2/20 IO I :2 7:5 5 PM] SI-IA W G ROU P INC (Fo rm : I 0-Q, Rece ive d : 04 /07/20 IO 17:08:2 0) respect to th is A ward . 8. Mi scellaneous . (a) No Re present a t io n s or Warra nt ies. Ne ith er th e Compa ny nor th e Committee o r a ny o f th e ir re present a ti ves or agent s has m ad e a ny represent a t io n s or warranti es to th e Recipi ent w ith res pect to th e incom e tax o r oth e r consequen ces o f th e tra nsacti o n s conte mpl ated by thi s Agreem e nt , a nd th e Recipi e nt is in no m ann e r re ly in g o n t he Com pa ny , th e Comm itt ee o r a ny o f th eir re present ati ves or agent s fo r a n assessm e nt o f s uc h tax o r o th er consequen ces . (b ) In vestment. T he Recipi e nt h ereby agrees a nd re p resen ts th a t a ny Sha res payable u po n Vestin g o f th e Restri c ted Stock Un its sha ll be he ld fo r th e Reci p ient's own acco unt for in vestm e nt purposes o nl y a n d no t w ith a view of re sa le o r di stri b ut io n unl ess th e S ha res a re registe re d un der th e Secur iti es Act of 1933 , as a m e nded. (c) Necessary Ac t s. T he R eci pi e nt a nd th e Co mpa ny he reby agree to perfo rm a ny furth e r acts a nd to execut e a nd de li ver a ny docume nt s w hi c h m ay b e reasona b ly n ecessary to carry o ut th e prov is io ns of thi s Agreeme nt. 2 (d ) S eve ra bility . T he p rov is io ns of thi s Agreeme nt are severabl e a nd if a ny o n e o r mo re p rov is io ns m ay be d e termine d to be ill egal o r o th erwi se un e n fo rceabl e , in wh o le or in pa rt, th e re m a ining prov is io ns, a nd a ny pa rti a ll y e n forcea bl e prov is io n to th e exte nt e n forceab le in a ny j uri sdi c ti o n , sh a ll neverth e less be bindi ng and e nforceabl e. (e) ~-T h e wa iver by th e Compa ny ofa b reach of any pro v is io n o f thi s Agree me nt by th e Recipi ent sh a ll no t o p erate o r be con strued as a waiver of any subseque nt breach by th e Recipient. (f) Bin d in i: Effect: A pplica ble Law . T h is Agreem e nt sh a ll bind a nd inu re to the b e nefi t of th e Company a nd it s s uccessors a nd ass ig n s, a nd th e Recipi e nt a nd a ny he ir, legatee, o r legal re presenta ti ve of th e R ecipi e nt. T h is Agreem e nt s ha ll be inte rpre te d unde r a nd govern ed by a nd con structed in accord a nce wi th the laws o f th e State of Lo ui s iana . (g) A dmini strati o n . T he a utho rity to m anage a nd control th e o p eratio n a nd a dmini strati o n of thi s Agreem e nt s ha ll b e vested in th e Comm ittee, a nd th e Committee sh a ll have a ll powers w ith resp e ct to thi s Agreeme nt as it has w ith resp ect to th e Pl a n. A ny inte rpre ta ti o n of th e Agreem e nt by th e Committee and a ny deci s io n m ade by it w ith res pect to the Agreem e nt is fin a l a nd bindin g . (h ) A m endment . T h is Agreeme nt m ay be a me nde d by w ritte n agreem ent of th e Rec ipi ent a nd th e Compa ny , wi th o ut th e consent of a ny oth e r pe rson. IN WITNESS WHEREOF , th e parties to th is Agreem e nt have executed thi s Agreem e nt effecti ve as of th e d a te first above w ritten. C OMPANY: TH E SH A W GRO U P I NC. Isl Dir k J. Wi ld Dirk J . W ild Sen io r Vi ce Preside nt a nd C h ie f Hum a n Reso urces O ffi cer RE C IPIE N T : !In s ert Recipient 's Na me! 3 j tt p ://in ve stin g.bu s ines swee k.co m/re search/s toc ks/fi nan c ia ls/drawF il ing .as p?fo rm Ty pe= I O-Q [S/12/20 IO I :27 :55 PM ] SI-IA W GROUP IN C (Form : I 0-Q , Rece iv ed: 04 107 120 IO 17:08 :20) CERTIFI CATION OF C HI EF E XECUTIVE OFFICER OF THE SHAW GROUP INC . PURSUANT TO 15 U .S .C. SECTION 7241 , AS ADOPTED P U RS UANT TO SECTION 302 OF THE SARBAN E S-OXLEY ACT OF 2002 I, J .M . Bernhard, Jr., certify th at: EX HIBIT 31.1 I . I have reviewed thi s qua rt e rl y report o n Form I 0-Q for the fi scal quarter ended Februa ry 28 , 20 IO (the "qu arterly report") of The Shaw Group Inc . (the "Reg istrant "); 2. Based on my kn owledge, thi s quarterly re port does not contain any untrue st ate ment of a material fact or omit to state a mate rial fact necessary to make the statements made, in light of the circumstances under which such statements were made , not misleading with re s pect to the period covered by thi s quarterly repo rt ; 3. Based on my knowledge, the financial statements and other financial information included in thi s quarterly report , fairly present in a ll material re s pects th e financial condition, results ofoperations a nd cash flow s of the Registrant as of, and for , the periods presented in thi s quarterly re port ; 4. The Registra nt's o ther certifying officer and I a re responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules I 3a-15(e) and I 5d-I 5(e)) and internal control over financial reporting (as defin ed in Exchange Act Rules I 3a-l 5(f) and I 5d-15(f)) for the Registrant and have : (a) Designed such disclosure controls and procedures, or caused s uch disclosure controls and procedures to be designed under our s upervisi o n , to ensure that mate rial information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within tho se entities, particularly during the pe riod in which this quarterly report is being prepared ; (b) Designed such internal control over financial reporting, or caused such internal contro l over financial reporting to be designed under our supervision, to pro v ide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles ; (c) Evaluated the effectiveness of the Registrant's disclosure contro ls and procedures a nd presented in this qua rterly report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this quarterly report based on such evaluation; (d) Disclosed in this quarterly report a ny change in the Registrant 's interna l control over financial reporting that occurred during the registrant's most recent fi scal quarter (the Registrant 's fourth fiscal quarter in the case of an annual report) that has mate riall y affected, or is reasonably likel y to materially affect, the Registrant 's internal control over financial reporting; and 5. The Registrant's other certifying officer and I have disclosed , based on our most recent evaluation of int ernal control over financial reporting, to the Registrant 's auditors and the audit committee of the Regi strant's bo a rd of directors (or persons performing the equivalent functions): (a) All significa nt defi c ie ncies and material weaknesses in the design or operati o n of int e rnal contro l over financial reporting which a re re aso nab ly lik e ly to adverse ly affect the Regi strant 's a bility to record , pro cess, s umm arize and report financial information; a nd (b ) An y fraud , whether o r no t material , th at in vo lve s management o r o ther empl oy ees w ho ha ve a s ignificant ro le in the Regi stra nt 's inte rnal control over fin a nc ial re porting. Dated: April 7 , 2010 I sl J .M . Bernh a rd , Jr. Chief E xecu ti ve Officer http:ll in ves tin g .businessweek.coml research/stocks/financialsldrawFiling .as p?fo rmTy pe =l 0-Q[S I 12120 IO I :27:55 PM] HA W GROU P INC (Fo rm : 10-Q, Rece ive d: 04 /07/2010 17 :08 :20) C E RTI F ICA TION O F C HI EF E X ECUTIV E O FF ICER O F T H E S HAW G RO UP I NC . PU R S UANT TO 15 U .S .C. S ECTIO N 7241 , AS A DOPTE D P U R SUA NT T O SECTION 302 O F TH E SA RB AN ES -OXL EY ACT O F 2002 I, Bri a n K . Fe rra io li , certi fy th at: EX HIBI T 3 1.2 I . I h ave rev iewed thi s qu a rterl y re po rt o n Fo rm I 0-Q fo r th e fi scal qu a rt e r e nd ed Fe bru ary 2 8, 20 I O (th e "q uart e rl y re po rt ") o f T he S haw Gro up In c . (th e "Reg istra nt"); 2. Based o n my kn owle dge, thi s qu a rt e rl y re po rt does not conta in a ny untru e st ate me nt o f a m ate ri a l fac t o r o m it to state a ma te ri a l fac t necessary to m ak e th e sta te m e nt s m ad e , in li g ht o f the c ir c umstan ces unde r whi c h s u c h sta te m e nt s we re m ad e , no t mi s leadin g w ith res pect to th e pe ri o d covered by thi s qu a rt e rl y r e po rt ; 3. Based o n my kn owle dge, th e fi n anc ia l state m e nt s a nd o th e r fin a nc ia l in fo rm a ti o n incl uded in thi s q ua rt e rl y re po rt, fa ir ly present in a ll m ate ri a l res pects th e financial conditi o n, re s ult s o f o pe rati o ns and cas h n o w s o f th e Registra nt as o f, a nd fo r, th e pe ri ods present ed in thi s qu a rt e rl y report ; 4 . T h e Reg istra nt 's o th er certify in g o ffi cer a nd I a re respo ns ibl e fo r esta bli s hin g a nd m a int ai nin g di sc losure co nt ro ls a nd p rocedures (as de fin ed in Excha nge Act Rul es l 3a-15(e) a nd 15d-15(e)) a nd inte rn a l control over fin anc ia l re po rtin g (as de fin e d in Exch a nge A ct Rul es 13a-15 (1) a nd l 5d-15(t)) fo r th e Regist ra nt and hav e : (a) Designe d s uc h di sclosure contro ls a nd p rocedures, o r cau sed suc h di scl osure co nt ro ls a nd procedures to be des ig ned un de r o ur s upe rv is io n , to e ns ure th at materi a l in fo rm ati o n re latin g to th e Re gi strant , includin g its co n so lida ted s ub s idi a rie s, is m ad e kn own to u s by o th ers wi th in th ose e ntiti es, pa rti c ul a rl y durin g th e pe ri o d in w hi c h thi s qu a rt e rl y re po rt is be in g pre pare d ; (b ) Des ig ned s uc h inte rn a l contro l over fin a nc ia l re po rtin g, o r caused s uc h intern a l cont ro l over fin a nci a l re po rting to be d es ig ned unde r o ur s upe rvi s io n, to p rov ide reaso na ble assura nce regarding th e re li a bility of fin a nc ial re po rtin g a nd th e pre pa rati o n o f fin a ncial statem ent s fo r exte rn a l purposes in acco rd a nce w ith g e n e ra ll y acce pted acco untin g principles; (c) Evalu ate d th e e ffecti venes s of the Reg istrant 's di scl os ure control s and procedures a nd presented in thi s qua rt e rl y re po rt our conclu s ion s a bo ut th e e ffecti veness of th e di sc losure control s a nd procedures, as of th e e nd o f th e perio d covered by thi s qu a rt e rl y repo rt based o n s uch ev alu ati o n ; (d) Di scl osed in thi s quarte rl y re port any c hange in the Re g is tra nt's inte rn a l contro l over finan c ia l re porting th at occurre d during th e re g istra nt 's most rece nt fi sc a l qu a rt e r (th e Registran t's fourth fis cal qu a rt e r in th e case o f a n a nnu a l re po rt ) th at has m ate ri a ll y affec ted , o r is reasona bl y li ke ly to mate ri a ll y a ffe c t, th e Registra nt 's int e rn a l co ntrol over fin anc ia l re po rtin g ; a nd 5 . T he Regis tra nt 's o th e r certify in g o ffi ce r a nd I have di sc losed , based o n o ur m ost rece nt evalu a ti o n of int ern a l control over fin a nc ia l re po rtin g , to th e Registra nt 's a udito rs a nd th e a udit committee of th e Registra nt 's board o f direc to rs (or p e rsons pe r fo rmin g th e equi vale nt fun cti o n s): (a) A ll s ignifi cant de fi cienc ies a nd m ate ri a l weakn esses in th e d es ig n or o perat io n of inte rn a l contro l over finan c ia l re po rtin g w hi c h are reasona bl y li ke ly to ad ve rse ly a ffect th e Regis tra nt's a bili ty to reco rd , process, s umm ari ze a nd re po rt fin anc ia l in fo rm a ti o n ; a nd (b ) A ny fr a ud , w he th er o r no t m ate ri a l, th a t in vo lves ma nagem e nt or ot h er employ ees w ho have a s ig n ifica nt ro le in th e Regis trant's in tern a l con tro l o ver fi nanc ial reporting . Dated : Apri l 7. 20 10 /s/ Brian K . Fe rraioli C hi e f Fi na nc ia l Offi cer EX HIBI T 3 2 .1 CE RT IF ICAT ION P U R SUANT TO http ://in ves tin g .bu si nesswee k.co m/resea rch/stoc ks/fi nanci a ls/dra wF ilin g.as p?fo nn Type=l O-Q [S /12 /20 IO I :27:55 PM] ;1-1A W GROUP INC (Form: I 0-Q , Receiv ed : 04 /07/20 IO I 7:08 :20 ) 18 U.S.C. SECTIO 1350, AS ADOPTE D PU RSUANT TO SECT IO N 906 OF TH E SA RB ANES -OXLEY ACT OF 2002 In conn ecti o n w ith th e Quarterly Re po rt of T he S haw Gro up In c. (the "Compa ny") o n Fo rm 10 -Q fo r th e fi scal qu art e r e nd ed Feb ru ary 28 , 20 10 , as fil ed wi th th e Securities and Excha nge Commissio n o n th e dat e h e reof(th e '·Report"), I, J.M. Bernhard , Jr., C hi ef Exec uti ve Officer of th e Compa ny, certify , purs ua nt to 18 U.S.C. Secti o n 1350, as ado pt ed pursuan t to Sec ti o n 906 of th e Sarbanes-Ox le y Act of 2002 , th at : (I ) T he Report full y compli es wit h th e require me nts of Section I 3(a) or I 5(d), as a ppli cable . of the Sec uriti es Excha nge Act of 193 4 , as a me nded, and (2) T he information cont a in ed in th e Report fa irl y present s, in a ll materi a l re s pects, the fin a ncial condition a nd results of operati o ns of th e Compa ny . Da ted: Apri l 7, 20 I 0 Isl J .M . Bern hard, Jr. C hi ef Exec utive Officer CERT IFI CATION PURSUANT TO 18 U.S .C . SECT ION 1350, AS ADOPTED P U RSUANT TO SECTION 906 OF THE SA RBAN ES -OXLEY ACT OF 2002 EXHIBIT 32.2 In connection with the Quarterly R epo rt of The Shaw Group Inc. (th e "Compa ny") o n Form I 0-Q for the fiscal qu a rter ended Fe bruary 28 , 20 I 0 , as filed with the Sec uriti es a nd Exchange Commi ssion o n the date he reof (the "Report"), I, Bri an K. Ferraio li , Chief Financial Officer of the Company, certify , pursuant to 18 U.S.C. Section 1350, as a dopted purs uant to Section 906 ofthe Sarbanes-Oxley A ct of 2002 , th at: ( 1) T he Report full y complies with the requirements of Section l 3(a) o r I 5(d), as app licabl e, o f the Sec urities Exchange Act of 1934 , as a me nd ed , a nd (2) The informa ti o n contai ned in th e Re po rt fairly presents, in a ll m aterial res pects , th e financial condition a nd results o f operation s of th e Company. Dated: April 7, 20 10 Isl Brian K. Ferraioli C hi ef Fin a nc ia l Offi cer http://inve stin g.bus in essweek.co ml resea rch/stoc ksl fin anc ia ls/d rawFi lin g.asp?fomlType =l O-Q[5/l 2/2 0 IO I :27 :55 PM]