DESIGN AGREEMENT

BETWEEN

THE DEPARTMENT OF THE ARMY

AND

THE PORT OF SEATTLE

FOR

DESIGN

FOR THE

SEATTLE HARBOR NAVIGATION IMPROVEMENT PROJECT

THIS AGREEMENT is entered into this ___ day of _________________, ______, by

and between the Department of the Army (hereinafter the “Government”), represented by the

District Commander for Seattle District (hereinafter the “District Commander”) and the Port of

Seattle (hereinafter the “Non-Federal Sponsor”), represented by the Executive Director.

WITNESSETH, THAT:

WHEREAS, Federal funds were provided in Further Consolidated Appropriations

Act, 2020, Public Law 116-94 to initiate design of deep draft navigation improvements for

Seattle Harbor, Seattle, Washington;

WHEREAS, the locally preferred plan (LPP) for Seattle Harbor Navigation

Improvement Project (hereinafter the “Project”, as defined in Article I.A. of this Agreement)

was approved by the Assistant Secretary of the Army (Civil Works) on December 11, 2017;

WHEREAS, Section 101 of the Water Resources Development Act of 1986, as amended

(33 U.S.C. 2211), specifies the cost-sharing requirements applicable to construction of the

Project, and Section 105(c) of the Water Resources Development Act of 1986 (33 U.S.C.

2215(c)), provides that the costs of design shall be shared in the same percentages as

construction of the Project;

WHEREAS, based on the Project’s primary purpose of commercial navigation, the

parties agree that the Non-Federal Sponsor shall contribute 50 percent of the NED Plan design

costs under this Agreement;

WHEREAS, the Non-Federal Sponsor is responsible for 100 percent of costs in excess of

that required for design of the national economic development plan (hereinafter the “NED Plan”,

as defined in Article I.B.); and

WHEREAS, the Government and Non-Federal Sponsor have the full authority and

capability to perform in accordance with the terms of this Agreement.

NOW, THEREFORE, the parties agree as follows:

Item No.: 10d_Attach

Date of Meeting: September 12, 2023

ARTICLE I - DEFINITIONS

A. The term “Project” means the LPP, which includes that plan for deep draft navigation

improvements that will contribute to the economic efficiency of commercial navigation in

Seattle Harbor by deepening the existing navigation channels to an authorized depth of -57

feet MLLW and widening the approach reach to 700 feet, as generally described in the Chief

of Engineer’s Report, Seattle Harbor Navigation Improvement Project, Seattle,

Washington, dated June 7, 2018 and approved by the Chief of Engineers on June 7, 2018

(hereinafter the “Decision Document”), and includes the Project features associated with the

portions of berths at Terminal 5 that overlap the Federal channel which are considered local

service facilities (LSF) and are 100% non-Federal expense, but extends solely to the deepening

of the existing West Waterway navigation channel and excludes the remainder of the

recommended plan that has not been remediated of the contaminated sediments located therein

under the oversight of the Environmental Protection Agency as of the date of this Design

Agreement.

B. The term “NED Plan” means the national economic development plan, which

includes deepening the existing navigation channels of Seattle Harbor to an authorized

project depth of -56 feet MLLW and widening the approach reach to 700 feet, as generally

described in the Decision Document.

C. The term “Design” means performance of detailed pre-construction engineering

and design, up through preparation of plans and specifications for the initial construction

contract for deepening of the West Waterway navigation channel only for the Project.

D. The term “design costs” means the sum of all costs incurred by the Government and

Non-Federal Sponsor in accordance with the terms of this Agreement that are directly related to

Design of the Project. Subject to the provisions of this Agreement, the term shall include, but is

not necessarily limited to: the Government’s costs for engineering and design, including real

estate, economic, and environmental analyses, a safety assurance review, if required, and

supervision and administration; the Non-Federal Sponsor’s creditable costs for in-kind

contributions, if any; the Non-Federal Sponsor’s costs for any design work allocated by the

Government to the LPP incremental design costs; and the Government’s costs of review and

oversight of any design work undertaken by the Non-Federal Sponsor. The term does not include

any costs for dispute resolution; participation by the Government and Non-Federal Sponsor in the

Design Coordination Team to discuss significant issues and actions; audits; betterments; or the

Non-Federal Sponsor’s cost of negotiating this Agreement.

E. The term “NED Plan design costs” means that portion of design costs, as determined

by the Government, that would have been incurred by the Government and Non-Federal Sponsor

had the NED Plan been designed.

F. The term “LPP incremental design costs” means that portion of design costs, as

determined by the Government, that are in excess of the NED Plan design costs.

G. The term “LSF incremental design costs” means that portion of design costs

associated with the portions of berths at Terminal 5 that overlap the Federal channel which are

considered local service facilities, as determined by the Government, that are in excess of the

NED Plan design costs.

H. The term “HTRW” means hazardous, toxic, and radioactive wastes, which includes

any material listed as a “hazardous substance” (42 U.S.C. 9601(14)) regulated under the

Comprehensive Environmental Response, Compensation, and Liability Act (hereinafter

“CERCLA”) (42 U.S.C. 9601-9675) and any other regulated material in accordance with

applicable laws and regulations.

I. The term "in-kind contributions" means those creditable materials or services provided

by the Non-Federal Sponsor for the NED Plan that are identified as being integral to Design of

the Project by the Division Commander for the Northwestern Division (hereinafter the

“Division Commander”). To be integral to Design of the Project, the material or service must be

part of the work that the Government would otherwise have undertaken for design of the NED

Plan. In-kind contributions also include any investigations performed by the Non-Federal

Sponsor for the NED Plan to identify the existence and extent of any HTRW as required for

Design of the Project.

J. The term “betterment” means a difference in the Design of the Project that results from

the application of standards that the Government determines exceed those that the Government

would otherwise apply to the Design of the Project.

K. The term “fiscal year” means one year beginning on October 1

and ending on

September 30th of the following year.

ARTICLE II - OBLIGATIONS OF THE GOVERNMENT AND

THE NON-FEDERAL SPONSOR

A. In accordance with Federal laws, regulations, and policies, the Government shall

conduct the Design using funds appropriated by the Congress and funds provided by the Non-

Federal Sponsor. In carrying out its obligations under this Agreement, the Non-Federal Sponsor

shall comply with all requirements of applicable Federal laws and implementing regulations,

including but not limited to, if applicable, Section 601 of the Civil Rights Act of 1964, as

amended (42 U.S.C. 2000d), and Department of Defense Directive 5500.11 issued pursuant

thereto; the Age Discrimination Act of 1975 (42 U.S.C. 6102); and the Rehabilitation Act of

1973, as amended (29 U.S.C. 794), and Army Regulation 600-7 issued pursuant thereto.

B. The Non-Federal Sponsor shall contribute 50 percent of the NED Plan design costs in

accordance with the provisions of this paragraph. In addition, the Non-Federal Sponsor is

responsible for 100 percent of the LPP incremental design costs, and is responsible for 100

percent of the LSF incremental design costs.

1. The Non-Federal Sponsor shall be responsible for undertaking any

investigations that the Government determines are required for Design of the Project to identify

the existence and extent of any HTRW.

2. After considering the estimated amount of credit for in-kind contributions, if

any, that will be afforded in accordance with paragraph C. of this Article, the Government shall

provide the Non-Federal Sponsor with a written estimate of the amount of funds required from

the Non-Federal Sponsor for the initial fiscal year of the Design to meet its cost share for the

NED Plan design costs. In addition, the Government shall determine the funds required from the

Non-Federal Sponsor to cover the LPP incremental design costs that will be incurred by the

Government, as well as to cover the LSF incremental design costs that will be incurred by the

Government. No later than 60 calendar days after such notification, the Non-Federal Sponsor

shall provide the full amount of such funds to the Government in accordance with Article III.C.

3. No later than August 1

prior to each subsequent fiscal year of the Design, the

Government shall provide the Non-Federal Sponsor with a written estimate of the amount of

funds required from the Non-Federal Sponsor during that fiscal year to meet its cost share. No

later than September 1

prior to that fiscal year, the Non-Federal Sponsor shall provide the full

amount of such required funds to the Government in accordance with Article III.C.

C. The Government shall include in NED Plan design costs and credit towards the Non-

Federal Sponsor’s share of such costs, the cost of in-kind contributions performed by the Non-

Federal Sponsor that are determined by the Government to be integral to design of the NED

Plan. Creditable in-kind contributions may include costs for engineering, design, and

supervision and administration, but shall not include any costs associated with betterments. Such

costs shall be subject to audit in accordance with Article VII to determine reasonableness,

allocability, and allowability, and crediting shall be in accordance with the following procedures,

requirements, and limitations:

1. As in-kind contributions are completed and no later than 60 calendar days after

such completion, the Non-Federal Sponsor shall provide the Government appropriate

documentation for the Government to determine the costs that are creditable to the Non-Federal

Sponsor’s share of design costs. Failure to provide such documentation in a timely manner may

result in denial of credit. Appropriate documentation includes invoices and certification of

specific payments to contractors, suppliers, and the Non-Federal Sponsor’s employees.

2. No credit shall be afforded for the following: interest charges, or any

adjustment to reflect changes in price levels between the time the in-kind contributions are

completed and credit is afforded; the value of in-kind contributions obtained at no cost to the

Non-Federal Sponsor; any items provided or performed prior to the effective date of this

Agreement unless covered by an In-Kind Memorandum of Understanding; any items not

identified as integral in the integral determination report; or costs that exceed the Government’s

estimate of the cost for such in-kind contributions.

3. No reimbursement will be provided for any in-kind contributions that exceed

the Non-Federal Sponsor’s share of the design costs under this Agreement.

D. To the extent practicable and in accordance with Federal laws, regulations, and

policies, the Government shall afford the Non-Federal Sponsor the opportunity to review and

comment on contract solicitations prior to the Government’s issuance of such solicitations;

proposed contract modifications, including change orders; and contract claims prior to resolution

thereof. Ultimately, the contents of solicitations, award of contracts, execution of contract

modifications, and resolution of contract claims shall be exclusively within the control of the

Government.

E. The Non-Federal Sponsor shall not use Federal program funds to meet any of its

obligations under this Agreement unless the Federal agency providing the funds verifies in

writing that the funds are authorized to be used for the Project. Federal program funds are those

funds provided by a Federal agency, plus any non-Federal contribution required as a matching

share therefor.

F. In addition to the ongoing, regular discussions between the parties regarding Design

delivery, the Government and the Non-Federal Sponsor may establish a Design Coordination

Team to discuss significant issues or actions. Neither the Government’s nor the Non-Federal

Sponsor’s costs for participation on the Design Coordination Team shall be included in the

design costs. The Non-Federal Sponsor’s costs for participation on the Design Coordination

Team shall be paid solely by the Non-Federal Sponsor without reimbursement or credit.

G. The Non-Federal Sponsor may request in writing that the Government include

betterments in the Design of the Project. Each request shall be subject to review and written

approval by the Division Commander. If the Government agrees to such request, the Non-

Federal Sponsor, in accordance with Article III.F., must provide funds to cover the difference in

the costs for design of such work, as determined by the Government, in advance of the

Government performing the work.

H. If the Government and Non-Federal Sponsor enter into a Project Partnership

Agreement for construction of the Project, the Government shall include the design costs in the

calculation of construction costs for the Project in accordance with the terms and conditions of

the Project Partnership Agreement.

ARTICLE III - PROVISION OF NON-FEDERAL COST SHARE

A. As of the effective date of this Agreement, design costs are projected to be

$3,473,924, with NED Plan design costs projected to be $3,340,000, and LPP and LSF

incremental design costs projected to be $133,924. The Government’s share of the NED Plan

design costs are projected to be $1,670,000, and the Non-Federal Sponsor’s share of such costs

are projected to be $1,670,000, which includes creditable in-kind contributions projected to be

$1,670,000, and the amount of funds required to meet its cost share projected to be $133,924.

The LPP incremental design costs are projected to be $100,400, which includes the amount of

funds to cover the LPP incremental design costs that will be initially incurred by the Government

projected to be $45,567. The LSF incremental design costs are projected to be $33,524, which

includes the amount of funds to cover the LSF incremental design costs that will be initially

incurred by the Government projected to be $15,215. Costs for betterments are projected to be

$0. These amounts are estimates subject to adjustment by the Government, after consultation

with the Non-Federal Sponsor, and are not to be construed as the total financial responsibilities

of the Government and the Non-Federal Sponsor.

B. The Government shall provide the Non-Federal Sponsor with monthly reports setting

forth the estimated design costs, NED Plan design costs, LPP incremental design costs, LSF

incremental design costs, and the Government’s and Non-Federal Sponsor’s estimated shares of

such costs; costs incurred by the Government, using both Federal and Non-Federal Sponsor

funds, to date; the amount of funds provided by the Non-Federal Sponsor to date; the estimated

amount of any creditable in-kind contributions; and the estimated remaining cost of the Design.

C. The Non-Federal Sponsor shall provide to the Government required funds by

delivering a check payable to “FAO, USAED, Seattle (G3)” to the District Commander, or

verifying to the satisfaction of the Government that the Non-Federal Sponsor has deposited such

required funds in an escrow or other account acceptable to the Government, with interest

accruing to the Non-Federal Sponsor, or by providing an Electronic Funds Transfer of such

required funds in accordance with procedures established by the Government.

D. The Government shall draw from the funds provided by the Non-Federal Sponsor to

cover the non-Federal share of the design costs as those costs are incurred. If the Government

determines at any time that additional funds are needed from the Non-Federal Sponsor to cover

the Non-Federal Sponsor’s required share of the design costs, the Government shall provide the

Non-Federal Sponsor with written notice of the amount of additional funds required. Within 60

calendar days of such notice, the Non-Federal Sponsor shall provide the Government with the

full amount of such additional funds.

E. Upon completion of the Design and resolution of all relevant claims and appeals, the

Government shall conduct a final accounting and furnish the Non-Federal Sponsor with the

written results of such final accounting. Should the final accounting determine that additional

funds are required from the Non-Federal Sponsor, the Non-Federal Sponsor, within 60 calendar

days of written notice from the Government, shall provide the Government with the full amount

of such additional funds by delivering a check payable to “FAO, USAED, Seattle (G3)” to the

District Commander, or by providing an Electronic Funds Transfer of such funds in accordance

with procedures established by the Government. Should the final accounting determine that the

Non-Federal Sponsor has provided funds in excess of its required amount, the Government shall

refund the excess amount, subject to the availability of funds or if requested by the Non-Federal

Sponsor, apply the excess amount towards the non-Federal share of the cost of construction of

the Project in the event a Project Partnership Agreement is executed for the Project. Such final

accounting does not limit the Non-Federal Sponsor's responsibility to pay its share of design

costs, including contract claims or any other liability that may become known after the final

accounting.

F. If the Government agrees to include betterments on the Non-Federal Sponsor’s behalf,

the Government shall provide written notice to the Non-Federal Sponsor of the amount of funds

required to cover such costs. No later than 30 calendar days after receipt of such written notice,

the Non-Federal Sponsor shall make the full amount of such required funds available to the

Government through either payment method specified in Article III.E. If at any time the

Government determines that additional funds are required to cover any such costs, as applicable,

the Non-Federal Sponsor shall provide those funds within 30 calendar days from receipt of

written notice from the Government. If the Government determines that funds provided by the

Non-Federal Sponsor exceed the amount required for the Government to complete such work,

the Government shall refund any remaining unobligated amount.

ARTICLE IV - TERMINATION OR SUSPENSION

A. If at any time the Non-Federal Sponsor fails to fulfill its obligations under this

Agreement, the Government may suspend or terminate Design unless the Assistant Secretary of

the Army (Civil Works) determines that continuation of the Design is in the interest of the

United States or is necessary in order to satisfy agreements with any other non-Federal interests

in connection with the Project.

B. If the Government determines at any time that the Federal funds made available for

the Design are not sufficient to complete such work, the Government shall so notify the Non-

Federal Sponsor in writing within 30 calendar days, and upon exhaustion of such funds, the

Government shall suspend Design until there are sufficient Federal funds appropriated by the

Congress and funds provided by the Non-Federal Sponsor to allow Design to resume.

C. In the event of termination, the parties shall conclude their activities relating to the

Design and conduct an accounting in accordance with Article III.E. To provide for this

eventuality, the Government may reserve a percentage of available funds as a contingency to pay

costs of termination, including any costs of resolution of contract claims and contract

modifications.

D. Any suspension or termination shall not relieve the parties of liability for any

obligation incurred. Any delinquent payment owed by the Non-Federal Sponsor pursuant to this

Agreement shall be charged interest at a rate, to be determined by the Secretary of the Treasury,

equal to 150 per centum of the average bond equivalent rate of the 13-week Treasury bills

auctioned immediately prior to the date on which such payment became delinquent, or auctioned

immediately prior to the beginning of each additional 3 month period if the period of

delinquency exceeds 3 months.

ARTICLE V - HOLD AND SAVE

The Non-Federal Sponsor shall hold and save the Government free from all damages

arising from the Design, except for damages due to the fault or negligence of the Government or

its contractors.

ARTICLE VI - DISPUTE RESOLUTION

As a condition precedent to a party bringing any suit for breach of this Agreement, that

party must first notify the other party in writing of the nature of the purported breach and seek in

good faith to resolve the dispute through negotiation. If the parties cannot resolve the dispute

through negotiation, they may agree to a mutually acceptable method of non-binding alternative

dispute resolution with a qualified third party acceptable to the parties. Each party shall pay an

equal share of any costs for the services provided by such a third party as such costs are incurred.

The existence of a dispute shall not excuse the parties from performance pursuant to this

Agreement.

ARTICLE VII - MAINTENANCE OF RECORDS AND AUDIT

A. The parties shall develop procedures for the maintenance by the Non-Federal Sponsor

of books, records, documents, or other evidence pertaining to costs and expenses for a minimum

of three years after the final accounting. The Non-Federal Sponsor shall assure that such

materials are reasonably available for examination, audit, or reproduction by the Government.

B. The Government may conduct, or arrange for the conduct of, audits of the Design.

Government audits shall be conducted in accordance with applicable Government cost principles

and regulations. The Government’s costs of audits for the Design shall not be included in design

costs.

C. To the extent permitted under applicable Federal laws and regulations, the

Government shall allow the Non-Federal Sponsor to inspect books, records, documents, or other

evidence pertaining to costs and expenses maintained by the Government, or at the Non-Federal

Sponsor’s request, provide to the Non-Federal Sponsor or independent auditors any such

information necessary to enable an audit of the Non-Federal Sponsor’s activities under this

Agreement. The Non-Federal Sponsor shall pay the costs of non-Federal audits without

reimbursement or credit by the Government.

ARTICLE VIII - RELATIONSHIP OF PARTIES

In the exercise of their respective rights and obligations under this Agreement, the

Government and the Non-Federal Sponsor each act in an independent capacity, and neither is to

be considered the officer, agent, or employee of the other. Neither party shall provide, without

the consent of the other party, any contractor with a release that waives or purports to waive any

rights a party may have to seek relief or redress against that contractor.

ARTICLE IX - NOTICES

A. Any notice, request, demand, or other communication required or permitted to be

given under this Agreement shall be deemed to have been duly given if in writing and delivered

personally or mailed by registered or certified mail, with return receipt, as follows:

If to the Non-Federal Sponsor:

[TITLE (NOT the name of the individual)]

THE PORT OF SEATTLE

[ADDRESS]

If to the Government:

District Commander

U.S. Army Corps of Engineers, Seattle District

ATTN: Project Manager: Seattle Harbor Navigation Improvement Project

CENWS-PMC

Building 1202

4735 E Marginal Way S.

Seattle, WA 98134

B. A party may change the recipient or address to which such communications are to be

directed by giving written notice to the other party in the manner provided in this Article.

ARTICLE X - CONFIDENTIALITY

To the extent permitted by the laws governing each party, the parties agree to maintain

the confidentiality of exchanged information when requested to do so by the providing party.

ARTICLE XI - THIRD PARTY RIGHTS, BENEFITS, OR LIABILITIES

Nothing in this Agreement is intended, nor may be construed, to create any rights, confer

any benefits, or relieve any liability, of any kind whatsoever in any third person not party to this

Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which shall

become effective upon the date it is signed by the District Commander.

DEPARTMENT OF THE ARMY THE PORT OF SEATTLE

BY: __________________________ BY: __________________________

Kathryn P. Sanborn [TYPED NAME]

Colonel, U.S. Army [Full Title]

District Commander

DATE: _______________________ DATE: ________________________