CONTRACTOR COST REDUCTION PROPOSALS. The provisions of this subsection will apply only to contracts awarded to the lowest bidder pursuant to competitive bidding. On projects with original contract amounts in excess of $100,000, the Contractor may submit, in writing, proposals for modifying the plans, specifications or other requirements of the contract for the sole purpose of reducing the cost of construction. The cost reduction proposal shall not impair, in any manner, the essential functions or characteristics of the project, including but not limited to service life, economy of operation, ease of maintenance, desired appearance, design and safety standards. This provision shall not apply unless the proposal submitted is specifically identified by the Contractor as being presented for consideration as a value engineering proposal. Not eligible for cost reduction proposals are changes in the basic design of a pavement type, runway and taxiway lighting, visual aids, hydraulic capacity of drainage facilities, or changes in grade or alignment that reduce the geometric standards of the project. As a minimum, the following information shall be submitted by the Contractor with each proposal: a. A description of both existing contract requirements for performing the work and the proposed changes, with a discussion of the comparative advantages and disadvantages of each: b. An itemization of the contract requirements that must be changed if the proposal is adopted; c. A detailed estimate of the cost of performing the work under the existing contract and under the proposed changes; d. A statement of the time by which a change order adopting the proposal must be issued; e. A statement of the effect adoption of the proposal will have on the time for completion of the contract; and f. The contract items of work affected by the proposed changes, including any quantity variation attributable to them. The Contractor may withdraw, in whole or in part, any cost reduction proposal not accepted, within the period specified in the proposal. The provisions of this subsection shall not be construed to require the Engineer to consider any cost reduction proposal that may be submitted. The Contractor shall continue to perform the work in accordance with the requirements of the contract until a change order incorporating the cost reduction proposal has been issued. If a change order has not been issued by the date upon which the Contractor’s cost reduction proposal specifies that a decision should be made, or such other date as the Contractor may subsequently have requested in writing, such cost proposal shall be deemed rejected. The Engineer shall be the sole judge of the acceptability of a cost reduction proposal and of the estimated net savings from the adoption of all or any part of such proposal. In determining the estimated new savings, the Engineer may disregard the contract bid prices if, in the Engineer’s judgment such prices do not represent a fair measure of the value of the work to be performed or deleted. The OWNER will not be liable for any delay in acting upon, or for any failure to act upon, any proposal submitted pursuant to this Article. The decision of the OWNER as to acceptance of any such proposal under the Contract shall be final. The submission of a proposal by the Contractor shall not in itself affect the rights or obligations of either party under the Contract. The OWNER may accept in whole or in part any proposal submitted pursuant to this Article by issuing a Contract Change Order which will identify the proposal on which it is based. The Contract Change Order will provide for an equitable adjustment in the Contract Amount and will revise any other affected provisions of the Contract Documents. The equitable adjustment in the Contract Amount shall be established by determining the net savings resulting from the accepted change. The net savings resulting from the change shall be shared between the Contractor and the OWNER on the basis of fifty percent (50%) for the Contractor and fifty percent (50%) for the OWNER. Net savings shall be determined by deducting from the estimated gross savings, the Contractor's costs of developing and implementing the proposal (including any amount attributable to a subcontractor) and the estimated amount of increased costs to the OWNER resulting from the change, such as implementation, inspection, related items, and OWNER-furnished material. Estimated gross savings shall include Contractor's labor, material, equipment, overhead, profit, and bond. The Contract Amount shall be reduced by the sum of the OWNER's costs and share of the net savings and shall constitute full compensation to the Contractor for the cost reduction proposal and performance of the work. Acceptance of the cost-reduction proposal and performance of the cost-reduction work shall not extend the time of completion of the contract unless specifically provided for in the change order. SECTION 60 - CONTROL OF MATERIALS 60-1 SOURCE OF SUPPLY AND QUALITY REQUIREMENTS. The materials used on the work shall conform to the requirements of the contract, plans, and specifications. Unless otherwise specified, such materials that are manufactured or processed shall be new (as compared to used or reprocessed). In order to expedite the inspection and testing of materials, the Contractor shall furnish complete statements to the Owner as to the origin, composition, and manufacture of all materials to be used in the work. Such statements shall be furnished promptly after execution of the contract but, in all cases, prior to delivery of such materials. At the Owner's option, materials may be approved at the source of supply before delivery is stated. If it is found after trial that sources of supply for previously approved materials do not produce specified products, the Contractor shall furnish materials from other sources.
Appears in 4 contracts
Samples: Construction Contract, Construction Contract, Construction Contract
CONTRACTOR COST REDUCTION PROPOSALS. The provisions of this subsection will apply only to contracts awarded to the lowest bidder pursuant to competitive bidding. On projects with original contract amounts in excess of $100,000, the Contractor may submit, in writing, proposals for modifying the plans, specifications or other requirements of the contract for the sole purpose of reducing the cost of construction. The cost reduction proposal shall not impair, in any manner, the essential functions or characteristics of the project, including but not limited to service life, economy of operation, ease of maintenance, desired appearance, design and safety standards. This provision shall not apply unless the proposal submitted is specifically identified by the Contractor as being presented for consideration as a value engineering proposal. Not eligible for cost reduction proposals are changes in the basic design of a pavement type, runway and taxiway lighting, visual aids, hydraulic capacity of drainage facilities, or changes in grade or alignment that reduce the geometric standards of the project. As a minimum, the following information shall be submitted by the Contractor with each proposal:
a. A description of both existing contract requirements for performing the work and the proposed changes, with a discussion of the comparative advantages and disadvantages of each:
b. An itemization of the contract requirements that must be changed if the proposal is adopted;
c. A detailed estimate of the cost of performing the work under the existing contract and under the proposed changes;
d. A statement of the time by which a change order adopting the proposal must be issued;
e. A statement of the effect adoption of the proposal will have on the time for completion of the contract; and
f. The contract items of work affected by the proposed changes, including any quantity variation attributable to them. The Contractor may withdraw, in whole or in part, any cost reduction proposal not accepted, within the period specified in the proposal. The provisions of this subsection shall not be construed to require the Engineer to consider any cost reduction proposal that may be submitted. The Contractor shall continue to perform the work in accordance with the requirements of the contract until a change order incorporating the cost reduction proposal has been issued. If a change order has not been issued by the date upon which the Contractor’s cost reduction proposal specifies that a decision should be made, or such other date as the Contractor may subsequently have requested in writing, such cost proposal shall be deemed rejected. The Engineer shall be the sole judge of the acceptability of a cost reduction proposal and of the estimated net savings from the adoption of all or any part of such proposal. In determining the estimated new savings, the Engineer may disregard the contract bid prices if, in the Engineer’s judgment such prices do not represent a fair measure of the value of the work to be performed or deleted. The OWNER will not be liable for any delay in acting upon, or for any failure to act upon, any proposal submitted pursuant to this Article. The decision of the OWNER as to acceptance of any such proposal under the Contract shall be final. The submission of a proposal by the Contractor shall not in itself affect the rights or obligations of either party under the Contract. The OWNER may accept in whole or in part any proposal submitted pursuant to this Article by issuing a Contract Change Order which will identify the proposal on which it is based. The Contract Change Order will provide for an equitable adjustment in the Contract Amount and will revise any other affected provisions of the Contract Documents. The equitable adjustment in the Contract Amount shall be established by determining the net savings resulting from the accepted change. The net savings resulting from the change shall be shared between the Contractor and the OWNER on the basis of fifty percent (50%) for the Contractor and fifty percent (50%) for the OWNER. Net savings shall be determined by deducting from the estimated gross savings, the Contractor's costs of developing and implementing the proposal (including any amount attributable to a subcontractor) and the estimated amount of increased costs to the OWNER resulting from the change, such as implementation, inspection, related items, and OWNER-furnished material. Estimated gross savings shall include Contractor's labor, material, equipment, overhead, profit, and bond. The Contract Amount shall be reduced by the sum of the OWNER's costs and share of the net savings and shall constitute full compensation to the Contractor for the cost reduction proposal and performance of the work. Acceptance of the cost-reduction proposal and performance of the cost-reduction work shall not extend the time of completion of the contract unless specifically provided for in the change order. SECTION 60 - CONTROL OF MATERIALS
60-1 SOURCE OF SUPPLY AND QUALITY REQUIREMENTS. The materials used on the work shall conform to the requirements of the contract, plans, and specifications. Unless otherwise specified, such materials that are manufactured or processed shall be new (as compared to used or reprocessed). In order to expedite the inspection and testing of materials, the Contractor shall furnish complete statements to the Owner as to the origin, composition, and manufacture of all materials to be used in the work. Such statements shall be furnished promptly after execution of the contract but, in all cases, prior to delivery of such materials. At the Owner's option, materials may be approved at the source of supply before delivery is stated. If it is found after trial that sources of supply for previously approved materials do not produce specified products, the Contractor shall furnish materials from other sources.
Appears in 1 contract
Samples: Construction Contract
