OWNER-CONTRACTOR AGREEMENT
(FIXED CONTRACT SUM)
THIS AGREEMENT is made on the 1st day of November, 1996:
REGARDING:
---------
"PROJECT": ABB OFFICE BUILDING
Xxxx County, Knoxville, Tennessee
BETWEEN:
-------
"OWNER": XXXXX REAL ESTATE FUND IX, L.P.
Address: 0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx, XX 00000
Tel. No.: (000) 000-0000
AND:
---
"CONTRACTOR" : INTEGRA CONSTRUCTION, INC.
Address: 0000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
Tel. No.: (000) 000-0000
DESIGNED BY:
-----------
"ARCHITECT" : SMALLWOOD, REYNOLDS, XXXXXXX & XXXXXXX &
ASSOCIATES, INC.
Address: One Piedmont Center, Suite 303
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Tel. No.: (000) 000-0000
The Owner and the Contractor hereby agree as follows:
FOR VALUABLE CONSIDERATION, the sufficiency of which is hereby acknowledged, the
parties promise, covenant and agree that the Owner shall engage and compensate
Contractor and the Contractor shall perform the Work relative to the Project all
as hereinafter set forth.
ARTICLE 1.
----------
THE WORK
--------
The Contractor shall perform all Work required by the Contract Documents
relative to the Project set forth above within the Contract Time stipulated
therein and in complete accordance with and fulfillment of the provisions,
terms, and conditions thereof.
ARTICLE 2.
----------
THE PROJECT
-----------
The Project as identified above shall consist of the total construction
required under the Contract Documents upon the real property identified by the
legal description attached as Exhibit "E-1" (the "site").
ARTICLE 3.
----------
THE CONTRACT DOCUMENTS
----------------------
3.1 "Contract Documents". The Contract Documents relative to this
--------------------
Agreement Package above consist of the following Exhibits:
(a) This Owner-Contractor Agreement;
(b) The General Conditions of the Contract for Construction
(hereinafter referred to as the "General Conditions");
(c) Payment Request Form;
(d) Waiver of Lien Form;
(e) Contractor's Affidavit Form;
(f) Final Waiver of Lien Form;
(g) Summary of Lump Sum Price dated June 13, 1996;
(h) Clarifications and Description of Work dated June 13, 1996;
(i) Construction Schedule Prepared by Integra Construction, Inc.
dated August 15, 1996;
(j) Upon Completion of drawings and specifications by the Architect,
a change order will be issued to incorporate all applicable
drawings and specifications as part of the Contract Documents.
These all collectively form the Contract, and are all as fully a part of the
Contract as if attached to this Agreement as repeated herein.
ARTICLE 4.
----------
TIME OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
-----------------------------------------------
4.1 "Date of Commencement". The Contractor shall commence the Work under
----------------------
this Agreement no later than seven (7) days from the date of a written notice
from the Owner to the Contractor to commence the work ("Notice to Proceed").
4.2 "Contract Time". The Contractor shall perform the Work as required in
---------------
the Contract Documents to achieve Substantial Completion of the entire Work on
or before 335 calendar days after the Date of Commencement.
---
4.3 "Adjustment for Changes". The Contract Time may be extended only for
------------------------
those causes expressly stipulated herein and elsewhere in the Contract Documents
and only strictly in accordance with the procedures and requirements set forth
therein.
4.4 "Substantial Completion". The Date of Substantial Completion shall be
------------------------
as defined in the Contract Documents.
4.5 "Final Completion". In no event shall the Work be considered complete
------------------
for purposes of final payment until the following have occurred: (a) all
construction items required by the Contract Documents have been fully completed
and approved, (b) a final certificate of payment issued by the Architect as
provided in the General Conditions.
2
ARTICLE 5.
----------
CHANGE ORDERS
-------------
5.1 "Right to Make Changes". Owner may make modifications in the Work in
-----------------------
accordance with the General Conditions and appropriate adjustments in Contract
Time and Contract Sum shall be made in compliance therewith.
5.2 "Fee". The fee earned by Contractor and any Subcontractor (as defined
-----
in the General Conditions) for performing any additional work under a Change
Order performed on a "cost" plus "fee" basis shall be determined on the
following basis:
(a) The fee earned by any Subcontractor for performing such additional
work shall be 10% of the Cost of the Work (as defined in the General
Conditions) incurred by such Subcontractor to perform such work.
(b) The fee earned by Contractor for additional work performed by
Subcontractors shall be 5% of the Cost of the Work incurred by Contractor
to have such work performed.
(c) The fee earned by Contractor for additional work performed by its
own forces shall be 10% of the Cost of the Work incurred by Contractor to
perform such work.
ARTICLE 6.
----------
CONTRACT SUM
------------
6.1 "Contract Sum". The Owner shall pay the Contractor the Sum of Four
-------------- ----
Million, One Hundred Thirty Four Thousand, Eight Hundred Fourteen
-----------------------------------------------------------------
($4,134,814.00) Dollars for the full and proper performance of the Work
-------------
hereunder, subject to Modification only and strictly in accordance with this
Agreement and as other provided by the Contract Documents.
ARTICLE 7.
----------
PAYMENTS
--------
Based upon Applications for Payment submitted to the Owner and Architect by
the Contractor and Certificates for Payment issued by the Architect, all in
accordance with the requirements of the Contract Documents the Owner shall make
payments on account of the Contract Sum to the Contractor as provided in the
Contract Documents as follows:
7.1 "Progress Payments". The Owner shall make progress payments based
-------------------
upon duly certified Applications for Payment for each period ending the 30th day
of each month, which shall be submitted to the Owner not later than the 10th day
of the following month. Such progress payments shall be in the amount of Ninety
(90%) Percent of the portion of the Contract Sum properly allocable to labor,
materials and equipment incorporated in the Work and properly allocable to
materials and equipment suitably stored, insured and protected at the site or,
at Owner's discretion, at some other location agreed upon in writing and
approved by the Owner, for the period covered by the Application for Payment,
less the aggregate of previous payments made by the Owner. When $206,740.00 has
been withheld as retainage, no further retainage will be held from progress
payments.
7.2 "Semifinal Payments". At the Date of Substantial Completion of the
--------------------
Work and submission of Semifinal Application for Payment all as provided in the
Contract Documents, the Owner shall within thirty (30) days after receipt of
such Application and other appropriate documentation and Certification by
Architect be required by the Contract Documents to make semifinal payment to the
Contractor of the certified amount owing of all unpaid balance of the Contract
Sum, as adjusted, for work completed, except for the amount of any continued
retention as provided by the Contract Documents determined necessary to protect
Owner's remaining interests until final completion.
3
7.3 "Final Payment". Final Payment constituting the entire unpaid balance
---------------
of the Contract Sum, as appropriately adjusted under the Contract Documents,
shall be paid by the Owner to the Contractor when the work has been finally
completed, the Contract fully performed, the Architect has issued a Final
Certificate for Payment which approves the Final Application for Payment, and
the Contractor has provided all necessary submittals and documents required by
and otherwise fulfilled all other requirements set forth in the Contract
Documents. Such application shall be submitted on or before the 25th day of the
month in which completion occurs and payment shall be due and payable on or
before 30 days after Owner's receipt of the Final Certificate of Payment.
7.4 "Payment of Subcontractors". No later than seven (7) days after
---------------------------
receipt of payment by Contractor, Contractor shall make payments to its
Subcontractors and suppliers reflecting appropriate retainage in the same
proportion as withheld by Owner and, to the extent to their interest therein for
amounts owing for labor, materials and services provided and for which payment
is so made by Owner.
7.5 "Payment Requests and Related Form". Owner provides as Exhibits C
-----------------------------------
through F the forms to be employed in appropriate circumstances in connection
with payment applications. Owner reserves the right upon reasonable advance
written notice to Contractors to modify or substitute any or all of these forms.
ARTICLE 8.
----------
PERFORMANCE AND PAYMENT BONDS
-----------------------------
8.1 The Contractor may be required to furnish Performance and Payment
Bonds, each in an amount at least equal to the Contract Sum, as defined herein,
as security for the faithful performance and payment of all of the Contractor's
obligations under the contract Documents. Such Bonds shall be as required by
the Contract Documents and shall be delivered to the Owner no later than five
(5) days after the date requested.
ARTICLE 9.
----------
MISCELLANEOUS PROVISIONS
------------------------
9.1 Notices. The proper addresses for giving Notices under this agreement
-------
are:
To Owner: Xxxxx Real Estate Fund IX, L.P.
0000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
To Contractor: Integra Construction, Inc.
0000 Xxxxxx xxxxx Xxxx, Xxxxx 000
Xxxxxxx, XX 00000
To Architect: Smallwood, Reynolds, Xxxxxxx, Xxxxxxx & Associates, Inc.
One Piedmont Center, Suite 303
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
9.2 "Owner's Liability". The liability of the Owner hereunder shall be
-------------------
limited to its interest in the Project and the Property. No other property of
the Owner (or of any Partner or Venturer in Owner if Owner is a partnership or
joint venture) shall be subject to seizure or any other claim of any nature
whatsoever to satisfy any of Owner's obligations arising from this Agreement.
Neither Xxx X. Xxxxx,III, nor any other person or entity who may at any time be
a member, partner, or joint venturer in any partnership or joint venture which
may be the Owner, shall have any liability for any of the obligations of the
Owner arising from this Agreement.
9.3 "Owner's and Contractor's Representatives". Owner hereby appoints Xxx
------------------------------------------ ---
X. Xxxxx, III, or his designee as the Owner's representative for all purposes
-------------
under this Contract. Contractor hereby appoints Xxxxx X. Xxxxxxxxx or his
------------------
designee under this Contract. Either party may change his representative by
written notice
4
to the other. Either representative may appoint a designee for either general or
limited purposes upon written notice to the other representative. If such
appointment is for less than all purposes, the notice shall set forth the
limited nature of the appointment.
9.4 Definitions. Terms used in this Agreement which are defined in the
-----------
Contract Documents shall have the meanings designated in the Contract Documents.
9.5 Examination of Documents. The Contractor affirms, by signature to
------------------------
this Contract, that he has carefully examined all Contract Documents, and
further agrees that he will not plead unfamiliarity with any of the Contract
Documents in connection with any dispute which may arise under the Contract
Documents.
9.6 The parties acknowledge that the Owner has or will obtain financing
for the construction of the Project from a third-party lender ("Lender"). The
Contractor agrees that it will cooperate with the Owner and Lender for the
purpose of facilitating the Owner's financing of the Project, and shall execute
any and all documents, notices, agreements, or forms which are required under
the Contract Documents or the Owner or Lender may reasonably require in order
for the Owner to obtain financing for the Project.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as a Contract under seal, as of the
date set forth on the first page hereof.
[Corporate Seal] OWNER:
XXXXX REAL ESTATE FUND IX, L.P.
Attest:/s/ Xxxxxx Xxxx /s/ Xxx X. Xxxxx, III
---------------------------- -------------------------------------
Xxx X. Xxxxx, III, General Partner
Title:
-----------------------------
[Corporate Seal] CONTRACTOR:
INTEGRA CONSTRUCTION, INC.
Attest:/s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxxxxx
---------------------------- -------------------------------------
Xxxxx X. Xxxxxxxxx, President
Title: Project Manager
5
EXHIBIT "B"
GENERAL CONDITIONS
------------------
OF THE
------
CONSTRUCTION CONTRACT
---------------------
INDEX
-----
Page No.
--------
ARTICLE 1. THE CONTRACT DOCUMENTS........................................ 1
1.1 DEFINITIONS.................................................... 1
1.2 EXECUTION, CORRELATION AND INTENT.............................. 1
1.3 OWNERSHIP AND USE OF DOCUMENTS................................. 3
ARTICLE 2. THE ARCHITECT................................................. 3
2.1 DEFINITION..................................................... 3
2.2 ADMINISTRATION OF THE CONTRACT................................. 3
ARTICLE 3. THE OWNER..................................................... 5
3.1 DEFINITION..................................................... 5
3.2 OWNER'S RESPONSIBILITIES....................................... 5
3.3 OWNER'S REPRESENTATIVES........................................ 5
ARTICLE 4. THE CONTRACTOR................................................ 6
4.1 DEFINITION..................................................... 6
4.2 STANDARD OF PERFORMANCE........................................ 6
4.3 REVIEW AND IMPLEMENTATION OF CONTRACT DOCUMENTS................ 6
4.4 SUPERVISION AND CONSTRUCTION PROCEDURES........................ 6
4.5 LABOR AND MATERIALS............................................ 7
4.6 WARRANTY....................................................... 7
4.7 TAXES.......................................................... 8
4.8 PERMITS, FEES AND NOTICES...................................... 9
4.9 DOCUMENTS AND SAMPLES AT THE SITE.............................. 9
4.10 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES........................ 10
4.11 USE OF SITE.................................................... 13
4.12 CUTTING AND PATCHING WORK...................................... 13
4.13 CLEANING UP.................................................... 13
4.14 COMMUNICATIONS................................................. 14
4.15 ROYALTIES AND PATENTS.......................................... 14
4.16 INDEMNIFICATION................................................ 14
4.17 LAYOUT......................................................... 15
4.18 TESTS.......................................................... 15
4.19 SITE AND RELATED PHYSICAL CONDITIONS AFFECTING THE WORK........ 15
4.20 FOUNDATION SURVEY.............................................. 16
4.21 START-UP....................................................... 16
ARTICLE 5. SUBCONTRACTORS............................................... 16
5.1 DEFINITION.................................................... 16
5.2 AWARD OF SUBCONTRACTORS AND OTHER CONTRACTS................... 17
5.3 SUBCONTRACTOR RELATIONS....................................... 17
ARTICLE 6. WORK BY OWNER, TENANT, AND SEPARATE CONTRACTORS.............. 19
6.1 OWNER'S RIGHT TO PERFORM WORK AND TO AWARD SEPARATE CONTRACTS.. 19
6.2 MUTUAL RESPONSIBILITY......................................... 19
6.3 OWNER'S RIGHT TO CLEAN UP..................................... 20
ARTICLE 7. TIME FOR COMPLETION.......................................... 20
7.1 DEFINITIONS................................................... 20
7.2 PROGRESS AND COMPLETION....................................... 21
7.3 DELAYS AND EXTENSIONS OF TIME................................. 21
7.4 OWNER'S RIGHT TO ACCELERATE................................... 23
7.5 THE CONSTRUCTION SCHEDULE..................................... 24
ARTICLE 8. PAYMENTS TO CONTRACTOR....................................... 25
8.1 CONTRACT SUM.................................................. 25
8.2 SCHEDULE OF VALUES............................................ 25
8.3 APPLICATIONS FOR PAYMENT...................................... 25
8.4 CERTIFICATES FOR PAYMENT...................................... 26
8.5 PROGRESS PAYMENTS............................................. 26
8.6 PAYMENTS WITHHELD............................................. 27
8.7 SEMIFINAL PAYMENT UPON SUBSTANTIAL COMPLETION................. 28
8.8 FINAL COMPLETION AND FINAL PAYMENT............................ 29
8.9 WAIVER........................................................ 30
ARTICLE 9. COMPLETION................................................... 31
9.1 SUBSTANTIAL COMPLETION........................................ 31
9.2 COMPLETION AND CLOSEOUT SUBMITTALS............................ 32
9.3 CONTRACTOR'S CLOSEOUT SUBMITTAL............................... 32
9.4 FINAL COMPLETION.............................................. 34
ARTICLE 10. PROTECTION OF PERSONS AND PROPERTY.......................... 34
10.1 SAFETY PRECAUTIONS AND PROGRAMS............................... 34
10.2 SAFETY OF PERSONS AND PROPERTY................................ 34
10.3 EMERGENCIES................................................... 35
ARTICLE 11. INSURANCE.................................................. 36
11.1 CONTRACTOR'S LIABILITY INSURANCE.............................. 36
11.2 OWNER'S LIABILITY INSURANCE................................... 37
11.3 PROPERTY INSURANCE............................................ 38
11.4 LOSS OF USE INSURANCE......................................... 39
11.5 WRAP-UP....................................................... 39
ii
ARTICLE 12. CHANGES IN THE WORK AND CLAIMS.............................. 39
12.1 CHANGE ORDERS................................................. 39
12.2 CONCEALED CONDITIONS.......................................... 41
12.3 MINOR CHANGES IN THE WORK..................................... 41
12.4 CHANGE ORDER REQUESTS AND PROPOSALS........................... 41
12.5 CLAIMS........................................................ 41
12.6 LIMITATION OF ENTITLEMENT..................................... 42
ARTICLE 13. UNCOVERING OF WORK AND CORRECTION OF WORK................... 42
13.1 UNCOVERING OF WORK............................................ 42
13.2 CORRECTION OF WORK............................................ 43
13.3 ACCEPTANCE OF DEFECTIVE OR NON-CONFORMING WORK................ 43
13.4 NON-LIMITATION OF RIGHTS...................................... 44
ARTICLE 14. TITLE TO WORK AND LIENS.................................... 44
14.1 UNENCUMBERED TITLE TO WORK.................................... 44
14.2 LIEN RELINQUISHMENT AND REMOVAL............................... 44
14.3 SUBORDINATION OF RIGHTS....................................... 45
ARTICLE 15. CONTRACTOR DEFAULT AND OWNER'S REMEDIES.................... 45
15.1 EVENTS OF CONTRACTOR'S DEFAULT................................ 45
15.2 OWNER'S REMEDIES FOR UNCURED CONTRACTOR DEFAULT............... 46
15.3 OWNER'S REMEDIES FOR REPEATED DEFAULT......................... 47
15.4 NONWAIVER OF DEFAULT REMEDIES................................. 48
ARTICLE 16. RIGHTS OF CONTRACTOR........................................ 48
16.1 STOP WORK FOR NONPAYMENT OR SUSPENSION........................ 48
16.2 TERMINATION BY CONTRACTOR..................................... 48
ARTICLE 17. ASSIGNMENT.................................................. 48
17.1 ASSIGNMENT.................................................... 48
ARTICLE 18. DISPUTES.................................................... 49
18.1 OBLIGATION TO PROCEED AND PERFORM............................. 49
ARTICLE 19. RIGHTS OF OWNER............................................. 49
19.1 CONDITIONS EXCUSING PERFORMANCE............................... 49
19.2 OWNER'S RIGHT TO SUSPEND WORK................................. 49
19.3 OWNER'S RIGHT TO STOP WORK.................................... 50
ARTICLE 20. BONDS....................................................... 50
20.1 PERFORMANCE AND PAYMENT BONDS................................. 50
iii
ARTICLE 21. MISCELLANEOUS PROVISIONS.................................... 50
21.1 GOVERNING LAW................................................. 50
21.2 WRITTEN NOTICE................................................ 50
21.3 CLAIMS FOR DAMAGES............................................ 51
21.4 NO WAIVER..................................................... 51
21.5 RIGHTS AND REMEDIES........................................... 51
21.6 SIGNS AND ADVERTISING......................................... 51
21.7 ATTORNEY FEES................................................. 51
21.8 AGREEMENT READ AND UNDERSTOOD................................. 52
21.9 COMPLETE AGREEMENT............................................ 52
21.10 INTEREST...................................................... 52
21.11 LABOR RELATIONS............................................... 52
21.12 COVENANT NOT TO XXX........................................... 52
21.13 UNENFORCEABILITY OF ANY CLAUSE................................ 52
21.14 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.................... 53
21.15 NOT TO BENEFIT THIRD PARTIES.................................. 53
21.16 TERMINATION OR SUSPENSION BY THE OWNER FOR CONVENIENCE........ 53
iv
GENERAL CONDITIONS OF THE
CONSTRUCTION CONTRACT
ARTICLE 1.
THE CONTRACT DOCUMENTS
----------------------
1.1 DEFINITIONS
-----------
1.1.1 The Contract Documents consist of the Owner-Contractor Agreement,
------------------
the Conditions of the Contract (General, Supplementary and other
Conditions), the Drawings, the Specifications, and all Addenda
issued prior to and all Modifications which have been approved in
writing by the Owner and issued after execution of the Contract. A
Modification is (1) a written amendment to the Owner-Contractor
Agreement signed by both parries, (2) a Change Order, (3) a written
interpretation issued by the Architect pursuant to Subparagraph
2.2.7, or (4) a written order for a minor change in the Work issued
by the Architect pursuant to Subparagraph 12.3. The Contract
Documents do not include bidding or proposal documents such as the
advertisement or invitation for bid or proposal, instructions to
bidders, sample forms, the Contractor's bid or proposals or portions
of Addenda relating to any of these, or any other documents, unless
specifically enumerated in the Owner-Contractor Agreement.
1.1.2 The Contract Documents form the Contract for Construction, which
represents the entire and INTEGRATED agreement between the parties
hereto and supersedes all prior negotiations, representations, or
agreements, either written or oral. The Contract may be amended or
modified only by a Modification as defined in Subparagraph 1.1.1.
The Contract Documents shall not be construed to create any
contractual relationship between the Owner or the Architect and any
Subcontractor or Sub-subcontractor supplier, or vendor of the
Contractor.
1.1.3 The Work comprises the completed construction required by the
----
Contract Documents and includes all labor necessary to produce such
construction, all materials, fabrications, assemblies, and equipment
incorporated or to be incorporated in such construction, and all
materials, equipment, tools, construction means, utilities,
facilities, transportation, appliances, supervision and services
necessary to achieve total completion of the Project, including such
materials and equipment which may be consumed or used but not
actually incorporated in such construction.
1.1.4 The Project is the total construction of which the Work performed
-------
under the Contract Documents may be the whole or a part.
1.1.5 The Site is the real property upon which the Project is situated.
----
1.2 EXECUTION, CORRELATION AND INTENT
---------------------------------
1.2.1 The Contract Documents shall be signed in not less than triplicate
by the Owner and Contractor. If either the Owner or the Contractor
or both do not sign the Conditions of the Contract, Drawings,
Specifications, or any of the other Contract Documents, the
Architect, with approval of the Owner, shall identify such
Documents.
1.2.2 By executing the Owner-Contractor Agreement, the Contractor
represents and acknowledges that:
(a) He has carefully reviewed the Contract Documents for errors,
discrepancies, ambiguities and omissions;
(b) He has visited the site and familiarized himself with its
physical conditions and the local conditions under which the
Work is to be performed; and
(c) He has reviewed carefully all surveys, records and data regarding
the site and its physical conditions as have been made available
by Owner or Architect or were otherwise reasonably accessible and
available to him; and
(d) He had correlated his observations with the requirements of the
Contract Documents.
1.2.3 The intent of the Contract Documents is to include all items
necessary for the proper execution and completion of the Work. The
Contract Documents are complimentary, and what is required by any
one shall be binding as if required by all. The Contractor shall be
obligated to perform Work required by any Contract Document as fully
as though required by all of them. Words and abbreviations which
have well known technical or trade meanings are used in the Contract
Documents in accordance with such recognized meanings. Without
limiting the duty of the Contractor regarding review of the Contract
Documents, in the event of a conflict or discrepancy among the
various Contract Documents, the Documents shall be given precedence
in the following order (in descending order or precedence):
Provisions of the Owner-Contractor Agreement
Modifications
Change Orders
Addenda
Special Conditions
Supplementary Conditions
General Conditions
Specifications
Drawings - (large-scale Drawings over small-scale)
(figures over scaled measurements)
(schedules over other information on Drawings)
1.2.4 The organization of the Specifications into divisions, sections and
articles, and the arrangement of Drawings shall not control the
Contractor in dividing the Work among subcontractors or in
establishing the extent of the Work to be performed by any trade.
1.2.5 If any errors, discrepancies, ambiguities or omissions are found at
any time in the Contract Documents, the Contractor shall notify the
Owner and Architect in writing before beginning the Work involved.
The Architect, with Owner's approval, will make corrections,
interpretations or clarifications promptly, basing his decisions on
what is reasonably inferable from and consistent with the intent of
the Contract Documents.
1.2.6 All pertaining statutes, ordinances, laws, rules, codes,
regulations, standards, and lawful orders of public authorities
having jurisdiction of the Work of this Contract are hereby
incorporated (in their form as effective on the date of execution of
the Owner-Contractor Agreement) into the Contract Documents as if
repeated in full herein and are intended wherever reference is made
in either the singular or plural to Code or Building Code, except as
otherwise specified. Contractor shall be responsible for such Code
compliance with regard to his Work on the Project.
1.2.7 Cross references and citations of Sections and Subsections in this
Document are for the convenience of the Contractor, the Owner, and
the Architect, and are not intended to be plenary or exhaustive nor
are they intended to be considered in interpreting the Contract or
any part of the Contract Documents.
2
1.3 OWNERSHIP AND USE OF DOCUMENTS
------------------------------
1.3.1 All Drawings, Specifications and revisions thereto and copies
thereof are and shall remain the property of Owner and shall be
returned to Owner upon completion of the Project.
ARTICLE 2.
THE ARCHITECT
-------------
2.1 DEFINITION
----------
2.1.1 The Architect is the person lawfully licensed to practice
architecture, or an entity lawfully practicing architecture,
identified as such in the Owner-Contractor Agreement, and is
referred to throughout the Contract Documents as if singular in
number and masculine in gender. The term Architect means the
Architect or his authorized representative.
2.2 ADMINISTRATION OF THE CONTRACT
------------------------------
2.2.1 The Architect will provide administration of the Contract as
hereinafter described.
2.2.2 The Architect will be the Owner's representative during construction
and until final payment is made. The Owner's instructions to the
Contractor shall be provided to the Contractor in writing either
directly, with copy to Architect, or through the Architect. The
Architect will have authority to act on behalf of the Owner only to
the extent provided in the Contract Documents.
2.2.3 The Architect will visit the site at intervals appropriate to the
stage of construction and as required by the Owner to familiarize
himself generally with the progress and quality of the Work and to
determine in general if the Work is proceeding in accordance with
the Contract Documents. On the basis of his on-site observations as
an Architect, he will keep the Owner informed of the progress of the
Work, and will endeavor to guard the Owner against defects and
deficiencies in the Work of the Contractor.
2.2.4 The Architect will not be responsible for and will not have control
or charge of construction means, methods, techniques, sequences or
procedures, or for safety precautions and programs in connection
with the Work. The Architect will not be responsible for or have
control or charge over the acts or omissions of the Contractor,
Subcontractors, or any of their agents or employees, or any other
persons performing any of the Work. The failure of the Architect to
discover or to call to Owner's attention any defects and
deficiencies in the Work of the Contractor shall not excuse or
otherwise relieve Contractor of its obligations to Owner under the
Owner-Contractor Agreement.
2.2.5 The Architect and the Owner shall at all times have access to the
Work wherever it is in preparation and progress. The Contractor
shall provide facilities for such access so the Architect may
perform his functions under the Contract Documents and the Owner may
observe such.
2.2.6 The Architect, will be the interpreter of the requirements of the
Contract Documents and the performance thereunder by the Contractor.
2.2.7 Subject to Subparagraph 2.2.9, the Architect will render
interpretations necessary for the proper execution of progress of
the Work, with reasonable promptness and in accordance with any time
limit agreed upon.
3
2.2.8 Claims, disputes and other matters in questions between the
Contractor and the Owner relating to the execution or progress of
the Work or the interpretation of the Contract Documents shall be
referred initially to the Architect for decisions, which he will
render in writing to Owner and Contractor within a reasonable time.
2.2.9 All interpretations and decisions of the Architect shall be
consistent with the intent of and reasonably inferable from the
Contract Documents and will be in writing or in the form of
drawings.
2.2.10 Both the Owner, with Architect's concurrence, and the Architect
independently will have authority to reject Work which does not
conform to the Contract Documents. Whenever, in Architect's opinion,
he considers it necessary or advisable for the implementation of the
intent of the Contract Documents, he will have authority to require
special inspection or testing of the Work in accordance with
Subparagraph 4.18.2 whether or not such Work be then fabricated,
installed or completed. However, neither the Architect's nor Owner's
authority to act under this Subparagraph 2.2.10 nor any decision not
to exercise such authority, shall give rise to any liability, duty
or responsibility of the Architect or Owner to the Contractor, any
Subcontractor, any of their agents or employees, or any other person
performing any of the Work, except as provided in Subparagraph
4.18.2.
2.2.11 The Architect will review and approve or take other appropriate
action upon Contractor's submittals such as Shop Drawings, Product
Data and Samples, but only for conformance with the design concept
of the Work, and with the information given in the Contract
Documents and applicable laws, rules and regulations. Such action
shall be taken with reasonable promptness so as to cause no delay in
the Work.
2.2.12 The Architect will prepare Change Orders in accordance with Article
12, and will have authority to order minor changes in the Work as
provided in Subparagraph 12.3.
2.2.13 Based upon observations at the site and upon an evaluation of the
Contractor's Application(s) for Payment, in consultation with the
Owner, the Architect shall determine the amount owing to the
Contractor, pursuant to the terms of the Owner-Contractor Agreement.
The Architect shall issue Certificate(s) for Payment to the Owner in
such amounts.
2.2.14 The Architect will conduct inspections to determine the Date of
Substantial Completion and the date of Final Completion and issue
such Certificates regarding completion in accordance with Sub-
Paragraphs 9.1.4 and 9.4.4 and will receive and review written
warranties and related documents required by the Contract Documents
and assembled by the Contractor, and will issue a final Certificate
for Payment upon compliance by Contractor with the requirements of
the Contract Documents.
2.2.15 The duties, responsibilities and limitations of authority of the
Architect as the Owner's representative during construction as set
forth in the Contract Documents will not be modified or extended
without the written consent of the Owner and the Architect.
2.2.16 In case of the termination of the employment of the Architect, the
Owner may appoint another Architect in which event he shall become
the Architect under the Contract Documents.
4
ARTICLE 3.
THE OWNER
---------
3.1 DEFINITION
----------
3.1.1 The Owner is the person or entity identified as such in the Owner-
Contractor Agreement and is referred to throughout the Contract
Documents as if singular in number and masculine in gender. The term
Owner means the Owner or his authorized representative.
3.2 OWNER'S RESPONSIBILITIES
------------------------
3.2.1 The Owner shall furnish or provide reasonable access to all surveys
in its possession describing the physical characteristics and
utility locations for the Site, subject, however, to the provisions
of Sub-Paragraph 4.19. Such survey(s) shall establish the property
lines and permanent bench marks. The Owner shall provide the
Contractor with a legal description of the Site including any known
legal limitations or restrictions.
3.2.2 Except as provided expressly in the Owner-Contractor Agreement, the
Owner shall secure and pay for necessary permits, approvals,
assessments and charges required for the actual use or occupancy of
permanent structures or permanent changes in existing structures.
3.2.3 Information or services under the Owner's control shall be furnished
by the Owner upon Contractor's request with reasonable promptness to
avoid delay in the orderly progress of the Work.
3.2.4 The Contractor will be furnished free of charge three (3) sets of
Contract Documents. Any revised Drawings, Specifications or other
Contract Documents issued after execution of the Agreement shall be
furnished as necessary for proper performance of the Work. All other
sets requested by the Contractor's expense.
3.2.5 The foregoing are in addition to the other duties and
responsibilities of the Owner enumerated herein.
3.2.6 The Owner, its consultants and the Architect shall all times have
access to the Work whenever it is in preparation or progress. The
Contractor shall provide safe facilities for such access.
3.3 OWNER'S REPRESENTATIVES
-----------------------
3.3.1 The Owner may provide, on a full time or part time basis, such
construction consultants as it shall deem necessary or appropriate
to preserve and protect its interests. Upon receipt of written
notice from Owner designating such consultant(s), Contractor shall
afford them all rights of access and inspection as are permitted to
the Owner and to its Architect. However, no action or inaction on
the part of any such consultants shall be deemed an acceptance by
the Owner of any work which does not strictly conform to the
Contract Documents unless specifically approved by Owner in writing.
3.3.2 Owner shall provide a representative authorized to act for it under
the Contract Documents. Such representative shall be expressly
stipulated (as the designated "Owner's Representative") in the
Owner-Contractor Agreement or by subsequent written designation by
Owner.
5
3.3.3 No observation of the Owner, its consultants or its Architect and no
inspections, tests or approvals by them shall relieve the Contractor
from his obligation to perform the Work in strict conformity with
the Contract Documents unless specifically approved by Owner in
writing.
ARTICLE 4.
THE CONTRACTOR
--------------
4.1 DEFINITION
----------
4.1.1 The Contractor is the person or entity identified as such in the
Owner-Contractor Agreement Documents and is referred to throughout
the Contract Documents as if singular in number and masculine in
gender. The term Contractor means the Contractor or his authorized
representative.
4.2 STANDARD OF PERFORMANCE
-----------------------
4.2.1 The Contractor recognized the relationship of trust and confidence
established between him and the Owner by this Agreement and
covenants with the Owner to furnish the highest and best skill,
attention, judgment and cooperation in performance of the Work as
measured against the prevailing industry standards of construction
contractors on comparable projects. The Contractor agrees to
cooperate fully with the Architect, to provide a high and efficient
level of business administration, management, coordination and
superintendence of the work.
4.3 REVIEW AND IMPLEMENTATION OF CONTRACT DOCUMENTS
-----------------------------------------------
4.3.1 Before submitting his bid or proposal to the Owner, and continuously
after the execution of the Contract, the Contractor shall carefully
study and compare the Contract Documents and shall at once report to
the Architect and the Owner any error, ambiguity, inconsistency or
omission that may be discovered, including any requirement which may
be contrary to any law, ordinance, rule, regulation, or order of any
public agency or authority, enacted as of the date of the Owner-
Contractor Agreement, bearing on the performance of the Work
including any building codes and drainage and sanitary requirements.
By submitting his proposal or bid for the Contract and the Work
under it, the Contractor agrees that the Contract Documents appear
accurate, consistent, and complete insofar as can be then reasonably
determined. Contractor agrees that the Contract Sum includes the
cost of all materials, equipment and labor and everything else which
will be required to comply with such ordinances, requirements, laws,
rules and regulations enacted as of the date of the Agreement.
4.3.2 The Contractor shall not proceed with any portion of the Work
affected by any error, ambiguity, inconsistency or omission upon its
discovery until further direction or instruction by the Architect.
If the Contractor has promptly upon discovery reported in writing
any error, ambiguity, inconsistency or omission, and has promptly
stopped the affected Work until instructed and otherwise followed
the instructions of the Owner or Architect, the Contractor shall not
be liable to the Owner for any damage or delay resulting from any
such errors, ambiguities, inconsistencies or omissions in the
Contract Documents.
4.3.3 However, no allowance for additional compensation or extension of
time for completion shall be permitted by the Contractor based on
claims of defects, errors, omissions, ambiguities or inconsistencies
in the Contract Documents to the extent that they were discoverable
upon exercise of reasonable diligence by the Contractor and such
discovery (and prompt notice) would have avoided or reduced their
impact on the work.
6
4.3.4 The Contractor shall perform no portion of the Work at any time
without Contract Documents authorizing and describing such portion
of the Work or, where required, approved Shop Drawings, Product Data
or Samples for such portion of the Work.
4.4 SUPERVISION AND CONSTRUCTION PROCEDURES
---------------------------------------
4.4.1 The Contractor shall supervise and direct the Work, using his best
skill, attention and judgment. He shall be solely responsible for
all construction means, methods, techniques, sequences and
procedures and for coordinating all portions of the work under the
Contract. All Work performed hereunder shall be in a skillful and
workmanlike manner.
4.4.2 The Contractor shall at all times during regular work days maintain
an adequate management and supervisory staff of competent persons,
and an adequate and competent supply of workmen and material
necessary to carry out the Work and agrees further to complete the
Work in an expeditious and efficient manner consistent with the best
interest of the Owner.
4.4.3 The Contractor shall not be relieved of his obligations to perform
the Work in accordance with the Contract Documents either by the
activities or duties of the Owner, his consultants, or the Architect
in his administration of the Contract, or by inspections, tests or
approvals required or performed by persons other than the
Contractor.
4.4.4 The Contractor's Project Manager and Project Superintendent shall be
designated to Owner in writing prior to commencement of Work.
Contractor shall not change such designations thereafter without
prior written notice to Owner and Owner's consent, unless the
designated person ceases to be employed by Contractor. The Owner
may, by written notice to Contractor, object to any person or
persons designated by Contractor, originally or subsequently, as
Project manager or Superintendent, whom Owner deems objectionable
within its reasonable discretion. Upon such notice of objection,
Contractor shall promptly submit an alternative designation
reasonably acceptable to the Owner.
4.5 LABOR AND MATERIALS
-------------------
4.5.1 Unless otherwise provided in the Contract Documents, the Contractor
shall provide and pay for all labor, materials, fabrications,
assemblies, equipment, tools construction equipment and machinery,
water, heat, utilities, transportation, and all other facilities and
services necessary for the proper execution and completion of the
Work, whether temporary or permanent and whether or not incorporated
or to be incorporated in the Work.
4.5.2 The Contractor shall at all times enforce strict discipline and good
order among his employees and subcontractors shall require his
subcontractors to do the same.
4.5.3 All Work shall be executed in neat, skillful, workmanlike manner in
accordance with best recognized trade practices. Only competent and
skilled workmen who satisfactorily perform their duties shall be
employed on the Work. When requested by Owner, Contractor shall
discharge and shall not reemploy on the Work any person who is
deemed by Owner as unfit, unskilled, disorderly, dangerous,
insubordinate, incompetent, or otherwise objectionable.
4.5.4 Contractor shall timely place orders for sufficient quantities of
material (including equipment, fabrications and assemblies) from
reputable suppliers and strictly in accordance and subject to
requirements of the Contract Documents. Contractor shall provide
Owner Promptly with complete copies of all such orders.
7
4.5.5 No substitutions or variations from the Contract Documents shall be
permitted in the work itself or any materials (including equipment,
fabrications or assemblies) comprising it, without the express prior
written authorization of such substitution or variation by Architect
or Owner.
4.5.6 Contractor will acknowledge receipt of materials and equipment
purchased for Owner for installation under the Contract Documents
and will provide storage and protection for such materials and
equipment.
4.5.7 Upon delivery of all materials (including fabrications, assemblies
and equipment), Contractor shall ascertain whether or not they
comply with contract requirements and shall reject all nonconforming
materials and have all nonconforming materials removed immediately
from the project site. All materials delivered to the job site shall
be stored and handled as to preclude inclusion of any foreign
substances or any discoloration or adulteration thereof and to
prevent any damage thereto which might reduce its effectiveness as
part of the Work.
4.5.8 Unless otherwise specifically indicated, where trade or brand names
appear in the Specifications they are used to indicate standards of
quality. However, this is intended to be an open specification
(except as otherwise designated), accessible to any reputable
manufacturer whose product is deemed by the Architect as equal to
that named or described and meets the quality, performance and other
requirements of Contract Documents. The Owner, however, shall have
the right to approve products submitted as being equal to those
specified and his decision shall be final and conclusive.
4.5.9 Should the Contractor desire to substitute another item of material
or equipment for one specified, he shall make such request for
substitution in writing to Architect, stating any credit or extra
involved and shall provide all required supporting data and samples
to justify his request. However, such substitution shall not be made
without express written authorization by Architect, based upon his
determination that the item proposed is equal to the one specified.
Further, even if so authorized, the Contractor shall be responsible
for its correct function and operation and its accommodation into
spaces allotted. In the event of a misfit, or change in Work being
required in work of any or all trades, on account of acceptance of a
substitution offered by the Contractor, the Contractor alone shall
bear the costs for extra work to make changes arising as a result of
the use of the substitute, including the cost of such architectural
or engineering analysis and drawing changes as may be required.
4.5.10 Whenever required in the opinion of the Owner or the Architect or
required by the Specifications for the proper determination of the
qualities of the materials to be furnished under the Contract
Documents, or to be used in the Work, the Contractor shall furnish
test specimens or samples of same, the costs of which shall be paid
as provided in Paragraph 4.18 of the General Conditions.
4.6 WARRANTY
--------
4.6.1 The Contractor warrants to the Owner and the Architect that all
materials and equipment furnished under this Contract will be new
unless otherwise specified, and that all Work (including all
materials and equipment) will be of the specified quality, free from
faults and defects and in conformance with the Contract Documents.
All Work not conforming to these requirements, including
substitutions not properly approved and authorized, may be
considered defective. If required by the Architect, the Contractor
shall furnish satisfactory evidence as to the kind and quality of
materials and equipment. This warranty is not limited by any other
provision of the Contract Documents. The Warranties set forth in
this paragraph and elsewhere in the Contract Documents shall survive
final acceptance of the Work.
8
4.6.2 Without limiting the responsibility of liability of the Contractor
under the Contract, all warranties and attendant rights given by
manufacturers on materials or equipment incorporated in the Work are
hereby assigned by the Contractor to the Owner. If requested, the
Contractor shall execute formal assignments of said manufacturers'
warranties to the Owner. The Contractor shall not obtain any
materials or equipment under warranties which do not run directly to
the benefit of the Owner and all such warranties shall be directly
enforceable by the Owner.
4.6.3 The foregoing warranties, and those contained elsewhere in the
Contract Documents or implied by law shall be deemed cumulative and
not alternative or exclusive. No one or more of them shall be deemed
to alter or limit any other or any other remedy or right under the
Contract Documents or the law.
4.7 TAXES
-----
4.7.1 Unless otherwise provided in the Contract Documents, the Contractor
shall pay all sales, retail , occupational, service, excise, old age
benefit and unemployment compensation taxes, consumer, use and other
similar taxes as well as any other taxes or duties on the material,
equipment and labor for the Work or portions thereof provided by the
Contractor which are legally enacted by any municipal, county,
federal or state authorities or department or agency thereof at the
time of execution of the Owner-Contractor Agreement, whether or not
yet effective.
4.7.2 All records maintained by the Contractor pertaining to such taxes
and levies and payment thereof shall be made available to the Owner
at reasonable times for inspection, audit and copying.
4.8 PERMITS, FEES AND NOTICES
-------------------------
4.8.1 Except as provided in Subparagraph 3.2.2, the Contractor shall
secure and pay for building permits, and all other permits,
approvals, assessments, charges, governmental fees and licenses
necessary for the construction and proper execution and completion
of the Work, which are legally required as of the date of the Owner-
Contractor Agreement.
4.8.2 The Contractor shall give all notices and comply with all applicable
laws, ordinances, building codes, rules, regulations and lawful
orders of any public authority bearing on the performance of the
Work. If the Contractor observes that any of the Contract Documents
are at variance therewith in any respect, he shall promptly notify
the Architect and the Owner in writing of such non-compliance.
4.8.3 If the Contractor performs any Work knowing it to be contrary to
such laws, ordinances, rules or regulations, and without such notice
to the Architect and Owner, he shall assume full responsibility
therefor and shall bear all costs attributable thereto.
4.9 DOCUMENTS AND SAMPLES AT THE SITE
---------------------------------
4.9.1 The Contractor shall maintain at the site for the Owner and
Architect one copy of all Drawings, Specifications, Addenda,
approved Shop Drawings, Product Data and Samples, Change Orders and
other Modifications in good order. These shall be available to the
Owner and Architect.
4.9.2 In addition to the foregoing, Contractor shall maintain at the
Project site records of all contracts and documents which arise out
of the Contract Documents or the construction of the Project,
including, without limitation, the following: subcontracts;
materials and technical standards and specifications; routine
Project correspondence; job meeting minutes, memoranda and notes;
and any other related documents and revisions thereto. During
progress of the Work and prior to
9
final payment, Contractor shall deliver to Owner duplicates of any
such documents that may be requested by Owner or as may be required
by the technical trade specifications or other Contract Documents.
4.9.3 Contractor shall maintain at the Project site a current marked set
of working drawing prints and specifications showing as built
conditions, configurations and locations, in order to facilitate the
preparation of as-built drawings.
4.9.4 Contractor shall maintain cost accounting records with respect to
the Cost of the Work on a cash basis in accordance with generally
accepted accounting principles.
4.9.5 From time to time and at any time after the execution of the
Agreement and after five (5) days' advance written notice to
Contractor, Owner shall have access to and the right to examine and
audit any pertinent books, documents, papers and records of
Contractor involving transactions related to the Contract Documents.
At the end of the Project construction, Contractor, if requested by
Owner, shall turn over such records, or copies thereof, to the
custody of Owner, and Owner may preserve such records for such
further period of time as Owner may elect.
4.10 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES
---------------------------------------
4.10.1 Shop Drawings are drawings, diagrams, schedules and other data
specifically prepared for the Work by the Contractor or any
subcontractor, manufacturer, supplier or distributor to illustrate
some portion of the Work.
4.10.2 Product Data are illustrations, standard schedules, performance
charts, instructions, brochures, diagrams and other information
furnished by the Contractor to illustrate a material, product or
system for some portion of the Work.
4.10.3 Samples are physical examples in the size, shape, finish and
quantity required by the specifications which illustrated materials,
equipment or workmanship and establish standards by which the Work
will be judged. Samples furnished under this Section are not to be
confused with full size on-the-site "Mock-Ups" called for in some
specification sections. At the option of Owner or Architect, Samples
will be subject to testing, and in such event such additional
Samples as may be necessary shall be supplied by Contractor at no
additional cost.
4.10.4 The Contractor shall prepare, review, approve and submit with
reasonable promptness and in such orderly sequence and time as to
cause no delay in the Work or in the work of the Owner or any
separate contractor, all Shop Drawings, Product Data and Samples
required by the Contract Documents.
4.10.5 The following provisions shall be applicable to the preparation and
submission of Shop Drawings and Product Data (as applicable):
(a) Shop Drawings shall be prepared in accordance with the following
minimum requirements:
(i) Sheets shall be numbered consecutively.
(ii) Shop Drawings shall indicate all working and erection
dimensions.
(iii) Shop Drawings shall show arrangements and sectional views.
10
(iv) Shop Drawings shall indicate anchoring and fastening
details, including information for making connections to
other work. Contractor shall furnish installation
instructions to be followed in the field to achieve
manufacturer's designed and planned intentions.
(b) The form of Shop Drawings shall be as follows:
(i) Up to 8-1/2" x 14" in size may be either prints on opaque
paper, or reproducible sepia transparency.
(ii) Submissions larger than above shall be reproducible sepia
transparency.
(c) The following number of copies shall be submitted:
(i) Opaque submissions shall be in duplicate.
(ii) Sepia transparency submissions shall include one
reproducible, and two prints.
4.10.6 Contractor shall be responsible for the following review and
submittal procedures:
(a) Contractor shall review, approve and stamp with its approval
before submission all Samples, Shop Drawings and Product Data
specified by the Contract Documents or subsequently by
Architect as covered by Modifications. Shop Drawings, Product
Data and Samples shall be submitted only by Contractor. By
approving and submitting Shop Drawings and Samples, Contractor
thereby represents that it has determined and verified all
field measurements, field construction criteria, materials,
catalog numbers and similar data and that it has checked and
coordinated each Shop Drawing, Product Data and Sample with the
requirements of the Contract Documents. At the time of
submission Contractor shall inform Architect in writing of any
deviations in the Shop Drawings, Product Data or Samples from
the requirements of the Contract Documents.
(b) Contractor shall be responsible for the following verifications
for all items furnished to work with existing job conditions:
(i) Dimensions shall be checked against field measurements.
(ii) Items specified to have mechanical utilities shall be
coordinated with services as to location and character.
(iii) Items specified to have electric service shall be
coordinated with services as to volts, phase, hurtz,
feeders and ampere protection at panel.
(c) Contractor shall date each Sample, Product Data and Shop
Drawing submittal and indicate the name of the Project,
description or name of equipment, material, and product and
identify by specification section where it is specified, and
indicate location where it is to be used in the Work.
(d) Contractor shall accompany each Sample, Product Data and Shop
Drawing submitted to Architect with a transmittal letter, in
duplicate with a copy being mailed to Owner containing project
name, Contractor's name, number of samples, data or drawings,
titles and other pertinent data. The transmittal letter shall
outline deviations, if any, in Samples, Product Data or Shop
Drawings from requirements of Contract Documents.
11
(e) Submissions made without Contractor's approval indicated
thereon will be returned for compliance with this requirements
before being reviewed by Architect.
(f) Contractor is responsible for obtaining and distributing
drawings after as well as before final approval to all
subcontractors who are concerned with coordination of the Work.
4.10.7 No portion of the Work requiring submission of a Shop Drawing,
Project Data or Sample shall be commenced until the submittal has
been approved by the Architect. All such portions of the Work shall
be in accordance with submittals approved by the Architect. Owner
shall not be responsible for the cost of any purchases which are
not in accord with Shop Drawings approved by the Architect.
4.10.8 The following provisions shall be applicable to Architect's review
of Samples, Product Data and Shop Drawings:
(a) Architect's acceptance is only for conformance with the design
concept of the Project and with information in Contract
Documents. Approval of a separate item does not constitute
approval of an assembly in which the item functions.
(b) Review of Shop Drawings, Product Data and Samples by Architect
shall not relieve Contractor of responsibility for deviations
and/or omissions from the Contract Documents, unless Contractor
has in writing called attention to such deviations and/or
omissions at the time of submissions of the Shop Drawings,
Product Data and Samples, nor shall it relieve Contractor of
the responsibility for errors and/or omissions of any kind in
Shop Drawings, Product Data and Samples, unless such
deviations, changes and/or omissions are duly reviewed as such
and noted by specific reference on the Shop Drawings, Product
Data or the Sample. When Contractor does call such deviations
and/or omissions to the attention of the Architect, Contractor
shall state in its letter whether or not such deviations,
changes and/or omissions involve any change in costs. If no
such change is mentions, it shall be assumed that no change in
cost is involved for making the change, deviation and/or
omission. Letters fully describing any deviation, change and/or
omission, together with the reasons therefor and the statement
of the amount of cost change, shall be submitted in duplicate
by Contractor to Owner and Architect together with the affected
drawings and specifications.
(c) Where only one Sample is called for, approval will be by letter
only; where two or more Samples are called for one Sample will
be returned with Architect's approval stamp and signature or
initials.
(d) One set of approved Shop Drawings and Product Data will be
returned, including an opaque print or a sepia, when a sepia is
submitted, with Architect's approval stamp and signature or
initials.
(e) Samples not complying with Contract Documents will be returned
noted "Not Approved," with a general description of corrections
and changes required noted thereon or in the transmittal. One
set of Product Data or Shop Drawings not complying with the
Contract Documents, including a set of opaque print or marked
up sepias when sepias are submitted, will be returned noted
"Not Approved" and with a general description of corrections
and changes required indicated thereon.
(f) Contractor shall make corrections and changes in unapproved
Samples, Product Data and Shop Drawings and shall resubmit such
Samples, Product Data and Shop Drawings in the same manner as
specified above, until Architect's approval is obtained. In the
transmittal letter accompanying Samples, Product Data and Shop
Drawings being resubmitted, Contractor shall direct specific
attention to revisions, if any, other than corrections
requested by Architect on previous resubmissions. Any such
resubmittal
12
processes, however, necessitated by deficient prior submittals
requiring correction shall not be justified for extension of
the Contract Time or increase in the Contract Sum.
4.11 USE OF SITE
-----------
4.11.1 The Contractor shall confine operations at the site to areas
permitted by law, ordinances, permits and the Contract Documents.
The Contractor shall not unreasonably encumber the site with any
materials or equipment, and shall maintain the site in a neat,
orderly manner. Contractor, all Subcontractors and suppliers and
anyone directly or indirectly employed by or associated with any of
them, shall confine their ingress and egress to the Project site to
areas approved in advance by Owner and shall not use or permit any
such persons to use any other ingress or egress to or from the
Project site. Contractor shall assume full responsibility for any
damage to any such land or area, or to the Owner or occupant
thereof or of any land or areas contiguous thereto, resulting from
he performance of the Work.
4.11.2 Contractor shall take measures to control the blowing or spreading
of dust, smoke, dirt, mud and refuse from its Work to avoid
nuisance and inconvenience to others whether on or off the site.
These measures shall be in compliance with, without being limited
to, all applicable laws, and shall be subject to the Architect
approval. Contractor shall furnish all necessary labor and
materials such as water, approved chemicals, equipment.
4.11.3 Contractor shall be responsible for the removal or drainage of all
water interfering with the proper prosecution of his Work. It shall
at all times assure such drainage shall not be a nuisance or
inconvenience to Owner, other separate contractors or their work,
or the occupants or users of any other public or private area on or
off the site. This paragraph supplements, and does not supersede,
any drainage or dewatering called for elsewhere in the Contract
Documents.
4.11.4 Contractor agrees (a) to perform its Work on the Project (and to
have the Subcontractors and other parties so perform their work) so
as not to interfere with or disrupt the business operations of
Owner and (b) upon the request of Owner to immediately take all
steps necessary to permit Owner's business operations to continue
without interference or disruption.
4.12 CUTTING AND PATCHING WORK
-------------------------
4.12.1 The Contractor shall be responsible for all cutting, fitting or
patching that may be required to complete the Work or make its
several parts fit together properly.
4.12.2 The Contractor shall not damage or endanger any portion of the Work
or the work of the Owner or any separate contractors by cutting,
patching or otherwise altering any work, or by excavation. The
Contractor Shall not cut our otherwise alter the work of the Owner
of any separate contractor except with the written consent of the
Owner and of such separate contractor.
4.12.3 Patching of all finishes shall match any existing work to meet
Architect's approval.
4.13 CLEANING UP
-----------
4.13.1 The Contractor at all times shall keep the Project and sit free
from accumulation of waste materials or rubbish caused by his
operations. As the Work is performed, he shall remove all his waste
materials and rubbish from and about the Project and the Property,
and at the completion of the Work he shall remove, as well, all of
his tools, construction equipment, machinery and surplus materials,
the title to which has not been vested in Owner pursuant to the
Contract Documents. He shall replace any broken glass, remove
stains, spots, marks and dirt
13
from painted decorated work, clean hardware, removed paint spots
and smears from all surfaces, clean fixtures and wash all concrete
masonry and tile and clean all glass.
4.13.2 If the Contractor fails to satisfy the obligations set forth in
Subparagraph 4.13.1, the Owner my do so and the cost thereof shall
be charged to the Contractor.
4.14 COMMUNICATIONS
--------------
4.14.1 The Contractor shall forward all communications directly to the
Architect, with a copy to the Owner, unless otherwise specifically
directed in writing by the Owner.
4.15 ROYALTIES AND PATENTS
---------------------
4.15.1 The Contractor shall pay all royalties and license fees. He shall
defend all suits or claims for infringement of any patent rights
and shall save the Owner harmless from loss on account thereof.
However, the Owner shall be responsible for all such loss when a
particular design, process, or the product of a particular
manufacturer or manufacturers is specified; provided, that if the
Contractor know or reasonably should have known, that the design,
process, or product specification is an infringement of a patent,
he shall promptly notify the Owner and Architect in writing of such
knowledge, otherwise he shall be responsible for such loss as may
result from his failure to give prompt notice.
4.16 INDEMNIFICATION
---------------
4.16.1 In consideration of the execution of the Owner-Contractor
Agreement, and receipt acknowledge by Contractor of Ten and No/100
($10.00) Dollars and other good and valuable consideration from
Owner to Contractor as payment for the promises given in this
Paragraph, the Contractor, to the fullest extent permitted by law,
shall indemnify and hold harmless the Owner, their agents,
employees, successors, and assigns from and against all liability,
claims, damages, losses, expenses and costs of any kind or
description (including, but not limited to, court costs and
attorney's fees and other related costs and expenses, losses and
damages, and any claim, damage, loss or expense attributable to
bodily injury, sickness, disease or death, or to injury to or
destruction of tangible property, including the loss of use
resulting (therefrom) arising out of or in connection with the
performance of the Work (including failure to comply with terms of
the Contract Documents or other breach or default) provided that
such liability, claim, damage, loss or expense is caused in whole
or in part by any act or omission of the Contractor, any
subcontractor or materialman, anyone directly or indirectly
employed by any of them or anyone for whose acts any of them may be
liable. Such obligation shall not be construed to negate, abridge
or otherwise reduce any other right or obligation of indemnity
which would otherwise exist as to any party or person described in
this Paragraph.
4.16.2 Contractor agrees that if any law or equity action is brought
against Owner and/or their agents or employees because of any of
the foregoing matters, whether or not any other party defendant
shall be joined in the action, Contractor shall, at is own expense,
settle or defend such action, paying all costs, expenses and
attorney's fees incurred and paying any judgement that may be
rendered therein against either Owner, or their agents and
employees or any or all of the foregoing parties, and, except to
the extent that any damage or expense is incurred as the result of
the act or omission which is the negligence of Owner or Architect,
as the case may be, neither Owner nor Architect shall be required
to make any contribution whatsoever to the payment of any such
judgement or settlement.
14
4.16.3 In any and all claims against the Owner or the Architect or any of
their agents or employees by any employee of the Contractor, any
subcontractor, anyone directly or indirectly employed by any of
them or anyone for whose acts any of them may be liable, the
indemnification obligation under this Paragraph shall not be
limited in any way by any limitation on the amount or type of
damages, compensation or benefits payable by or for the Contractor
or any Subcontractor under Worker's or Workmen's Compensation Act,
disability benefit acts or other employee benefit acts.
4.16.4 As an additional and independent covenant of the Contract
Documents, Contractor shall procure, as additional protection to
Owner, an independent indemnification and hold harmless agreement
from each Subcontractor, providing for the protection set forth in
Paragraph 4.16.1 and 4.16.2.
4.17 LAYOUT
------
4.17.1 Contractor shall be responsible for the accuracy of the Project
lines and levels. Contractor shall compare carefully the levels
shown on the drawings with existing levels and shall call
Architect's and Owner's attention to any discrepancies before
proceeding with the Work. The Work shall be erected square, plumb,
level, true and line and grade, in the exact plane and to the
correct elevation and/or sloped to drain as indicated and/or as
necessary to drain.
4.18 TESTS
-----
4.18.1 If the Contract Documents, laws, ordinances, rules, regulations or
orders of any public agency or authority having jurisdiction
require any portion of the Work to be inspected, tested or
approved, the Contractor shall give the Architect and the Owner at
least 24 hours notice (to the extent that Contractor has such
advance notice) of its readiness so the Architect and Owner may
observe such inspecting, testing or approval. Unless otherwise
specifically provided in the Contract Documents, the Contractor
shall bear all cost of such inspections, tests or approvals.
4.18.2 If the Architect or Owner determines that any Work requires special
inspection, testing, or approval which subparagraph 4.18.1 does not
include, the Owner or the Architect may instruct the Contractor to
order such special inspection, testing or approval, and the
Contractor shall give notice as provided in subparagraph 4.18.1. If
such special inspection or testing reveals a failure of the Work to
comply with the requirements of the Contract Documents (including
any laws, ordinances, rules, regulations or orders of any public
agency or authority having jurisdiction) the Contractor shall bear
all costs thereof, including compensation for the Architect's
additional services made necessary by such failure; otherwise the
Owner shall bear such costs, and an appropriate Change Order shall
be issued.
4.18.3 Required certificates of inspection, testing or approval shall be
secured by the Contractor and promptly delivered by him to the
Architect.
4.19 SITE AND RELATED PHYSICAL CONDITIONS AFFECTING THE WORK
-------------------------------------------------------
4.19.1 Before submitting his bid or proposal, the Contractor shall be
responsible for having taken all steps reasonably necessary to
evaluate and ascertain the nature and location of the Work, nature
of the site and all physical characteristics and conditions
relative to it, and the general and local conditions which can
effect the Work or the cost or duration thereof. This shall include
but not be limited to Contractor's careful inspection and
examination of the site and examination of all surveys, records and
information relating to it in the Contract Documents or otherwise
provided by the Owner for inspection by the Contractor. Upon
reasonable advance notice to Owner, the Contractor may undertake
himself, at his own expense, such other physical testing
15
or sampling of the site as he shall deem necessary to fully inform
himself of its physical conditions and characteristics.
4.19.2 Failure by the Contractor to fully aquatint himself with such
conditions which may affect the work, including but not limited to
conditions relating to transportation, handling, and storage of
materials, weather, topographic and/or other physical conditions,
availability of labor, water, roads or power, applicable laws,
ordinances or regulations, and the character and availability of
equipment and facilities needed prior to and during the prosecution
of the Work, shall not relieve the Contractor of his
responsibilities under the Contract Documents and shall not
constitute a basis for an adjustment of Contract Time or Contract
Sum under any circumstances.
4.19.3 The Owner assumes no responsibility for any understanding or
representations concerning such conditions or characteristics made
by any of his agents or representatives or by Architect prior to
the execution of the Owner-Contractor Agreement unless such
understanding or representations are expressly stated in the
Contract Documents.
4.19.4 The Owner shall provide Contractor reasonable access to such
information, surveys, data and records regarding subsurface and
other physical site characteristics and conditions which may have
been made by Architect or Owner or are otherwise in their
possession. These records are made available to Contractor for his
information; however, other than as expressly provided on the
Contract Documents, there is no express or implied warranty or
guarantee whatsoever as to the accuracy of any of the information
records nor any interpretation contained therein. Contractor
expressly recognizes this limitation and stipulates that his
opinions and interpretations regarding the character and condition
of the site upon which the Work is to be constructed is founded
only upon information and representations specifically made in the
Contract Documents and otherwise upon his independent observations,
examination and evaluation.
4.20 FOUNDATION SURVEY
-----------------
4.20.1 After completion of the foundation and before any part thereof has
been covered, Contractor shall promptly notify Owner and Architect
of such completion to permit the Owner, at his sole election, to
cause to be performed, a survey of the foundation to determine its
actual physical location in relation to all boundary lines and
servitudes.
4.21 START-UP
--------
4.21.1 Contractor shall be responsible for start-up of all systems and
equipment included in the Work and has included in the Contract Sum
sufficient allowances to cover contingencies which may arise in
connection with the start-up of individual systems, equipment and
the total facility. Full compliance with each manufacturer's
specifications and instructions shall be observed. Equipment which
has been specified to be furnished with manufacturer's supervision
of start-up shall be placed in operation only under of start-up
shall be placed in operation only under the supervision of
manufacturer's representative.
ARTICLE 5.
SUBCONTRACTORS
--------------
5.1 DEFINITION
----------
5.1.1 A subcontractor is a person or entity who has a direct contract
with the Contractor to perform any of the Work. The term
Subcontractor is referred to throughout the Contract Documents as
16
if singular in number and masculine in gender and means a
subcontractor or his authorized representative. The term
Subcontractor does not include any separate contractor of the Owner
or his subcontractors.
5.1.2 A Sub-subcontractor is a person or entity who has a direct or
indirect contract with a Subcontractor to perform any of the Work.
The term Sub-subcontractor is referred to throughout the Contract
Documents as if singular in number and masculine in gender and
means a Sub-subcontractor or an authorized representative thereof.
5.2 AWARD OF SUBCONTRACTORS AND OTHER CONTRACTS
5.2.1 As soon as practicable after award of the Contract and prior to
entering into any Subcontracts, the Contractor shall furnish to the
Owner and the Architect in writing the names of the persons or
entities (including those who are to furnish materials or equipment
fabricated to a special design) proposed for each of the principal
portions of the Work or as otherwise expressly requested by
Architect. Such listing shall include sufficient identifying
information and description of qualifications so as to permit a
reasonable evaluation of such persons or entities. The Architect
will such persons or entities. The Architect will promptly reply to
the Contractor in writing stating whether or not the Owner or the
Architect, after due investigation, has reasonable objection to any
such proposed person or entity. Failure of the Owner or Architect
to reply promptly shall constitute notice of no reasonable
objection.
5.2.2 The Contractor shall not contract with any such proposed person or
entity to whom the Owner or the Architect has made reasonable
objection under the provisions of Subparagraph 5.2.1. The
Contractor shall not be required to contract with anyone to whom he
has a reasonable objection.
5.2.3 If the Owner or the Architect has and timely asserts reasonable
objection to any such proposed person or entity, the Contractor
shall submit a substitute to whom the Owner or the Architect has no
reasonable objection, and the Contract Sum shall be increased or
decreased by the difference in cost occasioned by such substitution
and an appropriate Change Order shall be issued; however, no
increase in the Contract Sum shall be allowed for any such
substitution unless the Contractor has acted promptly and
responsively in submitting names as required by Subparagraph 5.2.1.
5.2.4 The Contractor shall make no substitution for any Subcontractor,
person or entity previously selected if the Owner or Architect
makes reasonable objection to such substitution.
5.3 SUBCONTRACTOR RELATIONS
-----------------------
5.3.1 The Contractor shall not be discharged from any obligations to
Owner hereunder as a result of any subcontract. The Contractor
shall be as fully responsible to the Owner for the acts and
omissions of its Subcontractors and its suppliers of materials and
of persons either directly or indirectly employed by them as it is
for the acts and omissions of persons directly employed by it. The
responsibility of the Contractor for its Subcontractors and
suppliers shall not be diminished by the right of the Owner to
approve Subcontractors and suppliers or that the Owner may have
exercised or not the exercised that right or by any other right of
the Owner relating to Subcontractors or suppliers. Nothing
contained in the Contract Documents shall relieve the Contractor of
the responsibility for his Subcontractors or create any contractual
relation between any Subcontractor or material supplier and the
Owner.
5.3.2 Subcontracts and agreements for the acquisition of materials and
equipment shall be in an appropriate written form acceptable to the
Owner. The Contractor shall include in all such subcontracts and
agreements the pertinent terms and conditions of this Contract to
the fullest
17
extent applicable and require that all work be performed in
accordance therewith. Further, such subcontracts or agreements
shall contain provisions which:
(a) Bind such Subcontractor or Supplier to the Contractor by the
terms of the Contract Documents and to assume toward the
Contractor all the obligations and responsibilities, which the
Contractor by those Documents, assumes toward the Owner, with
respect to the work of the Subcontractor or supplier;
(b) Preserve and protect the rights of Owner under the Contract
Documents with respect to the work to be performed under the
subcontract so that the subcontracting thereof will not
prejudice such rights;
(c) Bind such Subcontractor or Supplier to give to the Owner
written notice of any default under the subcontract or supply
agreement on the part of the Contractor and not to take any
action in respect of the default unless it remains uncured 30
days after the notice is given; and to accept payment or
performance under the subcontract by the Owner in lieu of
payment or performance by the Contractor, although the Owner
shall not be obligated to undertake the Contractor's payment
obligations thereunder;
(d) Require that all claims for additional cost or other damage and
extensions of time, with respect to subcontracted portions of
the Work shall be submitted to Contractor in sufficient time
and manner so that Contractor may comply in the manner provided
in the Contract Documents for like claims by Contractor upon
Owner should Contractor elect to pass such claims through to
Owner;
(e) Require that such Subcontractor or Supplier look only to the
Contractor and not to Owner or Owner's Lender for the
performance of any or all obligations owed the Subcontractor or
supplier;
(f) Require that such Subcontractor or supplier waive and
subordinate any lien, or claim or right of lien against the
Project or the land upon which it is situated as required by
Article 14 hereof;
(g) Contain a provision indemnifying Owner in accordance with
Paragraph 4.16 hereof;
(h) Waive all rights Owner, Architect, Contractor and Subcontractor
may have against one another for damages caused by fire or
other peril covered by property insurance described in
Subparagraph 11.3.6 hereof, except such rights as they may have
to the proceeds of such insurance.
(i) Permit assignment to Owner and assumption of all rights and
obligations thereunder, at Owner's sole election, upon written
notice, in the event of any termination of the Owner Contractor
Agreement.
(j) Require the Subcontractor to enter into similar agreements with
his Sub-subcontractors.
5.3.3 All subcontracts shall be entered by Contractor and copies of all
subcontracts greater than Fifty Thousand ($50,000.00) Dollars shall
be furnished to Owner.
5.3.4 The Contractor and all Subcontractors shall comply with all
applicable licensing laws for contractors prevailing within the
state in which the Project is located.
18
5.3.5 The Contractor shall make available to each proposed Subcontractor,
prior to the execution of the Subcontract, copies of those of the
Contract Documents to which the Subcontractor will be bound by this
Paragraph 5.3, and necessary to inform them fully of the
requirements of the Contract documents which pertain to or which
might otherwise affect their work. Each Subcontractor shall
similarly make copies of such Documents available to his Sub-
subcontractors.
5.3.6 The Contractor shall have no financial interest in the payments made
under any subcontract or any contract for materials, labor,
services. equipment or appliances.
ARTICLE 6.
WORK BY OWNER, TENANT, AND SEPARATE CONTRACTORS
-----------------------------------------------
6.1 OWNER'S RIGHT TO PERFORM WORK AND TO AWARD SEPARATE CONTRACTS
-------------------------------------------------------------
6.1.1 The Owner reserves the right to perform any work related to the
Project with his own forces, and to award separate contracts in
connection with any other portions of the Project or other work on
the site under these or similar Conditions of the Contract. The
Owner specifically reserves the right to have the forces of any
tenant or its separate contractors enter upon the Project for the
purpose of constructing or installing furniture, fixtures and
equipment for the Project ("Tenant-Owner Improvements"), with
respect to any portions of the Work that have reached such a stage
of completion as to permit the construction and installation of
Tenant-Owner improvements. Such use and occupancy by the Owner, its
tenants or their separate contractors shall not modify any part of
the Contract Documents or be construed as constituting Substantial
Completion or acceptance of any part of the Work. However, the
Owner, his tenants, or their respective separate contractors,
agents, or employees shall be responsible for any damage caused by
them to the Work so occupied by them. If the Contractor claims that
delay or additional cost (other than as compensable under
Subparagraph 6.1.3) is involved because of such action by the Owner,
he shall make such claim as provided elsewhere in the Contract
Documents.
6.1.2 The Contractor shall afford the Owner, his Tenants and either of
their respective separate contractors reasonable opportunity for the
introduction and storage of their material and equipment and the
execution of their work, and shall connect and coordinate his Work
with theirs as required by the Contract Documents. The Contractor
agrees to permit the use and sharing of use of those facilities
necessary for the rapid completion of their work, including without
limitation, the Contractor's utilities, hoists, elevators,
scaffolding and other equipment at Contractor's actual costs
incurred and, if requested by the Owner, the Contractor shall
provide a separate entrance. Such use and sharing of Contractor's
facilities shall not extend the Contract Time.
6.1.3 The Contractor shall be reimbursed for actual cost or expenses
reasonable incurred by the Contractor as a result of such
construction, use or occupancy. To the extent possible, before such
costs or expenses are incurred, the Contractor will provide the
Owner or his applicable tenant with a lump sum or unit prices as the
Owner may request to cover such costs or expenses.
6.1.4 The Owner will provide for the coordination of the Work of his own
forces and of each separate Contractor with the Work of the
Contractor.
6.2 MUTUAL RESPONSIBILITY
---------------------
6.2.1 If any part of the Contractor's Work depends for proper execution or
results upon the work of the Owner or any separate contractor, the
Contractor shall, prior to proceeding with the Work,
19
promptly report to the Architect and Owner any apparent
discrepancies or defects in such other work that render it
unsuitable for such proper execution and results. Failure of the
Contractor to so report shall constitute an acceptance of the
Owner's or separate contractor's work as fit and proper to receive
his Work.
6.2.2 Any cost caused by defective or ill-timed work shall be borne by the
party responsible therefor.
6.2.3 Should the Contractor wrongfully cause damage to the Work or
property of the Owner, any tenant of the Owner or to other work on
the site, the Contractor shall promptly remedy such damage or Owner,
at his option, may cause such damage to be remedied at the expense
of Contractor.
6.2.4 Should the Contractor wrongfully cause damage to the work or
property of any tenant of Owner or separate contractor, the
Contractor shall upon due notice promptly attempt to settle with
such other party (or otherwise resolves the dispute). If such
separate party issues or initiates proceedings against the Owner on
account of any damage alleged to have been caused by the Contractor,
the Owner shall notify in writing the Contractor who shall defend
such proceedings at the Contractor's expense, and if any judgment or
award against the Owner arises therefrom, the Contractor shall pay
or satisfy it and shall reimburse the Owner for all attorney's fees
and court costs which the Owner may have incurred.
6.3 OWNER'S RIGHT TO CLEAN UP
-------------------------
6.3.1 If a dispute arises between the Contractor and separate contractors
as to their responsibility for cleaning up as required by the
General Conditions of either such contract, the Owner may upon three
(3) days prior written notice clean up and charge the cost thereof
to the contractor responsible therefor as the Architect shall
determine.
ARTICLE 7.
TIME FOR COMPLETION
-------------------
7.1 DEFINITIONS
-----------
7.1.1 The Contract Time is the period of time after the Date of
Commencement of the Work allotted in the Owner contractor Agreement
in which to achieve Substantial Completion of the Work, as may be
adjusted by Change Order. The Contract Time shall commence on the
Date of Commencement of Work.
7.1.2 The Date of Commencement of the Work is the date established in a
notice to proceed.
7.1.3 The Date of Substantial Completion of the Work or designated portion
thereof is the date certified by the Architect pursuant to Article
9.1.
7.1.4 The Construction Schedule shall be the schedule of activities
derived by the Contractor pursuant to Paragraph 7.5 hereof showing
their sequences, durations and interrelationships and establishing
the Contractor's plans for accomplishing substantial completion
within the Contract Time.
7.1.5 The term "day" as used in the Contract Documents shall mean calendar
day unless otherwise specifically designated.
20
7.2 PROGRESS AND COMPLETION
-----------------------
7.2.1 Time is of the essence in the performance of the Work by or on
behalf of the Contractor including particularly, but without
limitation, any times or durations for commencement, prosecution and
completion of the Work.
7.2.2 The Contractor shall begin Work on the Date of Commencement. The
Contractor shall thereafter prosecute the Work expeditiously and
diligently at such a rate to maintain progress in accordance with
the Construction Schedule and achieve Substantial Completion within
the Contract Time. The Contractor shall employ all such additional
labor, services and supervision including such extra shifts and
overtime as may be necessary to maintain progress in accordance with
the Construction Schedule and achieve Substantial Completion within
the Contract Time, all without an increase in the Contract Sum
unless expressly authorized by the Contract Documents.
7.2.3 In executing the Owner-Contractor Agreement, the Contractor
represents that the Contract Time (as may be adjusted under the
Contract Documents) for construction and completion of the Work is
reasonable, taking into consideration the type of construction
planned and the site conditions, climatic conditions and industrial
conditions (including, without limitation, labor conditions)
prevailing in the area of the Project.
7.2.4 Should the Project or any portion there of not be completed in
accordance with the Construction Schedule or within the Contract
Time (as adjusted under the terms of the Contract Documents), Owner
shall have the right but not the obligation to occupy any portion of
the Project no so completed. In such event, Contractor shall not be
entitled to any extra compensation on account of said occupancy by
Owner or by Owner's normal full use of the Project nor shall
Contractor interfere in any way with said use of the Project, or be
relieved of any of its responsibilities under the Contract
Documents, including, without limitation, Contractor's obligation to
complete the Project in accordance with the Construction Schedule.
Occupancy by Owner hereunder shall be subject to the requirements of
Subparagraph 11.3.9 with regard to property insurance.
7.3 DELAYS AND EXTENSIONS OF TIME
-----------------------------
7.3.1 Except as otherwise specifically provided hereinafter and under
Paragraph 12.1 (Changes in the Work), the Contractor shall not be
entitled to an increase in the Contract Sum or payment or
compensation of any kind from the Owner for direct, indirect,
consequential, impact or other costs expenses or damages, including
but not limited to costs of acceleration or inefficiency, arising
because of delay, disruption, interference or hindrance from any
cause whatsoever, whether such delay, disruption, interference or
hindrance be reasonable or unreasonable, foreseeable or
unforeseeable, or avoidable or unavoidable; provided, however, that
this provision shall not preclude recovery of damages by the
Contractor for hindrances or delays due solely to fraud or bad faith
on the part of the Owner or its agents. Otherwise, the Contractor
shall be entitled only to extensions of the Contract Time as the
sole and exclusive remedy for such resulting delay, in accordance
with and to the extent specifically provided in the Contract
Documents.
7.3.2 The Contract Time shall be adjusted only as appropriate for Changes
in the Work (pursuant to Paragraph 12.1), Concealed Conditions
entitling contractor to such adjustment (pursuant to Paragraph
12.2), Suspension of Work (pursuant to Paragraph 19.2), Stopping of
Work (pursuant to Paragraph 16.1),and excusable delays (pursuant to
Subparagraph 7.3.4 ) and for no other reason. In the event the
Contractor requests an extension of the Contract Time based upon a
particular occurrence, he shall furnish such justification and
supporting evidence as the Architect may deem necessary for a
determination as to whether and to what extent the Contractor is
21
entitled to an extension of time under the provisions of the
Contract. After receipt of such justification and supporting
evidence as is timely submitted, the Architect shall make a
determination extending the Contract Time only to the extent that
such occurrence shall actually have caused extension of the Project
duration. The Contractor acknowledges and agrees that actual delays
in activities which according to the Construction Schedule, do not
affect activities critical to completion within the Contract Time
will not be the basis for an extension of the Contract Time.
7.3.3 If the Architect finds that the Contractor is entitled to any
extension of the Contract Time, he shall advise the Contractor and
Owner in writing thereof. Appropriate adjustment reflecting such
increase in the Contract Time and any resultant changes in
activities affected shall then be made to the Construction Schedule.
A change Order shall be then duly issued under Article 12
effectuating these adjustments and extending the Contract Time.
7.3.4 Subject to other provisions of the Contract Documents, the
Contractor may be entitled to an extension of the Contract Time (but
no increase in the Contract Sum) for delays arising from the
following unforeseeable causes but only to the extent that they were
beyond the control and without the fault or negligence of the
Contractor or his Subcontractors or suppliers as follows:
(a) Labor disputes and strikes including those affecting
transportation.
(b) Acts of God, such as tornado, fire, hurricane, blizzard,
earthquake, typhoon or flood or similar unavoidable casualties
that cause damage to completed Work or stored materials or
otherwise cause delay.
(c) Abnormal adverse weather not reasonably anticipatable; however,
the Contract Time will not be extended due to normal seasonal
weather variations.
(d) Acts of the Public enemy, and unanticipated acts of the state,
federal or local government in its sovereign capacity.
(e) Acts of another separate contractor in the performance of a
contract with the Owner relating to the Project.
(f) Any act or neglect of the Owner or the Architect or any of their
agents or employees.
7.3.5 No extension of Contract Time shall be granted if, in the exercise
of reasonable prudence, Contractor, or anyone for whom the
Contractor is responsible, could have avoided the delay in the
progress of the Work. Delays otherwise allowable shall be reduced by
the amount of time that Contractor or anyone for whom the Contractor
is responsible, in the exercise of reasonable prudence, could have
avoided, reduced or made up such delays in the course of the
performance of subsequent portions of the Work, provided that
Contractor shall not be obligated to incur additional cost to make
up excusable delays. In the case of impending delay resulting from
any act or neglect of the Owner or Architect, which was or should
reasonably have been foreseen by Contractor, such prudence shall
include prompt notice thereof to Owner and Architect.
7.3.6 Other than pursuant to Paragraph 12.1, no claims for extension of
Contract Time for delay, disruption, interference or hindrance of
the Work hereunder or any portion thereof shall be valid unless a
notice of claim is filed with the Owner and the Architect within ten
(10) days of the first instance of such delay, disruption,
interference or hindrance and, in addition, unless a written
statement of the claim as hereinafter described is filed with the
Owner and the Architect within
22
twenty (20) days of such first instance; otherwise all such claims
are waived by the Contractor. In the case of a continuous cause of
delay, only one written claim is necessary.
(a) Such notice of claim must clearly identify the instance of delay,
disruption, interference or hindrance and an estimate of the
probable effect of such delay on the progress of the Work.
(b) Such statement of the claim must provide all information required
by the scheduling requirements of the Contract Documents and
further provide the following specific information:
(i) Nature of the delay;
(ii) Date (or anticipated date) of commencement of delay;
(iii) Activities on the Construction Schedule affected by the
delay, and/or new activities created by the delay, and
their relationship with existing activities;
(iv) Identification of person (s) or organizations (s) or event
(s) responsible for the delay;
(v) Anticipated extent of delay;
(vi) Recommended action to avoid or minimize the delay.
(c) The Architect shall receive and process such claims for
extensions of time in accordance with the procedures set forth in
Paragraph 7.3 except that any Change Order issued shall only
amend the Contract Time.
(d) The failure of the Contractor to file any claims for extension of
time within the time limits prescribed herein and in the form and
manner required hereby shall be deemed a material prejudice to
the interests of the Owner and shall constitute an absolute
waiver of the claim and the right to file or thereafter prosecute
the same.
7.3.7 To the extent that Contractor is entitled to any increase in contact
sum for delay, disruption, interference or hindrance under this
Paragraph 7.3, an absolute condition precedent to such entitlement
shall be strict compliance with all requirements and procedures for
entitlement to an extension of time hereunder.
7.3.8 The Contractor shall keep the Owner and Architect constantly advised
to all factors which may affect the Contractor's progress toward
Substantial Completion time of the Work within the Contract Time.
7.4 OWNER'S RIGHT TO ACCELERATE
---------------------------
7.4.1 The Owner shall have the right to require, by Change Order issued
under Article 12, that completion of all or any portion of the Work
be accelerated to an earlier time. In the case of such acceleration,
the Contractor shall require his forces and Subcontractors to work
such overtime hours and take such other measures as reasonable
necessary to accomplish the acceleration. The Owner's obligation on
account of such acceleration shall be to reimburse the Contractor
for any increase on his cost for such acceleration. The Contractor
shall keep accurate records of such overtime hours and other premium
or acceleration costs and excuses resulting
23
from such acceleration. Such reimbursement shall include overhead
and profit of the Contractor and his Subcontractors. This
subparagraph shall have no application to overtime work which the
Contractor is required to perform because of his failure to meet the
Construction Schedule, or, without limitation, because of any other
fault of the Contractor.
7.5 THE CONSTRUCTION SCHEDULE
-------------------------
7.5.1 The Contractor, immediately after being awarded the Contract, shall
be responsible for deriving a Construction Schedule (as more
particularly prescribed in the Supplementary Conditions), which
shall fully describe the intended method of accomplishing all the
various work and related activities necessary to completion of the
entire Project hereunder. Such Construction Schedule shall
demonstrate an expeditious, practicable and reasonable plan for
accomplishing Substantial Completion of the Work within the Contract
Time and Final Completion of the Project.
7.5.2 The Construction Schedule shall take fully into account
accomplishment of such interim milestones or requirements of Owner
for completion of portions of the Work at times earlier than the
full Contract Time. Such milestones and requirements, if any, shall
be as prescribed in the Supplementary Conditions.
7.5.3 A preliminary Construction Schedule shall be prepared and submitted
to Owner and to Architect in final proposed form, in the format
prescribed in the Supplementary Conditions, no later than ten (10)
days after the date of the Owner-Contractor Agreement or the Date of
Commencement of Work, whichever is earlier. This preliminary
Construction Schedule should incorporate the input of major
subcontractors, fabricators, and suppliers of materials or equipment
which are not readily available for delivery to the Project. In
submitting this preliminary Construction Schedule, Contractor
warrants and represents that in his opinion and that of his major
subcontractors, fabricators and suppliers, it presents a reasonable
and workable plan and sequence for timely performance of all Work
and further constitutes their intended plan and sequence for is
accomplishment.
7.5.4 The Contractor shall be entitled to no payment under this Owner-
Contractor Agreement unless and until the Contractor has so
submitted the preliminary Construction Schedule in required format.
7.5.5 The Owner and Architect shall review this preliminary Construction
Schedule as initially submitted; however, such review shall be only
to determine its compliance with Contract requirements regarding
substantial completion, final completion and any specified interim
completion milestones or requirements. Such review shall not require
an independent evaluation or determination by Owner or Architect of
the workability, feasibility or reasonableness of the Contractor's
proposed Construction Schedule.
7.5.6 Within ten (10) days after submission of the preliminary
Construction Schedule under Subparagraph 7.5.3 above, the Owner,
Architect and Contractor shall jointly meet to review the
preliminary Construction Schedule at the Contractor's Project office
and at a time established by written notice from Architect. Within
ten (10) days thereafter, Contractor shall submit a revised
Construction Schedule incorporating any changes deemed necessary by
the Contractor or directed by Owner or Architect. This revised
Construction Schedule shall thereafter be deemed the Construction
Schedule for the Project.
7.5.7 Thereafter, the Construction Schedule shall be revised and updated
in such manner and frequency as specified in the Supplementary
Conditions.
24
7.5.8 The Construction Schedule shall be revised appropriately to reflect
accurately any adjustment extending the Contract Time allowed by
Architect including revision to the durations, sequences and
interrelationships of activities affected by the occurrences
permitting such adjustment.
7.5.9 The Contractor shall keep the Owner, the Architect and all of his
Subcontractors and material suppliers fully and completely informed
at all times of the content of the Construction Schedule, other
schedules and all other scheduling information applicable to or
which may effect the Work of all Subcontractors and material
suppliers. This information shall in all cases be furnished to the
Subcontractors and material suppliers in sufficient time to allow
them to adjust their plans so as to meet all required performance
dates relative to their portions of the Work.
7.5.10 To the extent that any provisions of this Paragraph 7.5 are at
variance with the scheduling requirements specified in the
Supplementary Conditions, the latter shall govern.
7.5.11 The Owner and the Architect shall be entitled to rely fully on the
content of the Construction Schedule (as it may be revised) in
planning and scheduling performance of their obligations under the
Contract Documents or of interrelated work by their own forces or
separate contractors.
ARTICLE 8.
PAYMENTS TO CONTRACTOR
----------------------
8.1 CONTRACT SUM
------------
8.1.1 The Contract Sum is as stated in the Owner-Contractor Agreement,
including adjustment thereto as authorized by the Contract
Documents. Such Contract Sum, (or the portion thereof authorized by
the Owner-Contractor Agreement) shall represent the total amount
payable by the Owner to the contractor for performance of the Work
under the Contract Documents.
8.2 SCHEDULE OF VALUES
------------------
8.2.1 Before the first Application for Payment and as a strict condition
precedent to payment under Article 8, the Contractor shall submit to
the Architect a Schedule of Values allocated to the various portions
of the Work aggregating and dividing the Total Contract Sum so as to
facilitate determination of progress and progress payment. The
Schedule of Values shall be prepared in such form and supported by
such data to substantiate its accuracy as the Architect may require.
The Schedule of Values shall be in a format consistent with that to
be used on the Application for Payment forms and shall segregate
each major work item and each subcontracted time on a single line,
with item numbers corresponding (if practicable) with specifications
section numbers. Further, it shall provide a preliminary schedule of
the Contractor's anticipated monthly Progress Payments. This
Schedule, unless objected to by the Architect shall be used only as
a basis for the Contractor's Applications for Payment.
8.3 APPLICATIONS FOR PAYMENT
------------------------
8.3.1 At least fifteen (15) days before the date for each progress payment
established in the Owner-Contractor Agreement, the Contractor shall
submit to the Architect an itemized Application for Payment duly
sworn and notarized on such for as required by Owner and based on
the previously approved Schedule of Values. It shall be supported by
such data information and documentation substantiating the
Contractor's right to payment as the Owner or the Architect may
require, and reflecting retainage, if any, as provided elsewhere in
the Owner-Contractor Agreement. To the extent of any delay in
submission of any Application for Payment in duly authorized form,
any specified date for progress payment shall be extended
commensurably.
25
8.3.2 If approved in writing in advance by Owner, payments will be made on
account of materials or equipment not incorporated in the Work but
delivered and suitably stored at the site and suitably stored at
some other location approved by Owner in writing. Payments for
materials or equipment stored on or of the site shall be further
conditioned upon submission by the Contractor of bills of sale or
such other evidence or procedures satisfactory to the Owner to
establish the Owner's title to such materials or equipment or
otherwise protect the Owner's interest, including applicable
insurance and transportation to the site for those materials and
equipment stored off the site.
8.4 CERTIFICATES FOR PAYMENT
------------------------
8.4.1 The Architect will promptly review such Application and, within
seven days after the receipt of the Contractor's Application for
Payment, either issue a Certificate for Payment to the Owner, with a
copy to the Contractor, for such amount as the Architect determines
is properly due, or notify the Contractor in writing his reasons for
withholding a Certificate as provided in Subparagraph 8.6.1
8.4.2 The issuance of a Certificate for Payment will constitute a
representation by the Architect to the Owner, based on his
observations at the site as provide in Subparagraph 2.2.3 and the
certified data comprising the Application for Payment, that the Work
has progressed to the point indicated and that it therefore appears
the Contractor is entitled to payment in the amount certified.
8.5 PROGRESS PAYMENTS
-----------------
8.5.1 After the Architect has issued a Certificate for Payment and
provided the Contractor has complied with all requirements of
Subparagraph 8.5.2 and otherwise is not in default under the
Contract Documents, the Owner shall make payment in the amounts and
manner and within the time provided in the Contract Documents.
8.5.2 As a condition precedent to payment, Contractor shall submit on a
monthly basis at or prior to the time of receipt of each payment its
duly executed waiver of all rights and claims of lien on the Work or
the Project Site for the period for which payment is made, in the
form provided by Owner. Contractor shall also submit on a monthly
basis at the time of receipt of each monthly payment a similar
waiver for labor and materials furnished during the period for which
the previous Application for Payment was made in the form provided
by Owner and executed by each of the Subcontractors who performed
services for that previous period and paid receipts from suppliers
and materialmen who provided equipment or material in that previous
period.
8.5.3 The Contractor shall promptly pay each Subcontractor (including
suppliers not previously paid), upon receipt of payment form the
Owner, out of the amount paid to the Contractor on account of such
Subcontractor's Work, the amount to which said Subcontractor is
entitled, reflecting the percentage actually retained, if any, from
payments to the Contractor on account of such Subcontractor's Work.
The Contractor shall, by an appropriate agreement with each
Subcontractor, require each Subcontractor to make payments to his
Subcontractors in similar manner. Until such payment is actually
made, Contractor shall be considered to hold such funds as a
fiduciary in trust for the benefit of such subcontractors.
8.5.4 The Architect may, on request and at his discretion, furnish to any
Subcontractor, if practicable, information regarding the percentage
of completion or the amounts applied for by the Contractor and the
action taken thereon by the Architect on account of Work done by
such Subcontractor.
26
8.5.5 Neither the Owner nor the Architect shall have any obligation to pay
or to see to the payment of any moneys to any Subcontractor or
supplier, except as may otherwise be required by law. However, if
the Contractor fails to pay any Subcontractor or supplier amounts
due them, the Owner shall upon seven(7) days notice to Contractor,
have the right to make payments out of any unpaid portion of the
Contract Sum to such parties as Owner may deem necessary to protect
its interest and those of Owner's Lender. Any such payments so made
by the Owner shall be considered as having been paid to Contractor.
8.5.6 No certificate for a progress payment, nor any progress payment, nor
any partial or entire use or occupancy of the Project by the Owner,
shall constitute an acceptance of any Work or performance not in
accordance with the Contract Documents. Any determination or
certification of the Architect shall be made for the limited purpose
of making monthly Progress Payments and shall not relieve the
Contractor of full responsibility for all defective materials and
workmanship and for its failure strictly to follow the Contract
Documents, notwithstanding the Owner or the Architect may have
observed the default or failure.
8.6 PAYMENTS WITHHELD
-----------------
8.6.1 The Architect may decline to certify payment and may withhold his
certificate in whole or in part, to the extent necessary reasonably
to protect the Owner, if, in his opinion, he is unable to make
representations to the Owner as to the accuracy of the facts and
estimates contained in the Contractor's Application for Payment. If
the Architect is unable to make such representations to the Owner
and to certify payment in the amount of the Application, he will
notify the Contractor as provided in Subparagraph 8.4.1. If the
Contractor and the Architect cannot agree on a revised amount, the
Architect will promptly issue a Certificate for Payment for the
amount in which he is able to make such representations to the
Owner. The Architect may also decline to certify payment or, because
of subsequently discovered evidence or subsequent observations, he
may nullify or modify the whole or any part of any certificate for
Payment previously issued, to such extent as may be necessary in his
opinion to protect the Owner from loss because of:
(a) Defective or nonconforming Work not remedied.
(b) Third party claims filed or reasonable evidence indicating
probable filing of such claims.
(c) Failure of the Contractor to make payments properly to
subcontractors or suppliers for labor, materials or equipment.
(d) Reasonable evidence that the Work cannot be completed for the
unpaid balance of the Contract Sum.
(e) Damage to the Owner or another contractor.
(f) Reasonable evidence that the Work will not be completed with the
Contract Time, or
(g) Unsatisfactory prosecution of the Work in accordance with the
Contract Documents.
8.6.2 When the above grounds in Subparagraph 8.6.1 are removed, payment
shall be made for amounts withheld because of them.
8.6.3 In the event that Architect should decline to certify or nullify a
prior certification regarding any portion of an Application for
Payment submitted by Contractor, the Owner shall pay only such
27
amount as certified by Architect as justifiably due Contractor. Any
overpayment to Contractor shall, unless otherwise credited or
adjusted be repaid to Owner upon demand.
8.6.4 The Architect and the Owner shall have the right to contact
subcontractors and suppliers directly to ascertain (1) what amounts,
if any, are due to them from Contractor, and (2) the projected costs
of completing the remaining portion of their Work, and (3) the
scope, amount and substance of any claims and disputes between them
and Contractor.
8.7 SEMIFINAL PAYMENT UPON SUBSTANTIAL COMPLETION
---------------------------------------------
8.7.1 Upon Substantial Completion of the Work or designated portion
thereof (as established pursuant to Paragraph 9.1), the Contractor
shall submit a Semifinal Application for Payment.
8.7.2 Subject to the more specific provisions elsewhere in the Contract
Documents, the Semifinal Application for Payment shall provide for
continued retention by Owner of at least an amount equal to twice
the reasonably estimated cost or expense necessary to accomplished
the following:
(a) Completion of all uncompleted work items;
(b) Remedy of any uncorrected work not in accordance with the
Contract Documents.
(c) Satisfy any and all unresolved claims or liens filed or asserted
(or reasonably anticipated filing or assertion) against Owner,
its Lender, the Project or any of the Work by any person or
entity providing labor, materials, equipment or services through
or on behalf of the Contractor; and
(d) Compensating Owner and its separate contractors for any
unresolved claims of damage or injury caused by Contractor, or
anyone for whom it shall be held responsible under the Contract
Documents, which have been asserted or are reasonably anticipated
(including claims arising out of Contractor's breach or default
hereunder).
8.7.3 The Contractor's Application for Semifinal payment shall provide an
estimated amount for the continued retainage set forth in
Subparagraph 8.7.2 which Architect and Owner shall review and adjust
as they deem necessary to reasonably protect the Owner's remaining
interests. Architect shall then certify such application, as
adjusted, for payment of any balance owing for Work performed over
such adjusted retainage.
8.7.4 Upon final adjustment and certification by Architect of such
Semifinal Application for Payment, Owner shall issue payment in
accordance with the amount certified provided Contractor shall have
first provided the following:
(a) An Affidavit that all indebtedness of Contractor connected with
Work has been paid in full with the exception of amounts
specifically listed in the Semifinal Application and
certification as unresolved or unpaid;
(b) Waivers of all rights and claims of lien as described in
Subparagraph 8.5.2;
(c) Other waivers, releases or data required by Owner or Architect
establishing such payment or satisfaction; and
(d) Consent of surety, if any.
28
8.8 FINAL COMPLETION AND FINAL PAYMENT
----------------------------------
8.8.1 Upon or prior to issuance of a written notice (under Subparagraph
9.4) by the Architect to the Owner and the Contractor that the Work
has reached final completion, Contractor shall submit his final
Application for Payment to Architect.
8.8.2 Such final Application for Payment shall include as a separate
attachment a final adjustment of accounts reflecting any and all
appropriate final accounting and adjustments of the contract
balances and Contract Sum including but not limited to:
(a) Cost of the Work (if the Owner-Contractor Agreement provides for
reimbursement of "cost").
(b) Additions and deductions resulting from the following:
(i) All Change Orders (and Change Order "cost" if appropriate
under the Contract Documents).
(ii) Allowances.
(iii) Unit Prices.
(iv) Deductions or Adjustments for defective or uncompleted
work.
(v) Bonuses, as applicable.
(vi) Deductions for liquidated or other damages.
(vii) Savings and other adjustments (as appropriate under the
Contract Documents).
(c) Total Contract Sum, as adjusted.
(d) Previous payments.
(e) Final Payment due to the Contractor.
8.8.3 As conditions precedent to final payment under the Contract
Documents, Contractor shall:
(a) execute and furnish a release of all claims and liens (except as
previously made in writing and identified as unsettled at the
time of the final Application for Payment) against Owner, its
Lender, the Project and the land upon which the Project is
situated arising under or by virtue of the Contract Documents,
including in the event of any termination as permitted by the
Contract Documents, claims or liens arising under or by virtue
of such termination;
(b) furnish written final releases and waivers of all rights to
claim or file liens properly executed by any and all
Subcontractors, vendors or others furnishing work, labor,
materials, machinery or fixtures for the performance of Work;
(c) furnish appropriate affidavits and other such other data in such
form designated by Owner as may be reasonably requested by Owner
to establish payment or satisfaction and of all payrolls,
material bills, and other indebtedness connected with the Work
for which the Owner, its lender or its property might in any way
be responsible; and
29
(d) furnish a consent of surety, if any, to final payment.
If any Subcontractor or Supplier refuses to furnish a release or
waiver required by the Owner, the Contractor may furnish a bond
satisfactory to the Owner to indemnify him against any such lien. If
any such lien remains unsatisfied after all payments are made, the
Contractor shall refund to the Owner all moneys that the latter may
be compelled to pay in discharging such lien, including all costs
and reasonable attorney's fees.
8.8.4 Upon his review an approval of such application the Architect shall
prepare a final Change Order reflecting approved adjustments to the
Contract Sum not previously made by Change Orders.
8.8.5 Upon such final adjustment and issuance of any change order so
required and upon his review and approval of the final Application
for Payment, reflecting such adjustments, the Architect shall
promptly issue a final Certificate of Payment stating that to the
best of his knowledge, information and belief, and on the basis of
his observations and inspections, the Work has been completed in
accordance with the terms and conditions of the Contract Documents
and that the entire balance found to be due the Contractor and noted
in said final Certificate, is due and payable. The Architect's final
Certificate for Payment will constitute a further representation
that the conditions precedent to the Contractor's being entitled to
final payment as set forth in Subparagraph 8.8.3 have been
fulfilled.
8.8.6 Final payment shall be due and payable in the amount certified
thirty (30) days after Owner's receipt of such final Certificate of
Payment.
8.9 WAIVER
------
8.9.1 Subject to Subparagraph 8.9.2, neither inspection by Owner or
Architect, or by any of their duly authorized representatives; nor
any order, measurement, notice or certificate by Owner; nor any
order by Owner for the payment of money; nor final payment
hereunder; nor acceptance of any work or any extension of time; nor
any possession taken by Owner, shall operate as a waiver of any
provision of the Contract Documents or any right of the Owner
thereunder or of any right to damages under the Contract Documents
or under law. Any waiver by Owner of any breach of the Contract
Documents shall not be held to be a waiver of any other or
subsequent breach, and any waiver by Owner of any right to terminate
the Agreement shall not be held to be a waiver of any breach of the
Contract Documents, but Owner retains all of its rights to recover
damages therefor.
8.9.2 The making of final payment shall constitute a waiver of all claims
by the Owner except those arising from:
(a) Unsettled liens.
(b) Faulty or defective Work appearing after Substantial Completion.
(c) Failure of the Work to comply with the requirements of the
Contract Documents.
(d) Terms of any special warranties required by the Contract
Documents.
(e) Claims thereafter asserted by third parties against Owner, its
Lender or the Project arising out of or relative in any way to
the Work or the performance thereof by or on behalf of the
Contractor.
30
8.9.3 The acceptance of final payment shall constitute a waiver of all
claims by the Contractor except those previously made in writing and
identified by the Contractor as unsettled at the time of the final
Application for Payment.
ARTICLE 9.
COMPLETION
----------
9.1 SUBSTANTIAL COMPLETION
----------------------
9.1.1 The Date of Substantial Completion of the Work or designated portion
thereof acceptable to Owner is the Date certified by the Architect
when construction is sufficiently complete, in accordance with the
Contract Documents, so that the Owner (or its tenants(s) can occupy
or utilize the Work or such designated portion thereof for the use
for which it is intended with all of the installations, parts and
systems relating thereto and required by the Work hereunder
functional, accessible, operable and usable by the Owner for their
full and unimpeded intended usage. Such completion shall include, as
applicable, all certificates of occupancy or other permits or
authorizations by governmental agencies having jurisdiction thereof,
necessary to permit such usage. Only minor or incidental corrective
work under punch lists and final cleaning (if required) beyond
cleaning needed for the Owner's full use may remain for Final
Completion.
9.1.2 When the Contractor considers the Work to be substantially complete,
he shall submit to the Owner and Architect written notice that the
Work, or such designated portion thereof, is substantially complete,
along with a list of items to be completed or corrected. The failure
to include any items on such list does not alter the responsibility
of the Contractor to complete all Work in accordance with the
Contract Documents. Within a reasonable time after receipt of
notice, the Architect shall make an inspection to determine the
status of completion.
9.1.3 Should the Architect determine that the Work has not reached
substantial completion, the Architect shall promptly notify the
Owner and Contractor in writing of his determination and the reasons
therefor. The Contractor shall promptly remedy deficiencies and
complete all incomplete Work and thereafter send another written
notice of substantial completion to the Owner and Architect who
shall within a reasonable time thereafter reinspect the Work.
9.1.4 When the Architect determines that the Work or such designated
portion is substantially complete, the Architect will prepare a
Certificate of Substantial Completion on AIA Form G704, or such
other form as the Owner shall stipulate, accompanied by the
Contractor's list of items to be completed or corrected, as verified
and amended by the Architect. The issuance of such certificate shall
establish the Date of Substantial Completion thereof. Such
certificate shall further state the responsibilities of the Owner
and Contractor for security, maintenance, heat, utilities, damage to
the Work and insurance, and shall set forth the time period within
which the Contractor shall remedy or complete items listed therein.
9.1.5 Warranties required by the Contract Documents shall commence on the
Date of Substantial Completion of the Work or designated portion
thereof, unless otherwise provided in the Certificate of Substantial
Completion.
9.1.6 If the appropriate governmental agencies refuse to issue a
Certificate of Occupancy or other necessary permits for reasons
other than fault of the Contractor, including without limitation
deficiencies in the Contract Documents, the requirement of such
Certificate will be deemed to be waived, unless the Contractor knew
or should have known of such deficiencies and failed to call it
timely to the attention of the Owner and Architect. The Contractor,
at the Owner's option,
31
shall thereafter perform the Work necessary to obtain such
Certificate which shall be effected by Change Order.
9.2 COMPLETION AND CLOSEOUT SUBMITTALS
----------------------------------
9.2.1 As soon as practicable, but in no event later than twenty (20) days
after the Date of Substantial Completion, the Contractor shall:
(a) Fully complete all remaining items and correct all deficient
items, whether or not listed on the Certificate of Substantial
Completion;
(b) Organize, prepare and submit to Owner through Architect all
Closeout Submittal information (as defined in Paragraph 9.3); and
(c) To the extent not previously accomplished for Substantial
Completion, complete the start-up of all systems and equipment
and provide the Owner's designated personnel with instructions by
Contractor (or its supplier, subcontractor or manufacturer) in
care, use, cleaning, maintenance and operation procedures for
each item.
(d) To the extent not previously accomplished, complete all cleaning
and disposal operations required by governing codes, ordinances,
regulations, anti-pollution requirements and Contract Documents.
The entire Work (buildings and grounds) shall be cleaned as
specified by Architect and as required for Owner's intended use.
9.3 CONTRACTOR'S CLOSEOUT SUBMITTAL
-------------------------------
9.3.1 As a necessary part of completion of the Work under the Contract
Documents, the Contractor shall assemble and submit to the Owner
through Architect the following material and documentation:
(a) Except as otherwise provided by the Contract Documents, all
certificates and approvals of any governmental agency with
authority over the Project or the Work required for the full,
unrestricted use and occupancy thereof by Owner for its intended
purpose, including specifically, but without limitation:
(i) Certificate(s) of Occupancy.
(ii) Certificates of inspection for such systems and
installations (as applicable) as:
(A) elevators, moving stairs and walks,
(B) mechanical systems,
(C) plumbing systems,
(D) fire protection, and
(E) electrical systems.
(b) One record set of all the following project documentation:
(i) Project Manual (Specifications).
(ii) Project Drawings.
(iii) Addenda.
32
(iv) Change Orders and Modifications to Contract.
(v) Owner's and Architect's Field Orders or written
instructions, sketches, etc.
(vi) Approved Shop Drawings, Product Data and Samples.
(vii) Testing laboratory reports.
(viii) All Construction samples and product samples.
(c) One record set of "as built" drawings, legibly marked
concurrently with the construction process including but not
limited to, the following:
(i) Depths of various elements of foundation in relation to
finish first floor datum;
(ii) Horizontal and vertical locations of underground utilities
and appurtenances, referenced to permanent surface
improvements;
(iii) Location of internal utilities and appurtenances concealed
in construction, referenced to visible and accessible
features of structure(s);
(iv) Field Changes of dimensions and details;
(v) Changes made by Field Orders, or Change Orders and not
shown on Contract Drawings (as amended); and
(vi) Details not on original Contract Drawings.
(d) One record set of "as built" specifications legibly marked so as
to indicate the manufacturer, trade name, catalog number, and
supplier of each product and item of equipment actually
installed.
(e) One record set of schematic diagrams covering installations of
all electrical, mechanical and pneumatic controls.
(f) Three duplicate sets, each separately bound and indexed in vinyl
covered three ring binders, of operating instructions and
maintenance recommendations for all Work, including, without
limitation, a printed parts list for all items which might be
subject to replacement. These instructions shall set forth all
of the information necessary for Owner to operate and make full
and efficient use of all equipment and systems comprising the
Work, and perform such maintenance and servicing as would
ordinarily be done by Owner or its personnel. They shall be
neatly typewritten in simple, non-technical language when
possible, with sufficient diagrams and explanation where
necessary to be readily understandable by average laymen.
(g) All keys and key schedules.
(h) All spare parts, maintenance materials and any materials or
equipment for which Contractor had been paid but which was not
actually incorporated into Work.
(i) The originals of all Warranties, Guaranties, Bonds, or
Certificate of Compliance required by the Contract Documents,
relative to the Work or its component parts, equipment and
33
systems, including those given by Contractor, Subcontractors and
material manufacturers or suppliers. These shall be prepared in
a vinyl covered three ring binder and indexed in order of and in
specification sections or other contract requirements. All such
warranties, guarantees and certificates, if not issued directly
to Owner, shall by their terms be assignable to Owner and shall
be accompanied by duly executed documentation effecting such
transfer and assignment.
9.4 FINAL COMPLETION
----------------
9.4.1 When the Contractor considers the Work is fully complete and ready
for final inspection, the Contractor shall certify in writing to the
Owner and Architect that:
(a) Contract Documents have been reviewed by the Contractor.
(b) All work has been carefully inspected by the Contractor for
compliance with the Contract Documents.
(c) All work has been completed in accordance with Contract
Documents.
(d) Equipment and systems have been cleaned, tested and started up
in accordance with the Contract Documents and are operational.
(e) All Closeout Submittals required by Paragraph 9.3 have been
properly made.
(f) Work is fully completed and ready for final inspection.
9.4.2 The Architect and the Owner shall make an inspection to verify the
status of completion within a reasonable time after receipt of the
Contractor's certification required by Article 9.4.1.
9.4.3 If the Owner and the Architect determine that any of the Work is
incomplete or defective, the Architect shall promptly notify the
Contractor, in writing, of such incomplete or defective Work,
itemizing and describing such remaining items with reasonable
particularity. The Contractor shall immediately complete all items
and remedy all stated deficiencies, after which the Contractor shall
send another written certification to the Owner and the Architect
that the Work is fully complete. The Architect shall promptly
reinspect the Work.
9.4.4 When the Owner and Architect determine that the entire Work has been
fully and properly completed in accordance with the Contract
Documents, the Architect shall give written notice of final
completion to the Owner and the Contractor.
ARTICLE 10.
PROTECTION OF PERSONS AND PROPERTY
----------------------------------
10.1 SAFETY PRECAUTIONS AND PROGRAMS
-------------------------------
10.1.1 The Contractor shall be responsible for initiating, maintaining,
and supervising all safety precautions and programs in connection
with the Work.
10.2 SAFETY OF PERSONS AND PROPERTY
------------------------------
10.2.1 The Contractor shall take all reasonable precautions for the safety
of, and shall provide all reasonable protection to prevent damage,
injury or loss to:
34
(a) All employees and subcontractors and sub-subcontractors and
their employees on the Project or performing the Work and all
other persons who may be affected thereby;
(b) All the Work and all materials and equipment to be incorporated
therein, whether in storage on or off the site, under the care,
custody or control of the Contractor or any of his
Subcontractors or Sub-subcontractors; and
(c) Other property at the site or adjacent thereto, including trees,
shrubs, lawns, walks, pavements, relocation or replacement in
the course of construction.
10.2.2 The Contractor shall give all notices and comply with all applicable
laws, ordinances, rules regulations and lawful orders of any public
authority bearing on the safety of persons or property or their
protection from damage, injury or loss. Specifically but without
limitation, Contractor and all of his Subcontractors shall
thoroughly familiarize themselves with all requirements of Public
Law 91-956 enacted by Congress, December 29, 1970, cited as the
"Occupational Safety and Health Act of 1970", and all amendments
thereto, commonly referred to as OSHA, and it shall be the
responsibility of the General Contractor to fully enforce and comply
with all of the provisions of this Act.
10.2.3 The Contractor shall erect and maintain, as required by existing
conditions and progress of the Work, all reasonable safeguards for
safety and protection, including posting danger signs and other
warnings against hazards, promulgating safety regulations and
notifying owners and users of adjacent utilities.
10.2.4 When the use or storage of explosives or other hazardous materials
or equipment is necessary for the execution of the Work, the
Contractor shall exercise the utmost care and shall carry on such
activities under the supervision of properly qualified personnel.
10.2.5 The Contractor shall promptly remedy all damage or loss to any
property referred to in this Paragraph 10.2. caused in whole or in
part by the Contractor, and Subcontractor, any Sub-subcontractor, or
anyone directly or indirectly employed by any of them, or by anyone
for whose acts any of them may be liable and for which the
Contractor is responsible under Subparagraph 10.2.1. except damage
or loss attributable solely to the negligent acts or omissions of
the Owner or Architect or anyone directly or indirectly employed by
either of them may be liable. The foregoing obligations of the
Contractor are in addition to his obligations under Paragraph 4.16.
10.2.6 The Contractor shall designate a responsible member of his
organization at the site whose duty shall be the prevention of
accidents. This person shall be the Contractor's superintendent
unless otherwise designated by the Contractor in writing to the
Owner and the Architect.
10.2.7 The Contractor shall not load or permit any part of the Work to be
loaded so as to endanger its safety.
10.3 EMERGENCIES
-----------
10.3.1 In any emergency affecting the safety of persons or property, the
Contractor shall act at his discretion to prevent threatened damage,
injury or loss.
35
ARTICLE 11.
INSURANCE
---------
11.1 CONTRACTOR'S LIABILITY INSURANCE
--------------------------------
11.1.1 Before commencing the Work, Contractor shall have in effect and
maintain, until completion and final acceptance of the Work, all
insurance required under this Paragraph 11.1. Such insurance shall
name Owner as an additional insured and shall be carried with
companies duly qualified to do business in the State in which the
Project is located and acceptable to Owner, and Contractor shall
furnish to Owner copies of Certificates of Insurance of all such
policies. Such certificates shall bear the endorsement that they are
not to be canceled, changed or permitted to lapse until thirty (30)
days after the Owner has received written notice as evidenced by
return receipt of registered or certified mail, and it is agreed
further that as to lapsing such notice will not be valid if mailed
more than thirty-five (35) days prior to the proposed expiration
date of the policy. Such notice must be sent to Owner as indicated
elsewhere in the General Conditions and be clearly labeled on
outside of the envelope "INSURANCE CANCELLATION". Contractor shall
require each Subcontractor to provide coverage adequate to protect
Subcontractor and its employees. Upon request, Contractor shall
deliver Contractor's and/or any Subcontractor's insurance policies
to Owner for review. If the terms of coverage of such policies are
unacceptable to Owner, Contractor and/or Subcontractor shall revise
its coverage or obtain additional coverage as reasonably requested
by Owner. Owner's approval of Contractor's and any Subcontractor's
insurance shall not relieve or limit their liability under the
Contract Documents. In the event of the failure of Contractor to
furnish and maintain such insurance, then Owner shall have the
right, but not the obligation, to take out and maintain such
insurance for and in the name of Contractor and Contractor shall pay
the cost thereof and furnish all necessary information to permit
Owner to take out and maintain such insurance for the account of
Contractor. Contractor shall not allow any Subcontractor to commence
work on its subcontract until all such insurance required of
Subcontractor has been obtained.
11.1.2 Contractor shall purchase and maintain such insurance as will
protect it from claims set forth below which may arise out of or
result from Contractor's operations under the Contract Documents,
whether such operations be by Contractor or by any Subcontractor or
by anyone directly or indirectly employed by any of them, or by
anyone for whose acts any of them may be liable:
(a) Claims under Worker's or Workmen's Compensation, disability
benefit and other similar employee benefit acts;
(b) Claims for damages because of bodily injury, occupational
sickness or disease, or death of his employees;
(c) Claims for damages because of bodily injury, sickness or
disease, or death of any person other than its employees;
(d) Claims for damages insured by usual personal injury liability
coverage which are sustained (i) by any person as a result of an
offense directly or indirectly related to the employment of such
person by Contractor, or (ii) by any other person;
(e) Claims for damages, other than to the Work itself, because of
injury to or destruction of tangible property, including loss of
use resulting therefrom; and
36
(f) Claims for damages because of bodily injury or death of any
person or property damage arising out of the ownership,
maintenance or use of any motor vehicle.
11.1.3 The liability insurance required by this Paragraph 11.1 shall be on
a comprehensive basis including:
(a) Premises - Operations (including X-C-U);
(b) Independent contractor's protection;
(c) Products and completed operations, which must be maintained for
one (1) year commencing with the issuance of the final
Certificate of Payment;
(d) Contractual, including specified provision for the Contractor's
obligations under Subparagraph 4.16.
(e) Owned, non-owned and hired motor vehicles; and
(f) Broad form coverage for property damage.
11.1.4 The insurance required in this Section 11.1 shall be in not less
than the following amounts:
(a) Worker's Compensation:
(i) Worker's or Workmen's Compensation - maximum permitted by
statute, unlimited, if permitted;
(ii) Employer's Liability - $100,000.
(b) Comprehensive General Liability.
Bodily injury and property damage having a combined single limit of $1,000,000
and including the following coverage:
(i) Personal Injury;
(ii) Independent Contractors;
(iii) Product and completed operations, which must be maintained
for one (1) year commencing with the issuance of the final
certificate of payment;
(iv) Umbrella liability coverage in the amount of $4,000,000.
(c) Automobile Liability:
(i) Bodily injury and death - $1,000,000/$100,000:
(ii) Property damage - $100,000.
37
11.2 OWNER'S LIABILITY INSURANCE
---------------------------
11.2.1 Owner shall be responsible for purchasing and maintaining its own
liability insurance and, at its option, may purchase and maintain
such insurance as will protect it against claims which may arise
from operations under the Contract Documents.
11.3 PROPERTY INSURANCE
------------------
11.3.1 Unless otherwise provided, Contractor shall purchase and maintain
property insurance upon the entire work and the Project site in the
full amount of the Contract Sum, as Adjusted pursuant to the terms
of the Contract Documents. This insurance shall include interest of
Owner, Contractor, Subcontractors and Sub-subcontractors in the Work
and shall insure against the perils of fire and extended coverage
and shall include "all risk" insurance for physical loss or damage.
If the insurance which Contractor will maintain contains
deductibles, whichever party that has experienced the loss shall pay
the deductible for any loss which is subject to said deductibles and
as a result is not recoverable from an insurance carrier. Such
certificates shall bear the endorsement that they are not to lapse
until thirty (30) days after Owner and Lender has received written
notice as evidenced by return receipt of registered or certified
mail.
11.3.2 Any loss insured under Subparagraph 11.3.1 and 11.3.2 is to be
adjusted with Contractor and made payable to Contractor as trustee
for the insureds, as their interests may appear, subject to the
requirements of any applicable mortgagee clause and of Section
11.3.8. Contractor shall pay each Subcontractor a just and equitable
share of any insurance monies received by Contractor, and by
appropriate agreement, written where legally required for validity,
shall require each Subcontractor to make payments to its
subcontractors in similar manner.
11.3.3 Contractor shall file a Certificate of Insurance describing
Contractor's insurance coverage provided for hereunder with Owner
before an exposure to loss may occur.
11.3.4 If Owner requests in writing that insurance for risks other than
those described in Subparagraph 11.3.1 and 11.3.2 be included in the
property insurance policy, Contractor shall, if possible, include
such insurance, and the cost thereof shall be charged to Owner by
appropriate Change Order.
11.3.5 Owner, Contractor, and all Subcontractors waive all rights against
(a) each other and Subcontractors, Sub-subcontractors, agents and
employees each of the other, and (b) Architect and separate
contractors, if any, and their subcontractors, sub-subcontractors,
agents and employees, for damages caused by fire or other perils to
the extent covered by insurance obtained pursuant to this Section
11.3 or any other property insurance applicable to the Work, except
such rights as they may have to the proceeds of such insurance held
by Owner as trustee. The foregoing waiver afforded Architect, its
agents and employees shall not extend to the liability of Architect,
its agents or employees arising our to (a) the preparation or
approval of maps, drawings, opinions, reports, surveys, Change
Orders, designs or specifications, or (b) the giving of or the
failure to give is the primary cause of the injury or damage. Owner
or Contractor, as appropriate, shall require of Architect, separate
contractors, Subcontractors and Sub-subcontractors by appropriate
written agreements, similar waivers each in favor of all other
parties enumerated in this Section 11.3.6.
11.3.6 If, after such loss, no other special agreement is made, replacement
of damaged work shall be covered by an appropriate Change Order.
11.3.7 Contractor, as trustee, shall have power to adjust and settle any
loss with the insurers.
38
11.3.8 If Owner finds it necessary to occupy or use a portion or portions
of the Work prior to Substantial Completion thereof, such occupancy
shall not commence prior to a time to which the insurance company or
companies providing the property insurance have consented by
endorsement to the policy or policies. This insurance shall not be
canceled or lapsed on account of such partial occupancy. Consent of
the insurance company or companies to such occupancy or use shall
not be unreasonably withheld.
11.3.9 Nothing in this Paragraph, however, shall alter the risk of loss,
excluding loss or damage resulting from faulty design, of all
improvements to be constructed and materials and equipment to be
sued in the Work, which shall remain with and upon the Contractor
until the Work has been fully completed and accepted by way of
issuance of final payment to Contractor. Without limiting this
liability, the Contractor shall be entitled to use the proceeds of
insurance obtained under this Paragraph to effect repairs to and
replacements of the Work in accordance with the foregoing
subparagraph.
11.4 LOSS OF USE INSURANCE
---------------------
11.4.1 Owner, at its option, may purchase and maintain such insurance as
will insure it against loss of use of this property due to fire or
other hazards, however caused. Owner waives all rights of action
against Contractor for loss of use of Owner's property, including
consequential losses due to fire or other hazards, however caused,
to the extent covered by insurance under this Section 11.4.1.
11.5 WRAP-UP
-------
11.5.1 In lieu of the insurance requirements set forth i Section 11.1
through 11.3 hereof, Owner shall have the right to purchase "Wrap-
Up" insurance for the Project to protect the interest of Owner,
Contractor, any separate contractor and all Subcontractors. In such
event, the Contract Sum shall be reduced to reflect the total amount
included therein to compensate Contractor and all Subcontractors for
the insurance coverage which would have been required under Section
11.1 hereof.
ARTICLE 12.
CHANGES IN THE WORK AND CLAIMS
------------------------------
12.1 CHANGE ORDERS
-------------
12.1.1 A Change Order is a written order to the Contractor signed by the
Owner and the Architect, issued after execution of the Contract,
authorizing a change in the Work or an adjustment in the Contract
Sum or the Contract Time. The Contract Sum and the Contract Time may
be changed only by Change Order. A Change Order signed by the
Contractor indicates his agreement therewith, including the
adjustment in the Contract Sum or the Contract Time; provided,
however, that the Contractor shall be obligated to proceed with any
duly executed Change Order regardless of whether it is signed by him
or not.
12.1.2 The Owner, without invalidating the Contract, may order changes in
the Work within the general scope of the Contract consisting of
additions, deletions or other revisions, the Contract Sum and the
Contract Time being adjusted accordingly. All such changes in the
Work shall be authorized by Change Order, and shall be performed
under the applicable conditions of the Contract Documents.
39
12.1.3 Upon issuance of a Change Order signed by Owner and Architect the
Contractor shall proceed promptly with the Changed Work
notwithstanding any disagreement regarding the resulting adjustments
to the Contract Sum or Contract Time. In such case, the Contract Sum
and Contract Time shall be adjusted unilaterally by the amounts
shown in the Change order, subject to any reservation of rights
regarding such dispute preserved by written notice of claim by
Contractor (pursuant to Paragraph 12.5) to Owner and Architect prior
to proceeding with the work in question.
12.1.4 The cost or credit to the Owner resulting from a change in the Work
shall be determined in one or more of the following ways:
(a) By mutual acceptance of a lump sum properly itemized and
supported by sufficient substantiating data to permit
evaluation;
(b) By unit prices stated in the Contract Documents or subsequently
agreed upon;
(c) By cost to be determined in a manner agreed upon by the parties
and mutually acceptable fixed or percentage fee; or
(d) By the method provided in Subparagraph 12.1.4.
(e) The cost or credit to the Owner resulting from a change in the
Work, or extra work, not covered by unit prices, shall be based
on the following percentages added to material and labor costs:
Percentage allowance to the Contractor for overhead (including
Bond Premiums), and profit for extra work performed by Contractor
with his own forces shall be ten percent (10%). Percentage
allowance to the Contractor for overhead (including Bond
Premiums) and profit for extra work performed by the Contractor's
Subcontractors and supervised by the Contractor shall be five
percent (5%).
12.1.5 If none of the methods set forth in Clauses 12.1.4 (1), 12.1.4 (2),
12.1.4 (3), or 12.1.4 (4) is agreed upon, the Contractor, provided
he receives a written order signed by the Owner, shall promptly
proceed with the Work involved. The cost of such Work shall then be
determined by the Architect on the basis of the reasonable
expenditures and savings of those performing the Work attributable
to the change, including, in the case of an increase in the Contract
Sum, a reasonable allowance for overhead and profit. In such case,
and also under Subparagraphs 12.1.4.(3) and 12.1.4.(4) above, the
Contractor shall keep and present, in such form as the Architect may
prescribe, an itemized accounting together with appropriate
supporting data for inclusion in a Change Order. Unless otherwise
provided in the Contract Documents, cost shall be limited to the
following: cost of materials, including sales tax and cost of
deliver; cost of labor, including social security, old age and
unemployment insurance, and fringe benefits required by agreement or
custom; worker's or workmen's compensation insurance; bond premiums;
rental value of equipment and machinery; and the additional costs of
supervision and field office personnel directly attributable to the
change. Pending final determination of cost to the Owner, payments
on account shall be made on the Architect's Certificate for Payment.
The amount of credit to be allowed by the Contractor to the Owner
for any deletion or change which results in a net decrease in the
Contract Sum will be the amount of the actual net cost as confirmed
by the Architect. When both additions and credits covering related
Work or substitutions are involved in any one change, the allowance
for overhead and profit shall be figured on the basis of the net
increase, if any, with respect to that change.
12.1.6 If unit prices are stated in the Contract Documents or subsequently
agreed upon, and if the quantities originally contemplated are so
changed in a proposed Change Order that application
40
of the agreed unit prices to the quantities of Work proposed will
cause substantial inequity to the Owner or the Contractor, the
applicable unit prices shall be equitably adjusted.
12.2 CONCEALED CONDITIONS
--------------------
12.2.1 Should concealed conditions encountered in the performance of the
Work below the surface of the ground or should concealed or unknown
conditions in an existing structure be materially at variance with
the conditions indicated by the Contract Documents, or should
unknown physical conditions below the surface of the ground or
should concealed or unknown conditions in an existing structure of
an unusual nature, differing materially from those ordinarily
encountered and generally recognized as inherent in work of the
character provided for in this Contract, be encountered, the
Contract Sum and Contract Time, as appropriate, shall be equitably
adjusted by Change Order upon written notice of claim written by
either Owner or Contractor made within ten (10) days after the first
observance of the conditions.
12.3 MINOR CHANGES IN THE WORK
-------------------------
The Architect, with the Owner's concurrence, will have authority to order
minor changes in the Work not involving an adjustment to the Contract Sum
or an extension of the Contract Time and not inconsistent with the intent
of the Contract Documents. Such changes shall be effected by written order,
and shall be binding on the Contractor. the Contractor shall carry out such
written orders promptly.
12.4 CHANGE ORDER REQUESTS AND PROPOSALS
-----------------------------------
12.4.1 Should Owner or Architect contemplate imposition of a change to the
Work, Architect may issue a Change Order Proposal Request to the
Contractor to indicate contemplated changes in the Work. Within ten
(10) days from receipt of such a Request, the Contractor shall
submit to the Owner through the Architect, a Change Order Proposal
indicating his estimated price and its estimated effect, if any, on
the Contract Time for such changed work.
12.5 CLAIMS
------
12.5.1 Other than as provided in Paragraphs 12.1 and 12.2, the Contractor
shall not be entitled to any adjustment of Contract Sum or Contract
Time except in strict compliance with the procedures and under the
circumstances hereinafter set forth.
12.5.2 Should the Contractor contend that any other written or oral order
(which shall include direction, instruction, interpretation or
determination) from the Owner or Architect or other event or
occurrence shall cause a change in the Work entitling Contractor to
adjustment to the Contract Sum or Contract Time, the Contractor
shall:
(a) Provide a written Notice of Claim to Owner and to Architect
within ten (10) days after the occurrence of the event upon
which the claim is based. Such Notice of Claim must clearly
identify the order or event which is relied upon and contain a
clear statement of why it constitutes a basis for adjustment.
(b) Provide a written statement of claim to Owner and to Architect
within twenty (20) days after the occurrence of the event, which
statement shall include a clear, concise recital of the basis
upon which the claim is asserted, including a designation of the
provision or provisions in the Contract Documents on which claim
is based and the amount of time and compensation claimed. All
costs, expenses or damages and extensions of time
41
claimed as a result of this alleged change shall be described in
reasonable detail under the circumstances together with complete
supporting documentation.
(c) To the extent that any adjustment to the Contract Time is
sought, the Contractor shall also fully comply with the
requirements of Subparagraph 7.3.5.
12.5.3 Upon receiving a Statement of Claim, the Architect shall review any
timely claim submitted by the Contractor within a reasonable time.
In conducting this review, the Architect shall have the right to
require the Contractor to submit such additional or supporting
documents, data and other information as the Owner and/or Architect
may require, and the failure to submit such additional documents,
data or other information within fifteen (15) days following written
request shall be deemed a waiver of the claim. Upon completion of
such review, the Architect, in consultation with Owner, shall issue
a Change Order amending the Contract Sum or Contract Time or both as
may be found proper. If the Contractor or Owner disputes the
determination made by the Architect as a condition precedent to any
further action to resolve such dispute, such party must notify the
other party and Architect in writing within five (5) days following
receipt of the decision of such dispute and permit the Architect
fifteen (15) additional days to reconsider and, if it deems it
appropriate, modify its decision.
12.5.4 The failure of the Contractor to assert any claim within the time
limits prescribed herein or in the form or manner precisely as
required hereby shall be deemed a material prejudice to the interest
of the Owner and shall constitute an absolute waiver of the claim
and the right to file or thereafter prosecute the same.
12.6 LIMITATION OF ENTITLEMENT
-------------------------
12.6.1 Except as provided in Paragraphs 12.1, 12.2 and 12.5, no order,
statement, or conduct of the Owner or the Architect shall entitle
the Contractor to any adjustment hereunder of the Contract Sum or
Contract Time. Nothing in this Article shall excuse the Contractor
from proceeding with the Contract as changed. Nothing contained in
this Article 12 shall operate to limit or extinguish any right or
defense of the Owner contained elsewhere in the Contract Documents
or available at law or in equity or constitute a waiver by the Owner
of any right or defense otherwise available.
ARTICLE 13.
UNCOVERING OF WORK AND CORRECTION OF WORK
-----------------------------------------
13.1 UNCOVERING OF WORK
------------------
13.1.1 If any portion of the Work shall be covered contrary to the request
of the Owner or Architect or to requirements specifically expressed
in the Contract Documents, it must, if required in writing by the
Owner, or the Architect be uncovered for his observation and shall
be removed and replaced at the Contractor's expense.
13.1.2 If any other portion of the Work has been covered which the Owner or
Architect has not specifically requested to observe prior to being
covered, the Owner or Architect may request to see such work and it
shall be uncovered by the Contractor. If such work be found in
accordance with the Contract Documents, the cost of uncovering and
replacement shall, by appropriate Change Order, be charged to the
Owner. If such Work would be found not in accordance with the
Contract Documents, the Contractor shall pay such costs unless it be
found that this condition was caused by the Owner or a separate
contractor in which event the Owner shall be responsible for the
payment of such costs.
42
13.2 CORRECTION OF WORK
------------------
13.2.1 The Contractor shall promptly correct all Work rejected by the
Architect or the Owner as defective or as failing to conform to the
Contract Documents whether observed before or after Substantial
Completion and whether or not fabricated, installed or completed.
The Contractor shall bear all costs of correcting and/or replacing
all other Work damaged or destroyed by such replacement and re-
execution.
13.2.2 If it is determined that within one year after the Date of
Substantial Completion of the Work or designated portion thereof or
within one year after acceptance by the Owner of designated
equipment or within such longer period of time as may be prescribed
by law or by the terms of any applicable special warranty required
by the Contract Documents, any of the Work is defective or not in
accordance with the Contract Documents, the Contractor shall correct
it promptly after receipt of a written notice from the Owner to do
so unless the Owner has previously given the Contractor a written
specific acceptance of such condition. This obligation shall survive
termination or final completion of the Contract.
13.2.3 The Contractor shall remove from the Site all portions of the Work
which are defective or non-conforming and which have not been
corrected unless removal is waived by the Owner.
13.2.4 If the Contractor fails to correct defective or nonconforming Work
within the time period set forth in a written notice from the Owner
to the Contractor, the Owner, after written notice to the Surety, if
any, may, but shall not be required to, correct such defective or
nonconforming Work. All costs of such corrective action incurred by
the Owner plus a fee equal to ten percent (10%) of the costs of such
Work incurred by the Owner and all out-of-pocket expenses incurred
by the Owner shall be deducted from balance of Contract Sum due to
the Contractor, or if that is insufficient, the Contractor shall pay
the difference to the Owner upon demand.
13.2.5 If the Contractor does not proceed with the correction of such
defective or nonconforming Work within the time fixed by written
notice from the Owner to the Contractor, the Owner may remove such
defective or nonconforming Work and may store the material or
equipment at the expense of the Contractor. If the Contractor does
not pay the costs of such removal in storage within ten (10) days
additional written notice sell such Work at auction or at private
sale and shall account for the net proceeds thereof after deducting
all the costs that shall have been borne by the Contractor,
including compensation for the Architect's additional services made
necessary thereby and the Owner's out-of-pocket expenses together
with a fee of ten percent (10%) of such costs. If such proceeds of
the sale do not cover all costs which the Owner shall have borne,
the difference shall be charged to the Contractor and appropriate
Change Order shall be issued. If the unpaid balance of the Contract
Sum owing the Contractor is not sufficient to cover such amount, the
Contractor shall pay the difference to the Owner upon demand.
13.2.6 The Contractor shall bear the cost of making good all work of the
Owner or separate contractors or damage by such correction or
removal.
13.3 ACCEPTANCE OF DEFECTIVE OR NON-CONFORMING WORK
----------------------------------------------
If the Owner prefers to accept defective or nonconforming Work, he may do
so instead of requiring its removal and correction, in which case a Change
Order will be issued to reflect a reduction in the Contract Sum in an
amount appropriate and equitable. Such adjustment shall be effective
whether or not final payment has been made.
43
13.4 NON-LIMITATION OF RIGHTS
------------------------
13.4.1 Nothing contained in Article 13 shall be construed to establish a
period of limitation with respect to any other obligation which
Contractor has under the Contract Documents or under any separate
warranty or guarantee required thereby, including, without
limitation, Paragraph 4.6 hereof, or under law. The establishment of
the time period of one year after date of substantial completion or
acceptance or such longer period of time as may be prescribed by law
or by the terms of any warranty or guarantee required by the
Contract Documents relates only to the specific obligation of
Contract to correct the Work, and has no relationship to the time
within which its obligation to comply with the Contract Documents or
applicable provisions of law may be sought to be enforced, nor to
the time within which proceedings may be commenced to establish
Contractor's liability with respect to its obligations other than
specifically to correct the Work.
ARTICLE 14.
TITLE TO WORK AND LIENS
-----------------------
14.1 UNENCUMBERED TITLE TO WORK
--------------------------
14.1.1 Contractor warrants and guarantees that title to all Work covered by
any Application for Payment, whether incorporated in the Project or
not, will pass to Owner free and clear of all liens, claims,
security interests or encumbrances upon the sooner of (i) the date
such Work is incorporated into the Project or (ii) the date
Contractor receives payment for such Work under Application for
Payment; and that no Work covered by an Application for Payment will
have been acquired by Contractor or by any other person performing
the Work at the Project Site or furnishing materials and equipment
for the Project, subject to an agreement under which an interest
therein or an encumbrance thereon is retained by the Seller or
otherwise imposed by Contractor or such other person.
14.2 LIEN RELINQUISHMENT AND REMOVAL
-------------------------------
14.2.1 The Contractor shall fully and promptly pay and discharge any and
all commitments and claims and wholly protect and save harmless
Owner and its property against any and all demands and claims which
may or could ripen into liens or claims of lien on the Project or
the property upon which it is situated. Further, the Contractor
shall not at any time suffer or permit any lien, attachment, or
other encumbrance under the laws of the State in which the Project
is situated or otherwise by any person or persons whomsoever to
remain on record against the Project or the property upon which it
is situated for any money due or any work done or materials
furnished relative to the Work or otherwise under the Contract
Documents or by reason of any other claim or demand against
Contractor or any Subcontractor. The Contractor shall impose similar
contractual requirements on its Subcontractors.
14.2.2 If Contractor fails to remove any mechanic's or other lien filed by
Contractor, its Subcontractors or materialmen, by satisfaction,
bonding or otherwise, Owner may retain sufficient funds, out of any
money due or thereafter to become due to Contractor by Owner, to pay
the same and to pay all costs incurred by reason thereof, including
reasonable attorneys fees and the cost of any xxxx xxxxx Owner may
elect to obtain. Additionally, without prejudice to any other rights
or remedies and at its sole election, Owner may pay said lien or
liens and costs out of any funds that are or that become due to
Contractor and that are at any time in the possession of the Owner.
44
14.3 SUBORDINATION OF RIGHTS
-----------------------
14.3.1 The Contractor agrees to subordinate, and agrees to have its
Subcontractors subordinate, any lien or claim or right of lien
against the Project and its real property which the Contractor and
his Subcontractors may now or hereafter have on account of
construction labor, services or materials provided under the
Contract in connection with the Work or otherwise for the Project,
to any promissory note, loan agreement, mortgage, deed to secure
debt, or other instrument executed by Owner which creates a first
lien on the Project and the real property on which it is located,
including any extension, renewal, additional advance or other
modification thereof. The Contractor shall not, either in its own
right or through subrogation, assignment or otherwise, assert any
lien, privilege or claim which might prejudice or become superior to
the rights of the Lender under such first lien agreement granted by
the Owner. Contractor agrees further to execute any documentation
reasonably required by Owner or its Lender effectuating this
subordination.
ARTICLE 15.
CONTRACTOR DEFAULT AND OWNER'S REMEDIES
---------------------------------------
15.1 EVENTS OF CONTRACTOR'S DEFAULT
------------------------------
15.1.1 An Event of Default shall occur if the Contractor shall:
(a) Fail or refuse to maintain progress of the Work in accordance
with the Contract Requirements and Construction Schedule
(except to the extent that an extension of time is allowed; or
(b) Fail to prosecute the Work or any of its components in
accordance with the Contract Documents; or
(c) Make any material misrepresentation to the Owner (including but
not limited to misrepresentations in connection with any
Application for Payment); or
(d) Persistently or repeatedly refuse or fail to supply sufficient
properly skilled workmen or proper materials, to permit timely
prosecution of the Work; or
(e) Fail to make prompt payment to subcontractors, or for materials
or labor; or
(f) Disregard laws, ordinances, rules, regulations, or orders of
any public authority having jurisdiction; or
(g) Be adjudicated a bankrupt; or
(h) Make a general assignment for the benefit of his creditors; or
(i) Have a receiver appointed as a result of his insolvency; or
(j) Be declared in breach or default under any general Agreement of
Indemnity or other guarantee or indemnity agreement with a
surety or lender and such declaration not be revoked within ten
(10) days thereafter; or
(k) Otherwise commit a substantial violation of a provision of the
Contract Documents.
45
15.1.2 Upon the happening of an Event of Default by Contractor, the Owner
may elect to give the Contractor written notice thereof. The
Contractor thereafter shall cure the default as soon as possible and
in any event within seventy-two (72) hours from the giving of the
notice of default.
15.2 OWNER'S REMEDIES FOR UNCURED CONTRACTOR DEFAULT
15.2.1 If the Contractor does not timely cure its default, as required by
Subparagraph 15.1.2 and upon 72 hours additional written
notification to Contractor and his surety, if any, the Owner may
exercise any one or more of the following rights and remedies:
(a) Termination
(i) Owner may terminate all or any portion of this Contract and
take possession of the Work or portions thereof, including
the Contractor's materials, tools, equipment, facilities,
supplies, machinery and appliances used or to be used in
connection with the Project, whether on or off the Project
site, and to cause the remaining Work to be finished by
another contractor or contractors as may be deemed
appropriate by the Owner. Such termination shall not relieve
the Contractor, his Surety, or any insurer of Contractor or
any liability or responsibility. Upon such termination and
written request by Owner, the Contractor shall assign its
full interests and rights to the Owner, in any or all of the
subcontracts and contracts with suppliers, or such part
thereof as the Owner may request, although the Owner shall
not be required to accept an assignment of, or otherwise
perform under any such contract. Owner shall be at liberty
to negotiate with and engage (for himself or for any other
contractors that Owner engaged to replace Contractor) any
Subcontractors, suppliers, or other that Contractor dealt
with prior to termination.
(b) Upon termination of all or any portion of the Work, Owner shall
not be obligated to make any further payment for any purpose
thereafter until all of such Work shall been completed, and all
subsequent cost necessary to complete the Work (including for
Architect's additional services necessitated thereby) shall be
paid for by Owner. If the cost to Owner for completing such Work
shall exceed the Contract Sum as adjusted in accordance with the
terms of the Contract Documents for the Work or any portion
thereof so terminated, such excess cost shall be a rightful
claim by Owner against the Contractor and such excess amount
shall be immediately due and payable and shall be paid by
Contractor to Owner upon demand. If the cost to Owner for
completing such Work shall be less than the Contract Sum as
adjusted under the Contract Documents for the Work or any
portion thereof so terminated, Owner shall pay any amounts which
Contractor had earned with respect to such Work prior to Owner's
termination thereof; provided, however, that Owner shall in no
event pay an amount greater than the difference between the
Contract Sum for the Work or the portion thereof terminated
hereunder and the amount previously paid to Contractor.
(c) If only a portion of Work has been terminated by Owner,
Contractor agrees to perform the remainder of the Work in
conformity with the Contract Documents and in such a manner as
not to interfere with Owner or others in their performance
completion of the portion of Work which was terminated.
46
(d) After the Work has been completed, the Contractor may remove such
materials, tools, plant equipment and appliances as remain at the
Property but the Owner shall not be liable for anything that has
been lost, stolen, destroyed, consumed, worn or used.
(e) Withhold Money Due
The Owner may withhold an amount from any and all retainages and
Progress or other payments then due or thereafter to become due
to the Contractor sufficient to cover the costs of curing such
default until the default has been corrected fully by the
Contractor or in the event same is contested by the Contractor.
(f) Direct Additional Effort
The Owner may direct the Contractor to furnish additional labor,
materials and equipment that, in the Owner's opinion, would be
sufficient to perform the Work and to expedite the delivery of
materials in order to complete the Work as required under the
Contract Documents. The additional labor, materials and equipment
so furnished without adjustment of the Contract Sum by reason
thereof.
(g) Perform Work Without Termination
The Owner may, without prejudice to any other rights or remedies
and without terminating this Agreement, and upon seventy-two (72)
hours prior written notice perform the obligations in respect of
which the Contractor is in default (including without limitation,
obligations relating to the performance of the Work and
obligations relating to the payment of money) with its own forces
or by engaging other contractors. In such case an appropriate
Change Order shall be issued deducting from the payments then or
thereafter due the Contractor the cost of correcting such
deficiencies, including compensation for the Architect's
additional services and any attorneys fees, made necessary by
such default, neglect or failure. If the payments then or
thereafter due the Contractor are not sufficient to cover such
amount, the Contractor shall pay the difference to the Owner upon
demand.
(h) Demand and Seek Specific Performance
The Owner may demand that the Contractor specifically perform the
obligation in respect of which he is in default or the Owner may
seek a mandatory injunction requiring the Contractor to do so or
a prohibitory injunction restraining the Contractor from acting
contrary to this Agreement or the Contract Documents, including
in each case a temporary injunction. The Owner may obtain such
injunctive relief without having to show irreparable injury or
the absence of an adequate remedy at law.
15.3 OWNER'S REMEDIES FOR REPEATED DEFAULT
-------------------------------------
15.3.1 The Owner may exercise any one or more of the rights or remedies set
forth in Paragraph 15.2 above without first giving the Contractor or
its Surety, a notice and opportunity to cure if: (a) on two or more
prior occasions the Owner shall have justifiably given the
Contractor a notice of default with respect to a similar or related
default, or (b) the Event of Default arises under bankruptcy or
insolvency.
47
15.4 NONWAIVER OF DEFAULT REMEDIES
-----------------------------
15.4.1 No election by Owner of or his failure to exercise any particular
rights or remedies set forth in Paragraph 15.2 and 15.3, shall
operate as a waiver of any other such rights or remedies; or prevent
it from exercising such rights or remedies, and the right of the
Owner to so act is without prejudice to its rights and without
waiver of the liabilities and obligations of Contractor or any
Subcontractors, as the case may be.
ARTICLE 16.
RIGHTS OF CONTRACTOR
--------------------
16.1 STOP WORK FOR NONPAYMENT OR SUSPENSION
--------------------------------------
16.1.1 If the entire Work should be suspended for a period of thirty (30)
days by order of Owner, or if Owner should fail to pay to Contractor
within fifteen (15) days after any payment becomes due and payable
to Contractor hereunder, through no act or fault of Contractor or
any Subcontractor or the agents or employees of either or any person
performing any of the Work under a contract with Contractor, then
upon seven (7) additional days' written notice to Owner and
Architect, Contractor may stop the Work until payment of the amount
owing has been received or the suspension order lifted.
16.1.2 The Contract Time shall be adjusted and the Contract Sum shall be
increased by the amount of the Contractor's reasonable duration and
costs of the shutdown, delay and startup, which shall be effected by
appropriate Change Order in accordance with Paragraph 12.1.
16.2 TERMINATION BY CONTRACTOR
-------------------------
16.2.1 If the Work is stopped for thirty (30) days by Contractor pursuant
to Paragraph 16.1, then upon seven (7) additional days written
notice to the Owner and Architect, the Contractor may terminate this
Agreement.
16.2.2 Upon such termination, the Contractor may recover from the Owner
payment for all Work executed and for any proven loss sustained upon
any materials, equipment, tools, construction equipment and
machinery, including reasonable profit but not any nondirect or
consequential damages.
ARTICLE 17.
ASSIGNMENT
----------
17.1 ASSIGNMENT
----------
17.1.1 The Contract Documents shall be binding upon the Owner and the
Contractor, their respective legal representatives, heirs,
successors and assigns. The Contractor shall not assign the whole or
any part of its obligations and undertakings under this Contract and
shall not assign any monies due or to become due hereunder without
the prior written consent of the Owner and the Lender. Any such
assignment by the Contractor of all or any part of the monies due or
to become due the Contractor under this Contract shall contain a
provision to the effect that the right of the assignee in and to any
monies due or to become due the Contractor hereunder shall be
subject to the prior claims of all persons, firms and corporations
for services rendered or materials supplies for the performance of
all claims of the Owner or of the Lender, or both, against the
Contractor in connection with the Contractor's performance under
this Contract and under the other Contract Documents. Any request by
the Contractor for the Owner to approve
48
any assignment hereunder shall be accompanied by a written statement
for the Surety whereby the Surety consents to the assignment and
agrees that such assignment will not affect the Surety's obligation
under the Bond. No assignment by the Contractor hereunder shall
relieve the Contractor of any of its obligations under this Contract
or under the other Contract Documents. The Contractor acknowledges
that the Owner may assign its rights hereunder to the Lender and the
Contractor agrees to execute such written documents to perfect such
assignment.
ARTICLE 18.
DISPUTES
--------
18.1 OBLIGATION TO PROCEED AND PERFORM
---------------------------------
18.1.1 In the event of any claim, dispute or matter in question
(collectively called a dispute), pending resolution of the dispute
the Owner shall make payments of undisputed amounts. If the Owner
requires the Contractor to proceed with the Work in a manner
directed by the Owner pending resolution of the dispute, the
Contractor shall comply with the requirement but reserving his
rights to assert a request for an increase in Contract Time or
Contract Sum as may be applicable pursuant to Article 12.
18.1.2 Contractor shall carry on the Work and adhere to the Project
Schedule during and notwithstanding all disputes or disagreements
with Owner. No Work shall be delayed or postponed pending resolution
of any disputes or disagreements, except as Contractor and Owner may
otherwise agree in writing.
ARTICLE 19.
RIGHTS OF OWNER
---------------
19.1 CONDITIONS EXCUSING PERFORMANCE
-------------------------------
19.1.1 The Owner shall not be responsible for any failure or inability of
the Owner to perform any of its obligations hereunder by reason of
fire, flood, strike or labor dispute (whether legal or illegal),
embargo, earthquake, work stoppages, acts of any government, acts of
war, sanctions by civil or military authorities, rebellion, civil
commotion or any other reason beyond Owner's control, whether or not
similar to those listed, but does not include unavailability of
funds.
19.2 OWNER'S RIGHT TO SUSPEND WORK
-----------------------------
19.2.1 The Owner or the Architect may order the Contractor in writing to
suspend, delay or interrupt all or any part of the Work for such
period of time as he may determine to be appropriate for the
convenience of the Owner.
19.2.2 If the Performance of the Work is, for an unreasonable period of
time, suspended, delayed or interrupted by the Owner, an adjustment
of the Contract Sum shall be made for any increase in Contractor's
costs of performance (excluding profit) and of the Contract Time for
any increase in the time required for performance of the Work
necessarily caused by such unreasonable suspension, delay or
interruption, and the Contact modified in writing accordingly.
However, no equitable adjustment shall be made under this
Subparagraph for any suspension pursuant to Subparagraph 19.3.1, or
for which an equitable adjustment is provided or excluded under any
other provision of the Contract Documents and no adjustment shall be
made to the extent that performance would have been so suspended,
delayed or interrupted by any other cause, including the fault or
negligence of the Contractor. No claim for an equitable adjustment
under this Subparagraph shall be allowed before the Contractor shall
have notified the Owner and the
49
Architect in writing of the act or failure to act involved and
unless the claims for increased costs or increased time required are
asserted in writing to the Owner and the Architect within ten (10)
days after the termination of such suspension, delay or
interruption.
19.3 OWNER'S RIGHT TO STOP WORK
--------------------------
19.3.1 If the Contractor fails to correct defective Work as required by
Paragraph 13.2, or persistently fails to carry out the Work or
supply labor or materials in accordance with the Contract Documents,
the Owner may order in writing the Contractor to stop the Work, or
any portion thereof, until the cause for such order has been
eliminated; however, this right of the Owner to stop the Work shall
not give rise to any duty on the part of the Owner to exercise this
right for the benefit of the Contractor or any other person or
entity.
ARTICLE 20.
BONDS
-----
20.1 PERFORMANCE AND PAYMENT BONDS
-----------------------------
20.1.1 Owner shall have the right to require Contractor to furnish Owner a
corporate surety performance bond and labor and material bond, each
in the amount of 100 percent of the Cost of the Work. The premiums
for these bonds will be paid by Owner. Owner shall have the right to
require Contractor to obtain corporate surety performance bonds and
labor and material bonds covering the work of any and all
Subcontractors whose respective portion of the Work totals Seventy-
Five Thousand ($75,000.00) Dollars or more; provided that, if the
construction Lender requires such bonds from other Subcontractors,
Contractor will obtain such required bonds. The premiums for such
bonds will be paid by the Contractor and, if such requirement is
made after the Contract Sum is agreed upon, reimbursed by the Owner.
The bonds shall be executed by a surety company authorized to engage
in such business in the state in which the Project is situated and
approved by the Owner. The form of the bonds shall be subject to
approval by Owner.
20.1.2 If the surety on any bond furnished by Contractor or any
Subcontractor is declared a bankrupt or becomes insolvent or its
right to do business is terminated in the sate where the Project is
located, Contractor shall within ten (10) days thereafter substitute
another bond and Surety, both of which must be acceptable to Owner.
ARTICLE 21.
MISCELLANEOUS PROVISIONS
------------------------
21.1 GOVERNING LAW
-------------
21.1.1 The Contract shall be governed by the laws of the State in which
the Project is located.
21.2 WRITTEN NOTICE
--------------
21.2.1 All applications for payment, notices, requests and other matters
required or permitted to be given hereunder shall be transmitted to
the addresses shown on the Owner-Contractor Agreement by letter,
telex, telegram, mailgram, cable or private commercial courier. Any
party may change the address for the giving of notices to it by
giving due notice of the new address to the other parties, provided
that the address must be a place in the United States of America
where the mails and either telexes, telegrams, mailgrams or cables
are regularly received.
50
21.2.2 The notice shall be deemed given to the party when properly
transmitted to it at its address set forth in the Owner-Contractor
Agreement.
21.3 CLAIMS FOR DAMAGES
------------------
21.3.1 Should either party to the Contract suffer injury or damage to
person or property because of any act or omission of the other party
or of any of his employees, agents or others for whose acts he is
legally liable, claim shall be made in writing to such other party
within a reasonable time after the first observance of such injury
or damage.
21.4 NO WAIVER
---------
21.4.1 No action or failure to act or to require in any one or more
instances upon the strict performance of any one or more of the
provisions of the Contract Documents, or to exercise any right
herein contained or provided by law by the Owner, the Architect, or
the Contractor shall constitute a waiver or relinquishment of any
right or duty afforded any of them under the Contract, nor shall any
such action or failure to act constitute an approval of or
acquiescence in any breach thereunder, nor shall it be construed as
a waiver of the right to subsequently demand strict performance or
exercise such rights, and the rights shall continue unchanged and
remain in full force and effect, except as may be specifically
agreed in writing.
21.5 RIGHTS AND REMEDIES
-------------------
21.5.1 Except as set forth in Subparagraph 21.5.2, the duties and
obligations imposed by the Contract Documents and the rights and
remedies available thereunder shall be in addition to and not a
limitation of any duties, obligations, rights and remedies otherwise
imposed or available by law.
21.5.2 The Contractor agrees that he can be compensated by money damages
for any breach of this Contract which may be committed by the Owner
and hereby agrees that no default, act, or omission of the Owner or
the Architect, (except for failure to make payments as specifically
addressed in Article 16) shall constitute a material breach of the
Contract entitling the Contractor to cancel or rescind the
provisions of this Contract or (unless the Owner shall so consent or
direct in writing) to suspend or abandon performance of all or any
part of the Work. The Contractor hereby waives any and all rights
and remedies to which he might otherwise be or become entitled, save
only his right to money damages.
21.6 SIGNS AND ADVERTISING
---------------------
21.6.1 Contractor shall not place or maintain any advertising signs, bills
or posters, nor shall he allow same to be placed in or about the
site or structure, except with the prior written consent of the
Owner.
21.7 ATTORNEY FEES
-------------
21.7.1 Should it be necessary for Owner, Lender or Contractor to employ an
attorney to enforce any part of the Contract or the Contract
Documents, then the party adjudged in breach or default shall pay
the reasonable fee of such attorney and all other costs related to
such enforcement or defense.
51
21.8 AGREEMENT READ AND UNDERSTOOD
-----------------------------
21.8.1 Each and every one of the Articles of the General Conditions and the
other Contract Documents has been read, examined and the meaning of
the foregoing is fully understood by the Contractor.
21.9 COMPLETE AGREEMENT
------------------
21.9.1 There are no understandings between parties to this Contract other
than as set forth herein and in the other Contract Documents, any
and all other verbal or written agreements or arrangements between
the parties hereto relative to any item or provision of this
Contract or of the other Contract Documents are hereby superseded
and voided.
21.10 INTEREST
--------
21.10.1 Payments due and unpaid under the Contract Documents shall bear
interest from the date payment is due at such rate as the parties
may agree upon in writing or, in the absence thereof, at the legal
rate prevailing at the place of the Project.
21.11 LABOR RELATIONS
---------------
21.11.1 Contractor shall use its best efforts to prevent and avoid labor
disputes and other labor problems which may affect the Work.
Contractor warrants and represents that it presently knows of no
fact, the existence of which might lead to a labor dispute which
might affect the Work.
21.11.2 In the event of any strike, picket, sympathy strike, work stoppage,
or other form of labor dispute at the Project whether directed at
the Contractor, other separate contractors, subcontractors,
suppliers or other persons, Contractor shall notwithstanding
continue to perform its Work required hereby without interruption
or delay. In the event the Contractor fails to continue its Work
without interruption or delay, because of any or such events, the
Owner, in addition to all other rights it has in the Contract
Documents and at law, may terminate the Contract after giving
Contractor seven (7) days written notice of its intent to do so for
reason of Contractor's failure to perform. Additionally, if
Contractor is party to one or more labor agreement, Contractor
shall take all reasonable action to avoid any Work stoppage,
Contractor shall within twenty-four (24) hours take all legal
action permitted by such labor agreements or by law in order to
expedite resumption of Work on this Project.
21.12 COVENANT NOT TO XXX
-------------------
21.12.1 Should the Owner elect to terminate the Agreement with the
Contractor for default as provided herein, then the Contractor
covenants that he will not file any suit or proceeding of any kind
against the Owner by reason thereof, until Owner shall have either
abandoned the Project or completed the Contractor's Work as
required under the Contract. If the Contractor should breach this
covenant not to xxx, then Contractor shall be liable to the Owner
for all costs resulting to the Owner therefrom including, without
limitation, all attorney's fees expended by the Owner in defending
said suit or proceeding, unless a positive determination is made
therein that the Contractor's termination by the Owner was
motivated by fraud and bad faith and was without justification of
any kind.
21.13 UNENFORCEABILITY OF ANY CLAUSE
------------------------------
21.13.1 If any clause of this Contract is held as a matter of law to be
unenforceable or unconscionable, the remainder of the Contract
shall be enforceable without such clause.
52
21.14 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
------------------------------------------
21.14.1 The representations and warranties made by the parties in the
Contract Documents and pursuant thereto shall survive the
consummation of the transaction contemplate therein and continue in
full force and effect without limitation.
21.15 NOT TO BENEFIT THIRD PARTIES
----------------------------
21.15.1 No provision of this Contract shall in any way inure to the benefit
of any third party (including the public at large) so as to
constitute such person a third party beneficiary of this Contract
or of any one or more of the terms and conditions of this Contract
or otherwise give rise to any cause of action in any person not a
party to the Owner-Contractor Agreement, except as provided
elsewhere in the Contract Documents.
21.16 TERMINATION OR SUSPENSION BY THE OWNER FOR CONVENIENCE
------------------------------------------------------
21.16.1 The Owner may, without cause, order the Contractor in writing to
suspend, delay or interrupt the Work in whole or in part for such
period of time as the Owner may determine.
21.16.2 An adjustment shall be made for increases in the cost of
performance of the Contract, including profit on the increased cost
of the performance, caused by suspension, delay or interruption. No
adjustment shall be made to the extent:
(a) That performance is, was or would have been so suspended,
delayed or interrupted by another cause for which the
Contractor is responsible; or
(b) That an equitable adjustment is made or denied under another
provision of the Contract.
21.16.3 Adjustments made in the cost of performance may have a mutually
agreed fixed or percentage fee.
21.16.4 The Owner may terminate this Contract without cause for the Owner's
convince at any time before a Notice to Proceed is issued to the
Contractor. In such a case, this Contract will terminate and be of
no further force or effect, and the Contractor shall be entitled to
no compensation from the Owner.
53
