Exhibit 10.9
AGREEMENT BETWEEN
OWNER AND CONSTRUCTION MANAGER
WHERE THE CONSTRUCTION MANAGER IS ALSO
THE CONSTRUCTOR
AGREEMENT
made as of July 26, 2002
BETWEEN the Owner: Chukchansi Economic Development Authority
46575 Road 417
Coarsegold, California 93614
and the Construction Manager: Walton Construction Company, Inc.
3252 Roanoke
Kansas City, Missouri 64111
The Project is: Chukchansi Gold Resort & Casino
Coarsegold, California
The Architect is: Morris & Brown Architects
105 East Reno Avenue, Suite 1
Las Vegas, Nevada 89119
The Development Manager is: Cascade Entertainment Group, LLC
7915 Folsom Boulevard
Sacramento, California 95826
The Owner and Construction Manager agree as set forth below.
<table>
<caption>
TABLE OF CONTENTS
Page
<s> <c> <c>
ARTICLE 1 GENERAL PROVISIONS................................................................1
1.1 RELATIONSHIP OF PARTIES..................................................................1
1.2 GENERAL CONDITIONS.......................................................................1
ARTICLE 2 CONSTRUCTION MANAGER'S RESPONSIBILITIES...........................................1
2.1 PRECONSTRUCTION PHASE....................................................................1
2.2 GUARANTEED MAXIMUM PRICE PROPOSAL AND CONTRACT TIME......................................4
2.3 CONSTRUCTION PHASE.......................................................................5
2.4 PROFESSIONAL SERVICES...................................................................11
2.5 WORK TO BE PERFORMED BY SEPARATE CONTRACTORS............................................11
2.6 LIQUIDATED DAMAGES......................................................................12
2.7 EARLY COMPLETION BONUS..................................................................13
ARTICLE 3 OWNER'S RESPONSIBILITIES.........................................................13
3.1 INFORMATION AND SERVICES................................................................13
3.2 OWNER'S DESIGNATED REPRESENTATIVE.......................................................14
3.3 ARCHITECT...............................................................................15
ARTICLE 4 COMPENSATION AND PAYMENTS FOR PRECONSTRUCTION PHASE SERVICES.....................15
ARTICLE 5 COMPENSATION FOR CONSTRUCTION PHASE SERVICES.....................................15
5.1 COMPENSATION............................................................................15
5.2 GUARANTEED MAXIMUM PRICE................................................................16
5.3 CHANGES IN THE WORK.....................................................................16
ARTICLE 6 COST OF THE WORK FOR CONSTRUCTION PHASE..........................................17
6.1 COSTS TO BE REIMBURSED..................................................................17
6.2 COSTS NOT TO BE REIMBURSED..............................................................20
6.3 DISCOUNTS, REBATES AND REFUNDS..........................................................21
6.4 ACCOUNTING RECORDS......................................................................21
ARTICLE 7 CONSTRUCTION PHASE...............................................................21
7.1 PROGRESS PAYMENTS.......................................................................21
7.2 FINAL PAYMENT...........................................................................24
ARTICLE 8 INSURANCE AND BONDS..............................................................26
8.1 INSURANCE REQUIRED OF THE CONSTRUCTION MANAGER AND OWNER................................26
8.2 PERFORMANCE BOND AND PAYMENT BOND.......................................................26
ARTICLE 9 MISCELLANEOUS PROVISIONS.........................................................27
9.2 DISPUTE RESOLUTION......................................................................28
9.3 OTHER PROVISIONS........................................................................30
ARTICLE 10 TERMINATION OR SUSPENSION.....................................................31
10.1 TERMINATION SUBSEQUENT TO ESTABLISHING GUARANTEED MAXIMUM PRICE.........................31
10.2 SUSPENSION..............................................................................31
ARTICLE 11 OTHER CONDITIONS AND SERVICES.................................................31
11.1 CONSTRUCTION MANAGER PRESS RELEASES.....................................................32
11.2 REPRESENTATIONS AND WARRANTIES OF CONSTRUCTION MANAGER..................................32
11.3 TRUSTEE'S INTEREST IN THE WORK..........................................................33
11.4 COMPLIANCE WITH TRUSTEE'S REQUESTS......................................................34
11.5 DOCUMENT DELIVERY.......................................................................34
</table>
ARTICLE 1 GENERAL PROVISIONS
1.1 RELATIONSHIP OF PARTIES
The Construction Manager accepts the relationship of trust and
confidence established with the Owner by this Agreement, and
covenants with the Owner to furnish the Construction Manager's best
skill and judgment and to cooperate with the Architect and
Development Manager in furthering the interests of the Owner. The
Construction Manager shall furnish construction administration and
management services and shall perform the Project consistent with the
representations and warranties set forth in Subparagraph 11.2 and in
an expeditious and economical manner consistent with the interests of
the Owner. Construction Manager shall endeavor to promote harmony and
cooperation among the Owner, Architect, Construction Manager,
Development Manager and other persons or entities employed by the
Owner for the Project.
1.2 GENERAL CONDITIONS
The General Conditions of the Contract shall be a modified version of
the A201-1997 Edition, General Conditions of the Contract for
Construction (the "General Conditions"), which is incorporated herein
by reference and attached hereto as Exhibit A. If anything in the
General Conditions is inconsistent with or is modified by this
Agreement, this Agreement shall govern. The attached General
Conditions shall also apply to Subcontractors.
ARTICLE 2 CONSTRUCTION MANAGER'S RESPONSIBILITIES
The Construction Manager shall perform the services described in this
Article.
2.1 PRECONSTRUCTION PHASE
2.1.1 CONSULTATION
2.1.1.1 The Development Manager shall schedule regular meetings which
shall be attended by the Construction Manager and Architect. The
Construction Manager shall consult with the Development Manager and
Architect regarding site use and improvements, and the selection of
materials, building systems and equipment so that the Work can be
performed by Construction Manager for an amount not to exceed the
Guaranteed Maximum Price set forth in attached Amendment No. 1
hereto. The Construction Manager shall provide recommendations on
construction feasibility; actions designed to minimize adverse
effects of labor or material shortages; time requirements for
procurement, installation and construction completion; and factors
related to construction cost including estimates of alternative
designs or materials, preliminary budgets and possible economies all
so that the Work can be performed by Construction Manager in
accordance with the Guaranteed Maximum Price and within the Contract
Time.
2.1.1.2 The Construction Manager shall review the Drawings and
Specifications as they are being prepared, recommending alternative
solutions whenever design details affect construction feasibility,
the ability of Construction Manager to perform the Work in accordance
with the assumptions and clarifications set forth in Amendment No. 1
or schedules, but without assuming any of the Architect's
responsibilities for design. Subject to Section 2.4 hereof,
Construction Manager shall review the Contract Documents to ensure
that the Architect has complied with the standards of quality and
finish as established by the Owner.
2.1.2 PHASED CONSTRUCTION
The Construction Manager shall make recommendations to the
Development Manager and Architect regarding the phased issuance of
Drawings and Specifications to facilitate phased construction of the
Work, if such phased construction is appropriate for the Project,
taking into consideration such factors as economies, time of
performance, availability of labor and materials.
2.1.3 SUBCONTRACTORS AND SUPPLIERS
2.1.3.1 The Construction Manager shall develop Subcontractor interest
in the Project and shall use its best efforts to furnish to the
Development Manager and Architect for their information a list of at
least five (5) pre-qualified Subcontractors, including suppliers who
are to furnish materials or equipment fabricated to a special design,
from whom proposals will be requested for each principal portion of
the Work. All Subcontractors who bid on any portion of the Work shall
have been pre-qualified by Construction Manager as satisfying each of
the requirements set forth on Exhibit B, unless waived in writing by
Development Manager. The Development Manager will promptly reply in
writing to the Construction Manager if the Development Manager or
Architect has any objection to any proposed Subcontractor or
supplier. The receipt of such list shall not require the Development
Manager to investigate the qualifications of proposed Subcontractors
or suppliers, nor shall it waive the right of the Development Manager
later to object to or reject any proposed Subcontractor or supplier.
The Subcontractor's bid list shall be approved by Development
Manager.
2.1.3.2 If separate Contracts for other portions of the Project are
to be awarded, the Construction Manager shall review the Drawings and
Specifications and make recommendations as required to provide that
(1) the Work of the separate Contractors is coordinated, (2) all
requirements for the Project have been assigned to the appropriate
separate Contractors, (3) the likelihood of jurisdictional disputes
has been minimized, and (4) proper coordination has been provided for
phased construction.
2.1.3.3 Construction Manager shall cause all subcontracts to include
a clause prohibiting Construction Manager from receiving any
discount, refund, inducement, benefit or payment which is not to or
for the benefit of Owner and which is not reflected in the terms of
the applicable subcontract. Each Subcontractor shall certify as to
such statement upon request of Owner, Development Manager or Trustee
(as defined in Subparagraph 3.1.1).
2.1.3.4 Construction Manager shall cause all Subcontracts to comply
with applicable laws, regulations and special requirements of the
Contract Documents regarding equal employment opportunity,
affirmative action programs and the Native American hiring
preferences set forth on Exhibit C hereto.
2.1.4 DIRECT PURCHASES AND LONG-LEAD TIME ITEMS
2.1.4.1 The Construction Manager shall act as an agent for the Owner
in the purchasing of certain items to be paid for by the Owner to the
vendor directly (the "Direct Purchases"), as provided in procedures
to be reasonably determined by Construction Manager and Development
Manager and approved by Owner (the "Direct Purchase Procedures").
Direct Purchases shall only be made by Construction Manager after
receipt of the written approval of Development Manager as to all
material terms. Construction Manager shall coordinate and be
responsible for the timely ordering, delivery to the site, storage if
required and proper installation of all Direct Purchases.
2.1.4.2 The Construction Manager shall recommend to the Owner and
Development Manager a schedule for procurement of long-lead time
items which will constitute part of the Work as required to meet the
Project schedule. If such long-lead time items are procured by the
Owner and are to be included in the Guaranteed Maximum Price,
Development Manager shall use its best efforts to procure such items
using Construction Manager's form of contract or otherwise on terms
and conditions reasonably acceptable to the Construction Manager. All
contracts for such items shall be assigned by the Owner to the
Construction Manager, who shall accept responsibility for such items
as if procured by the Construction Manager. The Construction Manager
shall expedite and coordinate the delivery of all Direct Purchases
and long-lead time items.
2.1.5 EXTENT OF RESPONSIBILITY
2.1.5.1 The Construction Manager shall complete the Project in
accordance with the Project schedule and within the Budget. The
recommendations and advice of the Construction Manager concerning
design alternatives shall be subject to the review and approval of
the Development Manager. Construction Manager shall use its best
efforts to confirm that the Drawings and Specifications are in
accordance with the assumptions and clarifications set forth in
Amendment No. 1 as well as applicable laws, statutes, ordinances,
building codes, rules and regulations; provided, that Construction
Manager shall not be required to provide professional services which
constitute the practice of architecture or engineering. If the
Construction Manager recognizes that portions of the Drawings and
Specifications are at variance therewith, the Construction Manager
shall promptly notify the Architect and Development Manager in
writing.
2.1.6 EQUAL EMPLOYMENT OPPORTUNITY AND AFFIRMATIVE ACTION
The Construction Manager shall comply with applicable laws,
regulations and special requirements of the Contract Documents
regarding equal employment opportunity, affirmative action programs
and the Native American hiring preferences set forth on Exhibit C
hereto.
2.2 GUARANTEED MAXIMUM PRICE PROPOSAL AND CONTRACT TIME
2.2.1 The Guaranteed Maximum Price, which shall be the sum of the
estimated Cost of the Work and the Construction Manager's Fee, is set
forth on Amendment No. 1 hereto, which Owner and Construction Manager
have executed concurrently herewith.
2.2.2 As the Drawings and Specifications are not finished at the time
the Guaranteed Maximum Price has been agreed upon pursuant to
Amendment No. 1, the Construction Manager has provided in the
Guaranteed Maximum Price for further development of the Drawings and
Specifications by the Architect that is consistent with the Contract
Documents and the Budget and reasonably inferable therefrom;
provided, that Construction Manager shall not be required to provide
professional services which constitute the practice of architecture
or engineering in order to make such inference. Construction Manager
acknowledges that in accordance with its review of the Drawings and
the Budget, Construction Manager represents that the Work can be
completed pursuant to the Drawings completed as of the date hereof in
accordance with the Budget for an amount less than or equal to the
Guaranteed Maximum Price. The allowances set forth on Amendment No. 1
have been agreed to by Owner, Development Manager and Construction
Manager based upon the expert advice of Construction Manager as to
the expenditures necessary to complete the Work in accordance with
the details remaining to be incorporated into the Drawings and
Specifications.
2.2.3 BASIS OF GUARANTEED MAXIMUM PRICE
The Guaranteed Maximum Price includes a written statement of its
basis, which shall include:
1. A list of the Drawings and Specifications, including all
addenda thereto and the Conditions of the Contract, which
were used in preparation of the Guaranteed Maximum Price
proposal.
2. A detailed list of allowances and a statement of their
basis, which shall include all associated costs of labor and
materials.
3. A detailed list of the clarifications and assumptions made
by the Construction Manager and approved by the Development
Manager in the preparation of the Guaranteed Maximum Price
proposal to supplement the information contained in the
Drawings and Specifications.
4. The proposed Guaranteed Maximum Price, comprising a detailed
schedule of values with the estimated cost organized by
trade-categories, allowances and other items, with the cost
of the Construction Manager's Fee as a separate line item,
all of which shall collectively total the Guaranteed Maximum
Price.
5. The Dates of Substantial Completion and Final Completion
upon which the proposed Guaranteed Maximum Price is based,
and a schedule of the Construction Documents issuance dates
upon which the dates of Substantial Completion are based.
2.2.4 Prior to the Development Manager's issuance of a Notice to
Proceed, the Construction Manager shall not incur any cost to be
reimbursed as part of the Cost of the Work under this Agreement,
except as the Development Manager may specifically authorize in
writing.
2.2.5 The Guaranteed Maximum Price shall be subject to additions and
deductions by a change in the Work as provided in the Contract
Documents and the dates of Substantial Completion and Final
Completion shall be subject to adjustment as provided in the Contract
Documents.
2.2.6 The Development Manager shall authorize the Architect to revise
the Drawings and Specifications, with the assistance of Construction
Manager, to the extent necessary to reflect the agreed-upon
assumptions and clarifications contained in Amendment No. 1. Such
revised Drawings and Specifications shall be furnished to the
Construction Manager in accordance with schedules agreed to by the
Development Manager. The Construction Manager shall notify the
Architect and Development Manager within three (3) business days if
such revised Drawings and Specifications are inconsistent with the
agreed-upon assumptions and clarifications; provided, that the review
of Construction Manager shall not include professional services which
constitute the practice of architecture or engineering.
2.2.7 The Guaranteed Maximum Price shall include in the Cost of the
Work only those taxes (subject to Subparagraph 6.1.6.1 hereof) which
are enacted at the time the Guaranteed Maximum Price is established.
A Change Order shall be executed to account for additional costs
resulting from any taxes first enacted after the time the Guaranteed
Maximum Price is established.
2.3 CONSTRUCTION PHASE
2.3.1 GENERAL
The Construction Phase shall commence upon the Development Manager's
issuance of a Notice to Proceed. Notwithstanding the foregoing,
either Owner or Construction Manager may suspend the Work at any time
after the date which is fourteen (14) days after delivery of the
Notice to Proceed but prior to the Development Manager's issuance of
the Satisfaction Notice as set forth in Subparagraph 3.1.1 of this
Agreement.
2.3.2 ADMINISTRATION
2.3.2.1 All Work other than the "General Conditions Work" (as defined
in Subparagraph 2.3.2.10) shall be performed under subcontracts or by
other appropriate agreements with the Construction Manager except to
the extent Construction Manager submits a bid for such Work and such
bid is approved by the Development Manager. The Owner also may retain
separate Contractors for portions of the work required for the
Project. The Construction Manager shall obtain sealed bids from
Subcontractors and from suppliers of materials or equipment
fabricated to a special design for the Work from the list previously
approved by Development Manager. Construction Manager shall deliver
such sealed bids to the Development Manager from such Subcontractors
and shall open them in the presence of the Development Manager. The
Development Manager shall then determine which bids will be accepted,
after receiving from the Construction Manager a detailed review of
the completeness and scope of each bid and an analysis of each
Subcontractor's ability to perform the subcontract financially and on
schedule, as well as a written recommendation as to which
Subcontractor should be selected. Development Manager shall
reasonably approve the form and process of Construction Manager's
review, analysis and recommendation. The Development Manager may
designate specific persons or entities from whom the Construction
Manager shall obtain bids; however, the Development Manager may not
prohibit the Construction Manager from obtaining bids from other
qualified bidders. The Construction Manager shall not be required to
contract with anyone to whom the Construction Manager has reasonable
objection.
2.3.2.2 If a specific bidder among those whose bids are delivered by
the Construction Manager to the Development Manager (1) is
recommended to the Development Manager by the Construction Manager;
(2) is qualified to perform that portion of the Work as reasonably
determined by Development Manager; and (3) has submitted a bid which
conforms to the requirements of the Contract Documents without
reservations or exceptions, but the Development Manager requires that
a higher bid be accepted, then the Construction Manager may require
that a Change Order be issued to adjust the Guaranteed Maximum Price
by the difference between the bid of the person or entity recommended
to the Development Manager by the Construction Manager and the amount
of the subcontract or other agreement actually signed with the person
or entity designated by the Development Manager; provided that,
Construction Manager's Fee shall not be increased as a result
thereof.
2.3.2.3 Subcontracts and agreements with suppliers furnishing
materials or equipment fabricated to a special design shall conform
to the payment provisions of Subparagraphs 7.1.8 and 7.1.9 and shall
not be awarded on the basis of cost plus a fee without the prior
consent of the Development Manager.
2.3.2.4 The Construction Manager shall conduct meetings scheduled by
Development Manager at which the Owner, Architect, Development
Manager, Construction Manager, Independent Consultant (as defined in
Paragraph 11.3) and appropriate Subcontractors can discuss the status
of the Work. The Construction Manager shall prepare and promptly
distribute meeting minutes to all parties set forth above.
2.3.2.5 The Project schedule prepared by Construction Manager in
accordance with Paragraph 3.10 of the General Conditions, and
approved by Development Manager, is attached hereto as Exhibit D.
2.3.2.6 The Construction Manager shall provide to the Development
Manager (a) weekly interim reports (the "Weekly Report") and (b)
monthly written reports (the "Monthly Report") on the progress of the
entire Work, including but not limited to information on each
Subcontractor and each Subcontractor's Work, as well as the entire
Project, showing percentages of completion and the number and amounts
of Change Orders. The Construction Manager shall also provide the
Monthly Report to the Independent Consultant and the Architect.
Development Manager shall provide copies of the Weekly Report and
Monthly Report to Owner after its review and approval thereof. The
Construction Manager shall maintain a daily log containing a record
of weather, Contractors and Subcontractors working on the site,
number of workers, Work accomplished, problems encountered and other
similar relevant data as the Owner or Development Manager may
reasonably require. The log shall be available for review at any time
during business hours by the Development Manager, Independent
Consultant or Architect. The logs shall be retained by Construction
Manager for four years following Final Completion.
2.3.2.7 The Construction Manager shall develop a system of cost
control for the Work, subject to the reasonable approval of the
Development Manager including regular monitoring of actual costs for
activities in progress and estimates for uncompleted tasks and
proposed changes. The Construction Manager shall identify variances
between actual and estimated costs and report the variances to the
Development Manager, Independent Consultant and Architect at weekly
intervals.
2.3.2.8 The Construction Manager shall monitor the work of the
separate Contractors, and its own Subcontractors and suppliers, and
coordinate their work with the activities and responsibilities of the
Architect, the Construction Manager, the Development Manager and the
Owner to complete the Project in accordance with the Owner's
objectives of cost, time and quality. The Construction Manager shall
provide sufficient organization, personnel and management to carry
out the requirements of this Agreement and the General Conditions
Work; provided that the amount of personnel provided by Construction
Manager shall be increased upon the written request of Development
Manager, without any Change Order or increase in the Cost of the Work
to the extent that (i) a material amount of the Work has been
completed which does not conform to the Drawings and Specifications,
(ii) the Work has not progressed in accordance with the Project
schedule, (iii) Construction Manager has failed to properly supervise
any Subcontractor or other Contractor as required in this Agreement,
or (iv) a material amount of the Work has been completed which fails
to meet the standards of quality required under this Agreement. The
Construction Manager shall determine that the Work of each Contractor
and Subcontractor is being performed in accordance with the
requirements of the Contract Documents and shall use its best efforts
to guard the Owner against defects and deficiencies in the Work. As
appropriate, the Construction Manager shall require special
inspection or testing or make recommendations to the Development
Manager regarding special inspection or testing of work not in
accordance with the provisions of the Contract Documents whether or
not such Work is then fabricated, installed or completed. Subject to
review by the Architect and Development Manager, the Construction
Manager shall reject work which does not confirm to the requirements
of the Contract Documents.
2.3.2.9 The Construction Manager shall maintain a competent staff at
the Project site to coordinate and provide general direction of the
Work and facilitate progress of the Contractors, Subcontractors and
suppliers on the Project. Construction Manager shall replace any
employee reasonably deemed unsatisfactory by Development Manager
within five (5) days of such written request. The Construction
Manager shall establish written procedures for coordination among the
Architect, Contractors, Subcontractors, suppliers and the
Construction Manager with respect to all aspects of the Project and
shall implement such procedures. If required, the Construction
Manager shall assist the Development Manager in selecting and
retaining the professional services of special consultants and
testing laboratories and shall coordinate their services, at Owner's
sole cost to the extent not included within the Guaranteed Maximum
Price.
2.3.2.10 The Construction Manager shall be responsible for performing
all of the "General Conditions Work". "General Conditions Work" shall
include, but not be limited to, (i) use of its supervisory field
personnel, (ii) their relocation, travel and subsistence, (iii)its
mobilization and demobilization, (iv) internal estimating and
scheduling services, (v) supervision, (vi)temporary field office
facilities for CM and DM, (vii) CM field office expenses, (viii)
utilities for temporary facilities for CM and DM, (ix), (x) oversight
responsibility for site cleanup (xi) quality assurance/control, (xii)
safety management,( but not costs associated with administering OCIP
requirements) (xiii) project cost management and reporting
obligations, and (xiv) insurance not required to be carried by Owner
pursuant to the Contract Documents and which the Construction Manager
desires to carry for its own supplemental protection. Construction
Manager shall be compensated for the General Conditions Work only as
a portion of the Construction Manager's Fee. Construction Manager
shall be entitled to reasonably allocate the Construction Manager's
Fee among various line items within the schedule of values, including
pre-construction services and specific general conditions line items,
as approved by the Development Manager.
2.3.2.11 The Construction Manager shall provide regular monitoring of
the Project schedule as construction progresses and shall identify
potential variances between scheduled and probable completion dates
in the Weekly Report. The Construction Manager shall review the
schedule for work not started or incomplete and recommend to the
Development Manager adjustments in the schedule to meet the scheduled
completion date.
2.3.2.12 The Construction Manager shall determine the adequacy of the
Subcontractors' and suppliers' personnel and equipment and the
availability of materials and supplies to meet the Project schedule.
The Construction Manager shall use its best efforts to achieve
satisfactory performance from each of the Subcontractors and
suppliers. The Construction Manager shall take appropriate action
when requirements of a contract are not being met.
2.3.2.13 The Construction Manager shall receive, review and approve
certificates of insurance, lien waivers and similar information and
shall forward copies where appropriate to the Architect and
Development Manager.
2.3.2.14 The Construction Manager shall develop and implement a
system for the preparation, review and processing of Change Orders,
which shall be subject to the approval of the Development Manager,
and shall recommend necessary or desirable changes to the Development
Manager.
2.3.2.15 The Construction Manager shall cause all permits and special
permits to be obtained for permanent improvements, and shall obtain
approvals from all authorities having jurisdiction. The Construction
Manager shall obtain a certificate of occupancy from the applicable
tribal agency.
2.3.2.16 In collaboration with the Architect and Development Manager,
the Construction Manager shall establish and implement procedures for
expediting the processing and approval of shop drawings and samples.
The Construction Manager shall receive from the Contractors and
Subcontractors, and shall review, all Shop Drawings, Product Data,
Samples and other submittals; coordinate them with information
contained in related documents; and transmit to the Architect and
Development Manager those recommended for approval.
2.3.2.17 As a part of the Cost of the Work the Construction Manager
shall arrange for delivery and storage, protection and security for
Owner-purchased materials, systems and equipment which are a part of
the Project as provided in the Direct Purchase Procedures until such
items are incorporated into the Project.
2.3.2.18 The Construction Manager shall assist the Architect and
Development Manager in determining the dates of Substantial and Final
Completion and shall provide written notice to the Development
Manager, Independent Consultant and the Architect that the Work is
ready for inspection. Development Manager shall notify Owner that the
Work is ready for inspection after receipt of such notice from the
Construction Manager. The Construction Manager shall assist the
Architect and Development Manager in conducting final inspections.
The Construction Manager, Architect and Development Manager shall
each prepare a separate punch-list of defective or incomplete work,
and shall schedule and supervise prompt completion of all punch-list
items. With the Architect and the Development Manager, the
Construction Manager shall observe the Contractors' and
Subcontractors' checkout of utilities, operational systems and
equipment for readiness and assist in their initial start-up and
testing.
2.3.2.19 The Construction Manager shall maintain at the Project site,
on a current basis, a record copy of all Contracts, Subcontracts,
Drawings, Specifications, Addenda, Change Orders and other
Modifications, in good order and marked to record all changes made
during construction; Shop Drawings; Product Data; Samples;
submittals; purchases; materials; equipment; applicable handbooks;
maintenance and operating manuals and instructions; other related
documents; and revisions which arise out of the Contracts or the
Work. The Construction Manager shall make all records available to
the Development Manager, Independent Consultant and Architect. At the
completion of the Project, the Construction Manager shall deliver all
such records to the Development Manager.
2.3.2.20 The Construction Manager shall secure and deliver to the
Development Manager all required warranties, affidavits, releases and
lien waivers and shall deliver to the Development Manager all keys,
manuals, "as-built" drawings and maintenance stocks as required by
the Contract Documents or otherwise pursuant to generally accepted
industry standards.
2.3.2.21 The Construction Manager shall arrange and conduct with
Development Manager and Owner briefings and turnovers for all
systems.
2.3.2.22 The Construction Manager shall prepare and deliver to the
Development Manager a final accounting for all costs incurred.
2.3.3 SAFETY AND PROTECTION OF PROPERTY
2.3.3.1 Before commencing any Work pertaining to the Project, the
Construction Manager shall prepare and submit copies of a
Site-Specific Safety and Health Program to the Development Manager
and the Project Safety Consultants for their collective review and
approval. The Construction Manager's Site-Specific Safety and Health
Program shall provide for the implementation of the Construction
Manager's safety responsibilities in connection with the Project and
the coordination of the Site-Specific Safety and Health Program and
its associated procedures and precautions with the safety programs,
precautions and procedures of each Contractor, Subcontractor and
subconsultants of any tier performing Work at the Project site. The
Construction Manager has the responsibility for developing its
Site-Specific Safety and Health Program in accordance with but not
limited to, the following standards:
1. OSHA Standards (Title 29 of the code of Federal
Regulations);
2. Cal/OSHA Standards (Title 8 of the California Code of
Regulations); and
3. The California Mandated Site Specific Injury and
Illness Prevention Plan (IIPP) per CA SB198.
2.3.3.2 The Construction Manager shall be responsible for initiating,
maintaining, monitoring and supervising all safety programs,
precautions and procedures in connection with the Project and for
coordinating its programs, precautions and procedures with those of
the other Contractors performing the Work at the site in conformance
with its Site-Specific Safety and Health Program. The Construction
Manager shall take all necessary precautions to prevent damage,
injury and loss to all of its employees on the Project, employees of
all Subcontractors and subconsultants of any tier, and other persons
and organizations that may be affected thereby.
2.3.3.3 The Construction Manager's Site-Specific Safety and Health
Program shall include a plan to protect until Final Completion:
1. All Work of Construction Manager and other Contractors
and material and equipment to be incorporated therein;
and
2. Other property at the site or adjacent thereto,
including trees, shrubs, lawns, walks, pavements,
roadways, structures, utilities and underground
facilities not designated for removal, relocation or
replacement in the course of construction.
2.3.3.4 The Construction Manager shall comply with all applicable
laws and regulations of any public body having jurisdiction for the
safety of persons or property and to protect them from damage, injury
or loss and shall erect and maintain all necessary safeguards for
such safety and protections. The Construction Manager shall notify
owners of adjacent property and of underground facilities and utility
owners when prosecution of the Work may affect them and shall
cooperate with them in the protection, removal, relocation and
replacement of their property. All damage, injury or loss to any
property caused, directly or indirectly, in whole or in part, by the
Construction Manager, or its Subcontractors or subconsultants of any
tier, suppliers or any other person or organization directly or
indirectly employed by any of them to perform or furnish any of the
Work or anyone for whose acts any of them may be liable shall be
remedied by the Construction Manager. The duties and responsibilities
of Construction Manager for the safety and protection of any portion
of the Work shall continue until such time as the applicable portion
of the Work is completed and the Development Manager has issued a
notice of Substantial Completion to the Construction Manager.
2.3.3.5 In emergencies affecting the safety or protection of persons
or the Work or property at the site or adjacent thereto, the
Construction Manager is obligated to prevent threatened damage,
injury or loss. The Construction Manager has the obligation to
control the means, methods, techniques and sequence of construction
and the authority to stop the Work, or any part thereof, which
represents an imminent threat to safety.
2.3.3.6 The Construction Manager shall designate a responsible
representative at the site whose duty shall be the prevention of
accidents and overall job site safety. This representative shall be
responsible for interfacing with the Project Safety Consultant.
Construction Manager shall comply with all reasonable requirements of
the Project Safety Consultant.
2.4 PROFESSIONAL SERVICES
Notwithstanding anything to the contrary in any of the Contract
Documents, Construction Manager shall not be required to provide
professional services which constitute the practice of architecture
or engineering unless the Construction Manager has specifically
agreed in a separate writing to provide such services. In such event,
the Construction Manager shall cause such services to be performed by
appropriately licensed professionals.
2.5 WORK TO BE PERFORMED BY SEPARATE CONTRACTORS
2.5.1 Construction Manager acknowledges that Owner may be retaining
separate Contractors to complete the following portions of the
Project, without limitation: the sewage treatment plant.
Notwithstanding the foregoing, as required by the terms of the
Agreement, Construction Manager shall supervise the Contractors
performing those portions the Project which are not included within
the Construction Manager's scope of Work, including by coordinating
work of such Contractors with Construction Manager's Work and the
Work of any Subcontractors of Construction Manager. Owner shall
include within any contract with such separate Contractors a
provision granting Construction Manager authority for coordinating
the overall Project. Payment for these coordination and supervisory
services to be rendered by the Construction Manager, is included in
the fixed Construction Manager's Fee and shall be at no additional
cost to Owner whether or not the sewage treatment plant are included
in the cost of Work.
2.5.2 At Development Manager's election in its sole and absolute
discretion, Construction Manager shall accept the assignment from
Owner of all of Owner's rights and obligations under any Contract for
performance of Work at the Project by Contractors other than
Construction Manager, and upon such assignment to Construction
Manager it shall accept the responsibilities of Owner thereunder and
continue performance of its coordination and supervisory duties
hereunder, subject to review and approval by Development Manager as
set forth herein. If any separate Contract is assigned to
Construction Manager, as of the date of such assignment Development
Manager shall use its best efforts to cause such Contract to
incorporate Construction Manager's standard form of contract or
otherwise include in the Contract terms and conditions reasonably
acceptable to the Construction Manager. The assignment of any such
separate Contract by Owner to Construction Manager (as opposed to
Owner remaining the responsible party under such Contract) shall not
result in any increase in the Construction Manager's Fee; provided,
that the Cost of the Work shall be increased by the amount properly
payable by "Owner" under such assigned Contract, which amount shall
be in addition to the Guaranteed Maximum Price.
2.6 LIQUIDATED DAMAGES
2.6.1 Construction Manager expressly acknowledges that Owner will
incur substantial costs, lost revenues and damages for each day that
Substantial Completion is delayed, including but not limited to,
interest charges, obligations to Lender, lack of gaming proceeds,
lack of casino revenues, personnel and administrative costs, loss of
profits, loss of goodwill, loss of market position, and other direct
and indirect losses. In view of the difficulty or impossibility of
determining what Owner's damages will be should Construction Manager
fail to achieve Substantial Completion on or before the date for
Substantial Completion set forth on Amendment No. 1 (the "Outside
Substantial Completion Date"), Construction Manager agrees to pay
Owner as liquidated damages, and not as a penalty, $17,500.00 for
each day Substantial Completion is delayed beyond the Outside
Substantial Completion Date. No liquidated damages due from the
Construction Manager shall constitute a Cost of the Work.
Construction Manager hereby specifically acknowledges that it has
reviewed all the aspects of Owner's damages, including without
limitation, Owner's daily interest carrying charges, and all data and
information supporting or reflecting such damages, and agrees,
represents and confirms that the daily liquidated damage amounts
provided herein represents the best estimate of a realistic and
accurate daily damage to Owner in the event of Construction Manager's
failure to Substantially Complete the Work on or before the Outside
Substantial Completion Date. The preceding liquidated damages, if
any, shall be due and payable by the Construction Manager upon demand
by the Owner, and shall be Owner's sole and exclusive monetary remedy
hereunder. Owner shall also have the right to terminate this
Agreement for Construction Manager's default in failing to
Substantially Complete the Work on or before the Outside Substantial
Completion Date and shall maintain all other remedies provided for in
this Agreement in addition to the recovery of the applicable
liquidated damages.
2.7 EARLY COMPLETION BONUS
Should Construction Manager achieve Substantial Completion on or
before the Outside Substantial Completion Date, Owner agrees to
increase Construction Manager's Fee by an amount equal to $10,000.00
for each day Substantial Completion is achieved prior to the Outside
Substantial Completion Date.
ARTICLE 3 OWNER'S RESPONSIBILITIES
3.1 INFORMATION AND SERVICES
3.1.1 Construction Manager acknowledges that Owner is presently
negotiating to obtain a loan to finance construction of the Project
(the "Construction Loan"). This Agreement, and the obligations of
Owner and Construction Manager to perform hereunder, are contingent
upon the receipt by the Owner, by obtaining the Construction Loan
from the lender thereunder ("Trustee"), of all funds necessary to
fully complete construction of the Project. If the Development
Manager or Owner notifies Construction Manager on or before one
hundred twenty (120) days following the execution of this Agreement
by Owner and Construction Manager (the "Financing Date") that, in
Owner's sole judgment and discretion, the foregoing contingency has
occurred or has been satisfied (a "Satisfaction Notice"), then this
Agreement shall remain in full force and effect. Owner shall provide
reasonable evidence of receipt of sufficient funds along with
delivery of the Satisfaction Notice. In the absence of a Satisfaction
Notice by Owner on or before the Financing Date, the foregoing
contingency shall be deemed unsatisfied, and either Owner or
Construction Manager shall have the right to terminate this Agreement
at any time prior to delivery of a Satisfaction Notice; provided,
however, that upon such termination Owner shall reimburse the
Construction Manager for those costs which have been reasonably
incurred by the Construction Manager prior to the Financing Date for
which Construction Manager has received the Owner's written consent
prior to incurring such cost. Notwithstanding anything to the
contrary contained herein, neither Owner nor Development Manager
shall have any liability to Construction Manager for Construction
Manager's Fee on any Cost of the Work not then expended in accordance
with the prior sentence or otherwise due to the failure of Owner to
obtain the Construction Loan.
3.1.2 STRUCTURAL AND ENVIRONMENTAL TESTS, SURVEYS AND REPORTS
Construction Manager acknowledges that Owner has furnished to it the
information, reports, surveys, drawings and tests described in this
Subparagraph 3.1.2 to the extent requested prior to the date hereof
by Construction Manager, and that Owner shall have no further
obligation to deliver any further such information, except for such
additional information which Owner obtains that Development Manager
and Construction Manager reasonably agree with expedite the
completion of the Project. All such information, reports, surveys,
drawings and tests described in this Subparagraph 3.1.2 which have
been or shall be completed at the sole cost and expense of Owner or
Development Manager, except as may be specifically included in the
Guaranteed Maximum Price. Construction Manager shall be entitled to
rely upon the accuracy of any such information, reports, surveys,
drawings and tests described in Clauses 3.1.2.1 through 3.1.2.4,
except to the extent that the Construction Manager knows or should
have known of any inaccuracy.
3.1.2.1 Reports, surveys, drawings and tests concerning the
conditions of the site which are required by applicable tribal law.
3.1.2.2 Surveys describing physical characteristics, legal
limitations and utility locations for the site of the Project, and a
written legal description of the site. The surveys and legal
information shall include, as applicable, grades and lines of
streets, alleys, pavements and adjoining property and structures;
adjacent drainage; rights-of-way, restrictions, easements,
encroachments, zoning, deed restrictions, boundaries and contours of
the site; locations, dimensions and necessary data pertaining to
existing buildings, other improvements and trees; and information
concerning available utility services and lines, both public and
private, above and below grade, including inverts and depths. All
information on the survey shall be referenced to a project benchmark.
3.1.2.3 The services of geotechnical engineers when such services are
requested by the Construction Manager. Such services may include but
are not limited to test borings, test pits, determinations of soil
bearing values, percolation tests, evaluations of hazardous
materials, ground corrosion and resistivity tests, including
necessary operations for anticipating subsoil conditions, with
reports and appropriate professional recommendations.
3.1.2.4 Structural, mechanical, chemical, air and water pollution
tests, tests for hazardous materials, and other laboratory and
environmental tests, inspections and reports which are required by
law.
3.1.2.5 The services of other consultants when such services are
reasonably required by the scope of the Project and are requested by
the Construction Manager.
3.2 OWNER'S DESIGNATED REPRESENTATIVE
The Owner hereby designates Development Manager as its sole
representative who shall have express authority to bind the Owner
with respect to all matters requiring the Owner's approval or
authorization. Development Manager shall have the authority to make
decisions on behalf of the Owner concerning estimates and schedules,
construction budgets, and changes in the Work, and shall render such
decisions promptly and furnish information expeditiously, so as to
avoid unreasonable delay in the Project. All items required to be
delivered to Owner by Construction Manager under the Agreement shall
be delivered instead to Development Manager. Notwithstanding anything
to the contrary contained in the Contract Documents, Owner may
replace the Architect with any other licensed architect within the
State of California at any time without the approval of Construction
Manager, and such architect shall thereafter become the "Architect"
under the Contract Documents for all purposes.
3.3 ARCHITECT
The Owner has retained Architect to provide the services, including
normal structural, mechanical and electrical engineering services,
other than cost estimating services, described in the AIA Document
B163 as modified by Owner and Architect. The Owner shall authorize
the Architect to provide the Services described in AIA Document B163
reasonably requested by the Construction Manager which must
necessarily be provided by the Architect for completion of the Work
by Construction Manager.
ARTICLE 4 COMPENSATION AND PAYMENTS FOR PRECONSTRUCTION PHASE SERVICES
All Preconstruction Phase services provided by Construction Manager
from and after the date of this Agreement shall be included in the
Construction Manager's Fee and shall not be billed separately to
Owner.
ARTICLE 5 COMPENSATION FOR CONSTRUCTION PHASE SERVICES
The Owner shall compensate the Construction Manager for Construction
Phase services as follows:
5.1 COMPENSATION
5.1.1 For the Construction Manager's performance of the Work as
described in Paragraph 2.3, including the General Conditions Work,
the Owner shall pay the Construction Manager in current funds the
Contract Sum consisting of (i) the Cost of the Work as defined in
Article 7 and (ii) the Construction Manager's Fee, which includes the
Construction Manager's profit and overhead and all costs of General
Conditions Work, in the amount of FIVE MILLION TWO HUNDRED THOUSAND
and NO/100 DOLLARS ($5,200,000.00). Construction Manager's Fee shall
not be increased or decreased as a result of any increase or decrease
in the Cost of the Work or the scope of the Project.
5.1.2 There shall be no mark-up by Construction Manager on Change
Orders, except to the extent the Change Order represents (i) a
material increase in the scope of the Project, including by way of
example adding an additional structure, (ii) an increase in the
Budget, or (iii) an increase in the square feet of the Project by
more than three percent (3%). With respect to a Change Order which
results in an increase in the Budget, no mark-up shall be taken by
Construction Manager except to the extent that the additional Work
provided for in such Change Order directly results in additional
supervisory expense to Construction Manager which may not be passed
on to Owner; provided, that (a) no mark-up shall be taken to
compensate for such additional supervisory costs with respect to the
first six percent (6%) of the Budget increase, (b) the mark-up which
may be taken with respect to the next six percent (6%) of the Budget
increase to compensate for such additional supervisory costs shall be
the lesser of (x) the reasonable and actual additional supervisory
costs incurred by Construction Manager and (y) ten percent (10%) of
the cost of the Change Order (excluding the amount equal to the
initial six percent (6%) Budget increase) and (c) the mark-up which
may be taken to compensate for such additional supervisory costs with
respect to the Budget increase in excess of twelve percent (12%)
shall be an amount such that the aggregate mark-up shall not exceed
ten percent (10%) of the cost associated with the Change Order.
Construction Manager's mark-up on Change Orders to account for
Construction Manager's overhead and profit and increased General
Conditions Work shall be in lieu of any increase in Construction
Manager's Fee. To the extent that Change Orders or allowance work
involves work, materials or equipment listed on a Unit Price List
approved by the Development Manager, the cost to Owner of such Change
Orders or allowance work shall be the applicable unit prices set
forth on the Unit Price List, plus the Construction Manager's
mark-up, if any (subject to the limitation in the preceding
sentence). Notwithstanding any provision of the Contract Documents to
the contrary, under no circumstances shall Owner be required to
compensate the Construction Manager for additional work unless the
Development Manager has signed a Change Order for such work prior to
such work being performed. In addition, each different change in the
Work shall be the subject of a separate Change Order, except as may
be agreed otherwise in writing by the Development Manager in each
instance.
5.2 GUARANTEED MAXIMUM PRICE
The sum of the Cost of the Work and the Construction Manager's Fee is
guaranteed by the Construction Manager not to exceed the amount
provided in Amendment No. 1, subject to additions and deductions by
changes in the Work as provided in the Contract Documents. Such
maximum sum as adjusted by approved changes in the Work is referred
to in the Contract Documents as the Guaranteed Maximum Price. Costs
which would cause the Guaranteed Maximum Price to be exceeded shall
be paid by the Construction Manager without reimbursement by the
Owner. Anything herein to the contrary notwithstanding, in the event
that the sum of the Cost of the Work and the Construction Manager's
Fee is less than the Guaranteed Maximum Price as amended by Change
Order, 80% of all such savings shall be retained by the Owner, with
the remainder payable to Construction Manager in accordance with
Paragraph 7.2 hereof; provided, that Construction Manager shall not
be entitled to any savings of any contingency portion of the Budget.
5.3 CHANGES IN THE WORK
5.3.1 Adjustments to the Guaranteed Maximum Price on account of
changes in the Work subsequent to the execution of Amendment No. 1
may be determined by any of the methods listed in Subparagraph 7.3.3
of the General Conditions, subject to the limitations in Paragraph
5.1 above.
5.3.2 In calculating adjustments to subcontracts (except those
awarded with the Owner's prior consent on the basis of cost plus a
fee), the terms "cost" and "fee" as used in Clause 7.3.3.3 of the
General Conditions and the terms "costs" and "a reasonable allowance
for overhead and profit" as used in Subparagraph 7.3.6 of the General
Conditions shall have the meanings assigned to them in that document
and shall not be modified by this Article 5; provided that the
combined overhead and profit paid to Subcontractors for changes in
the Work shall not exceed fifteen percent (15%). Adjustments to
subcontracts awarded with the Development Manager 's prior consent on
the basis of cost plus a fee shall be calculated in accordance with
the terms of those subcontracts.
5.3.3 In calculating adjustments to the Contract, the terms "cost"
and "costs" as used in the above-referenced provisions of the General
Conditions shall mean the Cost of the Work as defined in Article 6 of
this Agreement.
ARTICLE 6 COST OF THE WORK FOR CONSTRUCTION PHASE
6.1 COSTS TO BE REIMBURSED
The costs described in Subparagraphs 6.1.1 through 6.1.8 shall be
included in the Cost of the Work notwithstanding any provision of the
General Conditions or other Conditions of the Contract which may
require the Construction Manager to pay such costs, unless such costs
are excluded by the provisions of Paragraph 6.2.
6.1.1 The term "Cost of the Work" shall mean the reasonable and
necessary costs of all material and labor properly incurred by the
Construction Manager in good faith in the proper performance of the
Work. Such costs shall be at rates not higher than those customarily
paid at the place of the Project except with prior written consent of
the Development Manager. The Cost of the Work shall include only the
items set forth in this Article 6.
6.1.2 LABOR COSTS
1. Wages of construction workers directly employed by the
Construction Manager to perform the construction of the Work
at the site or, with the Development Manager 's agreement,
at off-site workshops, calculated in accordance with the
billable rates set forth in the Personnel Reimbursement
Schedule attached hereto as Exhibit E. The rates set forth
on Exhibit E shall remain fixed for the duration of the
Project.
2. Wages or salaries as set forth on Exhibit E of the
Construction Manager's supervisory and administrative
personnel in connection with the performance of the Work
when stationed at the site to the extent previously approved
in writing by Development Manager.
3. Wages and salaries in accordance with Exhibit E of the
Construction Manager's supervisory or administrative
personnel engaged, at factories, workshops or on the road,
in expediting the production or transportation of materials
or equipment required for the Work, but only for that
portion of their time required for the Work.
4. The hourly rates set forth as Exhibit E include costs paid
or incurred by the Construction Manager for taxes,
insurance, contributions, assessments and benefits required
by law or collective bargaining agreements, and, for
personnel not covered by such agreements, customary benefits
such as sick leave, medical and health benefits, holidays,
vacations and pensions.
6.1.3 SUBCONTRACT COSTS
Payments made by the Construction Manager to Subcontractors in
accordance with the requirements of the subcontracts previously
approved in writing by the Development Manager (i.e., the actual cost
without the Construction Manager's overhead or profit markup and with
the benefit of all discounts received). Upon mutual consent of the
Development Manager and Construction Manager, the Construction
Manager shall enter into a contract with each lowest responsible
bidder for performance of its respective construction work; provided
that the Development Manager shall not be obligated to accept the
lowest responsible bidder.
6.1.4 COSTS OF MATERIALS AND EQUIPMENT INCORPORATED IN THE COMPLETED
CONSTRUCTION
1. Costs, including transportation, of materials and equipment
incorporated or to be incorporated in the completed
construction.
2. Costs of materials described in the preceding Clause 6.1.4.1
in excess of those actually installed but required to
provide reasonable allowance for waste and for spoilage.
Unused excess materials, if any, shall be properly stored
during the performance of the Work and handed over to the
Owner at the completion of the Work or, at the Development
Manager 's option, shall be sold by the Construction
Manager; amounts realized, if any, from such sales shall be
credited to the Owner as a deduction from the Cost of the
Work.
6.1.5 COSTS OF OTHER MATERIALS AND EQUIPMENT, TEMPORARY FACILITIES
AND RELATED ITEMS
1. Costs, including transportation, installation, maintenance,
dismantling and removal of materials, supplies, temporary
facilities, machinery, equipment, and hand tools not
customarily owned by the construction workers, which are
provided by the Construction Manager at the site and fully
consumed in the performance of the Work; and cost less
salvage value on such items if not fully consumed, whether
sold to others or retained by the Construction Manager. Cost
for items previously used by the Construction Manager shall
mean fair market value.
2. Rental charges for temporary facilities, machinery,
equipment, and hand tools not customarily owned by the
construction workers, which are provided by the Construction
Manager at the site, whether rented from the Construction
Manager or others, and costs of transportation,
installation, minor repairs and replacements, dismantling
and removal thereof. Rates and quantities of equipment
rented shall be subject to the Development Manager 's prior
approval. The Construction Manager's equipment rates shall
be the local market rates. Charges for equipment rented from
third parties shall be the actual rental rates, which shall
in no event exceed local market rates. No rental charges for
any piece of equipment shall exceed in the aggregate for the
duration of the Project 60% of the cost to purchase such
item as of the date of its initial rental.
3. Costs of removal of debris from the site.
6.1.6 MISCELLANEOUS COSTS
1. Sales, use or similar taxes properly imposed by a
governmental authority which are related to the Work and for
which the Construction Manager is liable, provided that
Construction Manager has followed the Direct Purchase
Procedures.
2. Fees and assessments for the building permit and for other
permits, licenses and inspections which the Construction
Manager is required by the Contract Documents to pay.
3. Fees of testing laboratories for tests required by the
Contract Documents to the extent approved in writing by
Development Manager, except those related to nonconforming
Work.
4. Royalties and license fees paid for the use of a particular
design, process or product required by the Contract
Documents to the extent previously approved by Development
Manager in writing; payments made in accordance with legal
judgments against the Construction Manager resulting from
such suits or claims and payments of settlements made with
the Development Manager 's prior written consent; provided,
however, that such costs of judgments and settlements shall
not be included in the calculation of the Construction
Manager's Fee or the Guaranteed Maximum Price and provided
that such royalties, fees and costs are not excluded by the
last sentence of Subparagraph 3.17.1 of the General
Conditions or other provisions of the Contract Documents.
5. Deposits lost for causes other than the Construction
Manager's or any Subcontractor's negligence or failure to
fulfill a specific responsibility to the Owner set forth in
this Agreement.
6.1.7 OTHER COSTS
Other reasonable and necessary costs incurred in the performance of
the Work if and to the extent approved in advance in writing by the
Development Manager.
6.1.8 EMERGENCIES AND REPAIRS TO DAMAGED OR NONCONFORMING WORK
The Cost of the Work shall also include costs described in
Subparagraph 6.1.1 which are incurred by the Construction Manager in
taking action to prevent threatened damage, injury or loss in case of
an emergency affecting the safety of persons and property, as
provided in Paragraph 10.5 of the General Conditions.
6.2 COSTS NOT TO BE REIMBURSED
6.2.1 The Cost of the Work shall not include:
1. Salaries and other compensation of the Construction
Manager's personnel stationed at the Construction Manager's
principal office or offices other than the site office,
except as specifically provided in Clauses 6.1.2.2 and
6.1.2.3.
2. Expenses of the Construction Manager's principal office and
other offices except as specifically provided in Paragraph
6.1.
3. Overhead and general expenses, and the General Conditions
Work.
4. The Construction Manager's capital expenses, including
interest on the Construction Manager's capital employed for
the Work.
5. Rental costs of machinery and equipment, except as
specifically provided in Subparagraph 6.1.5.2.
6. Costs due to the fault or negligence of or failure to comply
with the requirements of the Contract Documents by the
Construction Manager, its Subcontractors, anyone directly or
indirectly employed by any of them, or for whose acts any of
them may be liable, including, but not limited to, costs for
the correction of damaged, defective or nonconforming Work,
disposal and replacement of materials and equipment
incorrectly ordered or supplied, and making good damage to
property not forming part of the Work, and costs due to the
failure of the Construction Manager to fulfill a specific
responsibility to the Owner set forth in this Agreement.
7. Costs incurred in the performance of Preconstruction Phase
Services.
8. Any cost not specifically and expressly described in
Paragraph 6.1.
9. Costs which would cause the Guaranteed Maximum Price to be
exceeded shall be paid by the Construction Manager without
reimbursement by the Owner.
10. Costs not commonly included within the Cost of the Work. No
costs shall be included in more than one category or line
item.
11. Taxes imposed due to Construction Manager's failure to
follow the Direct Purchase Procedures which exceed $1,000 in
the aggregate for the entire Project.
12. Costs related to the work described in Paragraph 2.5 prior
to the assignment of the contracts referenced therein to
Construction Manager.
13. Salaries and other compensation of the officers and senior
management of Construction Manager wherever located.
6.3 DISCOUNTS, REBATES AND REFUNDS
6.3.1 Cash discounts obtained on payments made by the Construction
Manager shall accrue to the Owner if (1) before making the payment,
the Construction Manager included them in an Application for Payment
and received payment therefore from the Owner, or (2) the Owner has
deposited funds with the Construction Manager with which to make
payments; otherwise, cash discounts shall accrue to the Construction
Manager. Trade discounts, rebates, refunds and amounts received from
sales of surplus materials and equipment shall accrue to the Owner,
and the Construction Manager shall make provisions so that they can
be secured.
6.3.2 Amounts which accrue to the Owner in accordance with the
provisions of Subparagraph 6.3.1 shall be credited to the Owner as a
deduction from the Cost of the Work.
6.4 ACCOUNTING RECORDS
Construction Manager shall keep full open book and detailed accounts
and exercise such controls as may be necessary for proper financial
management under this Contract; the accounting and control systems
shall be in accordance with Generally Accepted Accounting Principles
or otherwise satisfactory to the Development Manager. The Owner,
Development Manager, Independent Consultant and their accountants and
other authorized representatives shall be afforded access to the
Construction Manager's records, books, correspondence, instructions,
drawings, receipts, subcontracts, purchase orders, vouchers,
memoranda and other data relating to this Project, and the
Construction Manager shall preserve these for a period of four (4)
years after final payment, or for such longer period as may be
required by law.
ARTICLE 7 CONSTRUCTION PHASE
7.1 PROGRESS PAYMENTS
7.1.1 Based upon Applications for Payment submitted to the
Development Manager by the Construction Manager and Certificates for
Payment issued by the Development Manager and Architect, and such
other certificates as may be required by Lender or Trustee in
accordance with the Disbursement Agreement (as defined in Paragraph
11.3), the Owner shall make progress payments on account of the
Contract Sum to the Construction Manager as provided below and
elsewhere in the Contract Documents.
7.1.2 The period covered by each Application for Payment shall be one
calendar month ending on the last day of the month.
7.1.3 Provided an Application for Payment and all required supporting
certificates are received by the Development Manager and Architect
not later than the twenty-fifth (25th) day of a month, projected to
the end of such month, the Owner shall make payment to the
Construction Manager not later than the twenty-fifth (25th) day of
the following month. If an Application for Payment and all required
supporting certificates and documentation are received by the
Development Manager and Architect after the application date fixed
above, payment shall be made by the Owner not later than thirty (30)
days after the Development Manager and Architect receive the
Application for Payment and all required certificates and
documentation.
7.1.4 With each Application for Payment, the Construction Manager
shall submit payrolls, petty cash accounts, receipted invoices or
invoices with check vouchers attached, and any other evidence
required by the Development Manager to demonstrate that cash
disbursements already made by the Construction Manager on account of
the Cost of the Work equal or exceed (1) progress payments already
received by the Construction Manager; less (2) that portion of those
payments attributable to the Construction Manager's Fee; plus (3)
payrolls for the period covered by the present Application for
Payment.
7.1.5 Each Application for Payment shall be based upon the most
recent detailed schedule of values submitted by the Construction
Manager in accordance with the Contract Documents. The schedule of
values shall allocate the entire Contract Sum among the various
portions of the Work. Construction Manager shall be entitled to
reasonably allocate the Construction Manager's Fee among various line
items within the schedule of values, including pre-construction
services and specific general conditions line items. The schedule of
values shall be prepared in such form and supported by such data to
substantiate its accuracy as the Development Manager may require.
Development Manager and Architect shall each review and approve the
Construction Manager's Applications for Payment with such information
as each shall reasonably request, including but not limited to, the
schedule of values.
7.1.6 Applications for Payment shall show the percentage completion
of each portion of the Work as of the end of the period covered by
the Application for Payment. The percentage completion shall be the
lesser of (1) the percentage of that portion of the Work which has
actually been completed or (2) the percentage obtained by dividing
(a) the expense which has actually been incurred by the Construction
Manager on account of that portion of the Work for which the
Construction Manager has made or intends to make actual payment prior
to the next Application for Payment by (b) the share of the
Guaranteed Maximum Price or Lump Sum allocated to that portion of the
Work in the schedule of values.
7.1.7 Subject to other provisions of the Contract Documents, the
amount of each progress payment shall be computed as follows:
1. Take that portion of the Guaranteed Maximum Price properly
allocable to completed Work as determined by multiplying the
percentage completion of each portion of the Work by the
share of the Guaranteed Maximum Price allocated to that
portion of the Work in the schedule of values. Pending final
determination of cost to the Owner of changes in the Work,
amounts not in dispute may be included as provided in
Subparagraphs 7.3.7 and 7.3.8 of the General Conditions,
even though the Guaranteed Maximum Price has not yet been
adjusted by Change Order.
2. Add that portion of the Guaranteed Maximum Price properly
allocable to materials and equipment delivered and suitably
stored at the site for subsequent incorporation in the Work
or, if approved in advance by the Development Manager,
suitably stored off the site at a location agreed upon in
writing.
3. Add a portion of the Construction Manager's Fee. The portion
of the Construction Manager's Fee shall be determined by
multiplying the total Construction Manager's Fee by the
percentage of completion set forth in Subparagraph 7.1.7.1.
4. Subtract the aggregate of previous payments made by the
Owner.
5. Subtract the shortfall, if any, indicated by the
Construction Manager in the documentation required by
Subparagraph 7.1.4 to substantiate prior Applications for
Payment, or resulting from errors subsequently discovered by
the Owner's accountants in such documentation.
6. Subtract amounts, if any, for which the Development Manager
has withheld or nullified a Certificate for Payment as
provided in Paragraph 9.5 of the General Conditions.
7. Subtract retainage in the amount of ten percent (10%) of the
progress payment until total progress payments exceed fifty
percent (50%) of the Guaranteed Maximum Price and thereafter
subtract retainage in the amount of five percent (5%) of the
progress payment.
7.1.8 The Development Manager and the Construction Manager shall
agree upon a mutually acceptable procedure for review and approval of
payments and retention for subcontracts.
7.1.9 Except with the Development Manager's prior approval, the
Construction Manager shall not make advance payments to suppliers for
materials or equipment which have not been delivered and stored at
the site.
7.1.10 In addition to other required items, each Application for
Payment (including applications for Final Payment under Subparagraph
7.2) shall be accompanied by the following, all in form and substance
satisfactory to the Development Manager:
1. A duly executed and acknowledged statement of Construction
Manager sworn under penalty of perjury showing all
Subcontractors with whom Construction Manager has entered
into Subcontracts, the amount of such Subcontract, the
amount requested for any Subcontractor in the Application
for Payment and the amount to be paid to be paid to
Construction Manager from such progress payment together
with similar sworn statements from all Subcontractors and,
where appropriate, from sub-Subcontractors;
2. Duly executed conditional waivers of mechanics' and
materialmen's liens from Construction Manager and all such
Subcontractors, establishing payment or satisfaction of the
payment requested by Construction Manager in the current
Application for Payment;
3. Duly executed unconditional waivers of mechanics' and
materialmen's liens from Construction Manager and all such
Subcontractors, establishing payment or satisfaction of the
payment requested by Construction Manager in the prior
Application for Payment, and with respect to the Final
Payment, in the current Application for Payment;
4. Duly executed and acknowledged statements from each
Subcontractor certifying that such Subcontractor has not
provided any discount, payment or inducement of any kind to
Construction Manager which has not been reflected in such
Subcontractor's subcontract.
5. Such other information, documentation and materials as the
Development Manager or Architect (in conjunction with
disbursing under the Disbursement Agreement) may reasonably
require.
7.1.11 Upon Substantial Completion, the retainage held by Owner shall
be reduced to an amount equal to two (2) times the cost to complete
any uncompleted Work and all remaining punch list items, as
determined by the Architect, provided, that in no event shall the
retainage be increased. Owner shall pay any portion of the retainage
due to Construction Manager within ten (10) business days of the date
of Substantial Completion.
7.2 FINAL PAYMENT
7.2.1 Final payment shall be made by the Owner to the Construction
Manager when (1) the Contract has been fully performed by the
Construction Manager except for the Construction Manager's
responsibility to correct nonconforming Work, as provided in
Subparagraph 12.2.2 of the General Conditions, and to satisfy other
requirements, if any, which necessarily survive final payment; (2) a
final Application for Payment and a final accounting for the Cost of
the Work have been submitted by the Construction Manager and reviewed
by the Development Manager and Architect; (3) all certificates
reasonably required by Lender or Trustee have been delivered to
Development Manager and approved by Lender or Trustee; and (4) a
final Certificate for Payment has then been issued by the Development
Manager and Architect. Final payment shall be made by the Owner not
more than 30 days after the issuance of the Development Manager's and
Architect's final Certificate for Payment.
7.2.2 The amount of the final payment shall be calculated as follows:
1. Take the sum of the Cost of the Work substantiated by the
Construction Manager's final accounting and the Construction
Manager's Fee; but in no event more than the Guaranteed
Maximum Price.
2. Subtract amounts, if any, for which the Development Manager
withholds, in whole or in part, a final Certificate for
Payment as provided in Subparagraph 9.5.1 of the General
Conditions or other provisions of the Contract Documents.
3. Subtract the aggregate of previous payments made by the
Owner.
4. Add any amounts payable to Construction Manager as savings
calculated in accordance with Paragraph 5.2 hereof.
If the aggregate of previous payments made by the Owner exceeds the
amount due the Construction Manager, the Construction Manager shall
promptly reimburse the difference to the Owner.
7.2.3 The Development Manager and Architect will each review and
report in writing on the Construction Manager's final accounting
within 30 days after delivery of the final accounting to the
Development Manager and Architect by the Construction Manager. Based
upon such Cost of the Work as the Development Manager and Architect
report to be substantiated by the Construction Manager's final
accounting, and provided the other conditions of Subparagraph 7.2.1
have been met, the Development Manager and Architect will, within
such 30-day period, either issue to the Owner a final Certificate for
Payment with a copy to the Construction Manager and the other, or
notify the Construction Manager and Owner in writing of its reasons
for withholding a certificate as provided in Subparagraph 9.5.1 of
the General Conditions. The time periods stated in this Paragraph 7.2
supersede those stated in Subparagraph 9.4.1 of the General
Conditions.
7.2.4 If the Development Manager or Architect reports the Cost of the
Work as substantiated by the Construction Manager's final accounting
to be less than claimed by the Construction Manager, the Construction
Manager shall be entitled to proceed in accordance with Article 9
without a further decision of the Development Manager or Architect.
Unless agreed to otherwise, a demand for mediation or arbitration of
the disputed amount shall be made by the Construction Manager within
60 days after the Construction Manager's receipt of a copy of each
final Certificate for Payment. Failure to make such demand within
this 60-day period shall result in the substantiated amount reported
by the Development Manager's accountants becoming binding on the
Construction Manager. Pending a final resolution of the disputed
amount, the Owner shall pay the Construction Manager the amount
certified in the Development Manager's final Certificate for Payment.
7.2.5 Prior to Final Payment, Construction Manager shall furnish to
Owner the following:
1. All maintenance and operating manuals;
2. Marked sets of drawings and specifications reflecting "as
built" conditions, upon which the Construction Manager,
shall have transferred all changes in the location of any
concealed structural, utilities, mechanical or electrical
systems and components;
3. Any assignment and/or transfer all guaranties and warranties
from Subcontractors, vendors and suppliers and
manufacturers; and
4. A list of the names, address and phone numbers of all
Subcontractors and other persons providing guarantees and
warranties.
7.2.6 Final unconditional lien waivers shall be obtained by
Construction Manager from all Subcontractors contemporaneous with
receipt of Final Payment.
ARTICLE 8 INSURANCE AND BONDS
8.1 INSURANCE REQUIRED OF THE CONSTRUCTION MANAGER AND OWNER
Construction Manager and its Subcontractors, and Owner, shall
purchase and maintain insurance as set forth in Article 11 of the
General Conditions.
8.2 PERFORMANCE BOND AND PAYMENT BOND
8.2.1 The Construction Manager may be required to furnish bonds
covering its faithful performance of the Contract and payment of
obligations arising thereunder in the reasonable discretion of
Development Manager.
8.2.2 Construction Manager may also be required to, in the reasonable
discretion of Development Manager, furnish bonds covering faithful
performance of each Subcontract by the applicable Subcontractor and
payment of obligations arising thereunder. Each Subcontractor shall
be required to produce proof of bonding as a condition of its
pre-qualification to complete any portion of the Work. The cost of
the Bonds shall be included in the Cost of the Work. The amount of
each bond shall be equal to one hundred percent (100 %) of the Cost
of the Work under such subcontract.
8.2.3 The Construction Manager shall deliver the required bonds to
the Development Manager at least three days before the commencement
of any Work at the Project site by Construction Manager or the
applicable Subcontractor. The reasonable and customary cost of any
bonds Construction Manager or any Subcontractor shall be required to
obtain pursuant to this Agreement shall be deemed a Cost of the Work
and not a part of Construction Manager's Fee.
ARTICLE 9 MISCELLANEOUS PROVISIONS
9.1.1 Neither Construction Manager nor any parent, affiliate or
subsidiary of Construction Manager, directly or indirectly, shall
perform any work on, whether as a construction manager, contractor,
subcontractor, adviser or in any other capacity, or have any
ownership interest in, any casino or hotel project within the
"Prohibited Area" from and after the date of this Agreement except
with the written approval of Development Manager and Owner, to be
granted or withheld in each of Development Manager's and Owner's sole
and absolute discretion. The preceding prohibition shall expire six
(6) months after Final Completion. The "Prohibited Area" shall be a
seventy five (75) mile radius emanating from the site of the Project.
Owner and Construction Manager acknowledge that the foregoing
restriction is reasonable in light of Construction Manager's
particular skill in completing gaming facilities and Construction
Manager's extensive reputation for completing projects such as the
Project in a manner of the highest quality coupled with Owner's need
to establish its business at the Project free of competition to the
extent possible. Construction Manager and Owner further acknowledge
that the prohibited area reasonably approximates the geographic area
of Owner's anticipated clientele.
9.1.2 Without limiting Owner's remedies, if Construction Manager
should violate the covenant contained in this Paragraph 9.1, Owner
may, at its option, elect to seek injunctive relief to prevent
violation of Construction Manager's covenant or to require
Construction Manager to cease any such violation. Whether or not
Owner elects to pursue injunctive relief with respect to any
violation by Construction Manager of its covenant pursuant to this
Paragraph, Owner may treat such violation as a default under this
Agreement and, after notice and opportunity to cure, may seek all
remedies available to Owner by virtue of Construction Manager's
breach, including termination of this Agreement. Neither exercise nor
failure to exercise any of the foregoing remedies shall defeat or
limit Owner's right to recover from Construction Manager all damages
which Owner may establish as the result of Construction Manager's
violation of its covenant contained in this Paragraph.
9.1.3 For the purpose of this Paragraph 9.1 a "parent" of
Construction Manager shall be any person or entity who or which
holds, directly or indirectly, more than ten percent (10%) of the
outstanding voting rights in or profit and loss interests in
Construction Manager; a "subsidiary" of Construction Manager shall be
any entity as to which Construction Manager holds, directly or
indirectly more than ten percent (10%) of the outstanding voting
rights in or profit and loss interests of such entity; and an
"affiliate" shall be (A) any officer, director or general partner of
Construction Manager, (B) any franchisee licensee of Construction
Manager or any parent or subsidiary of Construction Manager or of any
other affiliate of Construction Manager, (C) any subsidiary of any
parent of Construction Manager, and (D) if Construction Manager is a
natural person, any spouse, sibling or first generation lineal
descendant of Construction Manager.
9.1.4 Construction Manager acknowledges that Construction Manager's
continuing compliance with the obligations of this Paragraph 9.1
constitutes a material economic consideration for Owner's agreement
to enter into this Agreement. As a further consideration to Owner,
Construction Manager agrees to confirm its continued compliance with
this Paragraph 9.1 during such time as compliance is required by
executing and delivering to Owner a statement of compliance within
ten (10) days after Construction Manager's receipt of Owner's or
Development Manager's written request therefore.
9.1.5 By its execution of this Agreement, Construction Manager
represents and warrants that the execution and delivery by
Construction Manager of this Agreement upon the terms described
herein will not violate the terms and provisions of any agreement to
which Construction Manager is a party or by which Construction
Manager or any of its properties are bound, including without
limitation the provisions of any radius restriction.
9.1.6 Development Manager shall be entitled to enforce the provisions
of this Paragraph 9.1 independently of Owner as an intended Third
Party Beneficiary.
9.2 DISPUTE RESOLUTION
9.2.1 In the event that Construction Manager or Owner believes that
the other is in breach of this Agreement, it may request in writing
that the parties meet and confer in good faith for the purpose of
attempting to reach a mutually satisfactory resolution of the issue
within fifteen (15) days of the date of service of said request;
provided that if the complaining party believes that the issue
identified creates a threat to public health or safety, the
complaining party may proceed directly to arbitration as provided in
Subparagraph 9.2.5.
9.2.2 If the complaining party is not satisfied with the result of
the meet and confer process, the complaining party may provide
written notice to the other identifying and describing any alleged
breach of this Agreement ("Notice of Disagreement"), with
particularity, if available, and setting forth the action required to
remedy the alleged breach.
9.2.3 Within fifteen (15) days of service of a Notice of
Disagreement, the recipient shall provide a written response either
denying or admitting the allegations set forth in the Notice of
Disagreement, and, if the truth of the allegations is admitted,
setting forth in detail the steps it has taken and/or will take to
cure the violations. Failure to serve a timely response shall entitle
the complaining party to proceed directly to arbitration, as provided
in Subparagraph 9.2.5 below.
9.2.4 If the Construction Manager or Owner reasonably believes that
in violation of the Contract Documents the other's conduct has caused
or will cause a significant threat to public health or safety,
resolution of which cannot be delayed for the time periods otherwise
specified in this section, the complaining party may proceed directly
to the arbitration procedures set out in Subparagraph 9.2.5, without
reference to the processes set out in Subparagraphs 9.2.1, 9.2.2 and
9.2.3 and seek immediate equitable relief. At least 24 hours before
proceeding in this manner, the complaining party shall provide to the
other a written request for correction and notice of intent to
exercise its rights under this section setting out the legal and/or
factual basis for its reasonable belief that there is a present or an
imminent threat to public health or safety.
9.2.5 Subject to prior compliance with the processes set forth above
in Subparagraphs 9.2.1, 9.2.2 and 9.2.3, and except as provided
Subparagraph 9.2.4, either party has the right to initiate binding
arbitration to resolve any dispute arising under this Agreement. The
arbitration shall be conducted in accordance with the following
procedures:
9.2.5.1 The arbitration shall be administered by the American
Arbitration Association in accordance with its Commercial Arbitration
Rules. The arbitrator shall be selected pursuant to such rules;
provided that he/she must be a licensed attorney, knowledgeable in
construction law and federal Indian law. The parties and the
arbitrator shall maintain strict confidentiality with respect to the
arbitration.
9.2.5.2 The arbitration shall be held in either Fresno County or
Sacramento County, California, at Owner's election, unless otherwise
agreed by the parties. The arbitrator shall be empowered to grant
equitable and injunctive relief and specific performance of the terms
and conditions of the Contract Documents. The arbitrator shall not
have the power to award punitive damages. The provisions of
California Code of Civil Procedure Section 1283.05 are incorporated
into, and made a part of the Contract Documents; provided, that no
discovery authorized by said section may be conducted without leave
of the arbitrator, who shall decide to grant leave based on the need
of the requesting party and the burden of such discovery in light of
the nature and complexity of the dispute.
9.2.5.3 If either party requests a hearing, the arbitrator shall set
the matter for hearing. Otherwise, the arbitrator shall decide
whether to set the matter for hearing.
9.2.5.4 The resulting award shall be in writing and give the reasons
for the decision. Judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. The costs
and expenses of the American Arbitration Association and the
arbitrator shall be shared equally by and between the parties unless
the arbitrator rules otherwise.
9.2.6 Any award in an arbitration held pursuant to Subparagraph 9.2.5
may be enforced by bringing an action in the United States District
Court for the Eastern District of California, or, if that court finds
that it lacks jurisdiction after the Construction Manager has made
reasonable efforts to argue for the jurisdiction of the federal
court, an action may be brought in the Superior Court for Madera
County.
9.2.7 Owner expressly and irrevocably waives its immunity from suit
as provided for and limited by this paragraph. This waiver is limited
to all arbitration proceedings brought pursuant to Subparagraph 9.2.5
regarding any dispute arising out of the Contract Documents and all
actions to compel such arbitration brought pursuant to Subparagraph
9.2.6.
(i) The waiver granted herein shall commence as of the date of
this Agreement and shall continue for one year following the
expiration, termination or cancellation hereof, or for the
duration of any litigation or dispute resolution proceeding
then pending, all appeals therefrom, and the satisfaction of
any awards or judgment that may issue from such proceedings,
whichever is later.
(ii) This waiver is granted only to the Construction Manager and
not to any other individual or entity.
9.3 OTHER PROVISIONS
9.3.1 Unless otherwise noted, the terms used in this Agreement shall
have the same meaning as those in the General Conditions.
9.3.2 EXTENT OF CONTRACT
This Contract, which includes this Agreement and the other documents
incorporated herein by reference, represents the entire and
integrated agreement between the Owner and Construction Manager and
supersedes all prior negotiations, representations or agreements,
either written or oral. This Agreement may be amended only by written
instrument signed by both the Owner and Construction Manager. If
anything in any document incorporated into this Agreement is
inconsistent with this Agreement, this Agreement shall govern.
9.3.3 OWNERSHIP AND USE OF DOCUMENTS
The Drawings, Specifications and other documents prepared by the
Architect or the Development Manager, and copies thereof furnished to
the Construction Manager, are for use solely with respect to this
Project. They are not to be used by the Construction Manager,
Subcontractors, sub-Subcontractors or suppliers on other projects, or
for additions to this Project outside the scope of the Work, without
the specific written consent of the Owner, Development Manager and
Architect. The Construction Manager, Subcontractors,
Sub-Subcontractors and suppliers are granted a limited license to use
and reproduce applicable portions of the Drawings, Specifications and
other documents prepared by the Architect or Development Manager
appropriate to and for use in the execution of their Work under the
Contract Documents.
9.3.4 GOVERNING LAW
The Contract shall be governed by the laws of the State of
California.
9.3.5 ASSIGNMENT
The Owner and Construction Manager respectively bind themselves,
their partners, successors, assigns and legal representatives to the
other party hereto and to partners, successors, assigns and legal
representatives of such other party in respect to covenants,
agreements and obligations contained in the Contract Documents.
Neither party to the Contract shall assign the Contract in whole or
in part without written consent of the other. If either party
attempts to make such an assignment without such consent, that party
shall nevertheless remain legally responsible for all obligations
under the Contract.
9.3.6 OWNER REIMBURSEMENT
If Owner is entitled to reimbursement of payment from Construction
Manager under or pursuant to the Contract Documents, such payment
shall be made promptly upon demand by Owner. In the event such
payment is not made, however, Owner shall have the option to either:
(i) deduct an equal amount from any payment then or thereafter due
Construction Manager or (ii) issue a Change Order reducing the
Contract Sum by an equal amount.
ARTICLE 10 TERMINATION OR SUSPENSION
10.1 TERMINATION SUBSEQUENT TO ESTABLISHING GUARANTEED MAXIMUM PRICE
Subsequent to execution by both parties of Amendment No. 1, the
Contract may be terminated as provided in Article 14 of the General
Conditions.
10.1.1 In the event of such termination by the Owner, the amount
payable to the Construction Manager pursuant to Subparagraph 14.1.3
of the General Conditions shall not exceed an amount calculated as
follows:
1. Take the cost of the Work incurred by the Construction
Manager.
2. Add the Construction Manager's Fee for the Work then
completed computed in accordance with this Agreement.
3. Subtract the aggregate of previous payments made by the
Owner on account of the Contract Sum.
10.1.2 In the event of such termination by the Construction Manager
due to a breach by Owner, the amount to be paid to the Construction
Manager under Subparagraph 14.1.3 of the General Conditions shall not
exceed the amount the Construction Manager would be entitled to
receive under Subparagraph 10.1.1 above, except that the Construction
Manager's Fee shall be calculated as if the Work had been fully
completed by the Construction Manager.
10.2 SUSPENSION
The Work may be suspended by the Owner as provided in Article 14 of
the General Conditions; in such case, the Guaranteed Maximum Price
shall be increased as provided in Subparagraph 14.3.2 of the General
Conditions.
ARTICLE 11 OTHER CONDITIONS AND SERVICES
11.1 CONSTRUCTION MANAGER PRESS RELEASES
The Construction Manager shall not divulge verbally, in writing, or
in the form of a press release or other public notice the terms of
this Agreement and/or any related agreement between the parties
without the prior written consent of the Development Manager.
11.2 REPRESENTATIONS AND WARRANTIES OF CONSTRUCTION MANAGER
Construction Manager represents and warrants the following to Owner
(in addition to any other representations and warranties contained in
the Contract Documents), as an inducement to Owner to execute the
Contract Documents, which representations and warranties shall
survive the execution and delivery of the Contract Documents and
shall continue to remain true and correct until the Work is completed
and all obligations of Construction Manager hereunder are fulfilled:
11.2.1 Construction Manager is and each of its Subcontractors will
be, financially solvent, able to pay all debts as they mature and
possessed of sufficient working capital to complete the Work and
perform all obligations hereunder.
11.2.2 Construction Manager is able to furnish the plant, tools,
materials, supplies, equipment and labor required to complete the
Work and perform its obligations hereunder and has sufficient
experience and competence to do so.
11.2.3 Construction Manager shall complete the Work in accordance
with all applicable laws, in a good and workmanlike manner, free and
clear of all defects.
11.2.4 Construction Manager is authorized to do business in the State
of California and is properly licensed by all necessary governmental
and public and quasi-public authorities having jurisdiction over it
and over the Work and the Project.
11.2.5 Construction Manager's execution of the Contract Documents and
its performance thereof is within its duly authorized powers.
11.2.6 Construction Manager's duly authorized representative has
visited the site of the Project, familiarized himself with the local
conditions under which the Work is to be performed and correlated his
or her observations with the requirements of the Contract Document.
11.2.7 Construction Manager is a large, sophisticated construction
manager and general contractor which possesses a high level of
experience and expertise in the business administration,
construction, construction management and superintendence of projects
of the size, complexity and nature of this particular Project and it
shall perform the Work with care, skill and diligence of such a
construction manager; provided, that Construction Manager shall not
be required to provide professional services which constitute the
practice of architecture or engineering.
11.3 TRUSTEE'S INTEREST IN THE WORK
Construction Manager expressly understands, acknowledges and agrees
that payment to the Construction Manager for the Work by Owner shall
be made from a Construction Disbursement Account to be established
pursuant to a Cash Collateral and Disbursement Agreement
("Disbursement Agreement"), a copy of which shall be delivered to
Construction Manager by Owner following execution thereof, utilizing
proceeds from the Construction Loan. Professional Associates
Construction Services, Inc. (the "Independent Consultant") has been
appointed by the Trustee to review and inspect the Work, review
payment applications, and control and authorize disbursements from
the Construction Disbursement Account and all other tasks set forth
for the Independent Consultant in the Disbursement Agreement. In
connection with the foregoing, from and after the Financing Date:
11.3.1 If requested by the Development Manager or the Trustee,
Construction Manager shall acknowledge Construction Manager's
agreement to the terms of the Disbursement Agreement. Construction
Manager agrees to execute and deliver to Trustee the "Contracting
Party's Consent to Assignment" in the form of Exhibit H to the
Disbursement Agreement.
11.3.2 Notwithstanding the terms and provisions of this Agreement,
the terms and provisions of the Disbursement Agreement shall prevail
in all respects in relation to matters dealing with the Project,
including without limitation, matters relevant to progress payments,
retainage, Change Orders, change to the Contract Documents, and
inspection and approval of the Work by the Independent Consultant,
and provided that Owner and Development Manager are acting in
accordance with the terms and conditions of the Disbursement
Agreement, Owner shall not be deemed to be in default under the
Contract Documents in the event of any conflict between the terms of
the Contract Documents and the Disbursement Agreement. Any consents,
approvals or other actions required or permitted by Owner or
Development Manager hereunder shall be subject to and conditioned
upon the consent, approval or other action by the Independent
Consultant to the extent so provided in the Disbursement Agreement.
11.3.3 All reimbursements or payments made by Construction Manager to
Owner shall be deposited directly in to the Construction Disbursement
Account established by the Disbursement Agreement to the extent
required by the Disbursement Agreement.
11.3.4 All indemnities contained in this Agreement which run in favor
of Owner or Development Manager shall also run in favor of Trustee
and no action by any of the parties indemnified shall affect the
continuing obligation of the Construction Manager to indemnify the
other indemnified parties.
11.3.5 All provisions in the Subcontracts which accrue specifically
to the benefit of Owner shall also provide they shall also run to the
benefit of Trustee.
11.3.6 Construction Manager acknowledges it has reviewed the
Disbursement Agreement, including the certificates which Construction
Manager shall be asked to provide in the forms attached to the
Disbursement Agreement as (i) Exhibit 7 to Exhibit B-1, (ii) Exhibit
2 to Exhibit C-1, (iii) Exhibit 2 to Exhibit E, (iv) Exhibit 2 to
Exhibit F and (v) Exhibit 2 to Exhibit J, and that so long as the
factual assertions of Construction Manager required therein shall be
true, Construction Manager shall deliver such certificates as and
when required by Owner or Development Manager in the manner and
within the time periods required by the Disbursement Agreement.
11.3.7 Promptly after the execution of this Agreement, Development
Manager and Construction Manager shall meet to establish a
commercially reasonable process for obtaining all required approvals
under the Contract Documents and the Disbursement Agreement,
including with respect to approval of Change Orders, from the various
parties to the Contract Documents and the Disbursement Agreement so
that the Work can be completed by Construction Manager in accordance
with the Project schedule.
11.4 COMPLIANCE WITH TRUSTEE'S REQUESTS
Construction Manager agrees to execute all documents reasonably
required by Trustee or Independent Consultant, including without
limitation an agreement by Construction Manager (which may be in the
form of an assignment) and Subcontractors under subcontract to
continue to perform their obligations under this Agreement for the
benefit of Trustee in the event Owner defaults in its obligations to
Trustee and Trustee assumes Owner's rights and obligations under this
Agreement; provided such assignees continue to perform the Owner's
obligations hereunder. Construction Manager shall incorporate into
all Subcontracts a provision obligating its Subcontractors to
continue to perform under their subcontracts in the event Trustee or
its agents take possession of the site.
11.5 DOCUMENT DELIVERY
All information, documentation and notes delivered or to be delivered
by Construction Manager to Architect shall also be delivered to
Development Manager. All consents and modifications authorized
hereunder to be made by the Architect or Construction Manager are
specifically conditioned upon the prior written approval of
Development Manager.
This Agreement entered into as of the day and year first written
above.
OWNER:
CHUKCHANSI ECONOMIC
DEVELOPMENT AUTHORITY
By: /s/ Dixie Jackson____________________________
Name: Dixie Jackson________________________________
Its: Chairperson__________________________________
Date: 8/20/02______________________________________
CONSTRUCTION MANAGER:
WALTON CONSTRUCTION COMPANY, INC.
By: /s/ Barry J. Owens___________________________
Name: Barry J. Owens_______________________________
Its: Senior Vice President________________________
Date: July 26, 2002________________________________
EXHIBIT A
GENERAL CONDITIONS
- -------------------------------------------------------------------------------
GENERAL CONDITIONS OF THE CONTRACT FOR CONSTRUCTION
- -------------------------------------------------------------------------------
ARTICLE 1. GENERAL PROVISIONS
1.1 BASIC DEFINITIONS
1.1.1 THE CONTRACT DOCUMENTS
The Contract Documents consist of the Agreement between Owner and
Construction Manager (hereinafter the Agreement), Conditions of the
Contract (General, Supplementary and other Conditions), GMP Schedule
of Values, Drawings, Specifications, Addenda issued prior to
execution of the Contract, OCIP Manuals, other documents listed in
the Agreement and Modifications issued after execution of the
Contract. A Modification is (l) a written amendment to the Contract
signed by both parties, (2) a Change Order or (3) a Construction
Change Directive. Unless specifically enumerated in or attached to
the Agreement, the Contract Documents do not include other documents
such as bidding requirements (advertisement or invitation to bid,
Instructions to Bidders, sample forms, the Construction Manager's bid
or portions of Addenda relating to bidding requirements).
1.1.2 THE CONTRACT
The Contract Documents form the Contract for Construction. The
Contract represents the entire and integrated agreement between the
parties hereto and supersedes prior negotiations, representations or
agreements, either written or oral. The Contract may be amended or
modified only by a Modification. The Contract Documents shall not be
construed to create a contractual relationship of any kind (l)
between the Architect and Construction Manager, (2) between the Owner
and a Subcontractor or Sub-subcontractor, (3) between the Owner and
Architect, (4) between the Development Manager and Construction
Manager, (5) between Development Manager and Architect or (6) between
any persons or entities other than the Owner and Construction
Manager. The Architect shall, however, be entitled to performance and
enforcement of obligations under the Contract intended to facilitate
performance of the Architect's duties.
1.1.3 THE WORK
The term "Work" means the construction and services required by the
Contract Documents, whether completed or partially completed, and
includes all other labor, materials, equipment and services provided
or to be provided by the Construction Manager to fulfill the
Contractor's obligations. The Work may constitute the whole or a part
of the Project. Construction Manager acknowledges and agrees that the
Contract Documents shall be adequate and sufficient to provide for
the completion of the Work, and shall include all work, whether or
not shown or described, which reasonably may be inferred to be
required for the completion of the Work in accordance with all
applicable laws, codes and professional standards.
1.1.4 THE PROJECT
The Project is the total construction of which the Work performed
under the Contract Documents may be the whole or a part and which may
include construction by the Owner or by separate contractors.
1.1.5 THE DRAWINGS
The Drawings are the graphic and pictorial portions of the Contract
Documents showing the design, location and dimensions of the Work,
generally including plans, elevations, sections, details, schedules
and diagrams.
1.1.6 THE SPECIFICATIONS
The Specifications are that portion of the Contract Documents
consisting of the written requirements for materials, equipment,
systems, standards and workmanship for the Work, and performance of
related services.
1.1.7 THE PROJECT MANUAL
The Project Manual is a volume assembled for the Work which may
include the bidding requirements, sample forms, Conditions of the
Contract and Specifications.
1.1.8 THE OCIP MANUALS
All OCIP Manuals provided by or through Owner or Development Manager
shall be incorporated herein as a portion of the Contract Documents.
1.2 CORRELATION AND INTENT OF THE CONTRACT DOCUMENTS
1.2.1 The intent of the Contract Documents is to include all items
necessary for the proper execution and completion of the Work by the
Construction Manager. The Contract Documents are complementary, and
what is required by one shall be as binding as if required by all;
performance by the Construction Manager shall be required only to the
extent consistent with the Contract Documents and reasonably
inferable from them as being necessary to produce the indicated
results.
1.2.2 Organization of the Specifications into divisions, sections and
articles, and arrangement of Drawings shall not control the
Construction Manager in dividing the Work among Subcontractors or in
establishing the extent of Work to be performed by any trade.
1.2.3 Unless otherwise stated in the Contract Documents, words which
have well-known technical or construction industry meanings are used
in the Contract Documents in accordance with such recognized
meanings.
1.2.4 Conflicts or discrepancies among the Contract Documents shall
be resolved in the following order:
1. The Agreement;
2. The Supplementary General Conditions, if any;
3. The General Conditions;
4. Drawings and Specifications; Drawings govern Specifications
of quantity and location, and Specifications govern Drawings
for quality and performance. In the event of ambiguity in
quantity or quality, the greater quantity and the better
quality shall govern;
5. Figured dimensions govern scale dimensions and large scale
Drawings govern small scale Drawings; and
6. Submittals.
Modifications and revisions of the foregoing of a later date take
precedence over those of earlier date.
1.3 CAPITALIZATION
1.3.1 Terms capitalized in these General Conditions include those
which are (1) specifically defined in the Contract or herein, (2) the
titles of numbered articles and identified references to Paragraphs,
Subparagraphs and Clauses in the document or (3) the titles of other
documents published by the American Institute of Architects.
1.4 INTERPRETATION
1.4.1 In the interest of brevity the Contract Documents frequently
omit modifying words such as "all" and "any" and articles such as
"the" and "an," but the fact that a modifier or an article is absent
from one statement and appears in another is not intended to affect
the interpretation of either statement.
1.5 EXECUTION OF CONTRACT DOCUMENTS
1.5.1 The Contract Documents shall be signed by the Owner and
Construction Manager. If either the Owner or Construction Manager or
both do not sign all the Contract Documents, the Development Manager
shall identify such unsigned Documents upon request.
1.5.2 Execution of the Contract by the Construction Manager is a
representation that the Construction Manager has visited the site,
become familiar with local conditions under which the Work is to be
performed and correlated personal observations with requirements of
the Contract Documents. The Construction Manager and each
Subcontractor shall evaluate and satisfy themselves as to the
conditions and limitations under which the Work is to be performed,
including, without limitation (1) the location, condition, layout and
nature of the Project site and surrounding areas, (2) generally
prevailing climatic conditions, (3) labor supply and costs, (4)
availability and cost of materials, tools and equipment and (5) other
similar issues. The Owner assumes no responsibility or liability for
the physical condition or safety of the Project site or any
improvements located on the Project site. The Owner shall not be
required to make any adjustment in the Contract Sum or Contract Time
in connection with any failure by the Construction Manager or any
Subcontractor to comply with the requirements of this Paragraph
1.5.2.
1.6 OWNERSHIP AND USE OF DRAWINGS, SPECIFICATIONS AND OTHER
INSTRUMENTS OF SERVICE
1.6.1 All Drawings, Specifications and other documents prepared by
the Architect and the Architect's consultants are and shall remain
the property of the Owner, and Owner shall retain all common law,
statutory and other reserved rights with respect thereto. They shall
not be used on any other project without the prior written consent of
the Development Manager and Owner, and Construction Manager shall
take such action as may be necessary to prevent their use on any
other project or for additions to the Project outside the scope of
the Work by any Subcontractor, Sub-subcontractor or material or
equipment supplier. The Construction Manager, Subcontractors,
Sub-subcontractors and material and equipment suppliers are granted a
limited license to use and reproduce applicable portions of the
Drawings, Specifications and other documents prepared by the
Architect and the Architect's consultants appropriate to and for use
in the execution of their Work under the Contract Documents. All
copies made under this license shall bear the statutory copyright
notice, if any, shown on the Drawings, Specifications and other
documents prepared by the Architect and the Architect's consultants.
Submittals or distributions necessary to meet official regulatory
requirements or for other purposes relating to completion of the
Project are not to be construed as a publication in derogation of the
Owner's copyright or other reserved rights.
ARTICLE 2. OWNER
2.1 GENERAL
2.1.1 The Owner is the person or entity identified as such in the
Agreement and is referred to throughout the Contract Documents as if
singular in number. The Development Manager has express authority to
bind the Owner with respect to all matters requiring the Owner's
approval or authorization, solely excluding approval of Change Orders
and amendments or modifications to the Contract. The Architect does
not have such authority. The term "Owner" means the Owner or the
Development Manager.
2.1.2 The Development Manager shall furnish to the Construction
Manager within 15 days after receipt of a written request, a correct
statement of the record legal title to the property on which the
Project is located, usually referred to as the site, and the Owner's
interest therein.
2.1.3 Owner shall provide Construction Manager with reasonable
evidence of receipt of sufficient funds to complete construction of
the Project in accordance with Section 3.1.1 of the Agreement.
2.2 INFORMATION AND SERVICES REQUIRED OF THE OWNER
2.2.1 Except for permits and fees, including those required under
Subparagraph 3.7.1, which are the responsibility of the Construction
Manager under the Contract Documents, the Development Manager shall
secure and the Owner shall pay for necessary approvals, easements,
assessments and charges required for construction, use or occupancy
of permanent structures or for permanent changes in existing
facilities.
2.2.2 The Owner shall furnish surveys describing physical
characteristics, legal limitations and utility locations for the site
of the Project, and a legal description of the site. The Construction
Manager shall be entitled to rely on the accuracy of information
furnished by the Owner but shall exercise proper precautions relating
to the safe performance of the Work.
2.2.3 Information or services required of the Owner by the Contract
Documents shall be furnished by the Development Manager with
reasonable promptness.
2.2.4 Unless otherwise provided in the Contract Documents, the
Construction Manager will be furnished, free of charge, such copies
of Drawings and Project Manuals as are reasonably necessary for
execution of the Work.
2.3 OWNER'S RIGHT TO STOP THE WORK
2.3.1 If the Construction Manager fails to correct Work which is not
in accordance with the requirements of the Contract Documents as
required by Paragraph 12.2 or fails to carry out Work in accordance
with the Contract Documents, the Development Manager may issue a
written order to the Construction Manager to stop the Work, or any
portion thereof, until the cause for such order has been eliminated;
however, the right of the Development Manager to stop the Work shall
not give rise to a duty on the part of the Owner to exercise this
right for the benefit of the Construction Manager or any other person
or entity. This right shall be in addition to, and not in restriction
of, Owner's rights under Subparagraph 12.2.
2.4 OWNER'S RIGHT TO CARRY OUT THE WORK
2.4.1 If the Construction Manager defaults or neglects to carry out
the Work in accordance with the Contract Documents and fails within a
five business day period after receipt of written notice from the
Development Manager to commence and continue correction of such
default or neglect with diligence and promptness, the Owner may,
without prejudice to other remedies the Owner may have, commence and
continue to carry out the Work. In such case an appropriate Change
Order shall be issued deducting from payments then or thereafter due
the Construction Manager the reasonable cost of correcting such
deficiencies or otherwise performing the Work, including Owner's
expenses and compensation for the Architect's and Development
Manager's additional services made necessary by such default, neglect
or failure. If payments then or thereafter due the Construction
Manager are not sufficient to cover such amounts, the Construction
Manager shall promptly pay the difference to the Owner. The right of
the Development Manager to stop the Work shall not give rise to a
duty on the part of the Owner to exercise this right for the benefit
of the Construction Manager or any other person or entity.
ARTICLE 3. CONSTRUCTION MANAGER
3.1 DEFINITION
3.1.1 The Construction Manager is the person or entity identified as
such in the Agreement and is referred to throughout the Contract
Documents as if singular in number. The term "Construction Manager"
includes the Construction Manager's authorized representative.
3.1.2 The Construction Manager shall perform the Work in accordance
with the Contract Documents.
3.1.3 The Construction Manager shall not be relieved of obligations
to perform the Work in accordance with the Contract Documents either
by activities or duties of the Architect or Development Manager in
their administration of the Contract, or by tests, inspections or
approvals required or performed by persons other than the
Construction Manager.
3.2 REVIEW OF CONTRACT DOCUMENTS AND FIELD CONDITIONS BY CONSTRUCTION
MANAGER
3.2.1 Since the Contract Documents are complementary, before starting
each portion of the Work, the Construction Manager shall carefully
study and compare the various Drawings and other Contract Documents
relative to that portion of the Work, shall take field measurements
of any existing conditions related to that portion of the Work and
shall observe any conditions at the site affecting it. These
obligations are for the purpose of facilitating construction by the
Construction Manager and are not for the purpose of discovering
errors, omissions, or inconsistencies in the Contract Documents;
however, any errors, inconsistencies or omissions discovered by the
Construction Manager shall be reported promptly to the Development
Manager and Architect as a request for information in such form as
each may require. In addition, if the Construction Manager performs
any construction activity and, in the Construction Manager's capacity
as a contractor and not as a licensed design professional, if it
knows or reasonably should have known that any of the Contract
Documents contains a recognized error, inconsistency or omission, the
Construction Manager shall be responsible for such performance and
shall bear the cost for correction thereof.
3.2.2 Any design errors or omissions noted by the Construction
Manager during this review shall be reported promptly to the
Development Manager and Architect, but it is recognized that the
Construction Manager's review is made in the Construction Manager's
capacity as a contractor and not as a licensed design professional
unless otherwise specifically provided in the Contract Documents. The
Construction Manager is not required to ascertain that the Contract
Documents are in accordance with applicable laws, statues,
ordinances, building codes, and rules and regulations, but any
nonconformity discovered by or made known to the Construction Manager
shall be reported promptly to the Development Manager and Architect.
3.2.3 If the Construction Manager believes that additional cost or
time is involved because of clarifications or instructions issued by
the Architect in response to the Construction Manager's notices or
requests for information pursuant to Subparagraphs 3.2.1 and 3.2.2,
the Construction Manager shall make Claims as provided in
Subparagraphs 4.3.6 and 4.3.7. If the Construction Manager fails to
perform the obligations of Subparagraphs 3.2.1 and 3.2.2, the
Construction Manager shall pay such costs and damages to the Owner as
would have been avoided if the Construction Manager had performed
such obligations.
3.2.4 Except as to any reported errors, inconsistencies or omissions,
and to concealed or unknown conditions defined in Paragraph 4.3.4, by
executing the Agreement, the Construction Manager represents the
following:
1. The Contract Documents are sufficiently complete and
detailed for the Construction Manager to (1) perform the
Work required to produce the results intended by the
Contract Documents and (2) comply with all the requirements
of the Contract Documents.
2. The Work required by the Contract Documents including,
without limitation, all construction details, construction
means, methods, procedures and techniques necessary to
perform the Works, use of materials, selection of equipment
and requirements of product manufacturers shall be
consistent with (1) good and sound practices within the
construction industry, (2) generally prevailing and accepted
industry standards applicable to Work; (3) requirements of
any warranties applicable to the work; and (4) all laws,
ordinances and regulations, rules and orders which bear upon
the Construction Manager's performance of the Work.
3.3 SUPERVISION AND CONSTRUCTION PROCEDURES
3.3.1 The Construction Manager shall supervise and direct the Work,
using the Construction Manager's best skill and attention. The
Construction Manager shall be solely responsible for and have control
over construction means, methods, techniques, sequences and
procedures and for coordinating all portions of the Work under the
Contract, including coordination of the duties of all trades, unless
the Contract Documents give other specific instructions concerning
these matters. If the Contract Documents give specific instructions
concerning construction means, methods, techniques, sequences or
procedures, the Construction Manager shall evaluate the jobsite
safety thereof and, except as stated below, shall be fully and solely
responsible for the jobsite safety of such means, methods,
techniques, sequences or procedures. If the Construction Manager
determines that such means, methods, techniques, sequences or
procedures may not be safe, the Construction Manager shall give
timely written notice to the Development Manager and Architect and
shall not proceed with that portion of the Work without further
written instructions from the Development Manager. If the
Construction Manager is then instructed to proceed with the required
means, methods, techniques, sequences or procedures without
acceptance of changes proposed by the Construction Manager, the
Construction Manager shall not be responsible for any resulting loss
or damage.
3.3.2 The Construction Manager shall be responsible to the Owner for
acts and omissions of the Construction Manager's employees,
Subcontractors and their agents and employees, and other persons or
entities performing portions of the Work for or on behalf of the
Construction Manager or any of its Subcontractors.
3.3.3 The Construction Manager shall be responsible for inspection of
portions of Work already performed to determine that such portions
are in accordance with the Drawings and in proper condition to
receive subsequent Work.
3.3.4 The Construction Manager acknowledges that it is the
Construction Manager's responsibility to hire all personnel for the
proper and diligent prosecution of the Work and the Construction
Manager shall use its best efforts to maintain labor peace for the
duration of the Project. In the event of any labor dispute with
respect to the Work or the Project, the Construction Manager shall
not be entitled to any increase in the Contract Sum. Labor disputes
other than with respect to labor at the Project site shall be
governed by Paragraph 8.3.1 hereof.
3.3.5 The Construction Manger shall be responsible for coordination
of Owner's other contractors to the extent set forth in the
Agreement.
3.4 LABOR AND MATERIALS
3.4.1 Unless otherwise provided in the Contract Documents, the
Construction Manager shall provide and pay for labor, materials,
equipment, tools, construction equipment and machinery, water, heat,
utilities, transportation, and other facilities and services
necessary for proper execution and completion of the Work, whether
temporary or permanent and whether or not incorporated or to be
incorporated in the Work.
3.4.2 The Construction Manager may make substitutions only with the
consent of the Development Manager, after evaluation by the Architect
and pursuant to a Change Order.
3.4.3 The Construction Manager shall enforce strict discipline and
good order among the Construction Manager's employees,
Subcontractors, and other persons carrying out the Contract. The
Construction Manager shall not permit employment of unfit persons or
persons not skilled in tasks assigned to them.
3.5 WARRANTY
3.5.1 The Construction Manager warrants to the Owner, Development
Manager and Architect that materials and equipment furnished under
the Contract will be of good quality and new unless otherwise
required or permitted by the Contract Documents, that the Work will
be free from defects not inherent in the quality required or
permitted, and that the Work will conform to the requirements of the
Contract Documents. Work not conforming to these requirements,
including substitutions not properly approved and authorized, shall
be considered defective. The Construction Manager's warranty excludes
remedy for damage or defect caused by abuse, modifications not
executed by the Construction Manager, improper or insufficient
maintenance, improper operation, or normal wear and tear and normal
usage. If required by the Development Manager, the Construction
Manager shall furnish satisfactory evidence as to the kind and
quality of materials and equipment.
3.6 TAXES
3.6.1 The Construction Manager shall pay sales, consumer, use and
similar taxes for the Work provided by the Construction Manager which
are legally enacted when bids are received or negotiations concluded,
whether or not yet effective or merely scheduled to go into effect.
Such taxes shall not be a Cost of the Work except to the extent
permitted by Paragraphs 6.1.6.1 and 6.2.1.12 of the Agreement.
3.7 PERMITS, FEES AND NOTICES
3.7.1 Unless otherwise provided in the Contract Documents, the
Construction Manager shall secure and pay for the building permit and
other permits and governmental fees, licenses and inspections
necessary for proper execution and completion of the Work which are
customarily secured after execution of the Contract and which are
legally required when bids are received or negotiations concluded.
3.7.2 The Construction Manager shall comply with and give notices
required by laws, regulations and lawful orders of public authorities
applicable to performance of the Work.
3.7.3 It shall be the obligation of the Construction Manager to
review the Contract Documents to determine and to notify the
Development Manager and the Architect of any discrepancy between
building codes and regulations of which the Construction Manager has
knowledge or should be reasonably able to determine. The Construction
Manager shall not violate any zoning, setback or other locational
requirements of applicable laws, codes and ordinances, or of any
recorded covenants of which the Construction Manager has knowledge.
If the Construction Manager observes that portions of the Contract
Documents are at variance with applicable laws, statutes, ordinances,
building codes, rules or regulations, the Construction Manager
promptly shall notify the Development Manager and Architect in
writing, and necessary changes shall be accomplished by appropriate
Modification.
3.7.4 If the Construction Manager or any of its Subcontractors at any
tier performs Work knowing it to be, or where it should have known it
to be, contrary to laws, statutes, ordinances, building codes, and
rules and regulations, including laws related to the presence and/or
protection of archeological artifacts or remnants or endangered
species without prior written notice to the Architect and Development
Manager, the Construction Manager shall assume full responsibility
for such Work and shall bear the costs attributable to correction as
well as all actual and consequential damages of Owner and Development
Manager resulting therefrom.
3.8 ALLOWANCES
3.8.1 The Construction Manager shall include in the Contract Sum all
allowances stated in the Contract Documents. Items covered by
allowances shall be supplied for such amounts and by such persons or
entities as the Development Manager may direct, but the Construction
Manager shall not be required to employ persons or entities to whom
the Construction Manager has reasonable objection.
3.8.2 Unless otherwise provided in the Contract Documents:
1. allowances shall cover the cost to the Construction Manager
of materials and equipment delivered at the site and all
required and reimbursable taxes, less applicable trade
discounts;
2. Construction Manager's costs for unloading and handling at
the site, labor, installation costs, overhead, profit and
other expenses contemplated for stated allowance amounts
shall be included in the Contract Sum but not in the
allowances, except as may be set forth in the Budget;
3. whenever costs are more than or less than allowances, the
Contract Sum shall be adjusted accordingly by Change Order.
The amount of the Change Order shall reflect (l) the
difference between actual costs and the allowances under
Clause 3.8.2.1 and (2) changes in Construction Manager's
costs under Clause 3.8.2.2.
3.8.3 Materials and equipment under an allowance shall be selected by
the Owner in sufficient time to avoid delay in the Work.
3.9 SUPERINTENDENT
3.9.1 The Construction Manager shall employ a competent project
manager and a competent superintendent and necessary assistants who
shall be in attendance at the project site during performance of the
Work. The project manager and the superintendent shall be persons
acceptable to Development Manager, and these persons shall not be
replaced without, and all replacements shall be subject to,
Development Manager's reasonable approval. The project manager shall
represent the Construction Manager, and communications given to the
project manager shall be as binding as if given to the Construction
Manager. Important communications shall be confirmed in writing.
Other communications shall be similarly confirmed on written request
in each case or as required by the Contract Documents.
3.10 CONSTRUCTION MANAGER'S CONSTRUCTION SCHEDULES
3.10.1 The schedule for the Work is attached to the Agreement as
Exhibit D thereto. The construction schedule shall be updated and
revised at appropriate intervals as required by the conditions of the
Work and Project, shall be related to the entire Project, shall
provide for expeditious and practicable execution of the Work and
shall not be modified or extended without the prior approval of the
Development Manager in each instance. The construction schedule shall
be in a detailed precedence-style critical path method (CPM) or other
format reasonably satisfactory to the Development Manager which (a)
provides graphic representation of all activities and events that
will occur during the performance of the Work; (b) identifies each
phase of construction and occupancy; and (c) sets forth dates
(hereinafter referred to as "Milestone Dates") that are critical in
ensuring the timely and orderly completion of the Work in accordance
with the requirements of the Contract Documents.
3.10.2 The Construction Manager shall prepare and keep current, for
the Architect's and Development Manager's approval, a schedule of
submittals which is coordinated with the Construction Manager's
construction schedule and allows the Architect and Development
Manager reasonable time to review submittals.
3.10.3 The Construction Manager shall perform the Work in accordance
with the schedule attached to the Contract Documents, including all
Milestone Dates set forth therein, and shall cause Substantial
Completion and Final Completion to occur on or before the dates
stated therefore in the Project schedule.
3.10.4 The Construction Manager shall monitor the progress of the
Work for conformance with the requirements of the construction
schedule and shall promptly advise the Development Manager of any
delays or potential delays. The accepted construction schedule shall
be updated to reflect actual conditions if requested by the
Development Manager. In the event any updated construction schedule
indicates any delays, the Construction Manager shall propose an
affirmative plan to correct the delay, including overtime and/or
additional labor, if necessary. In no event shall any updated
construction schedule constitute an adjustment in the Contract Time,
any Milestone Date or the Contract Sum unless any such adjustment is
agreed to by the Development Manager and authorized pursuant to a
Change Order.
3.10.5 In the event Development Manager determines that the
performance of the Work (i) as of any Milestone Date or (ii) as of
the end of two consecutive weeks, has not reached the level of
completion required by the Project schedule, and within three (3)
business days thereafter Construction has not provided Development
Manager with an alternative schedule reasonably acceptable to
Development Manager which shows the Work being completed before the
Outside Substantial Completion Date, the Development Manager shall
have the right to order the Construction Manager to take corrective
measures necessary to expedite the progress of construction,
including, without limitation, (1) working additional shifts or
overtime, (2) supplying additional manpower, equipment and facilities
and (3) other similar measures hereinafter referred to collectively
as Extraordinary Measures solely for the purpose of ensuring the
Construction Manager's compliance with the construction schedule.
3.10.5.1 Cost of such Extraordinary Measures shall not be included in
the Cost of the Work and all such costs shall be borne solely by
Construction Manager as a part of Construction Manager's Fee.
3.10.5.2 Development Manager may exercise its rights under or
pursuant to this paragraph 3.10.5 as frequently as the Development
Manager reasonably deems necessary to ensure that the Construction
Manager's performance of the Work will comply with any Milestone Date
or completion date set forth in the Contract Documents.
3.11 DOCUMENTS AND SAMPLES AT THE SITE
3.11.1 The Construction Manager shall maintain at the site for the
Development Manager one record copy of the Drawings, Specifications,
Addenda, Change Orders and other Modifications, in good order and
marked currently to record field changes and selections made during
construction, and one record copy of approved Shop Drawings, Product
Data, Samples and similar required submittals. These shall be
available to the Development Manager and Architect and shall be
delivered to the Development Manager for submittal to the Owner upon
completion of the Work, signed by the Construction Manager,
certifying that they show complete and exact "as-built" conditions,
stating sizes, kind of materials, vital piping, conduit locations and
similar matters.
3.12 SHOP DRAWINGS, PRODUCT DATA AND SAMPLES
3.12.1 Shop Drawings are drawings, diagrams, schedules and other data
specially prepared for the Work by the Construction Manager or a
Subcontractor, Sub-subcontractor, manufacturer, supplier or
distributor to illustrate some portion of the Work.
3.12.2 Product Data are illustrations, standard schedules,
performance charts, instructions, brochures, diagrams and other
information furnished by the Construction Manager to illustrate
materials or equipment for some portion of the Work.
3.12.3 Samples are physical examples which illustrate materials,
equipment or workmanship and establish standards by which the Work
will be judged.
3.12.4 Shop Drawings, Product Data, Samples and similar submittals
are not Contract Documents. The purpose of their submittal is to
demonstrate for those portions of the Work for which submittals are
required by the Contract Documents the way by which the Construction
Manager proposes to conform to the information given and the design
concept expressed in the Contract Documents. Review by the Architect
is subject to the limitations of Subparagraph 4.2.7. Informational
submittals upon which the Architect is not expected to take
responsive action may be so identified in the Contract Documents.
Submittals which are not required by the Contract Documents may be
returned by the Architect without action.
3.12.5 The Construction Manager shall review for compliance with the
Contract Documents, approve and submit to the Architect Shop
Drawings, Product Data, Samples and similar submittals required by
the Contract Documents with reasonable promptness and in such
sequence as to cause no delay in the Work or in the activities of the
Owner or of separate Construction Managers. Submittals which are not
marked as reviewed for compliance with the Contract Documents and
approved by the Construction Manager may be returned by the Architect
without action.
3.12.6 By approving and submitting Shop Drawings, Product Data,
Samples and similar submittals, the Construction Manager represents
that the Construction Manager has determined and verified materials,
field measurements and field construction criteria related thereto,
or will do so, and has checked and coordinated the information
contained within such submittals with the requirements of the Work
and of the Contract Documents.
3.12.7 The Construction Manager shall perform no portion of the Work
for which the Contract Documents require submittal and review of Shop
Drawings, Product Data, Samples or similar submittals until the
respective submittal has been approved by the Architect. Construction
Manager shall not be responsible for any delay in performing the Work
to the extent resulting from failure of Architect to perform its
obligations within the time period set forth in Paragraph 4.2.7, and
any such material delay shall result in one or both of an extension
of the Outside Substantial Completion Date or an increase in the
Contract Sum to account for the required acceleration of the Work.
Whether to extend the Outside Substantial Completion Date or increase
in the Contract Sum, or to undertake a combination of both, shall be
determined by Development Manager in its sole and absolute
discretion.
3.12.8 The Work shall be in accordance with approved submittals;
except that the Construction Manager shall not be relieved of
responsibility for deviations from requirements of the Contract
Documents by the Architect's approval of Shop Drawings, Product Data,
Samples or similar submittals unless the Construction Manager has
specifically informed the Architect in writing of such deviation at
the time of submittal and a Change Order or Construction Change
Directive has been issued authorizing the deviation. The Construction
Manager shall not be relieved of responsibility for errors or
omissions in Shop Drawings, Product Data, Samples or similar
submittals by the Architect's approval thereof.
3.12.9 The Construction Manager shall direct specific attention, in
writing or on resubmitted Shop Drawings, Product Data, Samples or
similar submittals, to revisions other than those requested by the
Architect on previous submittals. In the absence of such written
notice the Architect's approval of a resubmission shall not apply to
such revisions.
3.12.10 The Construction Manager shall not be required to provide
professional services which constitute the practice of architecture
or engineering unless such services are specifically required by the
Contract Documents for a portion of the Work or unless the
Construction Manager needs to provide such services in order to carry
out the Construction Manager's responsibilities for construction
means, methods, techniques, sequences and procedures. The
Construction Manager shall not be required to provide professional
services in violation of applicable law. If professional design
services or certification by a design professional related to
systems, materials or equipment are specifically required of the
Construction Manager by the Contract Documents, the Development
Manager and the Architect will specify all performance and design
criteria that such services must satisfy. The Construction Manager
shall cause such services or certifications to be provided by a
properly licensed design professional, whose signature and seal shall
appear on all drawings, calculations, specifications, certifications,
Shop Drawings and other submittals prepared by such professional.
Shop Drawings and other submittals related to the Work designed or
certified by such professional, if prepared by others, shall bear
such professional's written approval when submitted to the Architect.
The Owner, Development Manager and the Architect shall be entitled to
rely upon the adequacy, accuracy and completeness of the services,
certifications and approvals performed by such design professionals,
provided the Development Manager and Architect have specified to the
Construction Manager all performance and design criteria that such
services must satisfy. Pursuant to this Subparagraph 3.12.10, the
Architect will review, approve or take other appropriate action on
submittals only for the limited purpose of checking for conformance
with information given and the design concept expressed in the
Contract Documents. The Construction Manager shall not be responsible
for the adequacy of the performance or design criteria required by
the Contract Documents.
3.12.11 All shop drawings for any architectural, structural,
mechanical or electrical work must be submitted to, and approved by,
the Architect. The Construction Manager represents and warrants that
all shop drawings shall be prepared by persons and entities
possessing experience and expertise in the trade for which the shop
drawing is prepared and, if reasonably required by the Architect or
by applicable law, by a licensed engineer.
3.13 USE OF SITE
3.13.1 The Construction Manager shall confine operations at the site
to areas permitted by law, ordinances, permits and the Contract
Documents and shall not unreasonably encumber the site with materials
or equipment.
3.14 CUTTING AND PATCHING
3.14.1 The Construction Manager shall be responsible for cutting,
fitting or patching required to complete the Work or to make its
parts fit together properly.
3.14.2 The Construction Manager shall not damage or endanger a
portion of the Work or fully or partially completed construction of
the Owner or separate contractors by cutting, patching or otherwise
altering such construction, or by excavation. The Construction
Manager shall not cut or otherwise alter such construction by the
Owner or a separate contractor except with written consent of the
Development Manager and of such separate contractor; such consent not
to be unreasonably withheld. The Construction Manager shall not
unreasonably withhold from the Owner or a separate contractor the
Construction Manager's consent to cutting or, otherwise altering the
Work.
3.15 CLEANING UP
3.15.1 The Construction Manager shall keep and maintain the site and
surrounding area free from accumulation of waste materials or rubbish
caused by operations under the Contract on a daily basis to the
reasonable satisfaction of Development Manager. At completion of the
Work the Construction Manager shall remove from and about the Project
waste materials, rubbish, the Construction Manager's tools,
construction equipment, machinery and surplus materials.
3.15.2 If the Construction Manager fails to clean up as provided in
the Contract Documents, the Owner may do so and the cost thereof
shall be charged to the Construction Manager.
3.16 ACCESS TO WORK
3.16.1 The Construction Manager shall provide the Owner, Development
Manager, Independent Consultant and Architect access to the Work in
preparation and progress wherever located.
3.17 ROYALTIES AND PATENTS AND COPYRIGHTS
3.17.1 The Construction Manager shall pay all royalties and license
fees. The Construction Manager shall defend suits or claims for
infringement of copyrights and patent rights and shall hold the
Owner, Development Manager and Architect harmless from loss on
account thereof, but shall not be responsible for such defense or
loss when a particular design, process or product of a particular
manufacturer or manufacturers is required by the Contract Documents
or where the copyright violations are contained in Drawings,
Specifications or other documents prepared by the Owner or Architect.
However, if the Construction Manager has reason to believe that the
required design, process or product is an infringement of a copyright
or a patent, the Construction Manager shall be responsible for such
loss unless such information is promptly furnished to the Architect.
3.18 INDEMNIFICATION
3.18.1 To the fullest extent permitted by law, Construction Manager
shall indemnify, defend and hold harmless Owner, Development Manager,
Architect, Trustee, and each and every of their respective
contractors, consultants, officers, directors, partners, members,
agents and employees (each, an "Indemnified Party") from and against
all claims, demands, suits, damages, losses and expenses, including
consequential damages, to the extent arising out of or resulting from
the performance of the Work by Construction Manager, or any
Subcontractor, person or organization for whose acts the Construction
Manager is liable, provided that such claim, demand, suit, damage,
loss or expense is attributable to bodily injury or damage to
property.
3.18.2 In any and all claims against an Indemnified Party by any
employee of the Construction Manager, any Subcontractor or any person
or organization employed by any of them to perform or furnish any of
the Work, or anyone for whose acts any of them may be liable, the
indemnification obligation under Subparagraph 3.18.1 shall not be
limited by any limitation on amount or type of damages, compensation
or benefits payable by or for the Construction Manager or a
Subcontractor under any laws regulating worker's compensation,
disability benefit acts or other employee benefits.
3.18.3 The Construction Manager shall defend each Indemnified Party,
through counsel reasonably approved by such Indemnified Party, in any
action, proceeding or arbitration brought against the Indemnified
Party by reason of any such claim described in this Paragraph 3.18.
The Construction Manager's obligation to defend an Indemnified Party
shall not extend to any action, proceeding or arbitration which
asserts or alleges only that the injury to the claimant resulted
solely from the negligence or misconduct of the Indemnified Party and
from no other cause or if a final judgment is obtained establishing
that such injury to the claimant resulted solely from the negligence
or misconduct of the Indemnified Party and from no other cause in
which latter event Construction Manager's obligation to defend such
Indemnified Party shall cease upon the date such judgment becomes
final, and such Indemnified Party shall thereupon reimburse
Construction Manager for its reasonable attorneys' fees and the court
costs in so defending such Indemnified Party.
3.18.4 If any claim or lien or stop-notice or any other demand for
payment or security therefor, including claims or demands upon
performance and payment bond sureties for this Contract, is made or
filed with the Owner or against the Project by any person claiming
that Construction Manager or any Subcontractor or supplier or any
other person claiming under any of them has failed to perform its
contractual obligations or to make payment for any labor, services,
trust fund contribution, materials, equipment, taxes or other item
furnished or obligation incurred for or in connection with the Work,
or if at any time there shall be evidence of such nonperformance or
nonpayment of any claim or lien or stop-notice or other demand for
which, if established, the Owner or the Project might become liable,
and if the Construction Manager fails to issue a bond under
Subparagraph 3.18.5, then the Owner shall have the right to retain
from any payment then due or thereafter to become due under the
Contract, or to be reimbursed by Construction Manager of, any amount
sufficient to (i) satisfy, discharge and defend against any such
claim of lien or stop-notice or other demand, or any action or
proceeding thereon which may be brought to judgment or award; (ii)
make good any such nonpayment, nonperformance, damage, failure or
default; and (iii) compensate the Owner for any and all loss,
liability, damage, cost and expense (including attorneys' and
consultants' fees and costs) which may be sustained or incurred in
connection therewith. The foregoing shall not apply to the extent
such claim, lien or stop-notice or other demand for payment results
from any failure of Owner to make payment under the Contract
Documents in breach of the Contract Documents.
3.18.5 Should any Subcontractor, supplier or other person for which
the Construction Manager is responsible or any of them, make, record
or file, or maintain any action on or respecting a claim of
mechanic's lien, stop-notice, equitable lien, payment or performance
bond, or a lis pendens, relating to the Work, the Construction
Manager shall immediately and at its own expense procure, furnish and
record appropriate statutory release bonds which will extinguish or
expunge said claim, stop-notice or lis pendens.
3.18.6 Notwithstanding any other provision of the Agreement to the
contrary, an Indemnified Party shall be entitled to recovery of all
attorney's fees associated with the enforcement of this Section 3.18.
ARTICLE 4. ADMINISTRATION OF THE CONTRACT
4.1 ARCHITECT
4.1.1 The Architect is the person lawfully licensed to practice
architecture or an entity lawfully practicing architecture identified
as such in the Agreement and is referred to throughout the Contract
Documents as if singular in number. The term "Architect" means the
Architect or the Architect's authorized representative.
4.1.2 Duties, responsibilities and limitations of authority of the
Architect as set forth in the Contract Documents shall not be
restricted, modified or extended without written consent of the
Development Manager, Construction Manager and Architect.
4.2 ARCHITECT'S ADMINISTRATION OF THE CONTRACT
4.2.1 The Architect will provide administration of the Contract as
described in the Contract Documents, and will be an Owner's
representative (1) during construction, (2) until final payment is
due and (3) with the Owner's concurrence, from time to time during
the one-year period for correction of Work described in Paragraph
12.2. The Architect will have authority to act on behalf of the Owner
only to the extent provided in the Contract Documents, unless
otherwise modified in writing in accordance with other provisions of
the Contract.
4.2.2 The Architect, as a representative of the Owner, will visit the
site at intervals appropriate to the stage of the Construction
Manager's operations (1) to become generally familiar with and to
keep the Development Manager informed about the progress and quality
of the portion of the Work completed, (2) to endeavor to guard the
Owner against defects and deficiencies in the Work, and (3) to
determine in general if the Work is being performed in a manner
indicating that the Work, when fully completed, will be in accordance
with the Contract Documents. However, the Architect will not be
required to make exhaustive or continuous on-site inspections to
check the quality or quantity of the Work. The Architect will neither
have control over or charge of, nor be responsible for, the
construction means, methods, techniques, sequences or procedures, or
for safety precautions and programs in connection with the Work,
since these are solely the Construction Manager's rights and
responsibilities under the Contract Documents, except as provided in
Subparagraph 3.3.1.
4.2.3 The Architect will not be responsible for the Construction
Manager's failure to perform the Work in accordance with the
requirements of the Contract Documents. The Architect will not have
control over or charge of and will not be responsible for acts or
omissions of the Construction Manager, Subcontractors, or their
agents or employees, or of any other persons performing portions or
entities of the Work.
4.2.4 Communications Facilitating Contract Administration. The
Architect and Construction Manager shall communicate with Owner
through the Development Manager about matters arising out of or
related to the Contract. Communications by and with Subcontractors
and material suppliers shall be through the Construction Manager.
Communications by and with separate contractors shall be through the
Development Manager.
4.2.5 Based on evaluations of the Work by Architect and Development
Manager and of the Construction Manager's Applications for Payment,
the Architect and Development Manager will each review and certify
the amounts due the Construction Manager and will issue Certificates
for Payment in such amounts.
4.2.6 The Architect and Development Manager will each have authority
to reject Work that does not conform to the Contract Documents.
Whenever the Architect or Development Manager considers it necessary
or advisable, they each will have authority to require inspection or
testing of the Work in accordance with Subparagraphs 13.5.2 and
13.5.3, whether or not such Work is fabricated, installed or
completed. However, neither this authority of the Architect and
Development Manager nor a decision made in good faith either to
exercise or not to exercise such authority shall give rise to a duty
or responsibility of the Architect or Development Manager to the
Construction Manager, Subcontractors, material and equipment
suppliers, their agents or employees, or other persons or entities
performing portions of the Work.
4.2.7 The Architect will review and approve or take other appropriate
action upon the Construction Manager's submittals such as Shop
Drawings, Product Data and Samples, but only for the limited purpose
of checking for conformance with information given and the design
concept expressed in the Contract Documents. The Architect's action
will be taken with such reasonable promptness as to cause no delay in
the Work or in the activities of the Owner, Construction Manager or
separate contractors, but in no event longer than five (5) days after
receipt by Architect, except to the extent that such action cannot
reasonably be completed in a professional manner within such period
as reasonably agreed to by Development Manager and Construction
Manager. Review of such submittals is not conducted for the purpose
of determining the accuracy and completeness of other details such as
dimensions and quantities, or for substantiating instructions for
installation or performance of equipment or systems, all of which
remain the responsibility of the Construction Manager as required by
the Contract Documents. The Architect's review of the Construction
Manager's submittals shall not relieve the Construction Manager of
the obligations under Paragraphs 3.3, 3.5 and 3.12. The Architect's
review shall not constitute approval of safety precautions or, unless
otherwise specifically stated by the Architect, of any construction
means, methods, techniques, sequences or procedures. The Architect's
approval of a specific item shall not indicate approval of an
assembly of which the item is a component.
4.2.8 The Architect and Development Manager shall have authority to
prepare Change Orders and Construction Change Directives.
4.2.9 The Architect and Development Manager will conduct inspections
to determine the date or dates of Substantial Completion and the date
of Final Completion. Architect will receive and forward to the
Development Manager for the Development Manager's review and records
written warranties and related documents required by the Contract and
assembled by the Construction Manager. Architect and Development
Manager will each issue a final Certificate for Payment upon
compliance with the requirements of the Contract Documents.
4.2.10 If the Development Manager and Architect agree, the Architect
will provide one or more project representatives to assist in
carrying out the Architect's responsibilities at the site. The
duties, responsibilities and limitations of authority of such project
representatives shall be as set forth in an exhibit to be
incorporated in the Contract Documents.
4.2.11 The Architect will interpret and decide matters concerning
performance under and requirements of the Contract Documents on
written request of either the Development Manager or Construction
Manager. The Architect's response to such requests will be made in
writing within any time limits agreed upon or otherwise with
reasonable promptness. If no agreement is made concerning the time
within which interpretations required of the Architect shall be
furnished in compliance with this Paragraph 4.2, then delay shall not
be recognized on account of failure by the Architect to furnish such
interpretations until 10 days after written request is made for them.
4.2.12 Interpretations and decisions of the Architect will be
consistent with the intent of and reasonably inferable from the
Contract Documents and will be in writing or in the form of drawings.
When making such interpretations and initial decisions, the Architect
will endeavor to secure faithful performance by both Owner and
Construction Manager, will not show partiality to either, and will
not be liable for results of interpretations or decisions so rendered
in good faith.
4.2.13 The Architect's decisions on matters relating to aesthetic
effect will be final if consistent with the intent expressed in the
Contract Documents.
4.3 CLAIMS AND DISPUTES
4.3.1 Definition. A Claim is a demand or assertion by one of the
parties seeking, as a matter of right, adjustment or interpretation
of Contract terms, payment of money, extension of time or other
relief with respect to the terms of the Contract. The term "Claim"
also includes other disputes and matters in question between the
Owner and Construction Manager arising out of or relating to the
Contract. Claims must be initiated by written notice. The
responsibility to substantiate Claims shall rest with the party
making the Claim.
4.3.2 Time Limits on Claims. Claims by either party must be initiated
within 21 days after occurrence of the event giving rise to such
Claim or within 21 days after the claimant first recognizes the
condition giving rise to the Claim, whichever is later. Claims must
be initiated by written notice containing a brief description thereof
to the Architect and the other party.
4.3.3 Continuing Contract Performance. Pending final resolution of a
Claim, except as otherwise agreed in writing or as provided in
Subparagraph 9.7.1 and Article 14, the Construction Manager shall
proceed diligently with performance of the Contract and the Owner
shall continue to make payments in accordance with the Contract
Documents.
4.3.4 Claims for Concealed or Unknown Conditions. If conditions not
reasonably discoverable by Construction Manager or the applicable
Subcontractor are encountered at the site which are (l) subsurface or
otherwise concealed physical conditions which differ materially from
those indicated in the Contract Documents or (2) unknown physical
conditions of an unusual nature, which differ materially from those
ordinarily found to exist and generally recognized as inherent in
construction activities of the character provided for in the Contract
Documents, then notice by the observing party shall be given to the
other party promptly before conditions are disturbed and in no event
later than three (3) days after first observance of the conditions.
The Architect will promptly investigate such conditions and, if they
differ materially and cause an increase or decrease in the
Construction Manager's cost of, or time required for, performance of
any part of the Work, will recommend an equitable adjustment in the
Contract Sum or Contract Time, or both, but not in the amount of
Construction Manager's Fee. If the Architect determines that the
conditions at the site are not materially different from those
indicated in the Contract Documents or that such differences were
reasonably discoverable by Construction Manager or the applicable
Subcontractor and that no change in the terms of the Contract is
justified, the Architect shall so notify the Owner and Construction
Manager in writing, stating the reasons. Claims by either party in
opposition to such determination must be made within seven (7) days
after the Architect has given notice of the decision. Subject to
Sections 1.1.3 and 3.2.4 hereof, if the conditions encountered are
materially different, the Contract Sum and Contract Time shall be
equitably adjusted, but if the Owner and Contractor cannot agree on
an adjustment in the Contract Sum or Contract Time, the adjustment
shall be subject to further proceedings pursuant to the Agreement.
4.3.5 Claims for Additional cost. If the Construction Manager wishes
to make Claim for an increase in the Contract Sum, written notice as
provided herein shall be given before proceeding to execute the Work.
Prior notice is not required for Claims relating to an emergency
endangering life or property arising under Paragraph 10.5.
4.3.6 If the Construction Manager believes additional cost of the
Work is involved for reasons including but not limited to (l) a
written interpretation from the Architect, (2) an order by the
Development Manager to stop the Work where the Construction Manager
was not at fault, (3) failure of payment by the Owner, (4)
termination of the Contract by the Owner, (5) Owner's suspension or
(6) other reasonable grounds, Claim shall be filed in accordance with
this Paragraph 4.3.
4.3.7 Claims for Additional Time
4.3.7.1 If the Construction Manager wishes to make Claim for an
increase in the Contract Time, written notice as provided herein
shall be given. The Construction Manager's Claim shall include an
estimate of cost and of probable effect of delay on progress of the
Work. In the case of a continuing delay only one Claim is necessary.
4.3.7.2 Claims for adverse weather conditions shall be determined on
the basis of an entire calendar quarter (i.e. January 1-March 31,
April 1-June 30, July 1-September 30 and October 1-December 31).
Adverse weather conditions shall be a basis for a Claim for
additional time only if such Claim shall be documented by data
substantiating that adverse weather conditions for any applicable
calendar quarter at the nearest National Weather Service location to
the site exceeded the "Quartlerly Rainfall Threshold" for the
applicable calendar quarter and had an adverse effect on the critical
path of the construction schedule. The "Quarterly Rainfall Threshold"
shall equal the average of (i) the median rainfall recorded in the
past ten years for such calendar quarter and (ii) the heaviest
rainfall recorded in the past ten years for such calendar quarter.
4.3.8 Injury or Damage to Person or Property. If either party to the
Contract suffers injury or damage to person or property because of an
act or omission of the other party, or of others for whose acts such
party is legally responsible, written notice of such injury or
damage, whether or not insured, shall be given to the other party
within a reasonable time not exceeding 7 days after discovery. The
notice shall provide sufficient detail to enable the other party to
investigate the matter.
4.3.9 If unit prices are stated in the Contract Documents or
subsequently agreed upon, and if quantities originally contemplated
are so changed in a proposed Change Order or Construction Change
Directive that application of such unit prices to quantities of Work
proposed will cause substantial inequity to the Owner or Construction
Manager, the applicable unit prices shall be equitably adjusted.
ARTICLE 5. SUBCONTRACTORS
5.1 DEFINITIONS
5.1.1 A Subcontractor is a person or entity who has a direct contract
with the Construction Manager to perform a portion of the Work at the
site. The term "Subcontractor" is referred to throughout the Contract
Documents as if singular in number and means a Subcontractor or an
authorized representative of the Subcontractor. The term
"Subcontractor" does not include a separate contractor who has a
direct contract with Owner or subcontractors of a separate
contractor.
5.1.2 A Sub-subcontractor is a person or entity who has a direct or
indirect contract with a Subcontractor to perform a portion of the
Work at the site. The term "Sub-subcontractor" is referred to
throughout the Contract Documents as if singular in number and means
a Sub-subcontractor or an authorized representative of the
Sub-subcontractor.
5.2 AWARD OF SUBCONTRACTS AND OTHER CONTRACTS FOR PORTIONS OF THE
WORK
5.2.1 The Construction Manager shall develop Subcontractor interest
in the Project and shall use its best efforts to furnish to the
Development Manager and Architect for their information a list of at
least five (5) pre-qualified Subcontractors, including suppliers who
are to furnish materials or equipment fabricated to a special design,
from whom proposals will be requested for each principal portion of
the Work. All Subcontractors who bid on any portion of the Work shall
have been pre-qualified by Construction Manager as satisfying each of
the requirements set forth on Exhibit B to the Contract, unless
waived in writing by Development Manager. The Development Manager
will promptly reply in writing to the Construction Manager if the
Development Manager or Architect has any objection to such
Subcontractor or supplier. The receipt of such list shall not require
the Development Manager to investigate the qualifications of proposed
Subcontractors or suppliers, nor shall it waive the right of the
Development Manager later to object to or reject any proposed
Subcontractor or supplier. The Subcontractor's bid list shall be
approved by Development Manager.
5.2.2 The Construction Manager shall obtain sealed bids from
Subcontractors and from suppliers of materials or equipment
fabricated to a special design for the Work from the list previously
approved by Development Manager. Construction Manager shall deliver
such sealed bids to the Development Manager from such Subcontractors
and shall open them in the presence of the Development Manager. The
Development Manager shall then determine which bids will be accepted,
after receiving from the Construction Manager a detailed review of
the completeness and scope of each bid and an analysis of each
Subcontractor's ability to perform the subcontract financially and on
schedule, as well as a written recommendation as to which
Subcontractor should be selected. Development Manager shall
reasonably approve the form and process of Construction Manager's
review, analysis and recommendation. The Development Manager may
designate specific persons or entities from whom the Construction
Manager shall obtain bids; however, the Development Manager may not
prohibit the Construction Manager from obtaining bids from other
qualified bidders. The Construction Manager shall not be required to
contract with anyone to whom the Construction Manager has reasonable
objection.
5.2.3 If a specific bidder among those whose bids are delivered by
the Construction Manager to the Development Manager (1) is
recommended to the Development Manager by the Construction Manager;
(2) is qualified to perform that portion of the Work as reasonably
determined by Development Manager; and (3) has submitted a bid which
conforms to the requirements of the Contract Documents without
reservations or exceptions, but the Development Manager requires that
a higher bid be accepted, then the Construction Manager may require
that a Change Order be issued to adjust the Guaranteed Maximum Price
by the difference between the bid of the person or entity recommended
to the Development Manager by the Construction Manager and the amount
of the subcontract or other agreement actually signed with the person
or entity designated by the Development Manager; provided that
Construction Manager's Fee shall not be increased as a result
thereof.
5.2.4 The Construction Manager shall not change a Subcontractor,
person or entity previously selected if the Development Manager or
Architect makes reasonable objection to such substitute.
5.2.5 Construction Manager shall cause all subcontracts to include a
clause prohibiting Construction Manager from receiving any discount,
refunds, inducement, benefit or payment which is not to or for the
benefit of Owner and which is not reflected in the terms of the
applicable subcontract. Each Subcontractor shall certify as to such
statement upon request of Owner, Development Manager or Trustee.
5.3 SUBCONTRACTUAL RELATIONS
5.3.1 By appropriate written agreement, the Construction Manager
shall require each Subcontractor, to the extent of the Work to be
performed by the Subcontractor, to be bound to the Construction
Manager by terms of the Contract Documents, and to assume toward the
Construction Manager all the obligations and responsibilities,
including responsibility for safety of the Subcontractor's Work,
which the Construction Manager, by these Contract Documents, assumes
toward the Owner, Development Manager and Architect. Each subcontract
agreement shall preserve and protect the rights of the Owner,
Development Manager and Architect under the Contract Documents with
respect to the Work to be performed by the Subcontractor so that
subcontracting thereof will not prejudice such rights, and shall
allow to the Subcontractor, unless specifically provided otherwise in
the subcontract agreement, the benefit of all rights, remedies and
redress against the Construction Manager that the Construction
Manager, by the Contract Documents, has against the Owner. Where
appropriate, the Construction Manager shall require each
Subcontractor to enter into similar agreements with
Sub-subcontractors. The Construction Manager shall make available to
each proposed Subcontractor, prior to the execution of the
subcontract agreement, copies of the Contract Documents to which the
Subcontractor will be bound, and, upon written request of the
Subcontractor, identify to the Subcontractor terms and conditions of
the proposed subcontract agreement which may be at variance with the
Contract Documents. Subcontractors will similarly make copies of
applicable portions of such documents available to their respective
proposed Sub-subcontractors.
5.3.2 Notwithstanding any provision of Subparagraph 5.3.1, any part
of the Work performed for the Construction Manager by a Subcontractor
or its Sub-subcontractor shall be pursuant to a written Subcontract
between the Construction Manager and such Subcontractor (or the
Subcontractor and its Subcontractor at any tier), which shall be
prepared on a form of subcontract satisfactory to the Development
Manager in all respects. Each subcontract shall contain provisions
that:
1. require that such Work be performed in accordance with the
requirements of the Contract Documents;
2. waive all rights the contracting parties may have against
one another or that the Subcontractor may have against the
Owner for damages caused by fire or other perils covered by
the insurance described in the Contract Documents;
3. require the Subcontractor to carry and maintain insurance
coverage in accordance with the Contract Documents, and to
file certificates of such coverage with the Construction
Manager;
4. require the Subcontractor to submit certificates and waivers
of liens for work completed by it and by its
Sub-subcontractors as a condition to the disbursement of the
progress payment next due and owing;
5. require submission to Construction Manager or Subcontractor,
as the case may be, of applications for payment in a form
approved by the Owner, together with clearly defined
invoices and billings supporting all such applications under
each subcontract to which the Construction Manager is a
party;
6. report, so far as practicable, unit prices and any other
feasible formula for use in the determination of costs of
changes in the Work;
7. require each Subcontractor to furnish to the Construction
Manager in a timely fashion all information necessary for
the preparation and submission of the reports required
herein;
8. require that each Subcontractor continue to perform under
its subcontract in the event the Contract is terminated and
the Owner shall take an assignment of said subcontract and
request such Subcontractor to continue such performance;
9. require each Subcontractor to remove all debris created by
its activities;
10. prohibit Construction Manager from receiving any discount,
refund, inducement, benefit or payment which is not to or
for the benefit of Owner and which is not reflected in the
terms of the applicable subcontract;
11. require Subcontractor to certify upon request of Owner,
Development Manager, or Trustee that no discount, refund,
inducement, benefit or payment described in subparagraph 10
above has been paid to Construction Manager by such
Subcontractor, or to its knowledge, any other Subcontractor;
12. acknowledge that Development Manager has express authority
to bind Owner with respect to all matters requiring Owner's
approval or authorization, excluding approval of Change
Orders and amendments or modifications to the Contract; and
13. require the Subcontractor to adhere to such Native American
hiring preferences as may affect the Project from time to
time.
5.4 CONTINGENT ASSIGNMENT OF SUBCONTRACTS
5.4.1 Each subcontract agreement for a portion of the Work is
assigned by the Construction Manager to the Owner provided that:
1. assignment is effective only after termination of the
Contract by the Owner in accordance with the terms of the
Contract Documents or stoppage of the Work by Owner under
Section 2.3.1, and only for those subcontract agreements
which the Owner accepts by notifying the Subcontractor and
Construction Manager in writing; and
2. assignment is subject to the prior rights of the surety, if
any, obligated under bond relating to the Contract.
5.4.2 Upon such assignment, if the Work has been suspended for more
than 30 days, the Subcontractor's compensation shall be equitably
adjusted for increases in cost (if any) resulting from the
suspension.
ARTICLE 6. CONSTRUCTION BY OWNER OR BY SEPARATE CONTRACTORS
6.1 OWNER'S RIGHT TO PERFORM CONSTRUCTION AND TO AWARD SEPARATE
CONTRACTS
6.1.1 The Owner reserves the right to perform construction or
operations related to the Project with the Owner's own forces, and to
award separate contracts in connection with other portions of the
Project or other construction or operations on the site.
6.1.2 When separate contracts are awarded for different portions of
the Project or other construction or operations on the site, the term
"Construction Manager" in the Contract Documents in each case shall
mean the Contractor who executes each separate Owner-Contractor
Agreement.
6.1.3 The Construction Manager shall provide for coordination of the
activities of the Owner's own forces and of each separate contractor
with the Work of the Construction Manager, who shall cooperate with
them. The Construction Manager shall participate with other separate
contractors and the Development Manager in reviewing their
construction schedules when directed to do so. The Construction
Manager shall make any revisions to the construction schedule deemed
necessary after a joint review and mutual agreement. The construction
schedules shall then constitute the schedules to be used by the
Construction Manager, separate contractors and the Owner until
subsequently revised. Owner's contracts with such other contractors
shall delegate such coordination responsibility to Construction
Manager. In addition, any such separate contract to be assigned to
Construction Manager shall be in accordance with Section 2.5 of the
Agreement.
6.1.4 Unless otherwise provided in the Contract Documents, when the
Owner performs construction or operations related to the Project with
the Owner's own forces, the Owner shall be deemed to be subject to
the same obligations and to have the same rights which apply to the
Construction Manager under the Conditions of the Contract, including,
without excluding others, those stated in Article 3, this Article 6
and Articles 10, 11 and 12.
6.2 MUTUAL RESPONSIBILITY
6.2.1 The Construction Manager shall afford the Owner and separate
contractors reasonable opportunity for introduction and storage of
their materials and equipment and performance of their activities and
shall connect and coordinate the Construction Manager's construction
and operations with theirs as required by the Contract Documents.
6.2.2 If part of the Construction Manager's Work depends for proper
execution or results upon construction or operations by the Owner or
a separate contractor, the Construction Manager shall, prior to
proceeding with that portion of the Work, promptly report to the
Architect and Development Manager apparent discrepancies or defects
in such other construction that would render it unsuitable for such
proper execution and results. Failure of the Construction Manager to
so report shall constitute an acknowledgment that the Owner's or
separate contractor's completed or partially completed construction
is fit and proper to receive the Construction Manager's Work, except
as to defects not then reasonably discoverable.
6.2.3 The Owner shall be reimbursed by the Construction Manager for
costs incurred by the Owner which are payable to a separate
contractor because of delays, improperly timed activities or
defective construction of the Construction Manager.
6.2.4 The Construction Manager shall promptly remedy damage
wrongfully caused by the Construction Manager to completed or
partially completed construction or to property of the Owner or
separate contractors as provided in Subparagraph 10.2.5.
6.2.5 The Owner and each separate contractor shall have the same
responsibilities for cutting and patching as are described for the
Construction Manager in Paragraph 3.14.
6.3 OWNER'S RIGHT TO CLEAN UP
6.3.1 If a dispute arises among the Construction Manager, separate
contractors and the Owner as to the responsibility under their
respective contracts for maintaining the premises and surrounding
area free from waste materials and rubbish, the Owner may clean up
and the Architect will allocate the cost among those responsible.
ARTICLE 7. CHANGES IN THE WORK
7.1 CHANGES
7.1.1 Changes in the Work may be accomplished after execution of the
Contract, and without invalidating the Contract, by Change Order or
Construction Change Directive, subject to the limitations stated in
this Article 7 and elsewhere in the Contract Documents.
7.1.2 A Change Order shall be based upon agreement among the Owner,
Development Manager, Construction Manager and Architect; a
Construction Change Directive requires agreement by the Development
Manager and Architect and may or may not be agreed to by the
Construction Manager.
7.1.3 Changes in the Work shall be performed under applicable
provisions of the Contract Documents, and the Construction Manager
shall proceed promptly, unless otherwise provided in the Change Order
or Construction Change Directive.
7.2 CHANGE ORDERS
7.2.1 A Change Order is a written instrument prepared by the
Architect and signed by the Development Manager, Construction Manager
and Architect, stating their agreement upon all of the following:
1. a change in the Work;
2. the amount of the adjustment, if any, in the Cost of the
Work ; and
3. the extent of the adjustment, if any, in the Contract Time.
4. Methods used in determining adjustments to the Cost of the
Work may include those listed in Subparagraph 7.3.3.
7.3 CONSTRUCTION CHANGE DIRECTIVES
7.3.1 A Construction Change Directive is a written order prepared by
the Architect and signed by the Development Manager and Architect,
directing a change in the Work prior to agreement on adjustment, if
any, in the Cost of the Work or Contract Time, or both. The
Development Manager may by Construction Change Directive, without
invalidating the Contract, order changes in the Work within the
general scope of the Contract consisting of additions, deletions or
other revisions, the Contract Sum and Cost of the Work being adjusted
accordingly.
7.3.2 A Construction Change Directive shall be used in the absence of
total agreement on the terms of a Change Order.
7.3.3 If the Construction Change Directive provides for an adjustment
to the Cost of the Work, the adjustment shall be based on one of the
following methods:
1. mutual acceptance of a lump sum properly itemized and
supported by sufficient substantiating data to permit
evaluation;
2. unit prices stated in the Contract Documents or subsequently
agreed upon;
3. cost to be determined in a manner agreed upon by the parties
and a mutually acceptable fixed or percentage fee; or
4. as provided in Subparagraph 7.3.6.
7.3.4 Upon receipt of a Construction Change Directive, the
Construction Manager shall promptly proceed with the change in the
Work involved and advise the Architect of the Construction Manager's
agreement or disagreement with the method, if any, provided in the
Construction Change Directive for determining the proposed adjustment
in the Cost of the Work or Contract Time.
7.3.5 A Construction Change Directive signed by the Construction
Manager indicates the agreement of the Construction Manager
therewith, including adjustment in Cost of the Work and Contract Time
or the method for determining them. Such agreement shall be effective
immediately and shall be recorded as a Change Order.
7.3.6 If the Construction Manager does not respond promptly or
disagrees with the method for adjustment in the Cost of the Work, the
method and the adjustment shall be determined by the Architect on the
basis of reasonable expenditures and savings of those performing the
Work attributable to the change. The Construction Manager's Fee shall
only be adjusted if and to the extent set forth in the Agreement. In
such case, and also under Clause 7.3.3.3, the Construction Manager
shall keep and present, in such form as the Architect may prescribe,
an itemized accounting together with appropriate supporting data.
Unless otherwise provided in the Contract Documents, costs for the
purposes of this Subparagraph 7.3.6 shall be limited to the types of
costs set forth in Section 6.1 of the Agreement.
7.3.7 The amount of credit to be allowed by the Construction Manager
to the Owner for a deletion or change which results in a net decrease
in the Contract Sum shall be actual net cost as confirmed by the
Architect.
7.3.8 Pending final determination of the total cost of a Construction
Change Directive to the Owner, amounts not in dispute for such
changes in the Work shall be included in Applications for Payment
accompanied by a Change Order indicating the parties' agreement with
part or all of such costs. For any portion of such cost that remains
in dispute, the Architect will make an interim determination for
purposes of monthly certification for payment for those costs. That
determination of cost shall adjust the Contract Sum on the same basis
as a Change Order, subject to the right of either party to disagree
and assert a Claim in accordance with Article 4.
7.3.9 When the Development Manager and Construction Manager agree
with the determination made by the Architect concerning the
adjustments in the Cost of the Work and Contract Time, or otherwise
reach agreement upon the adjustments, such agreement shall be
effective immediately and shall be-recorded by preparation and
execution of an appropriate Change Order.
7.4 CHANGE ORDER REQUIRED.
No change in the Work shall be the basis of an addition to the
Contract Sum or a change in the Contract Time unless and until such
change has been specifically authorized by a Change Order executed
and issued in accordance with the Contract Documents. Changes in the
Work may be made without notice to Construction Manager's sureties,
and absence of such notice shall not relieve such sureties of any of
their obligations to Owner.
7.4.1 If a change in the Work is to be ordered, a preliminary request
("'Change Order Request"') shall be issued by Development Manager to
Construction Manager describing the change and requesting the
submission of a Change Order. Subject to the provisions of the
Disbursement Agreement, when time does not permit the processing of a
Change Order in advance of commencing the change in the Work, upon
receipt of a written authorization from Development Manager,
Construction Manager shall proceed with a change in the Work and
Construction Manager shall concurrently proceed with submission of a
Change Order. Such written authorization shall constitute a
commitment by Owner and Development Manager to subsequently issue a
Change Order providing for an addition to the Contract Time to
complete the Work and/or an increase in the Contract Sum
7.4.2 Within three (3) days of its receipt of a Change Order Request,
Construction Manager shall provide a preliminary estimate of any
change in the Cost of the Work or Contract Time associated with the
change described in the Change Order Request. Within ten (10) days
following receipt of a Change Order Request, Construction Manager
shall submit a Change Order Request to Development Manager together
with the revised or new documents which, if approved by Owner, will
become part of the Contract Documents setting forth any adjustment in
the Cost of the Work or the Contract Time, and including an
itemization of all costs of material and labor with extensions
listing quantities and total costs, and a substantiation of any Claim
for an extension of the Contract Time. If no Change Order request is
submitted by Construction Manager within such period, it shall be
conclusively presumed that the change described in the Change Order
Request does not call for any Work that results in an increase in the
Cost of the Work or the Contract Time, and such change shall be
performed by Construction Manager without any such increase. If
Construction Manager is unable to submit the above information within
the time limit it shall notify Development Manager in writing,
setting forth for Development Manager's approval a date by which
Construction Manager will submit the information as well as schedule
for the performance of the Work for which a Change Order will be
forthcoming.
7.4.3 If Development Manager accepts a Change Order submitted by
Construction Manager, upon execution by Owner the Cost of the Work
and the Contract Time shall be adjusted as provided in the Change
Order.
7.4.4 Nothing contained herein shall limit the right of the
Development Manager to order changes in Work by Change Orders that
have not been signed by Construction Manager, and Construction
Manager shall promptly perform all Work required under the Contract
Documents or a Change Order. Any disputes as to the amount of change
to the Contract Time or the Contract Amount with respect to a Change
Order which is not executed by Construction Manager shall be resolved
in the manner set forth in the Agreement.
ARTICLE 8. TIME
8.1 DEFINITIONS
8.1.1 Unless otherwise provided, Contract Time is the period of time,
including authorized adjustments, allotted in the Contract Documents
for Substantial Completion of the Work.
8.1.2 The date of commencement of the Work is the date established in
the Agreement.
8.1.3 The date of Substantial Completion is the date certified by the
Architect in accordance with Paragraph 9.8.
8.1.4 The term "day" as used in the Contract Documents shall mean
calendar day unless otherwise specifically defined.
8.2 PROGRESS AND COMPLETION
8.2.1 Time limits stated in the Contract Documents are of the essence
of the Contract. By executing the Agreement the Construction Manager
confirms that the Contract Time is a reasonable period for performing
the Work.
8.2.2 The Construction Manager shall not knowingly, except by
agreement or instruction of the Development Manager in writing,
prematurely commence operations on the site or elsewhere prior to the
effective date of insurance required by Article 11 to be furnished by
the Construction Manager and Owner. The date of commencement of the
Work shall not be changed by the effective date of such insurance.
8.2.3 The Construction Manager shall proceed expeditiously with
adequate forces and shall achieve Substantial Completion within the
Contract Time.
8.3 DELAYS AND EXTENSIONS OF TIME
8.3.1 If the Construction Manager is materially delayed at any time
in the commencement or progress of the Work by an act or neglect of
the Owner or Architect, or of an employee of either, or of a separate
contractor employed by the Owner, or by changes ordered in the Work,
as reflected in the Change Orders approved by Development Manager
that provide for the Contract Time to be extended, or Project related
strikes which cause delays to the Work in excess of seven (7) days in
the aggregate, fire, unanticipated significant delay in deliveries or
unavoidable casualties, all of which are beyond the Construction
Manager's or any Subcontractor's control (other than weather, which
shall be governed by Paragraph 4.3.7.2), and not reasonably
foreseeable by Construction Manager or any Subcontractor, or by delay
authorized by the Development Manager pending mediation and
arbitration, then the Contract Time shall be extended by Change Order
for such reasonable time as the Development Manager may determine. A
time extension shall be Construction Manager's sole remedy for all
such delays other than those resulting from the actions or neglect of
Owner, the Architect or Owner's separate contractors, and no increase
in the Contract Sum shall result therefrom except as specified in the
Contract Documents.
8.3.2 Claims relating to time shall be made in accordance with
applicable provisions of Paragraph 4.3.
8.3.3 This Paragraph 8.3 does not preclude recovery of damages for
delay by either party under other provisions of the Contract
Documents.
ARTICLE 9. PAYMENTS AND COMPLETION CONTRACT SUM
9.1.1 The Contract Sum is stated in the Agreement and, including
authorized adjustments, is the total amount payable by the Owner to
the Construction Manager for performance of the Work under the
Contract Documents.
9.1.2 Notwithstanding anything to the contrary contained in the
Contract Documents, the Owner may withhold any payment to the
Construction Manager hereunder if and for so long as the Construction
Manager fails to perform any of its obligations hereunder or
otherwise is in default under any of the Contract Documents, such
withholding not to exceed 150% of any amount or amounts in dispute in
the case of Work which Development Manager reasonably believes has
not been completed in accordance with the Contract Documents.
9.2 SCHEDULE OF VALUES
9.2.1 Before the first Application for Payment, the Construction
Manager shall submit to the Development Manager for its approval a
detailed schedule of values allocated to various portions of the
Work, prepared in such form and supported by such data to
substantiate its accuracy as the Development Manager may reasonably
require. This schedule, unless objected to by the Development
Manager, shall be used as a, but not the only, basis for reviewing
the Construction Manager's Applications for Payment.
9.2.2 The Construction Manager and each Subcontractor shall prepare a
trade payment breakdown for the Work for which each is responsible,
such breakdown being submitted on a uniform standardized form
approved by the Development Manager. The form shall be divided in
detail sufficient to exhibit areas, floors and/or sections of the
Work, and/or by convenient units and shall be updated as required by
the Development Manager as necessary to reflect (a) description of
Work (listing labor and material separately), (b) total value, (c)
percent of the Work completed to date, (d) value of Work completed to
date, (e) percent of previous amount billed, and (f) previous amount
billed. Any trade breakdown that fails to provide sufficient detail,
is unbalanced or exhibits front-end loading of the value of the Work
shall be rejected. If a trade breakdown had been initially approved
and subsequently used, but was later found to be in error, sufficient
funds shall be withheld from future Applications for Payment to
ensure an adequate reserve (exclusive of normal retainage) to
complete the Work.
9.3 APPLICATIONS FOR PAYMENT
9.3.1 Construction Manager shall submit to the Development Manager
and Architect an itemized Application for Payment for operations
completed in accordance with the schedule of values at the times set
forth in the Agreement. Such application shall be notarized, if
required, and supported by such data substantiating the Construction
Manager's right to payment as the Development Manager, Trustee or
Architect may require, such as copies of requisitions from
Subcontractors and material suppliers, and reflecting retainage if
provided for in the Contract Documents. Construction Manager shall
provide with each Application for Payment unconditional lien waivers
and releases in statutory form with respect to the period covered by
the prior Application for Payment and conditional lien waivers and
releases in statutory form covering the period related to the current
Application for Payment.
9.3.1.1 As provided for in Subparagraph 7.3.8, such applications may
include requests for payment on account of changes in the Work which
have been properly authorized by Construction Change Directives, but
not yet included in Change Orders.
9.3.1.2 Such applications may not include requests for portions of
the Work for which the Construction Manager does not intend to pay to
a Subcontractor or material supplier, unless such Work has been
performed by others whom the Construction Manager intends to pay.
9.3.2 Unless otherwise provided in the Contract Documents, payments
shall be made on account of materials and equipment delivered and
suitably stored at the site for subsequent incorporation in the Work.
If approved in advance by the Owner, payment may similarly be made
for materials and equipment suitably stored off the site at a
location agreed upon in writing. Payment for materials and equipment
stored on or off the site shall be conditioned upon compliance by the
Construction Manager with procedures satisfactory to the Development
Manager to establish the Owner's title to such materials and
equipment or otherwise protect the Owner's interest, and shall
include the costs of applicable insurance, storage and transportation
to the site for such materials and equipment stored off the site.
9.3.3 The Construction Manager warrants that title to all Work
covered by an Application for Payment will pass to the Owner no later
than the time of payment. The Construction Manager further warrants
that upon submittal of an Application for Payment all Work for which
Certificates for Payment have been previously issued and payments
received from the Owner shall be free and clear of liens, claims,
security interests or encumbrances in favor of the Construction
Manager, Subcontractors, material suppliers, or other persons or
entities making a claim by reason of having provided labor, materials
and equipment relating to the Work.
9.4 CERTIFICATES FOR PAYMENT
9.4.1 The Architect will, within seven days after receipt of the
Construction Manager's Application for Payment, either issue to the
Development Manager a Certificate for Payment, with a copy to the
Construction Manager, for such amount as the Architect determines is
properly due, or notify the Construction Manager and Development
Manager in writing of the Architect's reasons for withholding
certification in whole or in part as provided in Subparagraph 9.5.1.
9.4.2 The issuance of a Certificate for Payment will constitute a
representation by the Architect to the Owner, based on the
Architect's evaluations of the Work and the data comprising the
Application for Payment, that the Work has progressed to the point
indicated and that, to the best of the Architect's knowledge,
information and belief, quality of the Work is in accordance with the
Contract Documents. The foregoing representations are subject to an
evaluation of the Work for conformance with the Contract Documents
upon Substantial Completion, to results of subsequent tests and
inspections, to correction of minor deviations from the Contract
Documents prior to completion and to specific qualifications
expressed by the Architect. The issuance of a Certificate for Payment
will further constitute a representation that the Construction
Manager is entitled to payment in the amount certified. However, the
issuance of a Certificate for Payment will not be a representation
that the Architect has (1) made exhaustive or continuous on-site
inspections to check the quality or quantity of the Work, (2)
reviewed construction means, methods, techniques, sequences or
procedures, (3) reviewed copies of requisitions received from
Subcontractors and material suppliers and other data requested by the
Development Manager to substantiate the Construction Manager's right
to payment or (4) made examination to ascertain how or for what
purpose the Construction Manager has used money previously paid on
account of the Contract Sum.
9.5 DECISIONS TO WITHHOLD CERTIFICATION
9.5.1 The Architect may withhold a Certificate for Payment in whole
or in part, to the extent reasonably necessary to protect the Owner,
if in the Architect's opinion the representations to the Owner
required by Subparagraph 9.4.2 cannot be made. If the Architect is
unable to certify payment in the amount of the Application, the
Architect will notify the Construction Manager and Development
Manager as provided in Subparagraph 9.4.l. If the Construction
Manager and Architect cannot agree on a revised amount, the Architect
will promptly issue a Certificate for Payment for the amount for
which the Architect is able to make such representations to the
Owner. The Architect may also withhold a Certificate for Payment or,
because of subsequently discovered evidence or subsequent
observations, may nullify the whole or a part of a Certificate for
Payment previously issued, to such extent as may be necessary in the
Architect's opinion to protect the Owner from loss for which the
Construction Manager is responsible, including loss resulting from
acts and omissions described in Subparagraph 3.3.2, because of:
1. defective Work not remedied;
2. third party claims filed or reasonable evidence indicating
probable filing of such claims unless security acceptable to
the Development Manager is provided by the Construction
Manager;
3. failure of the Construction Manager to make payments
properly to Subcontractors or for labor, materials or
equipment;
4. reasonable evidence that the Work cannot be completed for
the unpaid balance of the Contract Sum;
5. damage to the Owner or another Contractor;
6. reasonable evidence that the Work will not be completed
within the Contract Time, and that the unpaid balance would
not be adequate to cover liquidated damages for the
anticipated delay; or
7. failure to carry out the Work in accordance with the
Contract Documents.
9.5.2 When the above reasons for withholding certification are
removed, certification will be made for amounts previously withheld.
9.5.3 If the Construction Manager disputes any determination by the
Architect with regard to any Certificate of Payment, the Construction
Manager nevertheless shall expeditiously continue to prosecute the
Work provided all amounts not in dispute have been properly paid to
Construction Manager in accordance with the Contract Documents.
9.6 PROGRESS PAYMENTS
9.6.1 After the Architect and Development Manager have each issued a
Certificate for Payment, subject to any additional requirements of
the Contract Documents, the Owner shall make payment in the manner
and within the time provided in the Contract Documents, and the
Development Manager shall so notify the Architect.
9.6.2 The Construction Manager shall promptly pay each Subcontractor,
upon receipt of payment from the Owner, out of the amount paid to the
Construction Manager on account of such Subcontractor's portion of
the Work, the amount to which said Subcontractor is entitled,
reflecting percentages actually retained from payments to the
Construction Manager on account of such Subcontractor's portion of
the Work. The Construction Manager shall, by appropriate agreement
with each Subcontractor, require each Subcontractor to make payments
to Sub-subcontractors in similar manner. 9.6.3 The Development
Manager will, on request, furnish to a Subcontractor, if practicable,
information regarding percentages of completion or amounts applied
for by the Construction Manager and action taken thereon by the
Architect, Development Manager and Owner on account of portions of
the Work done by such Subcontractor.
9.6.4 Neither the Owner, Development Manager nor Architect shall have
an obligation to pay or to see to the payment of money to a
Subcontractor except as may otherwise be required by law.
9.6.5 Payment to material suppliers shall be treated in a manner
similar to that provided in Subparagraphs 9.6.2, 9.6.3 and 9.6.4.
9.6.6 A Certificate for Payment, a progress payment, or partial or
entire use or occupancy of the Project by the Owner shall not
constitute acceptance of Work not in accordance with the Contract
Documents.
9.6.7 Unless the Construction Manager provides the Owner with a
payment bond in the full penal sum of the Contract Sum, payments
received by the Construction Manager for Work properly performed by
Subcontractors and suppliers shall be held by the Construction
Manager for those Subcontractors or suppliers who performed Work or
furnished materials, or both, under contract with the Construction
Manager for which payment was made by the Owner. Nothing contained
herein shall require money to be placed in a separate account and not
commingled with money of the Construction Manager, shall create any
fiduciary duty or tort liability on the part of the Construction
Manager for breach of trust or shall entitle any person or entity to
an award of punitive damages against the Construction Manager for
breach of the requirements of this provision.
9.6.8 Unless Construction Manager is not in default and otherwise
requests Owner not to do so as a result of Construction Manager's
good faith dispute with a Subcontractor or supplier, Owner may make
payments jointly to the order of Construction Manager and its
Subcontractor or supplier.
9.7 FAILURE OF PAYMENT
9.7.1 Except to the extent set forth in the Contract Documents, if
the Architect does not issue a Certificate for Payment, through no
fault of the Construction Manager, within ten (10) days after receipt
of the Construction Manager's Application for Payment, or if the
Owner does not pay the Construction Manager within seven days after
the date established in the Contract Documents the amount certified
by the Architect or awarded by arbitration, then the Construction
Manager may, upon seven additional days' written notice to the Owner
and Architect, stop the Work until payment of the amount owing has
been received. The Contract Time shall be extended appropriately and
the Cost of the Work shall be increased by the amount of the
Construction Manager's reasonable costs of shut-down, delay and
start-up, plus interest as provided for in the Contract Documents.
9.8 SUBSTANTIAL COMPLETION
9.8.1 Substantial Completion is the stage in the progress of the Work
when the Work or designated portion thereof is sufficiently complete
in accordance with the Contract Documents, and when all required
occupancy permits, if any, have been issued, so the Owner can occupy
or utilize the Work for its intended use and all Work contemplated to
be performed under the Contract is completed other than "punch list"
items. Material aesthetic details, as determined by Development
Manager in its reasonable discretion, which have not been completed
shall not be deemed "punch list" items and must be completed prior to
Substantial Completion being deemed to have occurred. The
Construction Manager shall secure and deliver to the Owner written
warranties and guarantees from all of its Subcontractors,
Sub-subcontractor and suppliers bearing the date of Substantial
Completion or some other date as may be agreed by the Owner and
stating the period of warranty as required by the Contract Documents.
The Construction Manager is responsible for the warranty of all Work,
whether performed by it or by its Subcontractors at any tier.
9.8.2 When the Construction Manager considers that the Work, or a
portion thereof which the Owner agrees to accept separately, is
substantially complete, the Construction Manager shall prepare and
submit to the Architect a comprehensive list of items to be completed
or corrected prior to final payment. Failure to include an item on
such list does not alter the responsibility of the Construction
Manager to complete all Work in accordance with the Contract
Documents.
9.8.3 Upon receipt of the Construction Manager's list, the Architect
will make an inspection to determine whether the Work or designated
portion thereof is substantially complete. If the Architect's
inspection discloses any item, whether or not included on the
Construction Manager's list, which is not sufficiently complete in
accordance with the requirements of the Contract Documents, so that
the Owner can occupy or utilize the Work or designated portion
thereof for its intended use, the Construction Manager shall, before
issuance of the Certificate of Substantial Completion, complete or
correct such item upon notification by the Architect. In such case,
the Construction Manager shall then submit a request for another
inspection by the Architect to determine Substantial Completion.
9.8.4 When the Work or designated portion thereof is substantially
complete, the Architect will prepare a Certificate of Substantial
Completion which shall establish the date of Substantial Completion,
shall establish responsibilities of the Owner and Construction
Manager for security, maintenance, heat, utilities, damage to the
Work and insurance, and shall fix the time within which the
Construction Manager shall finish all items on the list accompanying
the Certificate. 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.
9.8.5 The Certificate of Substantial Completion shall be submitted to
the Development Manager and Construction Manager for their written
acceptance of responsibilities assigned to them in such Certificate.
Upon such acceptance and consent of surety, if any, the Owner shall
make payment of retainage applying to such Work or designated portion
thereof. Such payment shall be adjusted for Work that is incomplete
or not in accordance with the requirements of the Contract Documents.
9.9 PARTIAL OCCUPANCY OR USE
9.9.1 The Owner may occupy or use any completed or partially
completed portion of the Work at any stage when such portion is
designated by separate agreement with the Construction Manager or in
accordance with the Contract Documents, provided such occupancy or
use is consented to by the insurer under the OCIP and authorized by
public authorities having jurisdiction over the Work. Such partial
occupancy or use may commence whether or not the portion is
substantially complete, provided the Owner and Construction Manager
have accepted in writing the responsibilities assigned to each of
them for payments, retainage if any, security, maintenance, heat,
utilities, damage to the Work and insurance, and have agreed in
writing concerning the period for correction of the Work and
commencement of warranties required by the Contract Documents. When
the Construction Manager considers a portion substantially complete,
the Construction Manager shall prepare and submit a list to the
Architect as provided under Subparagraph 9.8.2. The stage of the
progress of the Work shall be determined by written agreement between
the Owner and Construction Manager or, if no agreement is reached, by
decision of the Architect.
9.9.2 Immediately prior to such partial occupancy or use, the
Development Manager, Construction Manager and Architect shall jointly
inspect the area to be occupied or portion of the Work to be used in
order to determine and record the condition of the Work.
9.9.3 Unless otherwise agreed upon, partial occupancy or use of a
portion or portions of the Work shall not constitute acceptance of
Work not complying with the requirements of the Contract Documents.
9.10 FINAL COMPLETION AND FINAL PAYMENT
9.10.1 Upon receipt of written notice that the Work is ready for
final inspection and acceptance and upon receipt of a final
Application for Payment, the Architect will promptly make such
inspection and, when the Architect finds the Work acceptable under
the Contract Documents and the Contract fully performed, the
Architect will promptly issue a final Certificate for Payment stating
that to the best of the Architect's knowledge, information and
belief, and on the basis of the Architect's on-site visits and
inspections, the Work has been completed in accordance with terms and
conditions of the Contract Documents and that the entire balance
found to be due the Construction Manager and noted in the final
Certificate is due and payable. The Architect's final Certificate for
Payment will constitute a further representation that conditions
listed in Subparagraph 9.10.2 as precedent to the Construction
Manager's being entitled to final payment have been fulfilled.
9.10.2 Neither final payment nor any remaining retained percentage
shall become due until the Construction Manager submits to the
Architect and Development Manager (1) an affidavit that payrolls,
bills for materials and equipment, and other indebtedness connected
with the Work for which the Owner or the Owner's property might be
responsible or encumbered (less amounts withheld by Owner) have been
paid or otherwise satisfied, (2) a certificate evidencing that
insurance required by the Contract Documents to remain in force after
final payment is currently in effect and will not be canceled or
allowed to expire until at least 30 days' prior written notice has
been given to the Development Manager, (3) a written statement that
the Construction Manager knows of no substantial reason that the
insurance will not be renewable to cover the period required by the
Contract Documents, (4) consent of surety, if any, to final payment,
(5) all warranties and guarantees described in Section 9.8.1 and (6),
if required by the Development Manager, other data establishing
payment or satisfaction of obligations, such as receipts, releases
and waivers of liens, claims, security interests or encumbrances
arising out of the Contract, to the extent and in such form as may be
designated by the Development Manager. If a Subcontractor refuses to
furnish a release or waiver required by the Development Manager, the
Construction Manager may furnish a bond satisfactory to the
Development Manager to indemnify the Owner against such lien. If such
lien remains unsatisfied after payments are made, the Construction
Manager shall refund to the Owner all money that the Owner may be
compelled to pay in discharging such lien, including all costs and
reasonable attorneys' fees.
9.10.3 If, after Substantial Completion of the Work, final completion
thereof is materially delayed through no fault of the Construction
Manager or by issuance of Change Orders affecting final completion,
and the Architect so confirms, the Owner shall, upon application by
the Construction Manager and certification by the Architect, and
without terminating the Contract, make payment of the balance due for
that portion of the Work fully completed and accepted. If the
remaining balance for Work not fully completed or corrected is less
than retainage stipulated in the Contract Documents, and if bonds
have been furnished, the written consent of surety to payment of the
balance due for that portion of the Work fully completed and accepted
shall be submitted by the Construction Manager to the Architect prior
to certification of such payment. Such payment shall be made under
terms and conditions governing final payment, except that it shall
not constitute a waiver of claims.
9.10.4 Except to the extent specifically set forth to the contrary in
the Contract Documents, the making of final payment shall constitute
a waiver of Claims by the Owner except those arising from (i) liens,
Claims, security interests or encumbrances arising out of the
Contract and unsettled; (ii) failure of the Work to comply with the
requirements of the Contract Documents; or (iii) terms of special
warranties required by the Contract Documents.
9.10.5 Acceptance of final payment by the Construction Manager, a
Subcontractor or material supplier shall constitute a waiver of
Claims by that payee, except those Claims that have previously been
properly and timely asserted by such party in the manner set forth in
the Contract Documents.
ARTICLE 10. PROTECTION OF PERSONS AND PROPERTY
10.1 SAFETY PRECAUTIONS AND PROGRAMS
10.1.1 The Construction Manager shall be responsible for initiating,
maintaining and supervising all safety precautions and programs in
connection with the performance of the Contract in accordance with
Subparagraph 2.3.3 of the Contract.
10.2 SAFETY OF PERSONS AND PROPERTY
10.2.1 The Construction Manager shall take reasonable precautions for
safety of, and shall provide reasonable protection to prevent damage,
injury or loss to:
1. employees on the Work and other persons who may be affected
thereby;
2. the Work and materials and equipment to be incorporated
therein, whether in storage on or off the site, under care,
custody or control of the Construction Manager or
Subcontractors or Sub-subcontractors; and
3. other property at the site or adjacent thereto, such as
trees, shrubs, lawns, walks, pavements, roadways, structures
and utilities not designated for removal, relocation or
replacement in the course of construction.
10.2.2 The Construction Manager shall give notices and comply with
applicable laws, ordinances, rules, regulations and lawful orders of
public authorities bearing on safety of persons or property or their
protection from damage, injury or loss.
10.2.3 The Construction Manager shall erect and maintain, as required
by existing conditions and performance of the Contract, 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 sites and utilities.
10.2.4 When use or storage of explosives or other hazardous materials
or equipment or unusual methods are necessary for execution of the
Work, the Construction Manager shall exercise utmost care and carry
on such activities under supervision of properly qualified personnel.
10.2.5 The Construction Manager shall promptly remedy damage and loss
(other than damage or loss insured under the OCIP to property
referred to in Clauses 10.2.1.2 and 10.2.1.3) caused in whole or in
part by the Construction Manager, a Subcontractor, a
Sub-subcontractor, or anyone directly or indirectly employed by any
of them, or by anyone for whose acts they may be liable and for which
the Construction Manager is responsible under Clauses 10.2.1.2 and
10.2.1.3, except damage or loss attributable to acts or omissions of
the Owner or Architect or anyone directly or indirectly employed by
either of them, or by anyone for whose acts either of them may be
liable, and not attributable to the fault or negligence of the
Construction Manager. The foregoing obligations of the Construction
Manager are in addition to the Construction Manager's obligations
under Paragraph 3.18.
10.2.6 The Construction Manager shall designate a responsible member
of the Construction Manager's organization at the site whose duty
shall be the prevention of accidents. This person shall be the
Construction Manager's superintendent unless otherwise designated by
the Construction Manager in writing to the Development Manager and
Architect.
10.2.7 The Construction Manager shall not load or permit any part of
the construction or site to be loaded so as to endanger its
safety.
10.2.8 Construction Manager shall maintain Work, materials and
apparatus free from injury or damage from rain wind, storms, frost or
heat. If adverse weather makes it impossible to continue operations
safely in spite of weather precautions, the Construction Manager
shall cease Work and notify the Development Manager and the Architect
of such cessation. The Construction Manager shall not permit fires on
the Project site.
10.2.9 In addition to its other obligations pursuant to this Article
10, the Construction Manager shall, at its sole cost and expense,
promptly repair any damage or disturbance to walls, utilities
sidewalks, curbs and the property of third parties (including
municipalities) resulting from the performance of the Work, whether
by it or by its Subcontractors at any tier. The Construction Manager
shall maintain streets in good repair and traversable condition.
10.3 HAZARDOUS MATERIALS
10.3.1 For the purposes of the Contract Documents the term "Haz Mat"
shall mean any hazardous or toxic chemicals, materials, substances or
any other regulated pollutants, irritants or contaminants, including
but not limited to asbestos, PCBs, petroleum, hazardous waste or
radioactive materials.
10.3.2 As between the Owner and Construction Manager, the Owner shall
be responsible for any Haz Mat uncovered or revealed at the site
which was not shown or identified in the Contract Documents to be
within the scope of the Work and which may present a substantial
danger to persons or property exposed thereto in connection with the
Work at the site or which is required to be removed in accordance
with any law or regulatory order (a "Hazardous Condition").
10.3.3 The Owner and Development Manager shall not be responsible for
any Haz Mat brought to site by the Construction Manager or its
Subcontractors, subconsultants or suppliers of any tier or anyone
else for whom the Construction Manager is responsible unless such Haz
Mat was required by the Contract Documents.
10.3.4 The Construction Manager shall immediately (i) stop all work
in connection with such Hazardous Condition in only the area of the
site affected thereby, and (ii) notify the Development Manager (and
thereafter promptly confirm such notice to same in writing).
10.3.5 The Development Manager shall promptly determine the necessity
of retaining a qualified expert to evaluate such Hazardous Condition
or take corrective action, if any. The Construction Manager shall not
be required to resume work in connection with such Haz Mat or
Hazardous Condition in any such area of the site until after the
Development Manager has obtained any required permits related thereto
and delivered to the Construction Manager special written notice (i)
specifying that such condition and any affected area is or has been
rendered safe for the resumption of Work, or (ii) specifying any
special conditions under which such Work may be resumed safely. If
the Development Manager and the Construction Manager cannot agree as
to entitlement to, or the amount or extent of, an adjustment, if any,
to the Contract Price as a result of such work stoppage or such
special conditions under which Work is agreed by the Construction
Manager to be resumed, an adjustment, if requested by the
Construction Manager, shall be made therefore as provided in
Subparagraph 5.4 of the Agreement.
10.3.6 If after the receipt of such special written notice the
Construction Manager does not agree to resume such Work based on a
reasonable belief that it is unsafe, or does not agree to resume such
work under such special conditions, then the Development Manager may
order such portion of the Work that is in connection with Haz Mat or
Hazardous Condition in such affected area to be deleted from the
Work. If the Development Manager and Construction Manager cannot
agree as to entitlement to or the amount or extent of an adjustment,
if any, in the Contract Price as a result of deleting such portion of
the Work, then the dispute shall be referred as provided for in
subparagraph 9.2 of the Agreement. Notwithstanding any other
provisions of the Contract to the contrary, the Owner reserves the
right to have such deleted portion of the Work performed by its own
or other forces.
10.3.7 The Owner shall indemnify and hold harmless the Construction
Manager, its directors, employees, agents, subconsultants and
Subcontractors of any tier and each and any of them from and against
all claims, costs, losses and damages (including reasonable
attorneys' fees, and all court or arbitration or other dispute
resolution costs) arising out of or resulting from Hazardous
Conditions, provided that any such claim, loss, cost or damage is
attributable to bodily injury, sickness, disease or death, or to
injury to or destruction of tangible property (other than the Work
itself), except to the extent such claims, costs, losses or damages
result from the negligence or willful misconduct of the Construction
Manager, its Subcontractors, subconsultants or suppliers of any tier.
10.3.8 The Construction Manager shall indemnify and hold harmless the
Owner and Development Manager, their directors, employees, agents,
and consultants and each and any of them from and against all claims,
costs, losses and damages (including reasonable attorneys' fees, and
all court or arbitration or other dispute resolution costs) arising
out of or resulting from the negligence or willful misconduct of the
Construction Manager, its directors, employees, agents,
subconsultants and Subcontractors of any tier and each and any of
them relating to any Haz Mat.
10.4 PROTECTION OF ENDANGERED SPECIES AND ARTIFACTS
10.4.1 Construction Manager shall use its best efforts to avoid any
damage or disturbance to archeological artifacts or remnants or
endangered species located at the site, and shall conduct the Work in
accordance with all applicable laws and regulations of any public
body having jurisdiction for the protection of such archeological
artifacts or remnants or endangered species and shall take all
necessary actions to protect such archeological artifacts or remnants
or endangered species.
10.4.2 Upon encountering any such archeological artifacts or remnants
or endangered species at the site, Construction Manager shall
immediately (i) stop all work only in the area of the site affected
thereby, and (ii) immediately notify the Development Manager (and
thereafter promptly confirm such notice to same in writing).
10.4.3 The Development Manager shall promptly determine the necessity
of retaining a qualified expert to evaluate such archeological
artifacts or remnants or endangered species at the site. The
Construction Manager shall not be required to resume work in any
affected area of the site until after the Development Manager has
obtained any required permits related thereto and delivered to the
Construction Manager special written notice (i) specifying that such
condition and any affected area is or has been rendered ready for the
resumption of Work, or (ii) specifying any special conditions under
which such Work may be resumed in accordance with all applicable
laws. If the Development Manager and the Construction Manager cannot
agree as to entitlement to, or the amount or extent of, an
adjustment, if any, to the Contract Price as a result of such work
stoppage or such special conditions under which Work is agreed by the
Construction Manager to be resumed, an adjustment, if requested by
the Construction Manager, shall be made therefore as provided in
Subparagraph 5.3 of the Agreement.
10.5 EMERGENCIES
10.5.1 In an emergency affecting safety of persons or property, the
Construction Manager shall act, at the Construction Manager's
discretion, to prevent threatened damage, injury or loss. Additional
compensation or extension of time claimed by the Construction Manager
on account of an emergency shall be determined as provided in
Paragraph 4.3 and Article 7.
ARTICLE 11. INSURANCE AND BONDS
11.1 CONSTRUCTION MANAGER'S INSURANCE
11.1.1 The Construction Manager shall purchase, pay for and maintain
in full force and effect from a company or companies lawfully
authorized by the California Insurance Commissioner to do business of
the State of California and from such insurers as are reasonably
acceptable to Development Manager the policies of insurance set forth
on Exhibit 11.1.1 hereto. All insurance policies required under this
Section 11.1 shall be carried by insurance companies with at least an
"A" and "V" rating by the A. M. Best Company.
11.1.2 The insurance required by Subparagraph 11.1.1 shall be written
for not less than limits of liability specified in the Contract
Documents or required by law, whichever coverage is greater. All
coverages shall be maintained without interruption from date of
commencement of the Work until date of final payment or termination
of any coverage required to be maintained after final payment as
required by this Agreement.
11.1.3 Certificates of Insurance in conformance with all provisions
of this Agreement and otherwise acceptable to the Development Manager
shall be filed with the Development Manager prior to commencement of
any of the Work. In addition to the requirements specified in Exhibit
11.1.1, these certificates and the insurance policies required by
this Paragraph 11.1 shall contain a provision that coverages afforded
under the policies will not be canceled or allowed to expire until at
least 30 days' prior written notice has been given to the Development
Manager. If any of the foregoing insurance coverages are required to
remain in force after final payment, an additional certificate
evidencing continuation of such coverage shall be submitted with the
final Application for Payment as required by Subparagraph 9.10.2.
Information concerning reduction of coverage on account of revised
limits or claims paid under the General Aggregate, or both, shall be
furnished by the Construction Manager with reasonable promptness in
accordance with the Construction Manager's information and belief.
11.1.4 The amount and types of insurance coverages required herein
shall not be construed to be a limitation of the liability on the
part of the Construction Manager, any contractor, or any of their
Subcontractors. Any type of insurance or any increase of limits of
liability not described above which the Construction Manager requires
for its own protection or on account of statute shall be its own
responsibility and at its own expense. The carrying of the insurance
described shall in no way be interpreted as relieving the
Construction Manager of any responsibility or liability under the
Contract Documents.
11.1.5 The Construction Manager shall file certificates of such
insurance with Development Manager, which shall be subject to the
Development Manager's approval for adequacy of protection, including
the satisfactory character of any Insurer. If requested of the
Construction Manager, a certified copy of the actual policy(s) with
appropriate endorsement(s) and other documents shall be provided to
the Development Manager.
11.1.6 In the event of failure of the Construction Manager to furnish
and maintain said insurance and to furnish satisfactory evidence
thereof, the Owner shall have the right to take out and maintain same
coverages for all parties on behalf of the Construction Manager who
also agrees to furnish all necessary information thereof and to pay
the cost thereof to the Owner immediately upon presentation of a
premium invoice.
11.1.7 The same conditions and requirements of this Section 11.1 will
apply under the Contract Documents to each Subcontractor of every
tier. Copies of certificates of insurance for Subcontractors and
Sub-subcontractors must be filed with Development Manager within five
(5) business days after a Subcontractor is on site. Failure to
provide evidence of such insurance can result in the Subcontractor
being removed from the site until proper coverage is verified. Any
cost of resulting delay will be to the account of the Construction
Manager.
11.2 OWNER'S CONTROLLED INSURANCE PROGRAM
11.2.1 Notwithstanding anything to the contrary in the Contract
Documents, unless specified otherwise by the Development Manager,
Construction Manager and all Subcontractors of every tier will be
insured under "Owner-furnished insurance coverages," herein referred
to as an "OCIP." Construction Manager, all contractors, and
Subcontractors will be enrolled under the OCIP upon completion and
acceptance of forms included in the Special Bidding instructions
regarding insurance furnished by the broker appointed by the Owner.
All insurance, underwriting, payroll, rating, or loss history
information requested of the Construction Manager, any contractor or
Subcontractor by the Owner or Development Manager must be provided
within five (5) business days of the request. Construction Manager,
contractor(s) or Subcontractor(s) shall not be permitted to work on
the Project until they are acknowledged to be enrolled in the OCIP by
the Development Manager. At all times, Construction Manager,
contractor(s), or Subcontractor(s) shall cooperate with the OCIP and
its administrative broker. The coverages to be provided by Owner
under the OCIP are set forth on Exhibit 11.2.1 hereof.
11.2.2 Except for completed operations coverage, it is intended the
insurance furnished by the Owner under the OCIP will discontinue for
Construction Manager, contractors and Subcontractors upon certified
completion of their respective Work and final acceptance by either
the next tier contractor, the Construction Manager, or the
Development Manager, whichever has ultimate responsibility for the
applicable party's Work. The OCIP may also be discontinued in the
event the Project is substantially delayed for an extended period of
time, or the Project is permanently terminated for any cause.
11.2.3 Under the OCIP Program, the Development Manager will issue the
following coverage documents to the Construction Manager and to each
insured contractor and Subcontractor:
1. A Worker's Compensation insurance policy;
2. A certificate of insurance for Comprehensive General
Liability Coverage;
3. Subject to any named insured rights under any other policy
procured within the OCIP Program, and upon written request
by such an insured, a certificate of any the following
coverages: Builder's Risk, General Liability, and Excess
Liability Coverage.
Construction Manager agrees not to duplicate or include any portion
of its normal insurance cost, including that of its Subcontractors,
in its bid process or change orders (if any) for the coverages
provided by the Owner.
11.2.4 Construction Manager further agrees to cooperate fully with
the Development Manager to provide the necessary insurance data and
information as required in the bid specifications and associated
documents furnished by the Owner and/or Development Manager during
the duration of the Project or until the OCIP is terminated.
11.3 REPORTING OF CLAIMS
All potential claims for damage or loss which may be recoverable
under the OCIP shall be promptly reported to the Development Manager.
Development Manager shall be the sole party with authority to report
and resolve claims to any insurer under the OCIP.
11.4 WAIVER OF SUBROGATION
The Owner and Construction Manager waive all rights against each
other for all losses and damages caused by any perils but only to the
extent covered by the policies of insurance provided under the OCIP
and also waive all such rights against the Development Manager,
Architect and their subconsultants of any tier, and Construction
Manager's subconsultants and Subcontractors of any tier and all other
parties so named as insureds in such policies for losses or damages
so caused. None of the above waivers shall extend to the rights that
any of the insured parties may have to any to the proceeds of
insurance held by the Owner as trustee or otherwise payable under any
policy so issued. The policies shall provide such waivers of
subrogation by endorsement or otherwise. A waiver of subrogation
shall be effective as to a person or entity even though that person
or entity would otherwise have a duty of indemnification, contractual
or otherwise, did not pay the insurance premium directly or
indirectly, and whether or not the person or entity had an insurable
interest in the property damaged.
11.5 PERFORMANCE BOND AND PAYMENT BOND
11.5.1 The Owner shall have the right to require the Construction
Manager to furnish bonds covering faithful performance of the
Contract and payment of obligations arising thereunder as stipulated
in bidding requirements or specifically required in the Contract
Documents on the date of execution of the Contract.
11.5.2 Upon the request of any person or entity appearing to be a
potential beneficiary of bonds covering payment of obligations
arising under the Contract, the Construction Manager shall promptly
furnish a copy of the bonds or shall permit a copy to be made.
ARTICLE 12. UNCOVERING AND CORRECTION OF WORK
12.1 UNCOVERING OF WORK
12.1.1 If a portion of the Work is covered contrary to the
Architect's request or to requirements specifically expressed in the
Contract Documents, it must, if required in writing by the Architect,
be uncovered for the Architect's observation and be replaced at the
Construction Manager's expense without change in the Contract Time or
increase in the Contract Sum.
12.1.2 If a portion of the Work has been covered which the Architect
has not specifically requested to observe prior to its being covered,
the Architect, subject to prior written approval of the Development
Manager, may request to see such Work and it shall be uncovered by
the Construction Manager. If such Work is in accordance with the
Contract Documents, cost of uncovering and replacement shall, by
appropriate Change Order, be at the Owner's expense. If such Work is
not in accordance with the Contract Documents, correction shall
promptly be made at the Construction Manager's expense unless the
condition was caused by the Owner or a separate Contractor in which
event the Owner shall be responsible for payment of such costs.
12.2 CORRECTION OF WORK
12.2.1 BEFORE OR AFTER SUBSTANTIAL COMPLETION
12.2.1.1 The Construction Manager shall promptly correct Work
rejected by the Architect, the Development Manager or any
governmental authority or failing to conform to the requirements of
the Contract Documents, whether discovered before or after
Substantial Completion and whether or not fabricated, installed or
completed. Costs of correcting such rejected Work, including
additional testing and inspections and compensation for the
Architect's services and expenses made necessary thereby, shall be at
the Construction Manager's sole cost and expense.
12.2.2 AFTER SUBSTANTIAL COMPLETION
12.2.2.1 In addition to the Construction Manager's obligations under
Paragraph 3.5, if, within one year after the date of Substantial
Completion of the Work or designated portion thereof, or after the
date for commencement of warranties established under Subparagraph
9.9.1, or by terms of an applicable special warranty required by the
Contract Documents, any of the Work is found to be not in accordance
with the requirements of the Contract Documents, the Construction
Manager shall correct it promptly after receipt of written notice
from the Development Manager to do so unless the Development Manager
has previously given the Construction Manager a written acceptance of
such condition. During the one-year period for correction of Work, if
the Development Manager fails to notify the Construction Manager and
give the Construction Manager an opportunity to make the correction,
the Owner waives the right to require correction by the Construction
Manager or to make a claim for breach of warranty. If the
Construction Manager fails to correct nonconforming Work within the
time period set forth in Paragraph 2.4, the Owner may correct it in
accordance with Paragraph 2.4.
12.2.2.2 The one-year period for correction of Work shall be extended
with respect to portions of Work first performed or for corrective
Work completed after Substantial Completion by the period of time
between Substantial Completion and the actual performance of the
Work.
12.2.2.3 The one-year period for correction of Work shall not be
extended for Work which does not require corrective Work performed by
the Construction Manager pursuant to this Paragraph 12.2.
12.2.3 The Construction Manager shall promptly remove from the site
portions of the Work which are not in accordance with the
requirements of the Contract Documents and are neither corrected by
the Construction Manager nor accepted by the Owner.
12.2.4 The Construction Manager shall bear the cost of correcting
destroyed or damaged construction, whether completed or partially
completed, of the Owner or separate Contractors caused by the
Contractors correction or removal of Work which is not in accordance
with the requirements of the Contract Documents.
12.2.5 Nothing contained in this Paragraph 12.2 shall be construed to
establish a period of limitation with respect to other obligations
which the Construction Manager might have under the Contract
Documents. Establishment of the one-year period for correction of
Work as described in Subparagraph 12.2.2 relates only to the specific
obligation of the Construction Manager to correct the Work, and has
no relationship to the time within which the obligation to comply
with the Contract Documents may be sought to be enforced, nor to the
time within which proceedings may be commenced to establish the
Construction Manager's liability with respect to the Construction
Manager's obligations other than specifically to correct the Work.
12.3 ACCEPTANCE OF NONCONFORMING WORK
12.3.1 If the Owner prefers to accept Work which is not in accordance
with the requirements of the Contract Documents, the Owner may do so
instead of requiring its removal and correction, in which case the
Contract Sum will be reduced as appropriate and equitable. Such
adjustment shall be effected whether or not final payment has been
made.
ARTICLE 13. MISCELLANEOUS PROVISIONS
13.1 GOVERNING LAW
13.1.1 The Contract shall be governed by the law of the State of
California.
13.1.2 Historical lack of enforcement of any local law shall not
constitute a waiver of Construction Manager's responsibility for
compliance with such law in a manner consistent with the Contract
Documents unless and until the Construction Manager has received
written consent for the waiver of such compliance from the Owner and
the agency responsible for the local law enforcement.
13.2 SUCCESSORS AND ASSIGNS
13.2.1 The Owner and Construction Manager respectively bind
themselves, their partners, successors, assigns and legal
representatives to the other party hereto and to partners,
successors, assigns and legal representatives of such other party in
respect to covenants, agreements and obligations contained in the
Contract Documents. Except as provided in Subparagraph 13.2.2,
neither party to the Contract shall assign the Contract in whole or
in part without written consent of the other. If either party
attempts to make such an assignment without such consent, that party
shall nevertheless remain legally responsible for all obligations
under the Contract.
13.2.2 The Owner may, without consent of the Construction Manager,
collaterally assign the Contract to Trustee. The Construction Manager
shall execute all consents reasonably required to facilitate such
collateral assignment.
13.3 WRITTEN NOTICE
13.3.1 Written notice shall be deemed to have been duly served if
delivered in person to the individual or a member of the firm or
entity or to an officer of the corporation for which it was intended,
or if delivered at or sent by registered or certified mail to the
last business address known to the party giving notice.
13.4 RIGHTS AND REMEDIES
13.4.1 Duties and obligations imposed by the Contract Documents and
rights and remedies available thereunder shall be in addition to and
not a limitation of duties, obligations, rights and remedies
otherwise imposed or available by law.
13.4.2 No action or failure to act by the Owner, Development Manager,
Architect or Construction Manager shall constitute a waiver of a
right or duty afforded them under the Contract, nor shall such action
or failure to act constitute approval of or acquiescence in a breach
thereunder, except as may be specifically agreed in writing.
13.5 TESTS AND INSPECTIONS
13.5.1 Tests, inspections and approvals of portions of the Work
required by the Contract Documents or by laws, ordinances, rules,
regulations or orders of public authorities having jurisdiction shall
be made at an appropriate time. Unless otherwise provided, the
Construction Manager shall make arrangements for such tests,
inspections and approvals with an independent testing laboratory or
entity selected by the Development Manager, or with the appropriate
public authority, and Construction Manager shall bear all related
costs of tests, inspections and approvals. The Construction Manager
shall give the Architect and Development Manager timely notice of
when and where tests and inspections are to be made so that the
Architect and Development Manager may be present for such procedures.
The Owner shall bear costs of tests, inspections or approvals which
do not become requirements until after bids are received or
negotiations concluded.
13.5.2 If the Architect, Development Manager or public authorities
having jurisdiction determine that portions of the Work require
additional testing, inspection or approval not included under
Subparagraph 13.5.1, the Development Manager will instruct the
Construction Manager to make arrangements for such additional
testing, inspection or approval by an entity acceptable to the Owner,
and the Construction Manager shall give timely notice to the
Architect and Development Manager of when and where tests and
inspections are to be made so that the Architect and Development
Manager may be present for such procedures. Such costs, except as
provided in Sub-paragraph 13.5.3, shall be at the Owner's expense.
13.5.3 If such procedures for testing, inspection or approval under
Subparagraphs 13.5.1 and 13.5.2 reveal failure of the portions of the
Work to comply with requirements established by the Contract
Documents, all costs made necessary by such failure including, but
not limited to, the additional testing, inspection and approval costs
provided for in Subparagraph 13.5.2 and compensation for the
Architect's and Development Manager's services and expenses shall be
at the Construction Manager's expense.
13.5.4 Required certificates of testing, inspection or approval
shall, unless otherwise required by the Contract Documents, be
secured by the Construction Manager and promptly delivered to the
Architect and Development Manager.
13.5.5 If the Architect or Development Manager is to observe tests,
inspections or approvals required by the Contract Documents, each
will do so promptly and, where practicable, at the normal place of
testing.
13.5.6 Tests or inspections conducted pursuant to the Contract
Documents shall be made promptly to avoid unreasonable delay in the
Work.
13.6 INTEREST
13.6.1 Payments due and unpaid under the Contract Documents shall
bear interest from the date payment is due at the then current
discount rate of the Federal Reserve Bank of San Francisco plus two
percent (2%). In no event shall any interest be due and payable by
the Owner to the Construction Manager, any Subcontractor or any other
party on any of the sums payable by the Owner under this Contract
which the Owner is authorized to retain or prior to the time payment
is due pursuant to the Contract Documents.
13.7 COMMENCEMENT OF STATUTORY LIMITATION PERIOD
13.7.1 As between the Owner and Construction Manager:
1. Before Substantial Completion. As to acts or failures to act
occurring prior to the relevant date of Substantial
Completion, any applicable statute of limitations shall
commence to run and any alleged cause of action shall be
deemed to have accrued in any and all events on the date of
Substantial Completion;
2. Between Substantial Completion and Final Certificate for
Payment. As to acts or failures to act occurring subsequent
to the relevant date of Substantial Completion and prior to
issuance of the final Certificate for Payment, any
applicable statute of limitations shall commence to run and
any alleged cause of action shall be deemed to have accrued
on the date of issuance of the final Certificate for
Payment; and
3. After Final Certificate for Payment. As to acts or failures
to act occurring after the relevant date of issuance of the
final Certificate for Payment, any applicable statute of
limitations shall commence to run and any alleged cause of
action shall be deemed to have accrued in any and all events
not later than the date of any act or failure to act by the
Construction Manager pursuant to any Warranty provided under
Paragraph 3.5, the date of any correction of the Work or
failure to correct the Work by the Construction Manager
under Paragraph 12.2, or the date of actual commission of
any other act or failure to perform any duty or obligation
by the Construction Manager or Owner. whichever occurs last.
13.7.2 Notwithstanding any provision of Subparagraph 13.7.1 to the
contrary, no applicable statute of limitations shall be deemed to
have commenced with respect to any portion of the Work which is not
in accordance with the requirements of the Contract Documents, which
would not be visible or apparent upon conducting a reasonable
investigation, and which is not discovered by the Owner until after
the date which, but for this Subparagraph 13.7.2, would be the date
of commencement of the applicable statute of limitations. The
applicable statute of limitations instead shall be deemed to have
been commenced on the earlier of (i) date of such discovery by the
Owner and (ii) the date which is fifteen (15) years after the date of
issuance of the final Certificate of Payment.
ARTICLE 14. TERMINATION OR SUSPENSION OF THE CONTRACT
14.1 TERMINATION BY THE CONSTRUCTION MANAGER
14.1.1 The Construction Manager may terminate the Contract if the
Work is stopped for a period of sixty (60) consecutive days through
no act or fault of the Construction Manager or a Subcontractor,
Sub-subcontractor or their agents or employees or any other persons
or entities performing portions of the Work under direct or indirect
contract with the Construction Manager, for any of the following
reasons:
1. issuance of an order of a court or other public authority
having jurisdiction which requires all Work to be stopped;
2. an act of government, such as a declaration of national
emergency, which requires all Work to be stopped;
3. because the Architect has not issued a Certificate for
Payment and has not notified the Construction Manager of the
reason for withholding certification as provided in
Subparagraph 9.4.1, or because the Owner has not made
payment on a Certificate for Payment within the time stated
in the Contract Documents.
14.1.2 The Construction Manager may terminate the Contract if,
through no act or fault of the Construction Manager or a
Subcontractor, Sub-sub-contractor or their agents or employees or any
other persons performing portions of the Work under direct or
indirect contract with the Construction Manager, repeated
suspensions, delays or interruptions of the entire Work by the Owner
as described in Paragraph 14.3 constitute in the aggregate more than
100 percent of the total number of days scheduled for completion, or
120 days in any 365-day period, whichever is less.
14.1.3 If one of the reasons described in Subparagraph 14.1.1 or
14.1.2 exists, the Construction Manager may, upon seven (7) days'
written notice to the Development Manager and Architect, terminate
the Contract and recover from the Owner payment for Work executed and
for proven loss with respect to materials, equipment, tools, and
construction equipment and machinery, including an equitable portion
of Construction Manager's Fee less amounts necessary for Owner to
complete any corrective Work and outstanding disputed Work.
14.1.4 If the Work is stopped for a period of 90 consecutive days
through no act or fault of the Construction Manager or a
Subcontractor or their agents or employees or any other persons
performing portions of the Work under contract with the Construction
Manager because the Owner has persistently failed to fulfill the
Owner's obligations under the Contract Documents with respect to
matters important to the progress of the Work, the Construction
Manager may, upon seven (7) additional days' written notice to the
Development Manager and the Architect, terminate the Contract and
recover from the Owner as provided in Subparagraph 14.1.3.
14.2 TERMINATION BY THE OWNER FOR CAUSE
14.2.1 The Owner may terminate the Contract if the Construction
Manager:
1. refuses or fails to supply enough properly skilled workers
or proper materials;
2. fails to make payment to Subcontractors for materials or
labor in accordance with the respective agreements between
the Construction Manager and the Subcontractors:
3. persistently disregards laws, ordinances, or rules,
regulations or orders of a public authority having
jurisdiction;
4. otherwise is guilty of substantial breach of a provision of
the Contract Documents; or
5. has failed to timely achieve any Milestone Date and within
three (3) business days thereafter has not provided
Development Manager with an alternative schedule reasonably
acceptable to Development Manager which shows the Work being
completed before the Outside Substantial Completion Date,
provided such right to terminate shall lapse at such time as
the Milestone Date is achieved or an alternative schedule is
approved by Development Manager.
14.2.2 When any of the above reasons exist, the Owner may without
prejudice to any other rights or remedies of the Owner and after
giving the Construction Manager and the Construction Manager's
surety, if any, seven days' written notice, terminate employment of
the Construction Manager and may, subject to any prior rights of the
surety:
1. take possession of the site and of all materials, equipment,
tools, and construction equipment and machinery thereon
owned by the Construction Manager;
2. accept assignment of subcontracts pursuant to Paragraph 5.4;
and
3. finish the Work by whatever reasonable method the Owner may
deem expedient. Upon request of the Construction Manager,
the Development Manager shall furnish to the Construction
Manager a detailed accounting of the costs incurred by the
Owner in finishing the Work.
14.2.3 When the Owner terminates the Contract for one of the reasons
stated in Subparagraph 14.2.1, the Construction Manager shall not be
entitled to receive further payment until the Work is finished.
14.2.4 If the unpaid balance of the Contract Sum exceeds costs of
finishing the Work, including compensation for the Architect's
services and expenses made necessary thereby, and other damages
incurred by the Owner and not expressly waived, such excess shall be
paid to the Construction Manager. If such costs and damages exceed
the unpaid balance, the Construction Manager shall pay the difference
to the Owner. The amount to be paid to the Construction Manager or
Owner, as the case may be, shall be certified by the Architect, upon
application, and this obligation for payment shall survive
termination of the Contract.
14.3 SUSPENSION BY THE OWNER FOR CONVENIENCE
14.3.1 The Owner may, without cause, order the Construction Manager
in writing to suspend, delay or interrupt the Work in whole or in
part for such period of time as the Development Manager may
determine.
14.3.2 The Cost of the Work and the Contract Time shall be adjusted
for increases in the cost and time caused by suspension, delay or
interruption as described in Subparagraph 14.1.3. No adjustment shall
be made to the extent:
1. that performance is, was or would have been so suspended,
delayed or interrupted by another cause to the extent for
which the Construction Manager is responsible; or
2. that an equitable adjustment is made or denied under another
provision of the Contract.
14.4 TERMINATION BY THE OWNER FOR CONVENIENCE
14.4.1 The Owner may, at any time, terminate the Contract for the
Owner's convenience and without cause.
14.4.2 Upon receipt of written notice from the Owner of such
termination for the Owner's convenience, the Construction Manager
shall:
1. cease operations as directed by the Owner in the notice;
2. take actions necessary, or that the Owner may direct, for
the protection and preservation of the Work; and
3. except for Work directed to be performed prior to the
effective of termination stated in the notice, terminate all
existing subcontracts and purchase orders and enter into no
further subcontracts and purchase orders.
14.4.3 In case of such termination for the Owner's convenience, the
Construction Manager shall be entitled to receive payment for Work
executed, and costs incurred by reason of such termination, along
with Construction Manager's Fee on the Work not executed less amounts
reasonably necessary for Owner to complete any corrective Work and
outstanding disputed Work, less amounts reasonably necessary for
Owner to complete any corrective Work and outstanding disputed Work.