AGREEMENT BETWEEN OWNER AND DESIGN BUILDER

 

1.2                                   EXECUTIONS, CORRELATION AND INTENT

 

1.2.1.       It is the intent of the Owner and Design Builder that the Contract Documents include all items necessary for proper execution and completion of the Work. The Contract Documents are complimentary, and what is required by one shall be as binding as if required by all; performance by the Design Builder shall be required only to the extent consistent with and reasonably inferable from the Contract Documents as being necessary to produce the intended results. Words that have well-known technical or construction industry meanings are used in the Contract Documents in accordance with such recognized meanings.

 

1.2.2        If the Design Builder believes or is advised by another design professional retained by the Design Builder to provide services on the Project that implementation of any instruction received from the Owner would cause a violation of any applicable law, the Design Builder shall notify the Owner in writing. Neither the Design Builder nor another design professional retained by the Design Builder shall be obligated to perform any act which either believes will violate any applicable law.

 

1.2.3        Nothing contained in this Agreement shall create a contractual relationship between the Owner and any person or entity other than the Design Builder.

 

1.3                                 OWNERSHIP AND USE OF DOCUMENTS

 

1.3.1        Drawings, specifications, and other documents and electronic data furnished by the Design Builder and other design professionals retained by the Design Builder, are instruments of service. The Design Builder and other providers of professional services shall retain all common law, statutory and other reserved rights, including copyright in those instruments of service furnished by them. Drawings, specifications, and other documents and electronic data are furnished for use solely with respect to this Agreement. The Owner shall be permitted to retain copies, including reproducible copies, of the drawings, specifications, and other documents and electronic data furnished by the Design Builder for information and reference in connection with the Project except as provided in Subparagraphs 1.3.2 and 1.3.3.

 

1.3.2        Drawings, specifications, and other documents and electronic data furnished by the Design Builder shall not be used by the Owner or others on other projects, for additions to this Project or for completion of this Project by others, except by agreement in writing and with appropriate compensation to the Design Builder.

 

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1.3.3        Submission or distribution of the Design Builder’s documents to meet official regulatory requirements or for similar purposes in connection with the Project is not to be construed as publication in derogation of the rights reserved in Subparagraph 1.3.1.

 

ARTICLE 2 - OWNER

 

2.1                                 The Owner shall designate a representative authorized to act on the Owner’s behalf with respect to the Project. The Owner or such authorized representative shall examine documents submitted by the Design Builder and shall render decisions in a timely manner and in accordance with the schedule accepted by the Owner. The Owner may obtain independent review of the Contract Documents by a separate architect, engineer, contractor, or cost estimator under contract to or employed by the Owner. Such independent review shall be undertaken at the Owner’s expense in a timely manner and shall not delay the orderly progress of the Work.

 

2.2                                 The Owner shall cooperate with the Design Builder in securing building and other permits, licenses and inspections. The Owner shall not be required to pay the fees for such permits, licenses and inspections unless the cost of such fees is excluded from the Design Builder’s Scope of Services.

 

2.3                                 The Owner shall disclose, to the extent known to the Owner, the results and reports of prior tests, inspections or investigations conducted for the Project involving: structural or mechanical systems; chemical; air and water pollution; hazardous materials; or other environmental and subsurface conditions. The Owner shall disclose all information known to the Owner regarding the presence of pollutants at the Project’s site.

 

2.4                                 The Owner shall furnish all legal, accounting and insurance counseling services as may be necessary at any time for the Project, including such auditing services as the Owner may require to verify the Design Builder’s Applications for Payment.

 

2.5                                 Those services, information, surveys and reports required by Paragraphs 2.3 and 2.4 which are within the Owner’s control shall be furnished at the Owner’s expense. The Design Builder shall be entitled to rely upon the accuracy and completeness thereof, except to the extent the Owner advises the Design Builder to the contrary in writing.

 

2.6                                 If the Owner requires the Design Builder to maintain any special insurance coverage, policy, amendment, or rider, the Owner shall pay the additional cost thereof, except as otherwise stipulated in this Agreement.

 

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2.7                                 If the Owner observes or otherwise becomes aware of a fault of defect in the Work or nonconformity with the Design Builder’s Scope of Services or the Construction Documents, the Owner shall give prompt written notice thereof to the Design Builder.

 

2.8                                 The Owner shall promptly upon the request of the Design Builder, furnish to the Design Builder reasonable evidence that financial arrangements have been made to fulfill the Owner’s obligations under the Contract.

 

2.9                                 The Owner shall communicate with persons or entities employed or retained by the Design Builder through the Design Builder, unless otherwise directed by the Design Builder.

 

 

ARTICLE 3— DESIGN BUILDER

 

3.1                                 SERVICES AND RESPONSIBILITIES

 

3.1.1        Standard of Care: Design Builder shall perform or furnish Design Professional Services and related services in all phases of the project. The standard of care for all such services performed or furnished under this Agreement will be the care and skill ordinarily used by members of the engineering profession practicing under similar conditions at the same time and locality.

 

3.1.2        The Design Builder shall be responsible to the Owner for acts and omissions of the Design Builder’s employees, subcontractors and their agents and employees, and other persons, including other design professionals, performing any portion of the Design Builder’s obligations under this Agreement.

 

3.2                                 BASIC SERVICES

 

3.2.1        The Design Builder’s Basic Services are described below and in Article 14.

 

3.2.2        The Design Builder shall designate a representative authorized to act on the Design Builder’s behalf with respect to the Project.

 

3.2.3        The Design Builder, with the assistance of the Owner, shall file documents required to obtain necessary approvals of governmental authorities having jurisdiction over the Project.

 

3.2.4                         Unless otherwise provided in the Contract Documents, the Design Builder

 

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shall provide or cause to be provided and shall pay for design services, 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.

 

3.2.5        Design Builder shall supervise, inspect and direct the Construction competently and efficiently, devoting such attention thereto and applying such skills and expertise as may be necessary to provide the Construction in accordance with the Contract Documents. Design Builder shall be solely responsible for the means, methods, techniques, sequences and procedures employed for the provision of Construction. Design Builder shall be responsible to see that the complete Construction complies accurately with the Contract Documents and shall keep Owner advised as to the quality and progress of the Construction.

 

3.2.5        The Design Builder shall keep the Owner informed of the progress and quality of the Work.

 

3.2.7        The Design Builder shall be responsible for correcting Work which does not conform to the Contract Documents.

 

3.2.B The Design Builder warrants to the Owner 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 construction will be free from faults and defects, and that the construction will conform with the requirements of the Contract Documents. Construction not conforming to these requirements, including substitutions not properly approved by the Owner, shall be corrected in accordance with Article 9.

 

3.2.9        The Design Builder shall pay all state sales, consumer, use and similar taxes which had been legally enacted prior to the date of this Agreement, and shall secure and pay for building and other permits and governmental fees, licenses and inspections necessary for the proper execution and completion of the Work which are either customarily secured after execution of a contract for construction or are legally required prior to the date of this Agreement.

 

3.2.10      Laws and Regulations

 

1.     Design Builder shall give all notices and comply with all Laws and Regulations of the place of the Project which are applicable to furnishing and performance of the Work. Except where otherwise expressly required

 

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by applicable Laws and Regulations, Owner shall not be responsible for monitoring Design Builder’s compliance with any Laws or Regulations.

 

2.     If Design Builder performs any Work knowing or having reason to know that it is contrary to Laws or Regulations, Design Builder shall bear all costs arising therefrom.

 

3.     Changes in Laws and Regulations not known or foreseeable on the date of receipt of Proposals having an effect on the cost or time of performance may be the subject of a claim under Article B.

 

3.2.11      Design Builder shall pay all license fees and royalties and assume all costs incident to the use in the performance of the Work or the incorporation in the Work of any invention, design, process, product or device which is subject of patent rights or copyrights held by others. If a particular invention, design, process, product or device is specified in the Conceptual Documents for use in the performance of the. Construction and if to the actual knowledge of Owner its use is subject to patent rights or copyrights calling for the payment of any license fee or royalty to others, the existence of such rights shall be disclosed by Owner in the Conceptual Documents. To the fullest extent permitted by Laws and Regulations, Design Builder shall indemnify and hold harmless Owner, from and against all claims, costs, losses and damages (including but not limited to all fees and charges of engineers, architects, attorneys and other professionals and all court or arbitration or other dispute resolution costs) arising out of or resulting from any infringement of patent rights or copyrights incident to the use in the performance of the Work or resulting from the incorporation in the Work of any invention, design, process, product or device not specified in the Conceptual Documents.

 

3.2.12      Use of Site and Other Areas

 

1.     Design Builder shall confine construction equipment, the storage of materials and equipment and the operations of construction workers to those lands and areas permitted by the Owner and other land and areas permitted by Laws and Regulations, rights-of-way, permits and easements, and shall not unreasonably encumber the premises with construction equipment or other materials or equipment. Design Builder shall assume full responsibility for any damage to any such land or area, or to the owner or occupant thereof or of any adjacent land or areas, resulting from the performance of the Construction. Should any claim be made by any such owner or occupant because of the performance of the Construction, Design Builder shall promptly settle with such other party by negotiation or otherwise resolve the claim by arbitration or other dispute resolution proceeding or at law. Design Builder shall, to the fullest extent permitted

 

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by Laws and Regulations, indemnify and hold harmless Owner, Owner’s Consultants and anyone directly or indirectly employed by any of them from and against all claims, costs, losses and damages (including, but not limited to, fees of engineers, architects, attorneys and other professionals and court and arbitration or other dispute resolution costs) arising out of or resulting from any claim or action, legal or equitable, brought by any such owner or occupant against Owner, or any other party indemnified hereunder to the extent caused by or based upon Design Builder’s performance of the Construction.

 

2.     During the performance of the Construction, Design Builder shall keep the premises free from accumulations of waste materials, rubbish and other debris resulting from the Construction. At the completion of the Construction Design Builder shall remove all waste materials, rubbish and debris from and about the premises as well as all tools, appliances, construction equipment, temporary construction and machinery and surplus materials. Design Builder shall leave the Site clean and ready for occupancy by Owner at Substantial Completion. Design Builder shall restore to original condition all property not designated for alteration by the Contract Documents.

 

3.     Design Builder shall not load nor permit any part of any structure to be loaded in any manner that will endanger the structure, nor shall Design Builder subject any part of the Work or adjacent property to stresses or pressures that will endanger it.

 

3.2.13      The Design Builder shall notify the Owner when the Design Builder believes that the Work or an agreed upon portion thereof is substantially completed. If the Owner concurs, the Design Builder shall issue a Certificate of Substantial Completion which shall establish the Date of Substantial Completion, shall state the responsibility of each party for security, maintenance, heat, utilities, damage to the Work and insurance, shall include a list of items to be completed or corrected and shall fix the time within which the Design Builder shall complete items listed therein. Disputes between the Owner and Design Builder regarding the Certificate of Substantial Completion shall be resolved in accordance with provisions of Article 10.

 

3.2.14      The Design Builder shall maintain at the site for the Owner one record copy of the drawings, specifications, product data, samples, shop drawings, Change Orders and other modifications, in good order and regularly updated to record the completed construction. These shall be delivered to the Owner upon completion of construction and prior to final payment.

 

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3.2.15 Unless otherwise provided in the Contract Documents, Design Builder shall directly or through one or more Subcontractors obtain and pay for all permits and licenses necessary for construction. Owner shall assist Design Builder, when necessary, in obtaining such permits and licenses. Design Builder shall pay all governmental charges and inspection fees necessary for the prosecution of the Construction, which are applicable on the date of this Agreement. The Owner is responsible for paying any and all utility company connection charges and/or capital costs related thereto.

 

3.2.16      Design Builder’s General Warranty and Guarantee

 

1.     Design Builder warrants and guarantees to Owner that all Construction will be in accordance with the Contract Documents and will not be defective. This warranty shall be effective for a period of twelve months from the date of substantial completion and will cover all labor and materials to correct any deficiencies. Design Builder’s warranty and guarantee hereunder excludes defects or damage caused by:

 

a.                Abuse, modification or improper maintenance or operation by persons other than Design/Builder, Subcontractors or Suppliers; or

 

b.               Normal wear and tear under normal usage.

 

2.     Design Builder’s obligation to perform and complete the Work in accordance with the Contract Documents shall be absolute. None of the following will constitute an acceptance of Work that is not in accordance with the Contract Documents or a release of Design Builder’s obligation to perform the Work in accordance with the Contract

Documents:

 

a.                Observations by Owner;

 

b.               The making of any progress or final payment;

 

c.                The issuance of a certificate of Substantial Completion;

 

d.               Use or occupancy of the Work or any part thereof by Owner;

 

e.                Any acceptance by Owner or any failure to do so;

 

f.                  Any review and approval of a Submittal;

 

g.               Any inspection, test or approval by others; or

 

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h.               Any correction of defective Construction by Owner

 

3.2.17      Operational Phase: During the Operations Phase, Design Builder shall:

 

1.     Provide assistance in connection with the start-up, testing, refining and adjusting of any equipment or system.

 

2.     Assist Owner in training staff to operate and maintain the Project.

 

3.     Assist Owner in developing systems and procedures for control of the operation and maintenance of and record keeping for the Project.

 

3.3              ADDITIONAL SERVICES

 

3.3.1        The services described in this Paragraph 3.3 are not included in Basic Services unless so identified in Article 14, and they shall be paid for by the Owner as provided in this Agreement, in addition to the compensation for Basic Services. The services described in this Paragraph 3.3 shall be provided only if authorized or confirmed in writing by the Owner.

 

3.3.2        Making revisions in drawings, specifications, and other documents or electronic data when such revisions are required by the enactment or revision of codes, laws or regulations subsequent to the preparation of such documents or electronic data.

 

3.3.3        Providing consultation concerning replacement of Work damaged by fire or other cause during construction, and furnishing services required in connection with the replacement of such Work.

 

3.3.4        Providing services in connection with a public hearing, arbitration proceeding or legal proceeding, except where the Design Builder is a party thereto.

 

3.3.5        Providing coordination of construction performed by the Owner’s own forces or separate contractors employed by the Owner, and coordination of services required in connection with construction performed and equipment supplied by Owner.

 

3.3.6        Submitting Construction Documents for review and approval by the Owner. Construction Documents may include drawings, specifications, and other documents and electronic data setting forth in detail the requirements for construction of the Work.

 

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3.3.7        Preparing a set of reproducible record documents or electronic data showing significant changes in the Work made during construction.

 

3.3.8        Providing additional assistance for training personnel, preparing manuals or consulting during operation outside of the Scope of Basic Services.

 

ARTICLE 4 - TIME

 

4.1                                 Unless otherwise indicated, the Owner and the Design Builder shall perform their respective obligations as expeditiously as is consistent with reasonable skill and care and the orderly progress of the Project.

 

4.2                                 Time limits stated in the Contract Documents are of the essence. The Work to be performed under this Agreement shall commence upon receipt of a Notice To Proceed unless otherwise agreed and, subject to authorized Modifications, Substantial Completion shall be achieved on or before the date established in Article 14.

 

4.3                                 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 so the Owner ban occupy or utilize the Work for its intended use.

 

4.4                                 Based on the Design Builder’s Scope of Services, a construction schedule shall be provided consistent with Paragraph 4.2 above.

 

4.5                                 If the Design Builder is delayed at any time in the progress of the Work by an act or neglect of the Owner, Owner’s employees, or separate contractors employed by the Owner, or by changes ordered in the Work, or by labor disputes, fire, unusual delay in deliveries, adverse weather conditions not reasonably anticipatable, unavoidable casualties or other causes beyond the Design Builder’s control, or by delay authorized by the Owner pending arbitration, or by other causes which the Owner and Design Builder agree may justify delay, then Contract Time shall be reasonably extended by Change Order.

 

ARTICLE 5 - PAYMENTS

 

5.1                                 PROGRESS PAYMENTS

 

5.1.1        The Design Builder shell deliver to the Owner itemized Applications for Payment in such detail as indicated in Article 14.

 

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5.1.1.1     Application shall be made on AlA forms G702 and G703 or similar documents. Two percent retainage shall be held by the owner on up to fifty percent value of the original contract value after which no additional retainage will be held.

 

5.1.2        Within ten (10) days of the Owner’s receipt of a properly submitted and correct -Application for Payment, the Owner shall make payment to the Design Builder.

 

5.1.3        The Application for Payment shall constitute a representation by the Design Builder to the - Owner that the design and construction have progressed to the point indicated; the quality of Work covered by the application is in accordance with the Contract Documents; end the Design Builder is entitled to payment in the amount requested.

 

5.1.4        Upon receipt of payment from the Owner, the Design Builder shall promptly pay the other design professionals end each contractor the amount to which each is entitled in accordance with the terms of their respective contracts.

 

5.1.5        The Owner shall have no obligation under this Agreement to pay or to be responsible in any way for payment to another design professional, or a contractor performing portions of the Work.

 

5.1.6        Neither progress payment nor partial or entire use or occupancy of the Project by the Owner shall constitute acceptance of Work not in accordance with the Contract Documents.

 

5.1.7        The Design Builder warrants that title to all construction covered by an Application for Payment will pass to the Owner no later than the time of payment. The Design Builder further warrants that upon submittal of an Application for Payment all construction for which payments have been received from the Owner shall be free and clear of liens, claims, security interests or encumbrances in favor of the Design Builder or any other person or entity performing construction at the site or furnishing materials or equipment relating to the construction.

 

5.1.8        Upon substantial completion, the Owner shall pay the Design Builder the retainage, if any, less the reasonable cost to correct or complete incorrect or incomplete Work. Final payment of such withheld sum shall be made upon correction or completion of such Work.

 

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5.2.         FINAL PAYMENT

 

5.2.1        When the Work has been completed and the contract fully performed, the Design Builder shall submit a final application for payment to the Owner, who shall make final payment within ten (10) days of receipt.

 

5.2.2        The making of final payment shall constitute a waiver of claims by the Owner except those arising from:

 

5.2.2.1     liens, claims, security interests or encumbrances arising out of the Contract and unsettled;

 

5.2.2.2     failure of the Work to comply with the requirements of the Contract Documents; or

 

5.2.2.3     terms of special warranties required by the Contract Documents

 

5.2.3        Acceptance of final payment shell constitute a waiver of all claims by the Design Builder except those previously made in writing and identified by the Design Builder as unsettled at the time of final Application for Payment.

 

5.3 INTEREST PAYMENTS

 

5.3.1        Payments due to the Design Builder under this Agreement which are not paid when due shall bear interest from the date due at the rate specified in Article 13, or in the absence of a specified rate, at the legal rate prevailing where the Project is located.

 

ARTICLE 6 - PROTECTION OF PERSONS AND PROPERTY

 

6.1            The Design Builder shall be responsible for initiating, maintaining and providing supervision of safety precautions and programs in connection with the performance of this Agreement.

 

6.2           The Design Builder shall take reasonable precautions for the safety of, end shell 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 end materials and equipment to be incorporated therein, whether in storage on or off the site, under care, custody, or control of the Design Builder or the Design Builder’s contractors; and (3) other property at 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.

 

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6.3           The Design Builder shall give notices and comply with applicable laws, ordinances, rules, regulations and lawful orders of public authorities bearing on the safety of persons or property or their protection from damage, injury or loss.

 

6.4           The Design Builder shall promptly remedy damage and loss (other than damage or loss insured under property insurance provided or required by the Contract Documents) to property at the site caused in whole or in part by the Design Builder, a contractor of the Design Builder or anyone directly or indirectly employed by any of them, or by anyone for whose acts they may be liable.

 

ARTICLE 7 - INSURANCE AND BONDS

 

7.1          PERFORMANCE, PAYMENT AND OTHER BONDS

 

7.1.1        If it is required by the Primary Lender, Design Builder shall furnish performance and payment Bonds, each in an amount at least equal to the Contract Price as security for the faithful performance and payment of all Design Builder’s obligations to furnish, provide and pay for Construction and related materials under the Contract Documents. These Bonds shall remain in effect at least until one year after the date when final payment becomes due, except as provided otherwise by Laws or