Portions of this exhibit marked "* * *"
have been redacted and filed separately with the Securities and
Exchange Commission in connection with a request for confidential
treatment pursuant to Rule 24b-2 under the Securities Exchange Act
of 1934, as amended.
Exhibit 10.64
CONTRACT
FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
BETWEEN
BOISE POWER PARTNERS JOINT VENTURE
CONSISTING OF
KIEWIT POWER ENGINEERS CO.
AND
TIC - THE INDUSTRIAL COMPANY
AND
IDAHO POWER COMPANY
FOR
LANGLEY GULCH POWER PLANT
CONTRACT
FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
BETWEEN
BOISE POWER PARTNERS JOINT VENTURE AND IDAHO POWER
COMPANY
TABLE OF CONTENTS
|
Article 1
|
RESPONSIBILITIES OF CONTRACTOR
|
|
Article 2
|
RESPONSIBILITIES OF OWNER
|
|
Article 3
|
COMPENSATION
|
|
Article 4
|
PAYMENT TERMS
|
|
Article 5
|
NOTICE TO PROCEED
|
|
Article 6
|
INSPECTION OF THE WORK
|
|
Article 7
|
(Intentionally Deleted)
|
|
Article 8
|
FACILITY TESTS
|
|
Article 9
|
SUBSTANTIAL AND FINAL COMPLETION
|
|
Article 10
|
CHANGES
|
|
Article 11
|
WARRANTIES
|
|
Article 12
|
TITLE
|
|
Article 13
|
DEFAULT
|
|
Article 14
|
TERMINATION
|
|
Article 15
|
SUSPENSION
|
|
Article 16
|
FORCE MAJEURE
|
|
Article 17
|
INSURANCE
|
|
Article 18
|
RISK OF LOSS
|
|
Article 19
|
INDEMNIFICATION
|
|
Article 20
|
INTELLECTUAL PROPERTY INFRINGEMENT
|
|
Article 21
|
CONFIDENTIAL INFORMATION
|
|
Article 22
|
RIGHTS TO INTELLECTUAL WORK PRODUCT
|
|
Article 23
|
ASSIGNMENT
|
|
Article 24
|
LIENS
|
|
Article 25
|
NOTICES AND COMMUNICATIONS
|
|
Article 26
|
LIMITATIONS OF LIABILITY
|
|
Article 27
|
LIQUIDATED DAMAGES
|
|
Article 28
|
MISCELLANEOUS
|
|
Article 29
|
DISPUTE RESOLUTION
|
LIST OF EXHIBITS
|
DEFINITIONS
|
Exhibit A
|
|
SCOPE OF WORK AND TECHNICAL SPECIFICATIONS
|
Exhibit B
|
|
SCHEDULE OF VALUES
|
Exhibit C
|
|
OWNER FURNISHED EQUIPMENT/OWNER’S SCOPE
|
Exhibit D
|
|
FACILITY SITE DATA/GEOTECHNICAL REPORT
|
Exhibit
E
|
|
PERFORMANCE GUARANTEES
|
Exhibit F
|
|
CONTRACTOR’S OBLIGATIONS TOWARDS OFE
|
Exhibit G
|
|
PERMITS
|
Exhibit H
|
|
PRE-APPROVED EQUIPMENT SUPPLY SUBCONTRACTORS
|
Exhibit I
|
|
SAFETY
MANUAL
|
Exhibit
J
|
|
FORM OF CORPORATE GUARANTEE
|
Exhibit K
|
|
PROJECT SCHEDULE
|
Exhibit L
|
|
ENGINEERED EQUIPMENT
|
Exhibit M
|
|
FORM OF
NOTICE OF SUBSTANTIAL COMPLETION
|
Exhibit
N
|
|
FORM OF NOTICE OF FINAL COMPLETION
|
Exhibit O
|
|
T&M RATE SHEET
|
Exhibit P
|
|
FORM OF PARTIAL LIEN RELEASE
|
Exhibit Q
|
|
FORM OF
FINAL LIEN RELEASE
|
Exhibit
R
|
CONTRACT FOR
ENGINEERING, PROCUREMENT AND CONSTRUCTION SERVICES
NEW PLYMOUTH POWER PLANT
THIS CONTRACT (“Contract”) is made and entered into
this ______ day of April, 2009, by and between Idaho Power Company,
an Idaho corporation with offices located at 1221 West Idaho
Street, Boise, Idaho (“Owner”) and Boise Power Partners
Joint Venture, a joint venture consisting of Kiewit Power Engineers
Co., a Delaware corporation with offices located at 7311 W 132nd
St., Suite 300, Overland Park, KS
66213, and TIC-The Industrial Company, a Delaware corporation with
offices located at 2211 Elk River Road, Steamboat Springs, CO 80487
(“Contractor”), for the design, engineering,
procurement and construction services, as more fully described
herein.
RECITALS
WHEREAS, Owner wishes to have Contractor furnish certain
engineering, procurement, construction management and construction
services related to the Project, as more fully described in this
Contract; and
WHEREAS, Owner desires to furnish certain plant equipment,
interconnects, the Facility Site, and other items related to the Project, as more
fully described in this Contract; and
WHEREAS, Contractor desires to engineer, procure materials, manage
construction, construct and start up
the Project, as more fully described in this Contract.
NOW THEREFORE, in consideration of
the mutual covenants and agreements herein contained and other good
and valuable consideration, the receipt of which is hereby
acknowledged, and intending to be legally bound, the Parties hereto
agree as follows:
ARTICLE 1 – RESPONSIBILITIES OF CONTRACTOR
1.1
Performance of the Work. Contractor shall furnish or cause
to be furnished all Work in accordance with the terms and
conditions of this Contract, and in compliance with all
Governmental Approvals and Governmental Rules applicable to the
prosecution of the Work. Contractor shall design, install, and test
Project systems in a safe manner, using qualified, competent and,
where necessary, licensed personnel.
1.2 Design and
Engineering. Contractor
shall furnish detailed design and engineering of the Work including
appropriate specification of equipment, materials and systems to be
incorporated into the Work. Engineering shall be based on the
preliminary engineering, design criteria, and other information
contained in Exhibit B . Contractor’s engineering
services shall include the preparation of drawings, specifications,
schedules, calculations, documents, and estimates, and coordination
with the engineering efforts of Subcontractors.
1.3 Procurement.
Contractor shall procure and make
payments for Engineered Equipment, materials, equipment, supplies,
and services to be included in the Work by Subcontractors.
Contractor shall also perform such inspection, expediting, quality
surveillance, and traffic services as Contractor deems necessary in
connection with such procurement.
1.4 Construction . Contractor shall perform services to
construct the Work, including installation of OFE, furnishing
management, labor, equipment, tools, and temporary facilities
necessary for such construction. Contractor shall handle and
warehouse materials, supplies and equipment required for such
construction and materials, supplies
and equipment supplied by Owner and used by Contractor and
Subcontractors.
1.5
Start-Up, Testing, and Initial Operation. Contractor shall
perform the start-up, testing and initial operation as described in
Exhibit B . Contractor shall conduct the Performance Tests
as described in Exhibit F . Contractor shall provide first
fill of all lubricants.
1.6 Spare
Parts. Contractor shall have the right to use Owner’s
operating spare parts on a “use and replace” basis.
Contractor shall promptly replace at its expense any such spare
parts Contractor uses from Owner’s inventory. Operating spare
parts for OFE that are used by Contractor will be provided at
Owner’s expense and not replaced by Contractor; provided, if
Contractor must use a spare part for OFE because of negligence by
Contractor, then Contractor may use such spare part, but must
replace it.
1.7
Securing Governmental Approvals. Contractor shall secure
those Governmental Approvals that are listed in Exhibit H as
Contractor’s responsibility. Contractor shall on a timely
basis provide all customary and reasonably necessary support to
Owner in connection with Owner’s securing of Governmental
Approvals under Section 2.5 and that are listed in
Exhibit H as Owner’s responsibility.
1.8
Compliance with Governmental Approvals. Contractor shall
design and construct the Work so that, if properly operated and
maintained, and if Owner meets its obligations under the Contract,
the Work will be in compliance with
the technical requirements of all applicable Governmental
Approvals.
1.9
Independent Contractor. Except as may be expressly set forth
herein to the contrary, Contractor is an independent contractor and
nothing contained herein shall be construed as constituting any
relationship with Owner other than that of Owner and independent
contractor, nor shall it be construed as creating any relationship
whatsoever between Owner or Owner’s Representative and
Contractor’s employees. Except as expressly limited in this
Contract, Contractor shall be entitled to exercise the right to
hire, discharge, promote and transfer its employees; to select and
remove foreman or other persons at other levels of supervision; to
establish and enforce reasonable standards of production; to
introduce, to the extent feasible, labor saving equipment and
materials; to determine the number of craftsmen necessary to
perform a task; and to establish, maintain, and enforce rules and
regulations conducive to efficient and productive operations.
Notwithstanding anything to the contrary herein, Owner reserves the
right to prohibit such person(s) as it deems advisable from
entering onto the Facility Site without liability to Contractor
after notifying Contractor of the person(s) prohibited and the
reasons therefore, provided however that any such decision by Owner
shall entitle Contractor to an equitable adjustment to the Contract
Price and/or Project Schedule pursuant to a Change.
1.10 Responsibility
for Subcontractors and Agents. Contractor may subcontract
portions of the Work to any Person without further approval by
Owner. Notwithstanding any agreement with any Subcontractor(s),
Contractor shall be solely responsible for the Work, and has
complete and sole responsibility as a principal for its agents and
all others it hires to perform or assist in performing the Work.
However, Contractor will select from pre-approved first tier
equipment supply Subcontractors as identified in Exhibit I .
Equipment supply Subcontractors that are not on this list and which
have a contract value greater than *** shall be submitted to Owner
for approval, which shall not be
unreasonably withheld.
1.11 Progress
Reports. Contractor shall submit to the Owner monthly reports
describing the status of the Work in reasonable detail, which shall
include information showing actual progress against the Project
Schedule. Contractor shall provide a budget update with each
monthly report showing total amount
expended and billed to date and remaining contract
dollars.
1.12 Publicity.
Contractor shall obtain Owner’s prior written approval of the
text of any external announcement,
publication, or other type of public communication concerning the
Work or the Facility prior to the release of the same by
Contractor. Contractor shall provide that a similar obligation is
placed on Subcontractors.
1.13 Safety.
Contractor shall implement and administer for the Project, a safety
and health program subject to approval of Owner, and attached
hereto as Exhibit J , including development of a safety
manual for the Project establishing
Contractor and Subcontractor safety guidelines and requirements.
During performance of the Work, Contractor shall take reasonable
precautions for the safety of persons. Contractor shall require
Subcontractors working on the Facility Site to adhere to the safety
and health program established for the Project. Owner shall require
its employees and subcontractors working on the Facility Site to
adhere to the safety and health program established for the
Project, as well as any applicable OSHA requirements.
1.14 Site
Security. Contractor shall be responsible for the security of
the Work and the Facility Site after mobilization of
Contractor’s forces at the Facility Site during such times
that Contractor’s forces are physically present on the Facility Site, except
as excused by a Force Maj eure event.
1.15 Contractor
Representative. Contractor shall designate and identify by
Notice to Owner its Project Manager, who shall act as Owner’s
primary point of contact with Contractor with respect to the
prosecution of the Work.
1.16 Corporate
Guarantees. No later than thirty (30) Business Days after the
date of execution of this
Contract, Contractor shall deliver to Owner, in a form attached
hereto as Exhibit K , corporate guarantee from Kiewit Energy & Power Inc. guaranteeing
the performance of Contractor.
1.17
OFE. Contractor shall act as an agent to administer the
Siemens subcontract pursuant to Exhibit G .
ARTICLE 2 – RESPONSIBILITIES OF
OWNER
2.1
Owner Furnished Equipment. Owner shall furnish, at its
expense, OFE, including the Siemens SGT-6-PAC5000F combustion
turbine generator (“CTG”) and the SST-700HP –
900RH steam turbine generator (“STG”), which shall be
delivered undamaged to the Facility Site or to the designated rail
siding at the time specified in the Project Schedule, and shall be
in compliance with the requirements of Exhibit D of this
Contract and shall be free from defects and deficiencies. All OFE
shall be in a condition which does not increase Contractor’s
cost or delay the progress of the Work. Any increase in
Contractor’s cost or time of
performance due to a failure to comply with this Section 2.1
, including the timely delivery of the OFE, shall be treated as an
event entitling Contractor to an equitable adjustment under
Article 10 below. Owner shall retain payment obligations for
OFE contracts, subcontracts or other items assigned by Owner to
Contractor, if any; however, payments are not to be released
without first providing Contractor prior notice and an opportunity
to comment.
2.2
Cooperation with Contractor. Owner shall cooperate with
Contractor during the performance of this Contract. Such
cooperation shall include timely supply of all those items,
personnel, services, and information required to be supplied by
Owner under this Contract, including but not limited to the OFE; no
material interference with Contractor’s agents, employees, or
Subcontractors; and timely administration of all of Owner’s
obligations under this Contract.
2.3
General Responsibilities. Owner shall furnish the following
with respect to the Project:
a) provide a Facility Site of sufficient size, free of Hazardous
Wastes or Materials, including necessary easements, staging areas, and
unrestricted access;
b) provide environmental remediation of the Facility Site, if
required, except for any environmental remediation required due to the acts or omission
of Contractor or any Subcontractor;
c) furnish available geological and other Facility Site data,
including identification of any preexisting underground facilities,
on which Contractor shall be entitled to rely, which shall be set
forth in Exhibit E ;
d) Site Utilities / Consumables including Fuel:
i) Construction Utilities / Consumables -
Owner will provide adequate water for the Project in accordance with required specifications
including related coordination with the applicable utilities.
Construction power (including start-up, testing and commissioning)
and related coordination with the local utilities is by
Owner.
ii) Start-up, Testing and Commissioning Utilities /
Consumables - Owner will provide all fuel, reagents, consumables,
lubricants (except first fill of lubricants by Contractor),
chemicals, electrical power including back-feed, water, sanitary
and firewater at required specifications, through start-up, testing and through to Final
Completion.
e) Owner will provide start-up and operational
spare parts in time to support start-up, testing and commissioning
of the Project. Contractor shall be allowed to utilize these spares
as needed pursuant to Section 1.6 above;
f) Owner will provide all necessary permits, licenses and other
Governmental Approvals excluding those listed as Contractor’s
responsibility pursuant to Exhibit H . Any development,
start-up, operation, building, use, and environmental type
Governmental Approvals not listed on Exhibit H shall be
supplied by Owner;
g) Owner will coordinate and pay for any activities of the Owner
Engineer, if any, and other required
costs for development purposes;
h) Owner will coordinate and pay for all utility and
interconnection related system studies and interface requirements
and will provide available service utility and other interface data
on which Contractor shall be
entitled to rely and which shall be set forth in Exhibit
E;
i) All interconnects, backfeed power, natural gas, water,
construction power, chemicals, Owner- furnished Governmental
Approvals, Owner-furnished spare parts, technical assistants,
operators
and other Owner obligations shall be supplied by Owner in
quantities and qualities as required, no later than dates indicated on the Project
Schedule;
j)
Owner will furnish any required demineralized water production
mobile treatment system per the Project Schedule to support the start-up and
commissioning activities of the Project;
k)
Owner will provide any shop equipment, tools, office furniture, and
laboratory facilities necessary for
operation of the Project;
l)
Owner will arrange for disposal or sale of energy generated by the
Project during commissioning and any
Performance Test;
m)
Owner will provide other items as specifically detailed in
Exhibit D as Owner’s obligations, or as otherwise specified in the Contract;
and
n)
All OFE and Owner specified equipment of standard production
configuration and proven technology.
2.4
Owner’s Representative. Owner shall designate and
identify by Notice to Contractor its Owner’s representative,
who shall act as Contractor’s primary point of contact with
Owner with respect to the prosecution of the Work.
2.5
Operations Personnel. After Notice from Contractor, Owner
shall, within fifteen (15) days prior to commencement of the
Performance Tests, provide qualified, competent, and, where
necessary, licensed operations and maintenance personnel for
testing, start-up and initial operation of the Facility.
Owner shall provide that such
personnel perform the duties to which they are assigned in
accordance with generally accepted practices and standards of the
industry. Owner shall supply, or cause to be supplied, sufficient
small tools to facilitate on-the-job training of the operations and
maintenance personnel. Owner shall be responsible for the negligent
acts or omissions and willful misconduct of its operating and
maintenance personnel.
ARTICLE 3 – COMPENSATION
3.1
Contract Price. Owner shall pay Contractor the Contract
Price, which shall be paid in accordance with Sections 4.1
and 4.2 , subject to increases or decreases only as
specified in Changes approved in accordance with Article 10,
or as set forth in Section 3.5 below.
3.2 Other
Compensation. In addition, Owner shall pay to Contractor: (i)
certain costs of termination
of this Contract in accordance with
Article 14 ; (ii) reimbursement for certain costs of Changes
pursuant to Article 10 ; (iii) interest on late payment as
set forth in Section 4.3 ; and (iv) the ongoing suspension
costs set forth in Section 15.4 .
3.3
Purchase of Surplus Materials. Subject to mutually agreeable
terms, Owner shall have the option to purchase any or all surplus
construction materials and any supplies remaining on the Facility
Site at Substantial Completion.
3.4
Taxes. Contractor shall pay: (i) all payroll and other
related employment compensation taxes for Contractor’s
employees; (ii) all sales, use, and property taxes applicable to
the Contractor’s ownership, purchase or use of small tools,
consumables, expendables, and construction equipment required to
perform the Work, (iii) all sales, use, gross receipts and excise
taxes imposed on the Contractor’s purchase, sale, use or
storage of equipment, materials, and any other items procured by
Contractor for purposes of installation into, affixation or
attachment to, or incorporation into the Facility to be constructed
for Owner or to otherwise be provided by Contractor to Owner
pursuant to this Contract unless Owner has provided written
instructions to Contractor identifying specific items eligible for
exemption from Idaho sales and use taxes; and (iv) federal, state
and other taxes which may be assessed on Contractor’s net
income from the Work (collectively, the “Contractor
Taxes”). Owner is responsible for: (i) all sales, use, gross
receipts and excise taxes imposed on OFE; and (ii) property taxes
imposed on the Facility, the Facility Site, OFE and any other
equipment, materials, and all other items delivered to the Facility
Site for installation into, affixation or attachment to, or
incorporation into the Facility (collectively, the “Project
Taxes”). Contract Price includes Contractor Taxes and
excludes all Project Taxes. Owner shall directly reimburse
Contractor, in addition to Contract Price, for any and all Project
Taxes incurred and actually paid by Contractor and for the actual
cost incurred to post any necessary tax bond. Owner shall defend
and indemnify Contractor from and against any and all claims for,
and resulting liability for Project Taxes and any Idaho sales and
use taxes relating to pollution control equipment and related
penalties and interest, and any dispute resolution costs and
attorneys’ fees (including costs of enforcement of this
provision) that may be asserted on all items which Contractor
purchased under exemption certificates or written instructions
provided by Owner to Contractor and for which taxes are later
assessed. At Owner’s expense and only with Contractor’s
consent, Owner will have the right to direct the basis on which any
tax assessment will be paid or contested and to control any contest
leading to the settlement of assessed taxes. Owner retains the
right to choose the attorneys who will represent Contractor’s
and/or Owner’s interest regarding any tax assessments and/or
litigation.
It is acknowledged
between the Parties that the Owner believes the Work contains
certain items of property that may
qualify under Idaho Code Section 63-3622X as exempt from the State
of Idaho’s sales and use tax as pollution control equipment.
It is to the mutual advantage of both Parties to identify and claim
these items of property as exempt prior to providing sales or use
tax remittance to the State of Idaho. Contractor will use
commercially reasonable efforts to identify, based on information
provided by Owner, such property prior to placing orders to procure
it. Owner shall provide written instructions to Contractor
identifying materials, machinery, or devices that will be procured
for the Work upon which Contractor is to exclude Idaho sales or use
taxes on the basis of exemption pursuant to Idaho Code Section
63-3622X.
It is acknowledged by the Parties
that, pursuant to Idaho law as of the date of this Contract, all
shipping and handling charges do not attract Idaho sales or use tax
and will be stated separately in all invoices issued to Contractor.
Shipping refers to any charge incurred for the delivery, freight,
and transportation. Handling refers to the fees imposed by the
seller for the preparation of property for shipping.
Contractor shall, prior to Final
Acceptance, and with the Owner’s assistance, provide to Owner
a listing of equipment included in the Work that meets the
requirements of Idaho Code Section 63-602P as property that
contributes to the elimination, control or prevention of air or
water pollution.
If a change order results in an increase or decrease in the
Contract Price, the revised Contract Price (reflecting the increase
or decrease as a result of the change order) shall include all
Contractor Taxes and exclude all
applicable Project Taxes. Owner shall reimburse Contractor for all
applicable Project Taxes paid by Contractor in accordance with the
provisions of this Section 3.4.
3.5
Engineered Equipment Target Price Adjustments. Purchase
orders and subcontracts will be awarded by Contractor for the
procurement of the Engineered Equipment. The value of the purchase
orders and the subcontracts will be recorded and reported to the
Owner monthly throughout the course of the Work. Monthly reporting
will also include a projected Engineered Equipment Cost, that will
be compared to the Engineered Equipment Target Price. The Parties
shall reconcile the Engineered Equipment Cost with the Engineered
Equipment Target Price no later than two weeks after
Contractor’s last purchase of major Engineered Equipment,
within thirty (30) days after each of the Substantial Completion
Date, the Final Completion Date, and the conclusion of the Warranty
Period, unless the Parties otherwise agree. Upon conclusion of each
reconciliation, the Parties shall agree on a value for the
Engineered Equipment Cost, as applicable, and, to the extent excess
costs or shared savings have not yet been accounted for, either (i)
the Contractor shall make a reimbursement to Owner subject to the
limit set forth in Sections 3.6 (ii) Owner shall make a payment to
Contractor subject to the limit set forth in Section 3.6, or (iii)
no reimbursement will be required.
3.6
Engineered Equipment Target Price. The basis for the
Engineered Equipment Target Price is as listed in Exhibit M
and the technical specifications in Exhibit B applicable to
the Engineered Equipment. The Engineered Equipment Target Price, as
shown on Exhibit M , is ***. It is the intent of the Parties
that Contractor and Owner share the potential risks and benefits
associated with the Engineered Equipment Target Price. If the
Engineered Equipment Cost exceeds the Engineered Equipment Target
Price, up to seven million, nine hundred eight-two thousand, four
hundred thirty-three dollars ($7,982,433), the Owner and the
Contractor shall equally bear the excess costs. To the extent the
Engineered Equipment Cost exceeds the Engineered Equipment Target
Price by more than seven million, nine hundred eight-two thousand,
four hundred thirty-three dollars ($7,982,433), the Owner shall be
solely responsible for all costs above the seven million, nine
hundred eight-two thousand, four hundred thirty-three dollar
($7,982,433) difference. If the Engineered Equipment Cost is less
than the Engineered Equipment Target Price, up to eight million,
seventeen thousand, five hundred sixty-seven dollars ($8,017,567),
the Owner and the Contractor shall share equally in the savings
difference. To the extent the savings difference is greater than
eight million, seventeen thousand, five hundred sixty-seven dollars
($8,017,567), the Owner shall be solely entitled to all such
savings .
The Engineered Equipment Target Price shall
include the cost of the following items:
a)
Final detailed design scope adjustments required to provide a
facility meeting all requirements of the Contract (without regard to any
Changes).
b)
Vendor technical field services, required to support the
Contractor.
c)
Revisions or re-order of equipment caused by Contractor’s
engineering changes.
d)
Cost of all change orders issued to Engineered Equipment suppliers
and subcontractors initiated by the
Contractor.
The Engineered Equipment Target Price does not cover or incorporate
the costs associated with any Change, and any such costs shall be
the sole responsibility of Owner. In the event Contractor incurs
any additional costs relating to the Engineered Equipment due to a
Change or any additional sales or use tax, Contractor shall submit a Change Order in
accordance with Article 10 .
3.7
Engineered Equipment Target Price Disclosure and Rights. The
Contractor shall provide the Owner with copies of all purchase
orders, material contracts and subcontracts, including all change
orders and amendments, for all Engineered Equipment for the purpose
of allowing Owner to audit the Engineered Equipment
Cost.
Any liquidated damages
paid by any Subcontractor or Subcontractor’s subcontractor
shall not affect the Engineered Equipment Cost. The Owner shall not
share in the benefit of any liquidated damages payable by any Engineered Equipment Subcontractor or
Subcontractor’s subcontractor, as the damages are to
compensate the Contractor for costs resulting from failure of the
Engineered Equipment vendors to perform. Any back-charges, re-work
or other such work associated with the Engineered Equipment shall
not affect the Engineered Equipment Cost. The Owner shall not share
in the reduction of any Engineered Equipment contracts related to
Contractor’s back-charges, re-work or any other such work
associated with Engineered Equipment.
3.8 Labor
Adjustment. Contractor and Owner agree that portions of the
Contract Price as set forth in Exhibit C were established on
a firm price basis. Owner has requested and Contractor has agreed
to a seven month delay in issuing the Notice to Proceed. There may
be escalation on the labor portion of the Contract Price arising
from this delay; if so, the labor portion of the Contract Price
will qualify for adjustment as set forth in this Section. This
shall be the sole adjustment to the Contract Price for the impacts
to the labor portion of the Contract Price arising from the seven
month delay in issuing the Notice to Proceed. This Section shall in
no way limit Contractor's rights to other adjustments that are
allowed per Article 10 , such as: (a) impacts arising from
further delay, if any, in issuing the Notice to Proceed; and (b)
impacts arising from any other events.
(a) Labor
Indexes. For the purpose of this labor adjustment provision,
the Labor Indexes used shall be based on labor cost surveys
performed by a mutually acceptable independent third party firm.
Such surveys shall be formulated to accurately reflect the cost of
labor for the Project and the regional area, and shall consider
wages for applicable craft labor groups. The Labor Indexes shall
take into account the Labor Portion of each labor group as a fixed
percentage of the labor portion of the Contract Price as provided
below. The parties agree that labor cost surveys for the
Northwestern United States prepared by PAS, Inc. of Saline, Michigan, are mutually
acceptable.
A Base Labor Index (BLI)
shall be established using actual Survey Labor Rates dated on or
about March 1, 2009. For example:
|
|
|
|
Example Survey
|
|
|
|
Labor
|
|
Average
|
|
|
CRAFT
|
Portion
|
|
Hourly Wage Rate
|
|
|
Boilermakers
|
10%
|
X
|
$20.00 =
|
2.00
|
|
Electricians
|
20%
|
X
|
$20.00 =
|
4.00
|
|
Iron Workers, Structural
|
2%
|
X
|
$20.00 =
|
0.40
|
|
Millwrights
|
15%
|
X
|
$20.00 =
|
3.00
|
|
Pipefitters
|
16%
|
X
|
$20.00 =
|
3.20
|
|
Welders
|
17%
|
X
|
$20.00 =
|
3.40
|
|
Base Labor Index (BLI)
|
|
|
SUM =
|
16.00
|
A Periodic Labor Index (PLI)
shall be established using actual Survey Labor Rates dated on or
about September 1, 2009. For example:
|
|
Example Survey
|
|
Labor
|
Average
|
CRAFT
|
Portion
|
|
Hourly Wage Rate
|
|
|
Boilermakers
|
10%
|
X
|
$25.00 =
|
2.50
|
|
Electricians
|
20%
|
X
|
$18.00 =
|
3.60
|
|
Iron Workers, Structural
|
2%
|
X
|
$20.00 =
|
0.40
|
|
Millwrights
|
15%
|
X
|
$22.00 =
|
3.30
|
|
Pipefitters
|
16%
|
X
|
$30.00 =
|
4.80
|
|
Welders
|
17%
|
X
|
$20.00 =
|
3.40
|
|
Periodic Labor Index
(PLI)
|
|
|
SUM =
|
18.00
|
The BLI and PLI shall be calculated to two
decimal places.
(b) Adjustment Calculation. If the PLI is less than or equal
to the BLI, the Contract Price shall not be adjusted. If the PLI is
greater than the BLI, a Cost Increase to the Contract Price shall
be calculated as follows:
• Adjustment
Percentage ( AP ) = ***
• Cost
Increase = ***
The AP shall be calculated to four
decimal places. However, in no case shall the Cost Increase exceed
***. For example:
AP = ***
Computed Cost Increase =
***
*** (cap); therefore, a change order for the Cost Increase of ***
would be executed.
(c) Price Adjustment & Billing. The price adjustment
calculation shall be performed by Contractor within the pay period after the Survey Labor
Rates dated on or about September 1 st , 2009, are
published. If a Cost Increase results, the parties shall
immediately execute a change order for the Cost Increase in
accordance with Article 10 . The Contractor may submit an
invoice for the Cost Increase at any time after execution of such
change order and payment shall be made in accordance with
Article 4 .
ARTICLE 4 – PAYMENT
TERMS
4.1
Payment to Contractor.
a.
Subject to the terms of this Contract, Owner shall make payments to
Contractor on a monthly basis in accordance with the Schedule of
Values set forth in Exhibit C, as it may be adjusted by a Change.
Payments due Contractor under this Contract shall be electronically
transferred by wire transfer to the bank account and in accordance
with the bank instructions identified in Contractor’s most
recent invoice in immediately available funds no later than the
payment due date. Invoice number and project name shall be
referenced in the bank wire reference fields. All payments shall be
made in U.S. Dollars. To ensure that Contractor remains cash flow
positive at all points during the Project, taking into account
timing of payments and commitments to Subcontractors/vendors as may
be required, Contractor requires significant payments upon receipt
of the FNTP as set forth in the Schedule of Values. Payments made
to Contractor pursuant to this Contract shall in no way imply
approval or acceptance of the Work. Neither acceptance of the Work
nor payment by Owner shall be deemed to be a waiver of
Owner’s rights to enforce any obligations on Contractor
hereunder or the recovery of damages for defective Work not
discovered by Owner at the time of final inspection. Except as set
forth in Section 4.2(d) below, Owner shall not be entitled to retain any amount from
Progress Payments due Contractor hereunder.
b.
Owner shall pay Contractor the applicable milestone payments listed
in the Schedule of Values upon receipt of documentation sufficient
for Owner to verify that the corresponding milestone has been
met.
c.
Payment requests will be made monthly and shall not differ from the
cash flow by more than *** without a minimum of thirty (30) days
notice to the Owner. After receiving notice of the proposed
expenditure difference, Owner shall review and approve the
differing expenditure within seven (7) days, and such approval will
not be unreasonably withheld. EPC Contractor shall update the
projected cash flow monthly to reflect actual invoices. The cash
flow shall be tied to the Project Schedule.
4.2
Invoicing and Withholding.
(a)
Subject to the provision of this Article 4 , Owner shall
make monthly payments to Contractor equal in amount to the Progress
Payment, in accordance with Exhibit C , for that portion of
the Work that Contractor has completed through the end of the
previous month and for which Contractor has not previously been
paid. Each Progress Payment shall include documentary evidence of
the completion of such portion of the Work described in such
Contractor’s invoice sufficient for Owner to verify that the
portion of the Work has been completed unless the completion of
such portion of the Work is readily discernable without such
documentary evidence.
(b)
On or before the first day of each calendar month, Contractor shall
submit its progress report to Owner covering the previous calendar
month, along with Contractor’s invoice for (i) the payment
next due from Owner, (ii) any amount due for Work for which payment
was to be deducted or for which an earlier Progress Payment was
made in accordance with (i) above, (iii) any amount due on a
price-to-be-determined basis as provided in Section 10.4 ,
and (iv) any other amounts due Contractor under this Contract. In
connection with any invoice for amounts under (iii) or (iv) above,
Contractor shall provide such supporting information as shall be
reasonably necessary to evaluate such invoice, including such
information as Owner may reasonably request to verify the accuracy of the data contained in
the invoice.
(c)
Payments shall be made not later than fifteen (15) days after
Owner’s receipt of Contractor’s invoice therefor.
(d)
If there is any dispute about any amount invoiced by Contractor,
the amount not in dispute shall be promptly paid as described
above, and any disputed amount which is ultimately determined to
have been due shall be paid with interest from the date of
withholding to the date of payment as set forth in Section
4.3 , provided that such dispute does not arise as a result of
inadequate, improper or deficient supporting documentation of the
invoiced amount. Owner will provide a Notice to Contractor within
ten (10) days after receipt of Contractor’s invoice
concerning any invoiced amounts
disputed by Owner.
4.3
Interest on Late Payments. Late payments (excluding
partially withheld payments for deficient work or delayed work)
will be subject to interest at a rate equal to the lesser of ***,
or the maximum amount allowed by law. A Party’s entitlement
to interest under this Article 4 shall be in addition to
such Party’s rights under other provisions of this
Contract.
4.4
Contractor’s Right to Suspend Performance. Contractor
will have the right to suspend work if Owner fails to make any
reasonably undisputed payment to Contractor within ten (10) days of
the date such payment is due, and such suspension shall entitle
Contractor to equitable adjustment(s) to the Contract Price and
Project Schedule.
4.5 Final
Payment. The final Progress Payment shown in the Schedule of
Values shall not be made until the following conditions have been
satisfied or waived by Owner:
(a)
Subject to Article 24 , Contractor shall have furnished
Owner with Contractor’s certification that all claims for
payment for labor and materials for which Contractor is
responsible in connection with the
Work have been paid or satisfied, unless in dispute;
(b)
All Contractor’s and
Subcontractors’ personnel, supplies, equipment, waste
materials, rubbish and temporary facilities shall have been removed
from the Facility Site except as may be needed for ongoing
obligations;
(c)
The Punchlist items shall have been completed; and
(d)
Final Completion shall have occurred, as defined in Article
9 .
Contractor’s acceptance of the final payment listed on the
Schedule of Values shall constitute a full waiver of any and all
claims by Contractor against Owner for payment for Work performed
that are known or should have been
known by Contractor at the time of acceptance of final
payment.
4.6
Prompt Payment to and by Subcontractors. Contractor shall
promptly pay each Subcontractor in accordance with the terms of the
applicable subcontract or purchase order for each
Subcontractor’s performance of the Work. The
Contractor’s subcontract agreements and purchase order
agreements shall require each Subcontractor to make payment in a
similar manner to the entities with which it has contracted for
performance of the Work.
4.7 Owner
Information. Owner shall provide information reasonably
requested by Contractor to enable proper assessment of the risk of
non-payment, which shall be updated upon any material changes to
the information throughout the progress of the Work or upon
periodic request by Contractor. Contractor shall have satisfactory
assurance of payment; no amounts shall be included for risk of
non-payment.
ARTICLE 5 – NOTICES TO PROCEED
5.1 Full
Notice to Proceed. Owner will issue a Full Notice to Proceed
(“FNTP”) to Contractor no later than September 1
st , 2009 which will authorize the Contractor to
commence and complete all Work, and shall grant Contractor full and
unrestricted access to the Jobsite no later than ***. Owner shall
make a payment to Contractor in conjunction with the FNTP pursuant
to the Schedule of Values. The FNTP shall be effective on the first
Business Day following the date of its issuance.. Contractor shall
commence the Work upon the effective date of the FNTP. If said FNTP
has not been given by September 1 st , 2009, or if
Contractor has not been given full and unrestricted access to the
Jobsite by ***, Contractor shall be entitled to an equitable
adjustment to both Project Schedule and Contract Price.
5.2
Termination by Contractor for Non-Issuance of FNTP. If the
FNTP has not been issued by November 1 st , 2009,
Contractor may terminate this Contract by written Notice to Owner.
Any such termination shall be without liability to either Party and
Contractor shall have no right to make a claim against Owner for
payments required by or relating to the Contract, other than for
Contractor’s costs properly incurred pursuant to any work
performed under the Master Services Agreement, dated October 3
rd , 2008, by and between Client and
Contractor.
5.3
Preliminary Access to Jobsite. Owner shall provide
Contractor preliminary access to the Jobsite prior to *** so that
Contractor may begin preliminary site work, including but not
limited to geotechnical testing, grubbing, grading, or other
activities as the Parties may reasonably agree.
ARTICLE 6 – INSPECTION OF THE
WORK
6.1
Right of Access. Owner’s authorized representatives
and permitted assigns shall have the right at all reasonable times
during performance of the Work to inspect the Work and the Facility
and any item of equipment, material, design, engineering, or
service or the workmanship associated therewith (but not including
access to cost or pricing data associated therewith). Contractor
shall arrange for any such inspection of equipment or material on
the Facility Site, and at the point of significant fabrication off
the Facility Site upon reasonable
notice. All costs associated with Owner’s inspections shall
be to Owner’s account. Contractor shall cooperate with Owner
at any reasonable time that Owner shall determine that inspection
of the Work is necessary or appropriate. Such cooperation shall
include furnishing Owner with access to the Work, even to the
extent of dismantling finished Work where necessary to permit such
inspection. If such dismantling and subsequent inspection reveals
defects all associated Work shall be corrected at the expense of
Contractor. If such dismantling and subsequent inspection reveals
no defects, such Work shall be restored at the expense of Owner and
Contractor shall be entitled to an equitable adjustment to the
Project Schedule.
6.2
Objection to Work. Owner shall inform Contractor promptly of
any defects in the Work it
discovers in any inspection of the Work;
provided that no inspection (or lack of inspection) of any part of
the Work shall in any way affect Contractor’s obligations to
perform the Work and correct defects in accordance with the
Contract Documents. All such inspections shall be conducted in a
manner that does not interfere with the normal performance and
progress of the Work.
6.3
No Acceptance of Work.
Any rights asserted by Owner under
this Article 6 shall in no way affect or reduce Contractor's
obligations under this Contract and will not be deemed to
constitute an acceptance by Owner with respect to such
work.
ARTICLE 7 – Intentionally
Deleted.
ARTICLE 8 – FACILITY TESTS
8.1
Conduct of Facility Tests. Contractor shall conduct the
Performance Tests in accordance with
the Performance Test Conditions.
Contractor shall furnish reasonable advance Notices prior to, and
test reports after, all Performance Tests, including unsuccessful
tests and re-tests, as provided in Exhibit F .
Contractor shall maintain qualified personnel on the Facility Site
to supervise the activities of operating personnel regarding the operation and
maintenance of the Facility until Substantial Completion, and, to
the extent necessary, to provide technical direction during the
Performance Tests and any re-testing periods following Substantial
Completion. The Contract Price includes one set of Performance
Tests. Should re-testing be required, and such re-testing is not
directly attributable to Contractor’s fault, Contractor shall
be entitled to an equitable adjustment of either the Contract Price
or the Project Schedule, or both as appropriate.
8.2
Minimum Performance Criteria. If Substantial Completion is
achieved at less than the Guaranteed
Net Power Output and/or more than the Guaranteed Net Heat Rate,
Contractor shall have reasonable access to the Project for ***
after Substantial Completion to attempt to achieve such Guaranteed
Net Power Output and/or the Guaranteed Net Heat Rate. Contractor
may buy down plant performance at any time after Substantial
Completion by paying performance liquidated damages pursuant to
Section 27.4 at its discretion. Only one guarantee point
shall be provided for each performance guarantee.
8.3
Notice; Commencement; Conduct. Contractor shall provide
Owner with at least ten (10) Business Days’ prior written
notice of the date upon which Contractor proposes to commence any
of the Performance Tests. All Performance Tests shall be conducted
in accordance with the Test Procedures. Owner shall provide
qualified operating personnel for the conduct of all such tests,
who shall work entirely under the technical direction and control
of Contractor. Owner shall have the right to perform data
collection for each Performance Test. The Parties shall agree on
the data to be used for analysis and Contractor shall perform the
analysis. If Owner observes any defects in the Work or its
performance during any Performance Test, Owner shall promptly
notify Contractor; provided that no observance of (or failure to
observe) a defect by Owner shall affect any obligation of
Contractor under the Contract. Owner and Contractor shall cooperate
in good faith in determining when or to what extent the Project
shall be taken out of service in order to take corrective measures.
Test procedures and approvals shall be subject to Owner review without undue
delay.
ARTICLE 9 – SUBSTANTIAL AND
FINAL COMPLETION
9.1
Substantial Completion. Substantial Completion shall be met
when:
i)
The Project is materially complete, all essential equipment and
systems are operational in accordance with the Contract, and has
been fully designed, constructed and equipped in accordance with
the Contract (except as provided in the Final Completion punchlist
submitted by Contractor);
and
ii)
The Project demonstrates the following criteria after completion of
a *** period during the Performance
Tests:
a)
No less than *** of Guaranteed Net Capacity ; and
b)
No more than *** of Guaranteed Net Heat Rate; and
c)
Air emission levels meeting the less stringent of the guaranteed
levels in accordance with permit test procedures. Notwithstanding
the foregoing, in the event the actual level exceeds the less stringent of the level set
forth herein or the permit level but nonetheless the Project is not
precluded from commercial operation by any Government Authority,
air emission levels for the purposes of Substantial Completion
shall be deemed to be achieved and the parties agree that
Contractor shall not be liable for delay liquidated damages as a
result of failure to meet the emissions requirements. In the event
the Project is precluded from commercial operation by any
Governmental Authority at any time prior to meeting the lesser of
the guaranteed levels as a result of the actual air emission
levels, Contractor shall immediately commence necessary
modifications/repairs of the Project so as not to exceed the less
stringent of aforementioned levels. For each day until such level
is demonstrated, Contractor shall be liable for the delay
liquidated damages; and
iii) Owner has received from Contractor all information necessary
to secure permits, licenses, and
approvals required at the time of commercial operation.
Substantial Completion
shall also be deemed to occur in the event a) that Owner operates
the Project for its commercial
benefit or b) Contractor is prevented from conducting performance
tests within thirty (30) days of the date Contractor provides
notice to Owner it is ready to commence such tests.
9.2
Notice of Substantial Completion. Promptly after successful
completion of the Performance Tests in which, in Contractor’s
judgment, all the conditions of Substantial Completion set forth in
Section 9.1 have been satisfied, Contractor shall issue to
Owner a Notice of Substantial Completion, which shall include
copies of relevant test report(s) in reasonable detail and which
shall set forth the date upon which
the conditions set forth in Section 9.1 were satisfied.
Within ten (10) Business Days after receipt of Notice of
Substantial Completion, Owner shall respond to Contractor in
writing and either accept such Notice or, within such period,
identify any deficiencies, which shall be promptly corrected by
Contractor and a Notice of Substantial Completion resubmitted to
Owner. The date of Substantial Completion shall date back in time
to the date Contractor first submits for such approval, provided
that such submission is approved. Failure of Owner to respond
within ten (10) Business Days shall be deemed an
acceptance.
9.3
Punchlist. At a time designated by Owner and within seven
(7) days of Substantial Completion, Owner and Contractor shall
complete a joint inspection of the Work and Contractor shall
deliver its proposed Punchlist to Owner. Within seven (7) days of
the receipt of Contractor’s Punchlist, Owner shall respond to
Contractor’s proposed Punchlist either confirming the list or
specifying any disputed or missing items. Upon any such adjustment
of the Punchlist, Contractor shall so notify Owner in writing.
Within seven (7) days of Owner’s receipt of such adjusted
Punchlist, Owner shall deliver to Contractor either its written
acknowledgement that Punchlist is acceptable or a Notice specifying
any disputed or missing items. In the latter instance, the
foregoing procedure with respect to such items will be repeated
until Punchlist is acceptable. Owner will release the milestone
payment for achieving Substantial Completion as set forth in the
Schedule of Values less *** the mutually agreed upon estimated
value of remaining punchlist items (“Punchlist
Retainage”). The Punchlist Retainage will be released upon
full completion and Owner acceptance of the punchlist
items.
9.4 Final
Completion. Final Completion of the Work shall be defined to
occur on the date when:
a) The Project has achieved
Substantial Completion; and
b) The Project has completed a ***
reliability test at nominal plant output;
c) All Contractor’s
personnel, supplies, equipment, waste materials, rubbish and
temporary facilities have been removed from the Project and the
Facility Site properly restored to an acceptable condition;
d) All special tools required under
the Contract have been delivered to Owner;
e) Contractor has provided all
required “As-Built” drawings; and
f) Contractor has provided all
Operation and Maintenance Manuals; and
g) Contractor has provided and
replaced all spare parts as required by Section 1.6 above;
and
h) Contractor has completed all
Punchlist work, or made payment for incomplete work out of
the Punchlist Retainage.
9.5
Notice of Final
Completion. Promptly
after items in Section 9.4 above have b
