General Terms and Conditions for Engineering, Procurement, and Construction

Exhibit 10.2

 

 

 

General Terms and Conditions

for

Engineering, Procurement, and Construction

of

Air Quality Control (AQC) Systems

 

August 26, 2005

 

by and between

FirstEnergy Generation Corp.

and

Bechtel Power Corporation

 

 

 

 

 

 

 

 

 

 

 

 

General Terms and Conditions for Engineering, Procurement, and Construction

 

 

General Terms and Conditions for Engineering, Procurement, and Construction

ARTICLE 1 - DEFINITIONS

1.1 Definitions. The following terms, when used in this Agreement with initial capitalization, shall have the meanings given below unless in any particular instance the context clearly indicates otherwise:

"AE-Constructor" and/or "Contractor" means Bechtel Power Corporation, the entity primarily responsible for performing and procuring the work.

“Affiliate” means, with respect to a Party, any Person: (i) which such Party now or hereafter owns or controls directly or indirectly; (ii) which is owned or controlled by the same company or companies that owns, directly or indirectly, a controlling interest in such Party; or (iii) which owns or controls, directly or indirectly, such Party. As used herein, “control” means direct or indirect possession of the power to direct or cause the direction of the management or policies of a legal entity, whether through ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative to the foregoing.

“Agreement” has the meaning set forth in Section 1.2.

“Applicable Codes and Standards” means the codes, standards or requirements set forth herein or in any Applicable Law, which codes and standards include those described in FirstEnergy’s Requirements, and shall govern Contractor’s performance of the Project. In the event of an inconsistency or conflict between any of the Applicable Codes and Standards as contained in this Agreement and any referenced attachment, exhibit, schedule or subcontract, the highest such performance standard shall govern Contractor’s performance under this Agreement.

“Applicable Law” means any federal, state, or local statute, ordinance, rule, regulation, policy or guidance, any judicial or administrative order or judgment (whether or not by consent), any duties imposed by common law, and any provision or condition of any permit, license, or other operating authorization of any Governmental Authority or other body having jurisdiction over the Parties, the performance of the Project, or the Site.

“AQC Unit” means a portion of a Subproject associated with a Generating Unit.

“Available Amount” has the meaning set forth in Section 12.6.

“BAPC Ohio” means Bechtel Associates Professional Corporation, (Ohio), an Ohio professional corporation which is an Affiliate of Contractor.

“Bond” means an on demand, non-replenishing performance and/or payment security, in form and substance mutually agreeable to the parties.

“Business Day” means any day other than a Saturday, Sunday or other day on which banking institutions in the State of Ohio are required to be closed.

“Change Order” means a written order issued by FirstEnergy to Contractor after the execution and delivery of this Agreement or a written instrument signed by both Parties after execution and delivery of this Agreement in accordance with Article 8 or a written determination pursuant to Section 19.4 that authorizes an addition to, deletion from, suspension of or other modification to the requirements of this Agreement, and, to the extent provided for herein, an adjustment to the Target Construction Cost, the Project Schedule, any Guaranteed Final Completion Dates, any scope of work under the Subproject, the Performance Guarantee, any of the Warranties or any other obligation of either Party hereunder.

“Changed Criteria” has the meaning set forth in Section 8.1(A).

“Commencement Date” for each Subproject means the date of issuance of a Notice to Proceed with full construction, or an equivalent release to commence full construction of that Subproject.

“Contractor Indemnified Parties” means Contractor, its Affiliates, and their respective directors, officers, agents, employees, invitees, successors, and assigns.

 

 

"Contractor's Project Manager" means Contractor’s designated authorized Project representative actively engaged in the supervision of the Project and in all matters relating to this Agreement, who shall have complete authority to act on behalf of Contractor on all matters pertaining to the Project, including giving instructions and making changes in the Project.

“Contract Price”means the Fee, reimbursable costs, and all other amounts payable by FirstEnergy to Contractor under Section 5.1 (provided, the Contract Price shall not include any amounts paid to Contractor for payments to FE Vendors that Contractor administers on FirstEnergy’s behalf).

“Corrective Work”has the meaning set forth in Section 13.1(B).

“Craft Labor” means building and construction trades crafts employed by the Contractor or Subcontractors for the construction of the Project.

“Critical Path Schedule”has the meaning set forth in Section 6.4(A).

“Data" means documentation, manuals, maps, plans, schedules, programs, specifications, software, reports, drawings, designs and other relevant information and works of authorship.

“Development Phase” shall mean with respect to each Subproject, the time period prior to the Commencement Date.

“Drawings”mean the graphic and pictorial documents showing the design, location and dimensions of the Project, generally including plans, elevations, sections, details, schedules and diagrams and the 3-dimensional model. Upon approval by FirstEnergy pursuant to Section 3.3(C), such Drawings shall form a part of the Agreement.

“Effective Date”means the date of execution by FirstEnergy and Contractor of this Agreement, or such other date as may be mutually agreed by FirstEnergy and Contractor as the Effective Date of this Agreement.

“Environmental Law” means any Applicable Law relating to, (A) the protection of (i) natural resources and the environment, or (ii) human health and the public welfare from actual or potential exposure to any actual or potential release, discharge, disposal or emission (whether past or present) of any Hazardous Substance, or (B) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, of any Hazardous Substance.

“FE Vendor” means a supplier of equipment, Materials, and/or services with respect to the Project or any Subproject, under direct contract with FirstEnergy (including any direct contract with FirstEnergy in which Bechtel acts as FirstEnergy’s agent).

“FE Vendor Arrangement” has the meaning set forth in Section 3.1(B).

“Fee” has the meaning set forth in Exhibit 5.1.

“Final Completion Certificate”means a certificate signed by Contractor in the form of Exhibit 6.3(C).

“Final Completion”has the meaning set forth in Section 6.3(A).

“Final Document Delivery” has the meaning set forth in Section 6.3(A).

“Final Lien and Claim Waiver”means the waiver and releases provided to FirstEnergy by Contractor and Subcontractors in accordance with the requirements of Section 6.3(A), which shall be in the form of Exhibit 6.3(A).

“Financing Assignee” has the meaning set forth in Section 19.3(C).

“Financing Documents” means any and all loan agreements, notes, indentures, security agreements, pledges, mortgages, subordination agreements, intercreditor agreements, partnership agreements, subscription agreements, participation agreements and other documents relating to the construction, interim or long-term financing of any Subproject and any refinancing of any Subproject (including a leveraged lease), including any and all modifications, extensions, renewals and replacements of any such financing or refinancing.

 

 

“FirstEnergy” means FIRSTENERGY GENERATION CORP., an Ohio corporation.

“FirstEnergy Indemnified Parties” means FirstEnergy, its Affiliates, and their respective directors, officers, agents, employees, invitees, successors, and assigns.

“FirstEnergy Designated Representative” means that Person or Persons designated by FirstEnergy in a written notice to Contractor who shall have authority to act on behalf of FirstEnergy on all matters pertaining to the Project, including giving instructions and making changes in the Project.

“FirstEnergy Reliable Information” has the meaning set forth in Section 3.1(B).

“FirstEnergy’s Requirements” means the work scope attached hereto as Attachment A, the operating specifications, performance data sheets, and coal analysis data sheets, in each case together with all attachments thereto, and all other documents provided or identified by FirstEnergy to Contractor’s Project Manager specifying the purpose, scope, and/or design and/or other technical criteria for the Project.

“Force Majeure Event”means (i) an act of God, epidemic, landslide, lightning, earthquake, flood, fire, eruption, tornado, or other unusual natural event of any kind affecting a Party that was not voluntarily induced or promoted by the affected Party and did not result from a breach of such Party’s obligations under this Agreement or unlawful behavior by such Party, or (ii) failure of renewal, revocation, denial or delay in obtaining (after the affected Party has used due diligence and all reasonable commercial efforts to obtain) any necessary governmental authorization or permit, (iii) acts of any Governmental Authority (not resulting from a violation, or failure to fulfill the requirements, of Applicable Law by the affected Party), (iv) war, riot, civil disorder, terrorist act, embargo, strike or other concerted labor action, or (v) any other event, whether similar or not to the foregoing which, in each case, is beyond the reasonable control of the affected Party, despite such Party’s best efforts to fulfill its obligations under this Agreement. “Best efforts to fulfill its obligations” includes attempting to anticipate any Force Majeure Event and to address the effects of any such event (a) as it is occurring, and (b) after it has occurred, such that the delay or violation is minimized to the greatest extent possible. Failure or delay to perform of any Subcontractor, inability to obtain or delay in obtaining equipment, Materials or transport, and lack of availability of laborers, Subcontractors or local materials, shall not be a Force Majeure Event as to a Party unless caused by a Force Majeure Event or, where a Subcontractor fails to perform, an event which would, as to the Subcontractor directly affected thereby, qualify as a Force Majeure Event hereunder.

“Generating Unit” means an electric power generating unit to which a Subproject, or a portion of a Subproject, is being applied.

“Good Practices”means those practices and methods, and that level of competence, care, skill and judgment, generally used by internationally recognized, experienced and prudent contractors, engineers, manufacturers and professionals working in the electric power generation industry in the United States to design, engineer, construct, manufacture, commission, test and operate electric power generation facilities and ancillary equipment for the electric power industry, lawfully and safely, and with due consideration for reliability, efficiency, operability and maintainability. It is not intended that Good Practices be limited to the optimum practices, methods or acts to the exclusion of others, but rather a spectrum of practices, methods, or acts which internationally recognized, experienced and prudent contractors, engineers, manufacturers and professionals would be expected to employ in carrying out the requirements of this Agreement.

“Governmental Authority”means any federal, state, or local governmental body, including any legislative, judicial, or executive body, or agency or subdivision thereof, in each case having jurisdiction to exercise authority or control over a Party or its agent or over any part of or all of the Project or the Site.

“Guaranteed Final Completion Dates”has the meaning set forth in Section 6.3(B).

“Hazardous Substances”means any chemical or other material which is or may become injurious to the public health, safety, or welfare or to natural resources or the environment; any pollutant; contaminant; waste, solid or hazardous; any petroleum product; polychlorinated biphenyls; asbestos and asbestos-containing material; and includes substances defined as "hazardous substances" in the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sec. 9601, et seq.

 

 

“Incentive Criteria” means the Scorecard Incentive Criteria, Target Construction Cost, and any other criteria which adjusts Contractor’s Fee as provided in Exhibit 5.1.

“Interim Lien and Claim Waiver”means the waiver and release provided to FirstEnergy by Contractor and Subcontractors, in accordance with the requirements of Section 5.2(C), which shall be in the form of Exhibit 5.2(C) 

“Liquidated Damages”means Performance Liquidated Damages and Schedule Liquidated Damages.

“Losses”mean all losses, costs, damages, claims, liabilities, fines, penalties, and expenses (including attorneys’ and other professional fees and expenses, and court costs, incurred in connection with the investigation, defense, and settlement of any claim asserted against any Party).

‘‘Materials”means all materials and equipment required for the completion of and incorporation into the Project.

“Mechanical Completion”has the meaning set forth in Section 6.2(A).

“Monthly Progress Reports” has the meaning set forth in Section 3.10(A).

“Notice to Proceed” means, for any Subproject, a written notice to fully proceed with all work on a Subproject, or with that portion of the Subproject identified in such notice, that is agreed to and signed by FirstEnergy and Contractor.

“NSR Consent Decree” means the Consent Decree, dated March 18, 2005, issued in United States of America, et al. v. Ohio Edison Company and Pennsylvania Power Company, Civil Action No: 2:99-CV-1181 (U.S. District Court, SD Ohio), accessible at: www.epa.gov/compliance/resources/cases/civil/caa/ohioedison.html.

“OEM” means an original equipment manufacturer providing major process equipment for a Subproject.

“Party” or “Parties” means FirstEnergy and/or Contractor and their permitted successors and assigns.

“Performance Guarantee(s)” means the guarantees identified in Exhibit 7.2.

“Performance Liquidated Damages” has the meaning set forth in Section 7.2.  

“Performance Tests” means those tests required to be performed to ensure that the Project meets the Performance Guarantee(s), as mutually determined by the Parties during the Development Phase.

“Permit” means any valid waiver, certificate, license, exemption, variance, franchise, permit, authorization or similar order from any Governmental Authority required to be obtained and maintained in connection with the Site or otherwise in relation to the Project.

“Person” means any individual, company, joint venture, corporation, partnership, association, joint stock company, limited liability company, trust, estate, unincorporated organization, Governmental Authority or other entity having legal capacity.

“Professional Services” means the engineering, design, procurement, and non-manual construction management services performed or to be performed by Contractor under this Agreement.

“Project” means all services, labor, Materials, apparatus, structures, supplies, Data, engineering, design, fabrication, delivery, inspection, and testing, together with miscellaneous expendable job supplies, installation-related equipment and tools, and any other services, work or things furnished or used or required to be furnished or used, by Contractor in the performance of this Agreement, and including any work performed pursuant to a Warranty. The term “Project” shall refer to the work to be performed in any Subproject only when and to the extent that Contractor has been authorized to perform work on a Subproject during the Development Phase, and only when and to the extent that Contractor has been authorized by receipt of a Notice to Proceed with respect to such Subproject.

“Project Execution Plan” means a description of processes for implementation of a Subproject, as described in Attachment A and in Article 3.

 

 

“Project Schedule” means the schedule of the dates for certain stages of completion of the Subproject, such as the Scheduled Mechanical Completion Dates and the Guaranteed Final Completion Dates, as mutually determined by the Parties during the Development Phase, and which Contractor shall, at a minimum, use its best efforts to ensure, meets the requirements of Ohio Edison Company and Pennsylvania Power Company under the NSR Consent Decree.

“Recovery Schedule” has the meaning set forth in Section 9.3.

“Reliability Standard” has the meaning set forth in Exhibit 7.2

“Response Period” has the meaning set forth in Section 13.2(C).

“Schedule Liquidated Damages” has the meaning set forth in Section 6.5.

“Scheduled Mechanical Completion Date” for each Subproject shall mean the date by which Contractor is scheduled to achieve Mechanical Completion of the Subproject , as set forth in the Project Schedule to be delivered pursuant to Section 6.4.

“Site” means FirstEnergy’s W.H. Sammis electric generation facility located in Stratton, Ohio, and all other locations owned and exclusively operated by FirstEnergy or its Affiliates at which the Project or any Subproject is to be performed or to which Materials are to be delivered.

“Specifications” mean those preliminary documents consisting of the written requirements for Materials, standards, and workmanship for the Project and performance of related services. Upon approval by FirstEnergy pursuant to Section 3.3(C), such Specifications shall form a part of the Agreement.

“Subcontract” means an agreement by Contractor with a Subcontractor or by a Subcontractor with a lower tier Subcontractor for the performance of any portion of the Project.

“Subcontractor” means any vendor, subcontractor, materialman or supplier of any tier engaged by Contractor, or any higher-tier Subcontractor in connection with the performance of the Project, including BAPC Ohio, the entity to which all required engineering and design work will be subcontracted. The term “Subcontractor” shall not include any FE Vendor.

“Subproject” means a portion of the Project as more fully described in Section 3.1(A).

“Target Construction Cost” has the meaning set forth in Exhibit 5.1 

“Taxes” means any and all taxes, assessments, levies, duties, fees, charges and withholdings of any kind or nature whatsoever and howsoever described, including gross receipts, franchise, sales, use, value added, property, excise, capital, stamp, transfer, employment, occupation, generation, privilege, utility, regulatory, energy, consumption, lease, filing, recording and activity taxes, levies, duties, fees, charges, imposts and withholding, together with any and all penalties, interest and additions thereto, but excluding any taxes on the incomes of the Parties.

“Third Party” means employees of Contractor Indemnified Parties and the FirstEnergy Indemnified Parties, acting in their individual or personal capacity and subject to the foregoing, parties other than Contractor, FirstEnergy, and their respective Affiliates, successors and assigns.

“Updated Critical Path Schedule” has the meaning given it in Section 6.4(C).

“Vendor Termination Costs” has the meaning set forth in Section 12.6

“Warranty” has the meaning set forth in Section 13.1.

“Warranty Non-Conformance” has the meaning set forth in Section 13.2(B).

“Warranty Period”has the meaning set forth in Section 13.1.

“Work Scope” means the work scope mutually determined by the Parties during the Development Phase, which will include the matters described generally in Attachment A and such other matters as are mutually agreed by the Parties.

 

 

“Wrap Arrangement” has the meaning set forth in Section 3.1(B).

1.2 Entire Agreement; Modification. The terms and conditions set forth in these General Terms and Conditions for Engineering, Procurement, and Construction (including all exhibits and schedules attached hereto), together with the Purchase Order to be delivered by FirstEnergy, FirstEnergy’s Requirements, and the Drawings and Specifications approved by FirstEnergy pursuant to Section 3.3(C), in each case as they may be amended and supplemented from time to time, shall constitute the entire agreement between FirstEnergy and the Contractor with respect to the performance of the Project (the “Agreement”), and supersedes any and all other prior understandings, correspondence and agreements, oral or written, between them. This Agreement may not be altered, amended, or modified in any way except by a written modification signed by all Parties.

1.3 Priority. The documents making up this Agreement are intended to be complementary and mutually explanatory of one another. For the purposes of interpretation, the priority of the documents shall be in accordance with the following sequence:

The latest dated amendment or Change Order shall take precedence over that part of the foregoing documents that it supersedes. Either Party, upon becoming aware of any such conflict or variance, shall promptly notify the other Party in writing.

ARTICLE 2 - RELATIONSHIP OF FIRSTENERGY, CONTRACTOR, AND SUBCONTRACTORS

2.1 Status of Contractor. The relationship of Contractor to FirstEnergy shall be that of an independent contractor. Except to the extent set forth in this Agreement, nothing herein shall be interpreted to create a master-servant or principal-agent relationship between Contractor or any of its Subcontractors and FirstEnergy. Nevertheless, the fact that Contractor is an independent contractor does not relieve it from its responsibility to fully, completely, timely and safely perform the work in strict compliance with this Agreement. Nothing in this Agreement or in the performance of the Project shall be construed to create a partnership, joint venture or other joint business arrangement between FirstEnergy and Contractor.

2.2 Subcontractors. FirstEnergy acknowledges and agrees that Contractor intends to have portions of the Project accomplished by Subcontractors pursuant to written Subcontracts between Contractor and such Subcontractors. All Subcontractors shall be reputable, qualified firms with an established record of successful performance in their respective trades performing identical or substantially similar work. All Subcontracts with Subcontractors shall at all times be consistent with the terms or provisions of this Agreement. No Subcontractor is intended to be or shall be deemed a third-party beneficiary of this Agreement. Contractor shall be fully responsible to FirstEnergy for the acts and omissions of Subcontractors and of persons directly or indirectly employed by them, as it is for the acts or omissions of persons directly employed by Contractor. The work of any Subcontractor shall be subject to inspection by FirstEnergy to the same extent as the work of Contractor. All Subcontractors and personnel of Subcontractors are to be instructed in the terms and requirements of FirstEnergy-approved safety and environmental protection regulations and shall be expected to comply with such regulations. In the event that personnel are not adhering to such regulations, then they shall be removed by Contractor. Nothing contained herein shall (i) create any contractual relationship between any Subcontractor and FirstEnergy, or (ii) obligate FirstEnergy to pay or see to the payment of any Subcontractor. 

 

 

2.3 Subcontracts.

2.4 FE Vendors. FirstEnergy may elect to obtain certain products or services relating to each Subproject directly from an FE Vendor rather than through Contractor or its Subcontractors. Contractor will provide construction management and such other management and administrative services with respect to FE Vendors as provided herein. However, nothing contained herein shall (i) create any contractual relationship between any FE Vendor and Contractor, or (ii) obligate Contractor to pay or see to the payment of any FE Vendor, except as otherwise expressly agreed. No FE Vendor is intended to be or shall be deemed a third-party beneficiary of this Agreement. FirstEnergy shall use best efforts to include in its contracts with FE Vendors (or in the case that Contractor performs any work pursuant to this Agreement other than in respect of the Work Scope as contemplated in Exhibit 5.1, in any contracts with any other FirstEnergy contractor if such Contractor work has any physical or technical interfaces with such other FirstEnergy contractor’s work) a waiver of subrogation, indemnity, and waiver and release of consequential damages for the benefit of Contractor, and shall use reasonable commercial efforts to include in such contracts a waiver of property damage liability for the benefit of Contractor.

2.5 Bechtel Associates Professional Corporation (Ohio). As required by applicable Ohio law(s), Contractor intends to subcontract engineering and design services performed under this Agreement to BAPC Ohio. With respect to all services performed by BAPC Ohio, Contractor agrees that FirstEnergy shall have all rights in and to such services as though such services were performed directly by Contractor (including the rights described in Article 11). Contractor shall guaranty and be fully responsible to FirstEnergy for the acts and omissions of BAPC Ohio and of persons directly or indirectly employed by them, as it is for the acts or omissions of persons directly employed by Contractor, and FirstEnergy agrees that it shall look solely and exclusively to Contractor for fulfillment of any obligations in respect of such services. Contractor shall cause BAPC Ohio to perform, for the benefit of FirstEnergy, all of the obligations of Contractor under this Agreement that are applicable to the scope services provided by BAPC Ohio. Any Subcontract with BAPC Ohio shall be subject to approval by FirstEnergy.

 

 

Article 3 - Contractor’s Responsibilities

3.1 General Scope of Project; Phased Release of Project.

 

 

3.2 Specific Obligations. Without limiting the generality of Section 3.1, or the requirements of any other provision of this Agreement, Contractor shall:

3.3 Design and Engineering.