A133-2009 - Walbridge response to MCCC Response (Jan 2011)

AIA® Document A133TM – 2009Standard Form of Agreement Between Owner and Construction Manager as Constructor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price

AIA Document A133™ – 2009 (formerly A121™CMc – 2003). Copyright © 1991, 2003 and 2009 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at 15:31:05 on 07/02/2010 under Order No.8683877506_1 which expires on 09/17/2010, and is not for resale.User Notes: (1312978247)

1

ELECTRONIC COPYING of any portion of this AIA® Document to another electronic file is prohibited and constitutes a violation of copyright laws as set forth in the footer of this document.

ADDITIONS AND DELETIONS: The author of this document has added information needed for its completion. The author may also have revised the text of the original AIA standard form. An Additions and Deletions Report that notes added information as well as revisions to the standard form text is available from the author and should be reviewed.

This document has important legal consequences. Consultation with an attorney is encouraged with respect to its completion or modification.

AIA Document A201™–2007, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified.

AIA® Document A133TM – 2009Standard Form of Agreement Between Owner and Construction Manager as Constructor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price


1

ELECTRONIC COPYING of any portion of this AIA® Document to another electronic file is prohibited and constitutes a violation of copyright laws as set forth in the footer of this document.

ADDITIONS AND DELETIONS: The author of this document has added information needed for its completion. The author may also have revised the text of the original AIA standard form. An Additions and Deletions Report that notes added information as well as revisions to the standard form text is available from the author and should be reviewed.

This document has important legal consequences. Consultation with an attorney is encouraged with respect to its completion or modification.

AIA Document A201™–2007, General Conditions of the Contract for Construction, is adopted in this document by reference. Do not use with other general conditions unless this document is modified.

AGREEMENT made as of the « » day of « » in the year « »(In words, indicate day, month and year.)

BETWEEN the Owner:(Name, legal status and address)

«Monroe County Community College Main Campus1555 S. Raisinville Rd.Monroe, MI 48161

(734) 242-7300 »« »« »

and the Construction Manager:(Name, legal status and address)

« Walbridge Aldinger Company 777 Woodward Avenue, Ste, 300 Detroit, MI 48226 »« »« »

for the following Project:(Name and address or location)

«Monroe County Community College Career Tech Center»«Main Campus1555 S. Raisinville Rd.Monroe, MI 48161

»

The Architect:(Name, legal status and address)

« Hobbs& Black Associates Inc. 100 N. State Street Ann Arbor, MI48104 »« »« »

The Owner’s Designated Representative:(Name, address and other information)

« »« »« James BlumbergDirector of Physical Plant 1555 S. Raisinville Rd.Monroe, MI 48161(734) 384-4249 [email protected] »« »« »« »


3

mailto:[email protected]%20

The Construction Manager’s Designated Representative:(Name, address and other information)

« Donald Greenwell Jr. Senior Vice President »« »« »« »« »« »

The Architect’s Designated Representative:(Name, address and other information)

« »« Brian Bagnick Senior Vice President »« »« »« »« »

The Owner and Construction Manager agree as follows.


4

TABLE OF ARTICLES

1 GENERAL PROVISIONS

2 CONSTRUCTION MANAGER’S RESPONSIBILITIES

3 OWNER’S RESPONSIBILITIES

4 COMPENSATION AND PAYMENTS FOR PRECONSTRUCTION PHASE SERVICES

5 COMPENSATION FOR CONSTRUCTION PHASE SERVICES

6 COST OF THE WORK FOR CONSTRUCTION PHASE

7 PAYMENTS FOR CONSTRUCTION PHASE SERVICES

8 INSURANCE AND BONDS

9 DISPUTE RESOLUTION

10 TERMINATION OR SUSPENSION

11 MISCELLANEOUS PROVISIONS

12 SCOPE OF THE AGREEMENT

ARTICLE 1 GENERAL PROVISIONS§ 1.1 The Contract DocumentsThe Contract Documents consist of this Agreement, Conditions of the Contract (General, Supplementary and other Conditions), Drawings, Specifications, Addenda issued prior to the execution of this Agreement, other documents listed in this Agreement, and Modifications issued after execution of this Agreement, all of which form the Contract and are as fully a part of the Contract as if attached to this Agreement or repeated herein. Referenced to “General Conditions” in this document shall mean the AIA A201-2007 General Conditions of the Contract for Construction, as modified. Upon the Owner’s acceptance of the Construction Manager’s Guaranteed Maximum Price proposal, the Contract Documents will also include the documents described in Section 2.2.3 and identified in the Guaranteed Maximum Price Amendment and revisions prepared by the Architect and furnished by the Owner as described in Section 2.2.8. The Contract represents the entire and integrated agreement between the parties hereto and supersedes prior negotiations, representations or agreements, either written or oral. If anything in the other Contract Documents, other than a Modification, is inconsistent with this Agreement, this Agreement shall govern.

§ 1.1.1 The Contract Documents shall not be construed to create a contractual relationship of any kind (1) between the Architect and Owner, (2) between the Owner and a Contractor or Subcontractor, or (3) between any persons or entities other than the Owner and Construction Manager, including but not limited to any consultant retained by the Owner to inspect the Work. An enumeration of the Contract Documents, other than Modifications, appears in Article 12.

§1.1.2 Nothing contained in the Contract Documents shall create a contractual relationship between the Owner and any third party; however, it is understood and agreed that the Owner is an intended third-party beneficiary of all contracts for design or engineering services (if any), all subcontracts, purchase orders, and other agreements between the Construction Manager and third parties. The Construction Manager shall incorporate the obligations of this contract into its respective subcontracts, supply agreements, and purchase orders, including an express provision that the Owner is an intended third-party beneficiary of those agreements.

§ 1.2 Relationship of the PartiesThe Construction Manager accepts the relationship of trust and confidence established with the Owner by this Agreement and covenants with the Owner to cooperate with the Architect and exercise the Construction Manager’s skill and judgment in furthering the interests of the Owner; to furnish efficient construction administration, management services and supervision; to furnish at all times an adequate supply of workers and materials; and to perform the Work in an expeditious and economical manner consistent with the Owner’s interests. Construction


5

Manager shall perform its services under this Agreement and any subsequent modifications or supplemental agreements, and shall execute the entire Work described in the Contract Documents in accordance with the standard of care and skill for contractors experienced and specializing in the construction (preconstruction management, preconstruction consulting services, and construction management) of similar projects. The Owner agrees to furnish or approve, in a timely manner, information required by the Construction Manager and to make payments to the Construction Manager in accordance with the requirements of the Contract Documents.

§1.2.1 Throughout both the preconstruction and construction phases of the Project, Construction Manager shall coordinate its services under this Agreement with the services to be provided to Owner by Architect, Hobbs & Black Associates Inc., 100 N. State Street, Ann Arbor, MI 48104 and any other consultants engaged by Owner, or any replacements thereof or additions thereto made by Owner at its sole discretion.

§1.2.2 The Owner’s representative shall be James Blumberg. The Architect’s representative is Brian Bagnick. The Owner reserves the right to change either its representative or the Architect’s representative upon notice to the Construction Manager. The designated Owner’s representative has the express authority to act as the Owner’s agent throughout the course of the Project. The Construction Manager shall coordinate its services to the Owner through the designated Owner’s representative.

§1.2.3 The Construction Manager’s Project Team consists of the following key personnel:

[insert team members here]

The Owner selected the Construction Manager after interviewing its Project Team and, in part, because of their collective experience and talents. Construction Manager agrees that there will be no change in the Project Team personnel set forth above except as otherwise requested or approved by Owner or as may result from such personnel leaving their employ. Should circumstances beyond the control of the Construction Manager result in changes to this Project Team, the Construction Manager shall submit the credentials of the Construction Manager’s proposed replacement team member for the Owner’s approval, which approval shall not be unreasonably withheld. However, nothing in this clause shall be construed to limit the Owner’s rights to terminate the Contract, as provided for in this Agreement. Termination by the Owner as a result of a change in the Project Team shall be deemed a justifiable Termination for Cause.

§ 1.3 General ConditionsFor the Preconstruction Phase, AIA Document A201™–2007, General Conditions of the Contract for Construction, shall apply only as specifically provided in this Agreement. For the Construction Phase, the general conditions of the contract shall be as set forth in A201–2007, which document is incorporated herein by reference. The term “Contractor” as used in A201–2007 shall mean the Construction Manager.

ARTICLE 2 CONSTRUCTION MANAGER’S RESPONSIBILITIESThe Construction Manager’s Preconstruction Phase responsibilities are set forth in Sections 2.1 and 2.2. The Construction Manager’s Construction Phase responsibilities are set forth in Section 2.3. The Owner and Construction Manager may agree, in consultation with the Architect, for the Construction Phase to commence prior to completion of the Preconstruction Phase, in which case, both phases will proceed concurrently. The Construction Manager shall identify a representative authorized to act on behalf of the Construction Manager with respect to the Project.

§ 2.1 Preconstruction Phase§ 2.1.1 The Construction Manager shall provide a preliminary evaluation of the Owner’s program, schedule and construction budget requirements, each in terms of the other.

§ 2.1.2 ConsultationThe Construction Manager shall schedule and conduct meetings with the Architect and Owner to discuss such matters as procedures, progress, coordination, and scheduling of the Work. Construction Manager shall review design and design revisions during each stage of their development. The Construction Manager shall advise the Owner and the Architect on proposed site use and improvements, selection of materials, and building systems and


6

equipment. The Construction Manager shall also provide recommendations consistent with the Project requirements to the Owner and Architect on constructability; availability of materials and labor; time requirements for procurement, installation and construction; and factors related to construction cost including, but not limited to, costs of alternative designs or materials, preliminary budgets, life-cycle data, and possible cost reductions.

§ 2.1.3 When Project requirements in Section 3.1.1 have been sufficiently identified, the Construction Manager shall prepare and periodically update a Project schedule for the Architect’s review and the Owner’s acceptance. The Construction Manager shall obtain the Architect’s approval for the portion of the Project schedule relating to the performance of the Architect’s services. The Project schedule shall coordinate and integrate the Construction Manager’s services, the Architect’s services, other Owner consultants’ services, and the Owner’s responsibilities and identify items that could affect the Project’s timely completion. The updated Project schedule shall include the following: submission of the Guaranteed Maximum Price proposal; components of the Work; times of commencement and completion required of each Subcontractor; ordering and delivery of products, including those that must be ordered well in advance of construction; and the occupancy requirements of the Owner.

§ 2.1.4 Phased ConstructionThe Construction Manager shall provide recommendations with regard to accelerated or fast-track scheduling, procurement, or phased construction. The Construction Manager shall take into consideration cost reductions, cost information, constructability, provisions for temporary facilities and procurement and construction scheduling issues.

§ 2.1.5 Preliminary Cost Estimates§ 2.1.5.1 Based on the preliminary design and other design criteria prepared by the Architect, the Construction Manager shall prepare preliminary estimates of the Cost of the Work or the cost of program requirements using area, volume or similar conceptual estimating techniques for the Architect’s review and Owner’s approval. If the Architect or Construction Manager suggest alternative materials and systems, the Construction Manager shall provide cost evaluations of those alternative materials and systems.

§ 2.1.5.2 As the Architect progresses with the preparation of the Schematic Design, Design Development and Construction Documents, the Construction Manager shall prepare and update, at appropriate intervals agreed to by the Owner, Construction Manager and Architect, estimates of the Cost of the Work of increasing detail and refinement and allowing for the further development of the design until such time as the Owner and Construction Manager agree on a Guaranteed Maximum Price for the Work. Such estimates shall be provided for the Architect’s review and the Owner’s approval. The Construction Manager shall inform the Owner and Architect when estimates of the Cost of the Work exceed the latest approved Project budget and make recommendations for corrective action.

§ 2.1.6 Subcontractors and SuppliersConstruction Manager shall consult with Owner and Architect regarding pre-qualification criteria for Subcontractors, if any. The Construction Manager shall actively and positively develop subcontractor interest in the Project. Construction Manager shall establish bidding schedules and furnish to the Owner and Architect for their information a list of prospective subcontractors, for each trade or bid package, including suppliers who are to furnish materials or equipment fabricated to a special design, from whom proposals will be requested for each principal portion of the Work. All Subcontractors shall be reputable, financially sound, qualified firms with an established record of successful performance in their respective trades. The Architect will promptly reply in writing to the Construction Manager if the Architect or Owner know of any objection to such subcontractor or supplier. Construction Manager shall not request bids from, or contract with, any such proposed Subcontractor that Owner and Architect have rejected. The receipt of such list shall not require the Owner or Architect to investigate the qualifications of proposed subcontractors or suppliers, nor shall it waive the right of the Owner or Architect later to object to or reject any proposed subcontractor or supplier.

2.1.6.1 Construction Manager shall be responsible for developing procedures for the assignment of responsibilities for safety precautions and programs, temporary Project facilities, and equipment materials and services for common use of trade contractors or subcontractors (all such trade contractors, trade packages, subcontractors or suppliers are collectively referred to herein as “Subcontractors”). Construction Manager shall verify that such requirements and assignment of responsibilities are included in the proposed Contract Documents, and shall advise Owner and Architect of any omission and/or deficiencies therein in writing.


7

2.1.6.2 Construction Manager shall advise Owner and Architect on the separation of the Project into Subcontracts for various categories of Work. Without assuming design responsibility or responsibility for coordinating the various design elements, Construction Manager shall review the Drawings and Specifications and make recommendations as necessary to provide that (1) the Work activities of the separate Subcontractors is coordinated, (2) all express requirements for the Project (and those reasonably inferred by the express requirements) have been assigned to the appropriate Subcontractor or have otherwise been provided for as Work to be performed by Construction Manager’s own forces, (3) the likelihood of jurisdictional disputes has been minimized, and (4) proper coordination of activities has been provided for construction. The Construction Manager shall also assure that the Work under all Subcontracts, when aggregated with that of Construction Manager, will be complete and sufficient for the entire construction of the Project as indicated in the Contract Documents and plans.

2.1.6.3 Construction Manager shall prepare subcontracts (“Subcontracts”) and Construction Manager shall consult with Owner on the acceptability of trade Subcontractors and trade Sub-Subcontractors proposed by the Subcontractors. All trade Subcontracts shall incorporate A201-2007, and shall be assignable to Owner. All Subcontracts with respect to the Work will be between Construction Manager and the respective Subcontractors. The Construction Manager’s subcontract shall specifically provide that the Owner is an intended third-party beneficiary of the subcontract.

1.) The Construction Manager shall require its Subcontractors to furnish payment and performance bonds as specified in Section 8.1.1. In addition to that specification, Owner and Construction Manager shall consult and agree upon any additional Subcontractors that must furnish performance and payment bonds. If Owner and Construction Manager disagree, Owner’s preference shall govern. Subcontractors who are required to furnish performance and payment bonds, under either Section 8.1 or this subparagraph, shall furnish and maintain a performance and payment bond in the amount of the full value of the no less than twenty-five percent (25%) of the Subcontract, which bond shall name Construction Manager and Owner as co-obligees and shall be issued by a corporate surety acceptable to the Owner and Construction Manager and which is authorized to provide bonds in the State of Michigan, and shall be in a form of an AIA 311 or other form acceptable to Owner and Construction Managerapproved by Owner. To the extent that Section 8.1.1 requires First-Tier Subcontractors are required to provide a payment and performance bond in a greater penal amount, the greater amount in that Section shall apply to those subcontractors.

2.) Construction Manager shall provide to Owner, for Owner’s review, Construction Manager’s standard form of Subcontract and the copies of the executed final version of all any Subcontracts and Purchase Orders. prior to execution by a Subcontractor and/or Sub-Subcontractor. In no event shall any such review be deemed or construed as Owner’s undertaking of responsibility in any manner for construction means, methods, safety programs or other areas that are the responsibility of Construction Manager. Construction Manager shall provide the Owner with an executed copy of each and every Subcontract and Sub-Subcontract entered into for this Project within ten (10) days of the date on which said agreement is executed.

The Construction Manager shall develop bidders’ interest in the Project.

§ 2.1.7 The Construction Manager shall prepare, for the Architect’s review and the Owner’s acceptance, a procurement schedule for items that must be ordered well in advance of construction. The Construction Manager shall expedite and coordinate the ordering and delivery of materials that must be ordered well in advance of construction. If the Owner agrees to procure any items prior to the establishment of the Guaranteed Maximum Price, the Owner shall procure the items on terms and conditions acceptable to the Construction Manager. Upon the establishment of the Guaranteed Maximum Price, the Owner shall assign all contracts for these items to the Construction Manager and the Construction Manager shall thereafter accept responsibility for them. Construction Manager shall regularly advise Owner and Architect of the status of such materials and equipment at Project construction meetings.

§ 2.1.8 Extent of ResponsibilityThe Construction Manager shall exercise reasonable care in preparing schedules and estimates. The Construction Manager, however, does not warrant or guarantee estimates and schedules except as may be included as part of the Guaranteed Maximum Price. The Construction Manager is not required to ascertain that the Drawings and Specifications are in accordance with applicable laws, statutes, ordinances, codes, rules and regulations, or lawful orders of public authorities, but the Construction Manager shall promptly report to the Architect and Owner any AIA Document A133™ – 2009 (formerly A121™CMc – 2003). Copyright © 1991, 2003 and 2009 by The American Institute of Architects. All rights reserved. WARNING: This AIA® Document is protected by U.S. Copyright Law and International Treaties. Unauthorized reproduction or distribution of this AIA® Document, or any portion of it, may result in severe civil and criminal penalties, and will be prosecuted to the maximum extent possible under the law. This draft was produced by AIA software at 15:31:05 on 07/02/2010 under Order No.8683877506_1 which expires on 09/17/2010, and is not for resale.User Notes: (1312978247)

8

nonconformity discovered by or made known to the Construction Manager as a request for information in such form as the Architect may require.

§ 2.1.9 Notices and Compliance with LawsThe Construction Manager shall comply with applicable laws, statutes, ordinances, codes, rules and regulations, and lawful orders of public authorities applicable to its performance under this Contract, and with equal employment opportunity programs, and other programs as may be required by governmental and quasi governmental authorities for inclusion in the Contract Documents.

§ 2.2 Guaranteed Maximum Price Proposal and Contract Time§ 2.2.1 At a time to be mutually agreed upon by the Owner and the Construction Manager and in consultation with the Architect, the Construction Manager shall prepare a Guaranteed Maximum Price proposal for the Owner’s review and acceptance. Prior to performance of Construction Services and in accordance with the requirements set forth in this Section 2.2, the Construction Manager, in consultation with the Architect, shall prepare and deliver to the Owner for its review and acceptance a Guaranteed Maximum Price (“GMP”) proposal when the Construction Documents are seventy-five percent (75%) complete. “Seventy-five percent (75%) complete” Construction Documents is defined as the point in the development of the drawings when Foundation Drawings and Trade Drawings are 100% complete. The Guaranteed Maximum Price in the proposal shall be the sum of the Construction Manager’s estimate of the Cost of the Work, including contingencies described in Section 2.2.4, and the Construction Manager’s Fee.

Solely as an accommodation to the Owner, and without binding effect on either party, Construction Manager will provide Owner with a “conceptual budget” when the Construction Drawings are fifty percent (50%) complete.

If the GMP proposal is finalized in accordance with this Section 2.2 and the Guaranteed Maximum Price Amendment is executed by the parties, the Owner shall issue a written notice to the Construction Manager (“Notice to Proceed”) establishing the date construction is to commence (the “Commencement Date”).

§ 2.2.2 Construction Cost Contingency. To the extent that the Drawings and Specifications are anticipated to require further development by the Architect, the Construction Manager shall provide in the Guaranteed Maximum Price for such further development consistent with the Contract Documents and reasonably inferable therefrom. Such further development does not include such things as changes in scope, systems, kinds and quality of materials, finishes or equipment, all of which, if required, shall be incorporated by Change Order.

It is understood and agreed that the Construction Cost Contingency shall be available for to the Construction Manager to cover additional costs that are not otherwise the responsibility of the Owner and are not resulting from the Construction Manager’s gross negligence. NEED THIS LANGUAGE BACK The estimated Cost of the Work shall include a Construction Cost Contingency – a sum established by the Construction Manager’s exclusive use to cover possible additional costs arising under Cost of the Work as defined in Section 6.1.1, and other costs which are properly reimbursable as Cost of the Work but not the basis for a Change Order, subject to the Owner’s review and approval as noted in Section 2.2.2.1, below. By way of example and not limitation Construction Cost Contingency would be available for: (i) items of Work within the scope of the Contract Documents but not included in a Subcontract due to errors of the Contractor or interfacing omissions; (ii) impact costs on unchanged portions of the Work resulting from Change Orders to other portions of the Work discovered subsequent to the execution of a Change Order; (iii) time extensions as to which no increase in the Contract Price is allowed; (iv) estimating errors by the Construction Manager; (iv) omissions in the preparation of bid packages or awarding of Subcontracts; (vi) financial failures of unbonded Subcontractors or suppliers; (vii) correction costs not recoverable under Subcontracts or which are less than the cost of pursuing recovery from the Subcontractor (or its surety if the Subcontractor is bonded); (viii) overtime costs not allowed under this Agreement to expedite work to maintain the CPM Schedule to make up delays caused by the Construction Manager or a Subcontractor(s); NEED (viii) back in (ix) correction of defects to the extent that the costs thereof are not recoverable from the responsible Subcontractor, or which are less than the costs of pursuing recovery from the Subcontractor (or its surety if the Subcontractor is bonded); (x) costs resulting from bidder or Subcontractor defaults including bidder failure to execute a Subcontract; NEED (x) back in (xi) extraordinary or unpredictable labor rate and material increases during construction; and (viixii); and costs not otherwise recoverable under the Contract Documents resulting from coordination or constructability problems in the Drawings and Specifications or omissions in the Drawings and Specifications. The specific use of the Construction


9

Contingency shall be reported upon on a monthly basis by the Construction Manager, and the Construction Manager shall provide backup for any charges against the contingency. Use of the contingency shall not entitle the Construction Manager to any additional fee beyond that already included in the Guaranteed Maximum Price.Contractor.

If the actual Construction Cost amount for a Subcontract or Purchase Order awarded by the Construction Manager is less than the respective amount included in the Guaranteed Maximum Price for such Work items, the difference (“Buy-Out Savings) shall be added to the Construction Cost Contingency. If the actual Construction Cost amount for a Subcontract or Purchase Order is more than the respective amount included in the Guaranteed Maximum Price for such Work items, the over-run (“Buy-Out Over-Run”) shall be charged against the Construction Cost Contingency. Construction Manager shall show the Construction Contingency as a separate line item on each subsequent Schedule of Value and Project cost report. All unused portions of the Construction Cost Contingency shall remain the property of the Owner.

§ 2.2.2.1 Construction Manager may expend funds from the Construction Contingency for Cost of the Work incurred for completion of the Project, as described in the preceding section. The Owner has seven (7) days after receipt of the Construction Manager’s backup and report to object to the expenditure of the funds. In the event that the Owner objects, it shall provide Construction Manager with written explanation. The Construction Manager shall have seven (7) days to respond and demonstrate to Owner’s reasonable satisfaction that Construction Manager may properly charge the disputed cost against the Construction Contingency fund. If Construction Manager either fails to respond within seven (7) days or fails to reasonably satisfy Owner, then the dispute costs shall be credited back to the Construction Contingency for Costs of the Work. If Construction Manager believes Owner has unreasonably withheld approval, the Construction Manager may pursue the claim in accordance with Article 9, the Alternative Dispute Resolution Procedure

§ 2.2.3 The Construction Manager shall include with the Guaranteed Maximum Price proposal a written statement of its basis, which shall include the following:

.1 A list of the Drawings and Specifications, including all Addenda thereto, and the Conditions of the Contract;

.2 A list of the clarifications and assumptions made by the Construction Manager in the preparation of the Guaranteed Maximum Price proposal, including assumptions under Section 2.2.2, to supplement the information provided by the Owner and contained in the Drawings and Specifications;

.3 A statement of the proposed Guaranteed Maximum Price, including a statement of the estimated Cost of the Work organized by trade categories or systems, allowances, contingency, and the Construction Manager’s Fee;

.4 The anticipated date of Substantial Completion upon which the proposed Guaranteed Maximum Price is based; and

.5 An outline of preliminary Construction Schedule showing proposed start and finish dates of major components of construction; and

.6 A date by which the Owner must accept the Guaranteed Maximum Price. The date for acceptance provided for in the Guaranteed Maximum Price proposal must reflect a reasonable period of time for the Owner to review the Guaranteed Maximum Price proposal.

§ 2.2.4 In preparing the Construction Manager’s Guaranteed Maximum Price proposal, the Construction Manager shall include its contingency for the Construction Manager’s exclusive use to cover those costs considered reimbursable as the Cost of the Work but not included in a Change Order. To the extent there are any unused funds in this contingency upon final completion and acceptance of the Work, the remaining unused portion shall revert to the Owner.

§ 2.2.5 The Construction Manager shall meet with the Owner and Architect to review the Guaranteed Maximum Price proposal. In the event that the Owner and Architect discover any inconsistencies or inaccuracies in the information presented, they shall promptly notify the Construction Manager, who shall make appropriate adjustments to the Guaranteed Maximum Price proposal, its basis, or both.

§ 2.2.6 If the Owner notifies the Construction Manager that the Owner has accepted the Guaranteed Maximum Price proposal in writing before the date specified in the Guaranteed Maximum Price proposal, the Guaranteed Maximum


10

Price proposal shall be deemed effective without further acceptance from the Construction Manager. Following acceptance of a Guaranteed Maximum Price, the Owner and Construction Manager shall execute the Guaranteed Maximum Price Amendment amending this Agreement, a copy of which the Owner shall provide to the Architect. The Guaranteed Maximum Price Amendment shall set forth the agreed upon Guaranteed Maximum Price with the information and assumptions upon which it is based.

§ 2.2.7 The Construction Manager shall not incur any cost to be reimbursed as part of the Cost of the Work prior to the commencement of the Construction Phase, unless the Owner provides prior written authorization for such costs.

2.2.7.1 The Owner may furnish the Construction Manager a Notice to Proceed before the Parties agree upon a Guaranteed Maximum Price. The Construction Manager shall commence work within 10 days of receipt of the Notice to Proceed or the issuance of the applicable building permit, whichever is later, even if a Guaranteed Maximum Price has yet to be established. The Owner and the Construction Manager shall agree upon the cost of such work, and the cost shall be included in the subsequently agreed upon Guaranteed Maximum Price.

§ 2.2.8 The Owner shall authorize the Architect to provide the revisions to the Drawings and Specifications to incorporate the agreed-upon assumptions and clarifications contained in the Guaranteed Maximum Price Amendment. The Owner shall promptly furnish those revised Drawings and Specifications to the Construction Manager as they are revised. The Construction Manager shall notify the Owner and Architect of any inconsistencies between the Guaranteed Maximum Price Amendment and the revised Drawings and Specifications.

§ 2.2.9 The Construction Manager shall include in the Guaranteed Maximum Price all sales, consumer, use and similar taxes for the Work provided by the Construction Manager that are legally enacted, whether or not yet effective, at the time the Guaranteed Maximum Price Amendment is executed. The Guaranteed Maximum Price shall reflect the fact that Subcontractors shall not be paid for extra work on this Project on a time-and-material basis without Owner’s written concurrence.

§ 2.3 Construction Phase§ 2.3.1 General§ 2.3.1.1 For purposes of Section 8.1.2 of A201–2007, the date of commencement of the Work shall mean the date of commencement of the Construction Phase.

§ 2.3.1.2 The Construction Phase shall commence upon the Owner’s acceptance of the Construction Manager’s Guaranteed Maximum Price proposal or the Owner’s issuance of a Notice to Proceed, whichever occurs earlier.

§ 2.3.1.3 The Construction Manager shall establish and timely submit for Owner review:(i) Project cost control procedures;(ii) Project reporting procedures;(iii) Project Manual;(iv) Quality Management Program; and(v) Staffing Plan for the Construction period.

§ 2.3.2 Administration§ 2.3.2.1 Those portions of the Work that the Construction Manager does not customarily perform with the Construction Manager’s own personnel shall be performed under subcontracts or by other appropriate agreements with the Construction Manager. The Owner may designate specific persons from whom, or entities from which, the Construction Manager shall obtain bids. The Construction Manager shall obtain bids from Subcontractors and from suppliers of materials or equipment fabricated especially for the Work and shall deliver such bids to the Architect and the Owner. Owner’s Representative and/or consultant have the right to be present during the bid opening, and to view the bids as received and opened.. The Owner shall then determine, with the advice of the Construction Manager and the Architect, which bids will be accepted. The Construction Manager shall not be required to contract with anyone to whom the Construction Manager has reasonable objection.

§ 2.3.2.1.1 If Construction Manager believes that any actual construction would be best performed with its forces, it shall first request permission from the Owner to bid on such work. The Owner shall not unreasonably withhold


11

such permission. With the prior written approval of Owner, Construction Manager shall be permitted to bid on such work, but Construction Manager shall also solicit three additional bids, if possible. All bids on Work for which Construction Manager is a bidder shall be submitted and received at the office of the Owner. Should Owner agree that Construction Manager will perform any portion of the work with its own forces, Construction Manager shall treat the invoice for payment for that work the same as if for an independent subcontractor. Construction Manager shall not include the cost of equipment, tools, materials, or personnel performing the work as part of its General Conditions expense, under Article 6 or any other category so as to eliminate any “double dip” for those expenses.

§ 2.3.2.2 If the Guaranteed Maximum Price has been established and when a specific bidder (1) is recommended to the Owner by the Construction Manager, (2) is qualified to perform that portion of the Work, and (3) has submitted a bid that conforms to the requirements of the Contract Documents without reservations or exceptions, but the Owner requires that another bid be accepted, then the Construction Manager may require that a Change Order be issued to adjust the Contract Time and the Guaranteed Maximum Price by the difference between the bid of the person or entity recommended to the Owner by the Construction Manager and the amount and time requirement of the subcontract or other agreement actually signed with the person or entity designated by the Owner.

§ 2.3.2.3 Subcontracts or other agreements shall conform to the applicable payment provisions of this Agreement, and shall not be awarded on the basis of cost plus a fee without the prior consent of the Owner. If the Subcontract is awarded on a cost-plus a fee basis, the Construction Manager shall provide in the Subcontract for the Owner to receive the same audit rights with regard to the Subcontractor as the Owner receives with regard to the Construction Manager in Section 6.11 below.

§ 2.3.2.4 If the Construction Manager recommends a specific bidder that may be considered a “related party” according to Section 6.10, then the Construction Manager shall promptly notify the Owner in writing of such relationship and notify the Owner of the specific nature of the contemplated transaction, according to Section 6.10.2.

§ 2.3.2.5 The Construction Manager shall schedule and conduct meetings to discuss such matters as procedures, progress, coordination, scheduling, and status of the Work. The Construction Manager shall prepare and promptly distribute minutes to the Owner and Architect.

§ 2.3.2.6 Upon the execution of the Guaranteed Maximum Price Amendment, the Construction Manager shall prepare and submit to the Owner and Architect a construction schedule for the Work and submittal schedule in accordance with Section 3.10 of A201–2007.

§2.3.2.6.1 The Construction Manager shall update the Project Construction Schedule with current activities of Subcontractors on the Project, including processing of Shop Drawings and similar required submittals and delivery of products requiring long lead time procurement. Construction Manager shall include the Project occupancy requirements showing portions of the Project having occupancy priority, if any are established with the Owner. Construction Manager shall update and reissue the Project Construction Schedule monthly to show current conditions and revisions required by actual experience. Submissions of such updated schedules shall be a condition to Owner’s payment of monthly Applications for Payment. Construction Manager shall maintain the progress of all Work in accordance with the approved Project Construction Schedule, and to ensure all work meets the approved plans and specifications for the Project.

§ 2.3.2.7 The Construction Manager shall record the progress of the Project. On a monthly basis, or otherwise as agreed to by the Owner, the Construction Manager shall submit written progress reports to the Owner and Architect, showing percentages of completion and other information required by the Owner. The Construction Manager shall also keep, and make available to the Owner and Architect, a daily log containing a record for each day of weather, portions of the Work in progress, number of workers on site, identification of equipment on site, problems that might affect progress of the work, accidents, injuries, and other information required by the Owner.

§ 2.3.2.8 The Construction Manager shall develop a system of cost control for the Work, including regular monitoring of actual costs for activities in progress and estimates for uncompleted tasks and proposed changes. The Construction Manager shall identify variances between actual and estimated costs and report the variances to the


12

Owner and Architect and shall provide this information in its monthly reports to the Owner and Architect, in accordance with Section 2.3.2.7 above.

§2.3.2.9 The Construction Manager shall provide administrative, management and related services as required to coordinate the Work of Subcontractors with each other and with the activities and responsibilities of Owner and Architect, and Consultants where applicable, to complete the Project in accordance with the Contract Documents. The Construction Manager shall supervise and coordinate all aspects of the Project with all authorities, governmental agencies and utility companies who may be involved in the Project. The Construction Manager shall provide sufficient organization, personnel and management to carry out the requirements of this Agreement. The Construction Manager shall take all reasonable steps necessary to enforce agreements with Subcontractors for the benefit of Owner.

§2.3.2.10 The Construction Manager shall prepare a construction staging plan setting forth construction scheduling, lay down areas and storage, trailer areas, trailer locations, priorities as to site use, ingress/egress and other similar site logistic matters for the Project.

§2.3.2.11 Construction Manager shall be fully responsible for for and shall obtain satisfactory performance from each of the Subcontractors against the Project schedule, and the each of its Subcontractor’s timely performance and compliance with the Drawings and Specifications. Construction Manager shall advise consult with Owner regarding available courses of action when material requirements of a Subcontract are not being fulfilled and the non-performing party will not take satisfactory corrective action that is satisfactory to the Construction Manager.

§2.3.2.12 Construction Manager shall maintain, revise and issue monthly Cost vs. Budget Reports, which shall set forth actual and projected costs for the Project. Construction Manager shall incorporate approved changes to the Work as they occur and shall develop cash flow reports and forecasts as needed by Owner or Architect. Construction Manager shall submit to Owner a form of Anticipated Cost Report for use on the Project for Owner’s review, comment and acceptance. Upon acceptance by Owner, the form of Cost vs. Budget Report shall establish the standard for detail required for the remainder of the Project.

§2.3.2.9.13 The Anticipated Cost Report will show actual costs for completed activities and estimates for uncompleted tasks and will identify variances between actual and budgeted or estimated costs. Construction Manager shall advise Owner and Architect whenever projected costs exceed budgets or estimates and provide cost saving measures to negate budget deficits.

§2.3.2.14 Construction Manager shall be responsible to assure safe construction operations, shall review the safety programs developed by each of Subcontractors as required by their Contract Documents and shall coordinate the safety programs for the Project. Construction Manager shall be solely responsible to Owner for the adequacy of all construction means, methods, techniques and procedures employed by Construction Manager or its Subcontractors in the performance of the Work, and for coordinating all portions of the Work to be performed.

§2.3.2.15 Construction Manager shall prepare applications for and obtain all necessary and required building permits and special permits for permanent improvements, excluding permits required to be obtained directly by its the various Subcontractors. With respect to permits that Subcontractors are required to obtain, Construction Manager shall require insure that all such Subcontractors obtain have obtained those permits before they commence their work. Construction Manager shall verify that applicable fees and assessments for all permits have been paid. Construction Manager shall obtain, with Owner’s assistance, approval from authorities having jurisdiction over the Project, including but not limited to a Certificate of Occupancy after having achieved Substantial Completion, as defined by AIA A-201-2007, General Conditions of the Contract for Construction.

§2.3.2.16 Construction Manager shall immediately notify Owner and Architect in writing of any inaccuracies of which Construction Manager may become aware in any surveys or other documentation describing the physical characteristics, legal limitations, and utility locations for the Project Site.

§2.3.2.17 Construction Manager shall assist Owner in selecting and retaining the professional services of surveyors, special consultants and testing laboratories. Construction Manager shall supervise and coordinate its services with those provided by Owner’s Architect and other Consultants.


13

§2.3.2.18 Construction Manager shall develop and establish, for Owner’s benefit, a quality assurance control system in order that the standards of construction called for, specified, or drawn are met. Construction Manager shall develop a checking and testing procedure, which will ensure that all systems are adequately tested and balanced prior to their acceptance. Construction Manager shall coordinate all testing provided by others as required by the technical sections of the Specifications, and/or required by governing bodies charged with inspecting the Work for compliance with applicable building codes , and/or as required by applicable building codes and shall require that ensure all Work comply work complies with the Drawings and Specifications for the Project as well as such building codes. as well as such building codes. Construction Manager shall keep an accurate record of all tests, inspections conducted, findings, and test reports, and shall make them available to the Owner and Architect for review and copying.

§2.3.2.19 Construction Manager shall perform the Work in accordance with the requirements of the Contract Documents and shall assure that the Work of each Subcontractor is being performed in accordance with the requirements of the Contract Documents . Construction Manager shall endeavor to protect Owner against defects and deficiencies in the Work, shall warrant the Work is free from all defects and deficiencies, and shall correct at its expense all defects and deficiencies. As appropriate, Construction Manager shall require special inspection or testing, and make recommendations to Architect regarding special inspection or testing of Work.

§2.3.2.20 Construction Manager shall receive from each Subcontractor, review for conformance with the Contract Documents, approve or reject for re-review and submit to Architect all Shop Drawings, Product Data, Samples, As-Built Drawings and other submittals. Without assuming any of Architect’s responsibility for Shop Drawing review, Construction Manager shall stamp all Shop Drawings, Product Data, Samples, As-Built Drawings and other submittals, in order to verify Construction Manager’s review and approval thereof, which stamp shall constitute a representation by Construction Manager to Owner that the submitted item conforms with the Contract Documents and is coordinated with other shop drawings. Construction Manager shall transmit all submittals to Architect for Architect’s approval, and where applicable to Consultants for their approval. In collaboration with Architect, and where applicable with Consultants, Construction Manager shall establish and implement procedures for expediting the processing and approval of Shop Drawings, Product Data, Samples, As-Built Drawings and other submittals, and shall assure that the approved Project Construction Schedule shall include acceptable dates for the preparation, submission, processing and review of Shop Drawings and other required submittals. Architect’s review of submittals, or where applicable review by Consultants, by Construction Manager or by any Subcontractor shall be limited to review of an initial submittal and two (2) re-submittals for conformance with the design concepts expressed in the Contract Documents. Construction Manager shall pay or cause the responsible Subcontractor to pay (without reimbursement from Owner) for any costs and expenses incurred in connection with additional re-submittals, including, without limitation, compensating Architect and where applicable Consultants for additional services rendered in connection with reviewing such “extra” re-submittals, and agrees Owner may deduct such payment from the next monthly payment(s), when the re-submittals in excess of the allotted two reviews is caused by the Construction Manager, Subcontractor, and/or Sub-Subcontractor’s error.

§2.3.2.21 Construction Manager shall maintain at the Project Site, on a current basis: A record copy of all Drawings, Specifications and Addenda in good order and marked to record all changes made during construction; Change Order Logs and other Modifications; Shop Drawing Logs; Shop Drawings; Product Data; Samples; As-Built Drawings; submittals; applicable handbooks; maintenance and operating manuals and instructions; and other related documents and revisions which arise out of the Work. Construction Manager shall maintain records, in duplicate, of principal building layout lines, elevations of the bottom of footings, floor levels and key site elevations certified by a qualified surveyor or professional engineer. Construction Manager shall make all records available to Owner and Architect. As a condition of Final Payment, At the completion of the Project, Construction Manager shall deliver all such records to Architect for Owner. Construction Manager is responsible for preparing and submitting the marked-up Drawings, and the Architect shall prepare the record Drawings. The As-Built Drawings shall be prepared by using such version of AutoCad as agreed to by Owner, Architect and Construction Manager.

§2.3.2.22 Construction Manager shall arrange for delivery and storage, protection and security for Subcontractor furnished/installed and Owner-furnished/contractor-installed materials, systems and equipment which are a part of the Project until such items are satisfactorily incorporated into the Project.

§2.3.2.23 When Construction Manager considers the Work of a designated portion thereof substantially complete, Construction Manager shall prepare for Architect a list of items that are incomplete or not in compliance with the


14

Contract Documents unsatisfactory items and a schedule for their completion, all as more fully set forth in A201-2007. After Architect certifies the date of Substantial Completion of the Work, Construction Manager shall complete, or have completed all items of incomplete Work and perform, or have performed, any corrective Work as required by the Certificate of Substantial Completion.

§2.3.2.24 Construction Manager shall develop in conjunction with Owner and Architect a schedule setting forth anticipated dates for phased inspections of the Work or portions thereof (as the case may be) by Owner and Architect in order to determine Substantial Completion and Final Completion of the Work or designated portions thereof. If, after making any of such inspections, Architect, after consultation with Owner, determines that the Work or such portion thereof is not substantially complete or finally complete (as the case may be) or that any previously scheduled punchwork list has not been completed, then Construction Manager shall pay or cause the responsible Subcontractor to pay (without reimbursement from Owner) for any costs and expenses incurred in connection with such additional inspections, including, without limitation, compensating Architect for additional services rendered in connection with the performance of such additional inspections.

§2.3.2.25 In addition to other legal remedies available to Owner, upon written notice to Construction Manager with a detailed explanation and after a reasonable opportunity to cure of no less than seven (7) days, Owner has the right to backcharge, or retain sums from the amount owed to, the Construction Manager for (a) completing Work that is not finished; and (b) correcting Work that is not in compliance with the Contract Documentsunsatisfactory; and (c) additional services performed by the Architect during the course of the Project for which it is not paid which were made necessary by Construction Manager’s performance deficiencies or failures. This paragraph is not intended to be a complete listing of the circumstances that allow the Owner to backcharge or retain sums from amounts owed to the Construction Manager, but rather is intended to specify three of the most obvious situations where Owner has that right.

§ 2.4 Professional ServicesSection 3.12.10 of A201–2007 shall apply to both the Preconstruction and Construction Phases.

§ 2.5 Hazardous MaterialsSection 10.3 of A201–2007 shall apply to both the Preconstruction and Construction Phases.

ARTICLE 3 OWNER’S RESPONSIBILITIES§ 3.1 Information and Services Required of the Owner§ 3.1.1 The Owner shall provide information with reasonable promptness, regarding requirements for and limitations on the Project, including a written program which shall set forth the Owner’s objectives, constraints, and criteria, including schedule, space requirements and relationships, flexibility and expandability, special equipment, systems sustainability and site requirements.

§ 3.1.2 Prior to the execution of the Guaranteed Maximum Price Amendment, the Construction Manager may request in writing that the Owner provide reasonable evidence that the Owner has made financial arrangements to fulfill the Owner’s obligations under the Contract. Thereafter, the Construction Manager may only request such evidence if (1) the Owner fails to make payments to the Construction Manager as the Contract Documents require, (2) a change in the Work materially changes the Contract Sum, or (3) the Construction Manager identifies in writing a reasonable concern regarding the Owner’s ability to make payment when due. The Owner shall furnish such evidence as a condition precedent to commencement or continuation of the Work or the portion of the Work affected by a material change. After the Owner furnishes the evidence, the Owner shall not materially vary such financial arrangements without prior notice to the Construction Manager and Architect.

§ 3.1.3 The Owner shall establish and periodically update the Owner’s budget for the Project, including (1) the budget for the Cost of the Work as defined in Section 6.1.1, (2) the Owner’s other costs, and (3) reasonable contingencies related to all of these costs. If the Owner significantly increases or decreases the Owner’s budget for the Cost of the Work, the Owner shall notify the Construction Manager and Architect. The Owner and the Architect, in consultation with the Construction Manager, shall thereafter agree to a corresponding change in the Project’s scope and quality.


15

§ 3.1.4 Structural and Environmental Tests, Surveys and Reports. During the Preconstruction Phase, the Owner shall furnish the following information or services with reasonable promptness. The Owner shall also furnish any other information or services under the Owner’s control and relevant to the Construction Manager’s performance of the Work with reasonable promptness after receiving the Construction Manager’s written request for such information or services. To the extent that the information was generated by or prepared for the Owner, as opposed to prepared for an independent third party or governmental agency, the The Construction Manager shall be entitled to rely on the accuracy of information and services furnished by the Owner. Regardless of the source of the information, the Construction Manager but shall exercise proper precautions relating to the safe performance of the Work.

§ 3.1.4.1 The Owner shall furnish tests, inspections and reports required by law and as otherwise agreed to by the parties, such as structural, mechanical, and chemical tests, tests for air and water pollution, and tests for hazardous materials.

§ 3.1.4.2 The Owner shall furnish surveys describing physical characteristics, legal limitations and utility locations for the site of the Project, and a legal description of the site. The surveys and legal information shall include, as applicable, grades and lines of streets, alleys, pavements and adjoining property and structures; designated wetlands; adjacent drainage; rights-of-way, restrictions, easements, encroachments, zoning, deed restrictions, boundaries and contours of the site; locations, dimensions and necessary data with respect to existing buildings, other improvements and trees; and information concerning available utility services and lines, both public and private, above and below grade, including inverts and depths. All the information on the survey shall be referenced to a Project benchmark.

§ 3.1.4.3 The Owner, when such services are requested, shall furnish services of geotechnical engineers, which may include but are not limited to test borings, test pits, determinations of soil bearing values, percolation tests, evaluations of hazardous materials, seismic evaluation, ground corrosion tests and resistivity tests, including necessary operations for anticipating subsoil conditions, with written reports and appropriate recommendations.

§ 3.1.4.4 During the Construction Phase, the Owner shall furnish information or services required of the Owner by the Contract Documents with reasonable promptness. The Owner shall also furnish any other information or services under the Owner’s control and relevant to the Construction Manager’s performance of the Work with reasonable promptness after receiving the Construction Manager’s written request for such information or services.

§ 3.2 Owner’s Designated RepresentativeThe Owner shall identify a representative authorized to act on behalf of the Owner with respect to the Project. The Owner’s representative shall render decisions promptly and furnish information expeditiously, so as to avoid unreasonable delay in the services or Work of the Construction Manager. It shall be Construction Manager’s responsibility to timely advise Owner of all time requirements and restraints with respect to such approvals and decisions that are not identified on the Project Schedule. Except as otherwise provided in Section 4.2.1 of A201–2007, the Architect does not have such authority. The term “Owner” means the Owner or the Owner’s authorized representative. Owner reserves the right to change such representative, and Owner shall notify Construction Manager in writing within 10 business days of such change.

§ 3.2.1 Legal Requirements. To the extent Owner is aware of any special legal requirements relating specifically to the Project which differ from those generally applicable to construction in the jurisdiction of the Project, Owner shall so advise the Construction Manager and Architect. The Owner shall furnish all legal, insurance and accounting services, including auditing services, that may be reasonably necessary at any time for the Project to meet the Owner’s needs and interests.

3.2.2 If Owner observes or otherwise becomes aware of any fault or defect in the Project or nonconformance with the Contract Documents, written notice thereof shall be given by Owner to Construction Manager, and to the Architect and any applicable Consultant; provided, however, that this Paragraph shall apply only to such actual knowledge of any fault, defect or nonconformance as may be obtained by Owner’s Representative, and it is specifically understood that Owner shall have no obligation to investigate for the purpose of becoming aware of faults, defects or nonconformance. Owner’s obligation as set forth in this Paragraph is only with respect to such faults, defects or nonconformance as may come to the attention of said representative or his/her designee.


16

§ 3.3 ArchitectThe Owner shall retain an Architect to provide services, duties and responsibilities as described in AIA Document B103™–2007, Standard Form of Agreement Between Owner and Architect, or another Agreement between the Owner and the Architect, including any additional services requested by the Construction Manager that are necessary for the Preconstruction and Construction Phase services under this Agreement. The Owner shall provide the Construction Manager a copy of the executed agreement between the Owner and the Architect, and any further modifications to the agreement.

ARTICLE 4 COMPENSATION AND PAYMENTS FOR PRECONSTRUCTION PHASE SERVICES§ 4.1 Compensation§ 4.1.1 For the Construction Manager’s Preconstruction Phase services, the Owner shall compensate the Construction Manager as follows:

§ 4.1.2 For the Construction Manager’s Preconstruction Phase services described in Sections 2.1 and 2.2:(Insert amount of, or basis for, compensation and include a list of reimbursable cost items, as applicable.)

« Fee Schedule Attached. »

§ 4.1.3 If the Preconstruction Phase services covered by this Agreement have not been completed within « Six » ( « 6» ) months of the date of this Agreement, through no fault of the Construction Manager, the Construction Manager’s compensation for Preconstruction Phase services shall be equitably adjusted.

§ 4.1.4 Compensation based on Direct Personnel Expense includes the direct salaries of the Construction Manager’s personnel providing Preconstruction Phase services on the Project and the Construction Manager’s costs for the mandatory and customary contributions and benefits related thereto, such as employment taxes and other statutory employee benefits, insurance, sick leave, holidays, vacations, employee retirement plans and similar contributions.

§ 4.2 Payments§ 4.2.1 Unless otherwise agreed, payments for services shall be made monthly in proportion to services performed.

§ 4.2.2 Payments are due and payable upon presentation of the Construction Manager’s invoice. Amounts unpaid «thirty » ( «30 » ) days after the invoice date shall bear interest at the rate entered below, or in the absence thereof at the legal rate prevailing from time to time at the principal place of business of the Construction Manager.(Insert rate of monthly or annual interest agreed upon.)

« » % « » Interest. If Owner fails to make payment of an undisputed sum due as a Progress Payment to the Construction Manager as required by this Article 4, Owner shall pay interest to the Construction Manager equivalent to the rate applicable to judgments as set forth in Michigan’s Revised Judicature Act.

ARTICLE 5 COMPENSATION FOR CONSTRUCTION PHASE SERVICES§ 5.1 For the Construction Manager’s performance of the Work as described in Section 2.3, the Owner shall pay the Construction Manager the Contract Sum in current funds for the Construction Manager’s performance of the Contract. The Contract Sum is the Cost of the Work as defined in Section 6.1.1 plus the Construction Manager’s Fee.

§ 5.1.1 The Construction Manager’s Fee:The Construction Manager's Fee for the entire Project set forth in the Guaranteed Maximum Price shall be a fixed amount computed on the basis of one and eight-tenths percent (1.8%) of the Estimated Cost of the Work on which the Guaranteed Maximum Price Amendment is based. To the extent that a portion of the Work is authorized for release prior to acceptance of the GMP< by Work Authorization Amendment, the Construction Manager's Fee shall be allocated to the authorized Work in the Work Authorization Amendment based upon the relative Cost of the Work for that respective scope of the Work to a reasonable estimate of the Cost of the Work for the entire Work. The Construction Manager’s Fee shall be the Construction Manager’s complete fee compensation (which includes Construction Manager’s profit and indirect overhead) and, together with the payment for the Cost of the Work for those costs which are expressly set forth in Article 6 of this Agreement and as otherwise stated herein, shall


17

constitute Construction Manager’s sole reimbursement for indirect and direct costs and expenses, general conditions, and profit arising from or attributable to the performance of the Work as described herein.

a. Once the Guaranteed Maximum Price for the entire Project is established in a Contract Amendment, established by Work Authorization Amendment, if the changes in the Work cause the final Guaranteed Maximum Price for the entire Project to increase by more than One Hundred Thousand and no/100 Dollars ($100,000.00), the Construction Manager's Fee shall be increased by one and eight-tenths percent (1.8%) of that portion of the Estimated Cost of the Work on which the Guaranteed Maximum Price for the entire Project was based that increased in excess of One Hundred Thousand and no/100 Dollars ($100,000.00).

b. Once the Guaranteed Maximum Price for the entire Project is established in a Contract Amendmentby Work Authorization Amendment, if the changes in the Work (including a scope reduction) cause the final Guaranteed Maximum Price for the entire Project to decrease by more than One Hundred Thousand and no/100 Dollars ($100,000.00), the Construction Manager's Fee shall be decreased by one and eight-tenths percent (1.8%) of that portion of the Estimated Cost of the Work on which the Guaranteed Maximum Price for the entire Project was based that decreased in excess of One Hundred Thousand and no/100 Dollars ($100,000.00)

(State a lump sum, percentage of Cost of the Work or other provision for determining the Construction Manager’s Fee.)

« »

§ 5.1.2 The method of adjustment of the Construction Manager’s Fee for changes in the Work:

«< See Section 5.1.1 above> »

§ 5.1.3 Limitations, if any, on a Subcontractor’s overhead and profit for increases in the cost of its portion of the Work:5.1.3 Allowable Markups. Allowable Markups consist of the percentages set forth in this Paragraph 5.1.3 that, except as otherwise stated in the Contract Documents, are the maximum percentages (for Compensable Changes) and the minimum percentages (for Deleted Work) to be used for purposes of computing Contract Adjustments by means of the pricing methods set forth in Article 5. Subject to the exclusions and limitations set forth in Subparagraph 5.1.3.7, below, or elsewhere in the Contract Documents, Allowable Markups include and are limited to the following:

Construction Manager Overhead and Profit: The Construction Manager's profit and overhead shall be based on a markup calculation on Cost of the Changed Work, determined as follows:

1. For Work performed by the Construction Manager’s own forces, the markup shall be equal to fifteen percent (15%) of the direct cost as defined herein. Costs of tax and insurance shall not be marked up.

2. For Work performed by a Subcontractor, the Construction Manager markup shall be five percent (5%) of the direct cost of the Subcontractor and the Subcontractor markup shall be fifteen percent (15%) of his own direct cost. Costs of tax and insurance shall not be marked up.

3. For Work performed by a Sub-Subcontractor, the Construction Manager markup shall be five percent (5%) of the direct cost of the Sub-Subcontractor, the Subcontractor markup shall be five percent (5%) of the Sub-Subcontractor direct cost, and the Sub-Subcontractor markup shall be fifteen percent (15%) of his own direct cost. Costs of tax and insurance shall not be marked up.

4. All tiers lower than the Sub-Subcontractor shall have their markup included in the Sub-Subcontractor markup.

5. In all cases the total markup on the direct cost shall not exceed twenty five percent (25%). There shall be no compound markup.

The table below summaries the allowable markups:


18

Markup byWork Done By CM Sub Sub-Sub TotalCM 15% 15%Sub 5% 15% 20%Sub-Sub 5% 5% 15% 25%

§ 5.1.3.1 Review of Markups. It is Construction Manager's responsibility to review information submitted by Subcontractors and Subconsultants to ensure that all markups comply with the requirements of the Contract Documents. Payment by the Owner of markups that exceed Allowable Markups shall not be considered as a waiver by Owner of the right to require repayment by Construction Manager of any markup charged that is in excess of Allowable Markups and such excess amounts shall be promptly paid by Construction Manager to Owner.

§ 5.1.3.2 Exclusions and Limitations. Neither Construction Manager nor any Subcontractor of any tier is entitled as part of a Contract Adjustment to an Allowable Markup or any other markup or multiplier of any kind, on:

(1) agreed unit prices;

(2) Owner Furnished Materials;

(3) compensation payable to the Construction Manager for Compensable Delay; or

(4) any Allowable Cost or other compensation or cost with respect to which the Contract Documents state that there shall be “no Allowable Markup”, “no markup for overhead and profit” or words of similar meaning.

§ 5.1.4 Direct Cost of Changed Work Defined: Direct costs shall only include the basic wage rates for labor, labor burden, material and equipment required for the Contract Modification.

A. Labor rates will not be recognized when in excess of those prevailing in the locality and time the Work under Contract Modification is being performed. The costs for all supervision, including general superintendents and foreman, shall be included in the markup defined herein. Working foreman will be considered a direct cost if the individual is on the project site only installing Work under Contract Modification with no other work being performed at the time.

B. Labor burden shall only include fringe benefits by governing trade organizations. No other costs will be included as labor burden.

C. Material costs directly required for the performance of the Contract Modification. Such costs may include the cost of transportation. If a trade reduction by an actual supplier is available to the Contractor, it shall be credited to the Owner. If the materials are obtained from a supplier or source owned wholly by or in part by the Contractor, payment thereof will not exceed the current wholesale price for the materials.

D. Equipment Costs: The allowance for equipment costs (both rental as well as Contractor-owned equipment) shall be based on eighty (80) percent of the Association of Equipment Distributors (AED) Blue Book rental rates. Hourly, daily, weekly, or monthly rates shall be used, whichever is lower. Hourly rates including operator shall not be used. Unless otherwise specified, manufacturer’s ratings, and manufacturer-approved modifications, shall be used to classify equipment for determination of applicable rental rates.

1. The actual time to be paid for equipment shall be the time that the equipment is in productive operation on the Work under Contract Modification. In computing the hourly rental of equipment, any time less than thirty (30) minutes shall be considered one-half (1/2) hour. No payment will be made for time while equipment is inoperative due to breakdown, or for non-workdays. In addition, the rental time shall not include the time required to move the equipment to and from the project site. No mobilization or demobilization will be allowed for equipment already on site. If such equipment is not moved by its own power, then loading and transportation costs will be paid in lieu of rental time thereof. However,


19

neither moving time nor loading and transportation costs will be paid if the equipment is used on the Project Site in any other way than upon the work directly related to the Contract Modification.

2. Individual pieces of equipment having a replacement value of one thousand dollars ($1,000) or less shall be considered to be small tools or small equipment, and no payment will be made since the costs of these tools and equipment is included as part of the markup for overhead and profit defined herein.

3. Payment to the Contractor for the use of equipment as set forth above shall constitute full compensation to the Contractor for the cost of fuel, power, oil, lubricants, supplies, small equipment, necessary attachments, repairs and maintenance of any kind, depreciation, storage, insurance, labor (except for equipment operators), and any and all costs to the Contractor incidental to the use of the equipment.

E. Labor Productivity Rates: All Contract Modification work involving mechanical and electrical trades shall use labor productivity rates based on the following: Electrical labor productivity rates shall be based on the most current edition of N.E.C.A Column 1 with a five percent (5%) reduction. Wet side mechanical labor productivity rates shall be based on the most current edition of "M.C.A. Standards" with a twenty ten percent (1020%) reduction. Dry side mechanical labor productivity rates shall use SMACNA Standards at a ten twenty (120%) percent reduction.

F. Costs Included as part of the Markup for Project General Conditions (hereinafter "Overhead"), and Profit: All Contract Modification costs not specifically listed above as a direct cost shall be included in the markup for general conditions, including overhead and profit. No separate allowance or itemization for general conditions, including overhead costs shall be allowed. Below is a list of costs, which is not intended to be comprehensive, of the type of costs included in the markup for overhead and profit for all Contract Modifications including Force Account Work.

1. Field and home office personnel including, but not limited to, principals, project managers, superintendents, supervisory foremen, estimators, project engineers, detailers, draftsmen, schedulers, consultants, watchmen, payroll clerks, administrative assistants, and secretaries.

2. All field and home office expenses including, but not limited to, field trailers, parking, storage sheds, office equipment and supplies, telephone service and long distance telephone calls, fax machines, temporary utilities, sanitary facilities and services, janitorial services, small tools and equipment with a cost under $1000 each, portable scaffolding, blocking, shores, appliances, job vehicles, security and fencing, conformance to regulatory requirements including compliance to safety regulations, safety programs and meetings, cartage, warranties, as-builts, as well as any related maintenance costs.

3. Administrative functions such as, but not limited to, reviewing, coordinating, distributing, processing, posting, recording, estimating, negotiating, expediting, engineering, drawing, detailing, revising shop drawings, carting, layout, cleaning, protecting the work, and other incidental Work related to the Contract Modifications.

4. All other costs and taxes required to be paid, but not included under direct costs as defined above.

G. Miscellaneous Requirements:

1. For individual items within a Contract Modifications that only include deleted work of a Contractor or Subcontractors that would receive fifteen percent (15%) for work performed, the Owner shall receive a credit markup of ten percent (10%). That will be negotiated based on the Scope of Work deleted. Neither the Contractor nor the Subcontractor shall be allowed a positive markup on their respective Subcontractors to administer the credit Contract Modification.

2. When both additions and credits are involved in any one Contract Modification, the Contractor shall calculate its labor productivity and costs based on the net change in the quantity of the work for each item listed. For example, if a Contract Modification adds 14 light fixtures on one drawing and deletes 5


20

on another drawing, the "net change in quantity" is 9, and the labor productivity rates and costs shall be based on the net add of 9 light fixtures.

3. The Contractor shall be solely responsible for determining which of its Subcontractors receive Contract Modifications. No additional compensation will be provided the Contractor for the Subcontractor’s cost to review, post, coordinate and perform related tasks to administer Contract Modifications that do not result in directs cost charges from said Subcontractor. Such costs are considered normal business costs that are contractually determined prior to bid between the Contractor and its subcontractors, and that such costs shall be included in the Total Lump Sum Bid.

4. Taxes: Federal excise tax shall not be included. The Owner will issue an exemption on request.

5. Insurance and Bond Premiums: The actual cost to the Contractor of the following will be allowed with no markup for overhead and profit: Federal Insurance Contributions Act taxes, bond premiums, Federal and State Unemployment taxes; and net actual premium paid for public liability, workers' compensation, property damage, and other forms of insurance required by the Owner.

H. Records: The Contractor shall maintain its records in such a manner as to provide a clear distinction between the direct costs of Contract Modifications and the cost of the original Work. This requirement pertains to all types of Contract Modifications, as well as the Contractor's Requests for Changes and Claims.

I. Notice of Delay: Contractor shall notify the Owner of all anticipated delays resulting from proposed time extensions included with Contract Modification cost proposals, and Request for Changes.

J. Change Order: When the Owner and Contractor agree on the total cost and time of a PCO, the Owner will prepare a Change Order to formally implement the work described in the PCO.

K. Oral Instructions: No oral instruction of any person whomsoever shall in any manner or degree modify or otherwise affect the terms of this Contract.

For all work performed directly by the own forces of the Construction Manager, Subcontractors, Suppliers, Sub-Subcontractor’s or further lower tier Subcontractor’s or Suppliers, the allowable markup shall be 15% of the applicable Cost of the Changed Work being performed.

For any work that is not performed directly by the own forces of the Construction Manager, a Subcontractor, a Supplier, a Sub-subcontractor, or lower tier Subcontractor or Supplier, but for which such entities are responsible for over-sight, the allowable markup shall be 5% of the applicable Cost of the Changed Work being performed.

« »

§ 5.1.4 Rental rates for Construction Manager-owned equipment shall not exceed « » percent ( « » %) of the standard rate paid at the place of the Project. For clarity, equipment related to information technology and/or communication, such as computers, printers, cables, software, phones, fax machines, etc., are not Equipment and shall be a reimbursable expense as outlined in the Guaranteed Maximum Price.

§ 5.1.5 Unit prices, if any:(Identify and state the unit price; state the quantity limitations, if any, to which the unit price will be applicable.)

Item Units and Limitations Price per Unit ($0.00)

§ 5.2 Guaranteed Maximum Price§ 5.2.1 The Construction Manager guarantees that the Contract Sum shall not exceed the Guaranteed Maximum Price set forth in the Guaranteed Maximum Price Amendment, as it is amended from time to time. To the extent the Cost of the Work exceeds the Guaranteed Maximum Price, the Construction Manager shall bear such costs in excess of the Guaranteed Maximum Price without reimbursement or additional compensation from the Owner.


21

(Insert specific provisions if the Construction Manager is to participate in any savings.)

« »TO BE SUPPLIED AT TIME THE GUARANTEED MAXIMUM PRICE IS ESTABLISHED BY CHANGE ORDERGURANTEED MAXIMUM PRICE AMENDMENT, AIA A133 EXHIBIT A-2009.

§ 5.2.2 The Guaranteed Maximum Price is subject to additions and deductions by Change Order as provided in the Contract Documents and the Date of Substantial Completion shall be subject to adjustment as provided in the Contract Documents. The Owner acknowledges that the Guaranteed Maximum Price is a series of individual budgeted items and that cost over-runs in one item may be offset by cost under-runs in other items, so long as the overall Guaranteed Maximum Price is not exceeded.

§ 5.3 Changes in the Work§ 5.3.1 The Owner may, without invalidating the Contract, order changes in the Work within the general scope of the Contract consisting of additions, deletions or other revisions. The Owner shall issue such changes in writing. The Architect may make minor changes in the Work as provided in Section 7.4 of AIA Document A201–2007, General Conditions of the Contract for Construction. The Construction Manager shall be entitled to an equitable adjustment in the Contract Time as a result of changes in the Work.

§ 5.3.2 Adjustments to the Guaranteed Maximum Price on account of changes in the Work subsequent to the execution of the Guaranteed Maximum Price Amendment may be determined by any of the methods listed in Section 7.3.3 of AIA Document A201–2007, General Conditions of the Contract for Construction.

§ 5.3.3 In calculating adjustments to subcontracts (except those awarded with the Owner’s prior consent on the basis of cost plus a fee), the terms “cost” and “fee” as used in Section 7.3.3.3 of AIA Document A201–2007 and the term “costs” as used in Section 7.3.7 of AIA Document A201–2007 shall have the meanings assigned to them in AIA Document A201–2007 and shall not be modified by Sections 5.1 and 5.2, Sections 6.1 through 6.7, and Section 6.8 of this Agreement. Adjustments to subcontracts awarded with the Owner’s prior consent on the basis of cost plus a fee shall be calculated in accordance with the terms of those subcontracts.

§ 5.3.4 In calculating adjustments to the Guaranteed Maximum Price, the terms “cost” and “costs” as used in the above-referenced provisions of AIA Document A201–2007 shall mean the Cost of the Work as defined in Sections 6.1 to 6.7 of this Agreement and the term “fee” shall mean the Construction Manager’s Fee as defined in Section 5.1 of this Agreement.

§ 5.3.5 If no specific provision is made in Section 5.1.2 for adjustment of the Construction Manager’s Fee in the case of changes in the Work, or if the extent of such changes is such, in the aggregate, that application of the adjustment provisions of Section 5.1.2 will cause substantial inequity to the Owner or Construction Manager, the Construction Manager’s Fee shall be equitably adjusted on the same basis that was used to establish the Fee for the original Work, and the Guaranteed Maximum Price shall be adjusted accordingly.

ARTICLE 6 COST OF THE WORK FOR CONSTRUCTION PHASE§ 6.1 Costs to Be Reimbursed§ 6.1.1 The term Cost of the Work shall mean costs necessarily incurred by the Construction Manager in the proper performance of the Work. Such costs shall be at rates not higher than the standard paid at the place of the Project except with prior consent of the Owner. The Cost of the Work shall include only the items set forth in Sections 6.1 through 6.7.

§ 6.1.2 Where any cost is subject to the Owner’s prior approval, the Construction Manager shall obtain this approval prior to incurring the cost. The parties shall endeavor to identify any such costs prior to executing Guaranteed Maximum Price Amendment.

§ 6.2 Labor Costs§ 6.2.1 Wages of construction workers directly employed by the Construction Manager to perform the construction of the Work at the site or, with the Owner’s prior approval, at off-site workshops.

§ 6.2.2 Wages or salaries of the Construction Manager’s supervisory and administrative personnel when stationed at the site , but only to the extent of the services provided by personnel or their approved replacements below , and


22

wages or salaries of certain personnel stationed at the Construction Manager’s principal or other offices for the work performed for the Project, with the Owner’s prior approval., but only to the extent of the services provided by personnel or their approved replacements indentified below: (If it is intended that the wages or salaries of certain personnel stationed at the Construction Manager’s principal or other offices shall be included in the Cost of the Work, identify in Section 11.5, the personnel to be included, whether for all or only part of their time, and the rates at which their time will be charged to the Work.)

§ 6.2.3 Wages and salaries of the Construction Manager’s supervisory or administrative personnel engaged at factories, workshops or on the road, in expediting the production or transportation of materials or equipment required for the Work, but only for that portion of their time required for the Work.

§ 6.2.4 Costs paid or incurred by the Construction Manager for taxes, insurance, contributions, assessments and benefits required by law or collective bargaining agreements and, for personnel not covered by such agreements, customary benefits such as sick leave, medical and health benefits, holidays, vacations and pensions, provided such costs are based on wages and salaries included in the Cost of the Work under Sections 6.2.1 through 6.2.3.

§ 6.2.5 Bonuses, profit sharing, incentive compensation and any other discretionary payments paid to anyone hired by the Construction Manager or paid to any Subcontractor or vendor, with the Owner’s prior approval.

§ 6.3 Subcontract CostsPayments made by the Construction Manager to Subcontractors in accordance with the requirements of the subcontracts.

§ 6.4 Costs of Materials and Equipment Incorporated in the Completed Construction§ 6.4.1 Costs, including transportation and storage, of materials and equipment incorporated or to be incorporated in the completed construction.

§ 6.4.2 Costs of materials described in the preceding Section 6.4.1 in excess of those actually installed to allow for reasonable waste and spoilage. Unused excess materials, if any, shall become the Owner’s property at the completion of the Work or, at the Owner’s option, shall be sold by the Construction Manager. Any amounts realized from such sales shall be credited to the Owner as a deduction from the Cost of the Work.

§ 6.5 Costs of Other Materials and Equipment, Temporary Facilities and Related Items§ 6.5.1 Costs of transportation, storage, installation, maintenance, dismantling and removal of materials, supplies, temporary facilities, machinery, equipment and hand tools not customarily owned by construction workers that are provided by the Construction Manager at the site and fully consumed in the performance of the Work. Costs of materials, supplies, temporary facilities, machinery, equipment and tools that are not fully consumed shall be based on the cost or value of the item at the time it is first used on the Project site less the value of the item when it is no longer used at the Project site. Costs for items not fully consumed by the Construction Manager shall mean fair market value.

§ 6.5.2 Rental charges for temporary facilities, machinery, equipment and hand tools not customarily owned by construction workers that are provided by the Construction Manager at the site and costs of transportation, installation, minor repairs, dismantling and removal. The total rental cost of any Construction Manager-owned item may not exceed the purchase price of any comparable item. Rates of Construction Manager-owned equipment and quantities of equipment shall be subject to the Owner’s prior approval.

§ 6.5.3 Costs of removal of debris from the site of the Work and its proper and legal disposal.

§ 6.5.4 Costs of document reproductions, facsimile transmissions and long-distance telephone calls, postage and parcel delivery charges, telephone service at the site and reasonable petty cash expenses of the site office.

§ 6.5.5 That portion of the reasonable expenses of the Construction Manager’s supervisory or administrative personnel incurred while traveling in discharge of duties connected with the Work, outside the Metropolitan Detroit area (including Monroe County) with the Owner’s prior written approval.


23

§ 6.5.6 Costs of materials and equipment suitably stored off the site at a mutually acceptable location, subject to the Owner’s prior approval.

§ 6.6 Miscellaneous Costs§ 6.6.1 Premiums for that portion of insurance and bonds required by the Contract Documents that can be directly attributed to this Contract. Self-insurance for either full or partial amounts of the coverages required by the Contract Documents, with the Owner’s prior approval.

§ 6.6.2 Sales, use or similar taxes imposed by a governmental authority that are related to the Work and for which the Construction Manager is liable.

§ 6.6.3 Fees and assessments for the building permit and for other permits, licenses and inspections for which the Construction Manager is required by the Contract Documents to pay.

§ 6.6.4 Fees of laboratories for tests required by the Contract Documents, except those related to defective or nonconforming Work for which reimbursement is excluded by Section 13.5.3 of AIA Document A201–2007 or by other provisions of the Contract Documents, and which do not fall within the scope of Section 6.7.3.

§ 6.6.5 Royalties and license fees paid for the use of a particular design, process or product required by the Contract Documents; the cost of defending suits or claims for infringement of patent rights arising from such requirement of the Contract Documents; and payments made in accordance with legal judgments against the Construction Manager resulting from such suits or claims and payments of settlements made with the Owner’s consent. However, such costs of legal defenses, judgments and settlements shall not be included in the calculation of the Construction Manager’s Fee or subject to the Guaranteed Maximum Price. If such royalties, fees and costs are excluded by the last sentence of Section 3.17 of AIA Document A201–2007 or other provisions of the Contract Documents, then they shall not be included in the Cost of the Work.

§ 6.6.6 Costs for electronic equipment and software, directly related to the Work with the Owner’s prior approval.

§ 6.6.7 Deposits lost for causes other than the Construction Manager’s negligence or failure to fulfill a specific responsibility in the Contract Documents.

§ 6.6.8 Legal, mediation and arbitration costs, including attorneys’ fees, other than those arising from disputes between the Owner and Construction Manager, reasonably incurred by the Construction Manager after the execution of this Agreement in the performance of the Work and with the Owner’s prior approval, which shall not be unreasonably withheld.

§ 6.6.9 Subject to the Owner’s prior approval, expenses incurred in accordance with the Construction Manager’s standard written personnel policy for relocation and temporary living allowances of the Construction Manager’s personnel required for the Work.

§ 6.7 Other Costs and Emergencies§ 6.7.1 Other costs incurred in the performance of the Work if, and to the extent, approved in advance in writing by the Owner or as a cost in the Guaranteed Maximum Price Amendment.

§ 6.7.2 Costs incurred in taking action to prevent threatened damage, injury or loss in case of an emergency affecting the safety of persons and property, as provided in Section 10.4 of AIA Document A201–2007.

§ 6.7.3 Costs of repairing or correcting damaged or nonconforming Work executed by the Construction Manager, Subcontractors or suppliers, provided that such damaged or nonconforming Work was not caused by negligence or failure to fulfill a specific responsibility of the Construction Manager and only to the extent that the cost of repair or correction is not recovered by the Construction Manager from insurance, sureties, Subcontractors, suppliers, or others.

§ 6.7.4 The costs described in Sections 6.1 through 6.7 shall be included in the Cost of the Work, notwithstanding any provision of AIA Document A201–2007 or other Conditions of the Contract which may require the Construction Manager to pay such costs, unless such costs are excluded by the provisions of Section 6.8.


24

§ 6.8 Costs Not To Be Reimbursed§ 6.8.1 Cost incurred in connection with the following shall not be Cost of the Work and Owner shall make no payment in connection therewith other than as part of the Construction Manager’s General Conditions of the Work and FeeThe Cost of the Work shall not include the items listed below:

.1 The services and related expenses of any Construction Manager’s officers or home office supervisory personnel and Construction Manager’s personnel in its accounting legal, labor relations, insurance and tax departments and all other costs of doing business, services and related expenses required to maintain and operate Construction Manager’s home offices and any established branch offices, except as listed in the Construction Manager’s Guaranteed Maximum Price proposal and specifically provided in Section 6.2.; Salaries and other compensation of the Construction Manager’s personnel stationed at the Construction Manager’s principal office or offices other than the site office, except as specifically provided in Section 6.2, or as may be provided in Article 11;

.2 Expenses of the Construction Manager’s principal office and offices other than the site office;

.3 Overhead and general expenses of the Construction Manager, except as may be expressly included in Sections 6.1 to 6.7;

.4 The Construction Manager’s capital expenses, including interest on the Construction Manager’s capital employed for the Work;

.5 Except as provided in Section 6.7.3 of this Agreement, costs due to the negligence or failure of the Construction Manager, Subcontractors and suppliers or anyone directly or indirectly employed by any of them or for whose acts any of them may be liable to fulfill a specific responsibility of the Contract, including but not limited to, defective or nonconforming Work, disposal of materials and equipment wrongfully supplied, or making good any damage to property, except as providing in Art. 2.2.2;

.6 Any cost not specifically and expressly described in Sections 6.1 to 6.7;

.7 Costs, other than costs included in Change Orders approved by the Owner, that would cause the Guaranteed Maximum Price to be exceeded; and

.8 Costs for services incurred during the Preconstruction Phase for which Construction Manager was compensated under Article 4, above; and .

.9 Construction Manager shall not expense any motor vehicle to the Project, except as part of an employee’s benefits.

§ 6.9 Discounts, Rebates and Refunds§ 6.9.1 Cash discounts obtained on payments made by the Construction Manager shall accrue to the Owner if (1) before making the payment, the Construction Manager included them in an Application for Payment and received payment from the Owner, or (2) the Owner has deposited funds with the Construction Manager with which to make payments; otherwise, cash discounts shall accrue to the Construction Manager. The Construction Manager will use its best efforts to obtain trade discounts and cash discounts at time of negotiating Subcontracts. All discounts will inure to the benefit of the Owner, including discounts granted for prepayments or timely payments. The Construction Manager shall deliver to Owner invoices for the payments to be made at discounts in time for Owner to pay to Construction Manager the money necessary to timely make such payments. Trade discounts, rebates, refunds and amounts received from sales of surplus materials and equipment shall accrue to the Owner, and the Construction Manager shall make provisions so that they can be obtained.

§ 6.9.2 Amounts that accrue to the Owner in accordance with the provisions of Section 6.9.1 shall be credited to the Owner as a deduction from the Cost of the Work.

§ 6.9.3 Prior to commencing work, Construction Manager shall furnish Owner with a reasonably accurate estimate of the maximum expected value of any materials stored on site for which Owner may make payment in advance of the materials becoming incorporated into the structure, and thereby assist Owner in obtaining the correct level of builder’s risk insurance rider to cover such material. SEE SECTION 8.2.4.1 – CONSTRUCTION MANAGER TO PROCURE BUILDER’S RISK.

§ 6.10 Related Party Transactions§ 6.10.1 For purposes of Section 6.10, the term “related party” shall mean a parent, subsidiary, affiliate or other entity having common ownership or management with the Construction Manager; any entity in which any stockholder in, or management employee of, the Construction Manager owns any interest in excess of ten percent in


25

the aggregate; or any person or entity which has the right to control the business or affairs of the Construction Manager. The term “related party” includes any member of the immediate family of any person identified above.

§ 6.10.2 If any of the costs to be reimbursed arise from a transaction between the Construction Manager and a related party, the Construction Manager shall notify the Owner of the specific nature of the contemplated transaction, including the identity of the related party and the anticipated cost to be incurred, before any such transaction is consummated or cost incurred. If the Owner, after such notification, authorizes the proposed transaction, then the cost incurred shall be included as a cost to be reimbursed, and the Construction Manager shall procure the Work, equipment, goods or service from the related party, as a Subcontractor, according to the terms of Sections 2.3.2.1, 2.3.2.2 and 2.3.2.3. If the Owner fails to authorize the transaction, the Construction Manager shall procure the Work, equipment, goods or service from some person or entity other than a related party according to the terms of Sections 2.3.2.1, 2.3.2.2 and 2.3.2.3.

§ 6.11 Accounting RecordsThe Construction Manager shall keep full and detailed records and accounts related to the cost of the Work and exercise such controls as may be necessary for proper financial management under this Contract and to substantiate all costs incurred. files, records and accounts of expenditures for materials, equipment, employees and Subcontracts and the like and other costs of rendering services or performing Work under this Contract. The accounting and control systems shall be satisfactory to the Owner. The Owner and the Owner’s auditors shall, during regular business hours and upon reasonable notice, be afforded access to, and shall be permitted to audit and copy, the Construction Manager’s records and accounts, including complete documentation supporting accounting entries, books, correspondence, instructions, drawings, receipts, subcontracts, Subcontractor’s proposals, purchase orders, vouchers, memoranda and other data relating to this Contract. The Construction Manager shall preserve these records for a period of three years after final payment, or for such longer period as may be required by law. Such records shall be kept on the basis of generally accepted accounting principles and in accordance with the Contract Documents. Construction Manager shall furnish Owner with statements of such expenditures, together with complete documentary back-up therefor on a monthly basis. Construction Manager shall cause Owner and Owner’s Representative to be afforded access to all accounting records, receipts, documents, vouchers and other documentation in the possession or control of Construction Manager relating to the rendering of services or performance of Work under this Contract commencing with the effective date of this Contract and for a period of three years after Final Completion or such earlier date on which a final audit is completed by Owner.

ARTICLE 7 PAYMENTS FOR CONSTRUCTION PHASE SERVICES§ 7.1 Progress Payments§ 7.1.1 Based upon Applications for Payment submitted to the Architect by the Construction Manager and Certificates for Payment issued by the Architect, the Owner shall make progress payments on account of the Contract Sum to the Construction Manager as provided below and elsewhere in the Contract Documents.

§ 7.1.2 The period covered by each Application for Payment shall be one calendar month ending on the last day of the month, or as follows:

« »

§ 7.1.3 Within thirty (30) calendar days after receipt by the Owner of the Construction Manager’s invoice for the construction draw based upon the percentage of completion applied against the Construction Price, properly prepared and approved by the Architect, who shall promptly review and render its opinion on the propriety of the pay application, the Owner shall pay to the Construction Manager the total amount approved by the Architect, less retainage when applicable as defined in Paragraph 7.1.7 below, unless there is a dispute about the amount of compensation due the Construction Manager. The date on which payment is due shall be referred to as the “Payment Date”.

§ 7.1.3.1 Notwithstanding anything in Subparagraph 7.1.3 to the contrary, the Owner may elect, in the Owner’s sole discretion, to make any payment due the Construction Manager on behalf of a Subcontractor of any tier jointly payable to the Construction Manager and such Subcontractor. The Construction Manager and such Subcontractor shall be responsible for the allocation and disbursement of funds included as part of any such joint payment. Any such joint payment shall constitute payment to the Construction Manager, in the full amount of the joint payment, as if such joint payment were made to the Construction Manager alone. In no event shall any joint payment be


26

construed to create any contract between the Owner and a Subcontractor of any tier, obligations from the Owner to such Subcontractor, or rights in such Subcontractor against the Owner.Provided that an Application for Payment is received by the Architect not later than the « » day of a month, the Owner shall make payment of the certified amount to the Construction Manager not later than the « » day of the « » month. If an Application for Payment is received by the Architect after the application date fixed above, payment shall be made by the Owner not later than « » ( « » ) days after the Architect receives the Application for Payment.

§ 7.1.4 With each Application for Payment, the Construction Manager shall submit payrolls, petty cash accounts, receipted invoices or invoices with check vouchers attached, and any other evidence required by the Owner or Architect to demonstrate that cash disbursements already made by the Construction Manager on account of the Cost of the Work equal or exceed progress payments already received by the Construction Manager, less that portion of those payments attributable to the Construction Manager’s Fee, plus payrolls for the period covered by the present Application for Payment.

§ 7.1.5 Each Application for Payment shall be based on the most recent schedule of values submitted by the Construction Manager in accordance with the Contract Documents. The schedule of values shall allocate the entire Guaranteed Maximum Price among the various portions of the Work, except that the Construction Manager’s Fee shall be shown as a single separate item. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect may require. This schedule, unless objected to by the Architect, shall be used as a basis for reviewing the Construction Manager’s Applications for Payment.

§ 7.1.6 Applications for Payment shall show the percentage of completion of each portion of the Work as of the end of the period covered by the Application for Payment. The percentage of completion shall be the lesser of (1) the percentage of that portion of the Work which has actually been completed, or (2) the percentage obtained by dividing (a) the expense that has actually been incurred by the Construction Manager on account of that portion of the Work for which the Construction Manager has made or intends to make actual payment prior to the next Application for Payment by (b) the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values.

§ 7.1.7 Subject to other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:

.1 Take that portion of the Guaranteed Maximum Price properly allocable to completed Work as determined by multiplying the percentage of completion of each portion of the Work by the share of the Guaranteed Maximum Price allocated to that portion of the Work in the schedule of values. Pending final determination of cost to the Owner of changes in the Work, amounts not in dispute shall be included as provided in Section 7.3.9 of AIA Document A201–2007;

.2 Add that portion of the Guaranteed Maximum Price properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work, or if approved in advance by the Owner, suitably stored off the site at a location agreed upon in writing;

.3 Add the Construction Manager’s Fee, less retainage of «ten » percent ( «10 » %). The Construction Manager’s Fee shall be computed upon the Cost of the Work at the rate stated in Section 5.1 or, if the Construction Manager’s Fee is stated as a fixed sum in that Section, shall be an amount that bears the same ratio to that fixed-sum fee as the Cost of the Work bears to a reasonable estimate of the probable Cost of the Work upon its completion;

.4 Subtract retainage of «ten » percent ( «10 » %) from that portion of the Work that the Construction Manager self-performs;

.5 Subtract the aggregate of previous payments made by the Owner;

.6 Subtract the shortfall, if any, indicated by the Construction Manager in the documentation required by Section 7.1.4 to substantiate prior Applications for Payment, or resulting from errors subsequently discovered by the Owner’s auditors in such documentation; and

.7 Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment as provided in Section 9.5 of AIA Document A201–2007.

.8 With respect to the retainage calculations to be withheld pursuant to Subparagraphs 7.1.7.3 and 7.1.7.4 above, payments to Construction Manager shall be subject to retention of ten percent (10%) of the dollar value of the Construction Manager’s work in place until fifty percent (50%) of the Construction Manager’s work is in place; and after the Construction Manager’s work is fifty percent (50%) in place, the Owner shall not withhold additional retainage unless the Owner determines that


27

the Construction Manager is not making satisfactory progress, or for other specific cause relating to the Construction Manager’s performance under this Contract. If the Owner so determines, the Owner may continue withholding retainage up to ten percent (10%) of the dollar value of fifty percent (50%) of the Construction Manager’s work in place.

For clarity, the Owner and Construction Manager agree that retention shall not be held on Construction Manager’s General Conditions Costs

§ 7.1.8 The Owner and Construction Manager shall agree upon (1) a mutually acceptable procedure for review and approval of payments to Subcontractors and (2) the percentage of retainage held on Subcontracts, and the Construction Manager shall execute subcontracts in accordance with those agreements.

§ 7.1.8.1 Except with the Owner's prior approval, payments to Subcontractors shall be subject to retention of ten percent (10%) of the dollar value of the Subcontractor’s work in place until fifty percent (50%) of the Subcontractor’s work is in place; and after the Subcontractor’s work is fifty percent (50%) in place, the Construction Manager shall not withhold additional retainage unless the Construction Manager determines that the Subcontractor is not making satisfactory progress, or for other specific cause relating to the Subcontractor’s performance under the Subcontract. If the Construction Manager so determines, the Construction Manager may continue withholding retainage up to ten percent (10%) of the dollar value of fifty percent (50%) of the Subcontractor’s work in place. Upon Owner’s release of retention for a particular Subcontractor, pursuant to the terms of Articles 7.1.14 and 7.1.15, Construction Manager shall similarly pay such Subcontractor its retainage.

§ 7.1.9 Except with the Owner’s prior approval, the Construction Manager shall not make advance payments to suppliers for materials or equipment which have not been delivered and stored at the site.

§ 7.1.10 In taking action on the Construction Manager’s Applications for Payment, the Architect shall be entitled to rely on the accuracy and completeness of the information furnished by the Construction Manager and shall not be deemed to represent that the Architect has made a detailed examination, audit or arithmetic verification of the documentation submitted in accordance with Section 7.1.4 or other supporting data; that the Architect has made exhaustive or continuous on-site inspections; or that the Architect has made examinations to ascertain how or for what purposes the Construction Manager has used amounts previously paid on account of the Contract. Such examinations, audits and verifications, if required by the Owner, will be performed by the Owner’s auditors acting in the sole interest of the Owner.

§ 7.1.11 Construction Manager shall submit monthly Applications for Payment to Architect in the form of AIA Document G702 and G703 (an “Application for Payment”), or any other form which the Owner approves prior to commencing work.

§ 7.1.12 As an express condition precedent to payment, Construction Manager shall provide the Owner, as part of each Application for Payment, a current and accurate Sworn Statement and its own Waiver of Lien in accordance with the Michigan Construction Lien Act, and a copy of the updated and/or revised Project Schedule.

§ 7.1.13 Except for the first Application for Payment, the Construction Manager shall also submit, with each Application for Payment and as an express condition precedent to payment, Partial Unconditional Waivers of Lien from each of the Construction Manager’s Subcontractors, Suppliers, and any other entity which has served both the Construction Manager and the Owner with a Notice of Furnishing, acknowledging receipt of the prior month’s payment of the sums reflected on the immediate preceding Application for Payment (i.e., Owner acknowledges a one-month lag in Subcontractor/Supplier waivers of lien is acceptable). Construction Manager shall require each of its Subcontractors and Suppliers to provide it with similar Sworn Statements and shall require its Subcontractors and Suppliers to provide Waivers of Lien in accordance with the Michigan Construction Lien Act to ensure that payments are being made and lower-tier subcontractors and suppliers are receiving payment, and that there is not at risk of a Construction Lien being recorded against Owner’s property.

§ 7.1.14 Except as hereinafter provided Owner will retain 10% all payments of Cost of the Work otherwise due and payable until 50% of the Work of each trade is in place. After 50% of the Work of each trade is in place, Owner shall refrain from withholding additional retainage on future payments unless Architect or Owner determines that


28

the Construction Manager is not making satisfactory progress or that it is otherwise in default under the terms of the Contract Documents. If Architect or Owner determines that Construction Manager is not making satisfactory progress or that Construction Manager is otherwise in default under the terms of the Contract Documents, then after written notice with detailed explanation as to the reasons, Owner may continue or reinstate retainage of up to 10% of the Guaranteed Maximum Price. Upon 100% completion of a portion of the Work performed by a particular Subcontractor, and upon recommendation of Architect, Owner shall release from retainage a sum sufficient to increase the total payments to 100% of the cost of the portion of the Work performed by such Subcontractor. Upon Substantial Completion of the Work or designated portions thereof agreed to by the Construction Manager and Owner, Owner will retain an amount equal to two (2) times the amount determined by Architect and Owner for unsettled claims, punchlist work other incomplete Work. All remaining retainage shall be released with final payment.

§ 7.1.15 Early Completing Subcontractor Retainage. The Owner shall release retention to the Construction Manager and make a one hundred percent (100%) payment on a “line item” basis within 60 days after Substantial Completion of the following line items: (a) excavation; (b) sheeting and shoring; (c) site utilities; (d) structural steel; and (e) other early completing subcontractors upon which Owner and Construction Manager agree and insert in this subparagraph prior to executing the agreement. Construction Manager shall release such retention and the final subcontract balance for these early completing subcontractors upon receipt of payment from the Owner.

§ 7.1.16 Payments in Trust. Any funds that Construction Manager receives from the Owner as payment for services or Work performed by a Subcontractor, Supplier or Subconsultant shall constitute assets of a trust, which trust funds shall be used for the exclusive benefit of the Subcontractor, Supplier or Subconsultant for the purpose of discharging Construction Manager’s financial obligations on account of labor, services, materials or equipment furnished to the Project by the Subcontractor, Supplier or Subconsultant, provided that such labor, services, materials or equipment were performed in accordance with the Contract Documents, were included in an Application for Payment to Owner, and were paid by the Owner to Construction Manager. Construction Manager shall be the trustee of the trust and shall be required to deal with the trust assets for the benefit of the Subcontractor, Supplier or Subconsultant. Construction Manager shall not be a beneficiary of the trust. Nothing herein shall be construed as an intent to require that Construction Manager maintain trust funds in separate bank accounts, specifically designate any third party as a beneficiary of the trust created herein, or otherwise give rise to any cause of action against the Owner by any third party beneficiary of the trust created herein.

§ 7.2 Final Payment§ 7.2.1 Final payment, constituting the entire unpaid balance of the Contract Sum, shall be made by the Owner to the Construction Manager when

.1 the Construction Manager has fully performed the Contract except for the Construction Manager’s responsibility to correct Work as provided in Section 12.2.2 of AIA Document A201–2007, and to satisfy other requirements, if any, which extend beyond final payment;

.2 the Construction Manager has submitted a final accounting for the Cost of the Work and a final Application for Payment; and

.3 a final Certificate for Payment has been issued by the Architect.

The Owner’s final payment to the Construction Manager shall be made no later than 30 days after the issuance of the Architect’s final Certificate for Payment, or as follows:

« »

§7.2.1.1 Final payment shall not be due until Construction Manager has furnished to Owner (1) a Partial Unconditional Waiver of Lien and a Sworn Statement that payrolls, bills for materials and equipment, and other indebtedness connected with the Work for which a Subcontractor, Supplier or Subconsultant may make a claim against the Payment Bond and/or for which the Owner might be responsible by virtue of Construction Liens or (less amounts withheld by Owner) have been paid or otherwise satisfied, (2) a Full Unconditional Waiver of Lien or a Full Conditional Waiver of Lien, as the case may be, from every Subcontractor, Supplier or Subconsultant that provided labor or materials for the Project certifying they have or will be paid in full from Owner’s final payment consistent with the Construction Manager’s final Sworn Statement, (3) a certificate evidencing that insurance required by the Contract Documents to remain in force after final payment is currently in effect and will not be cancelled or allowed to expire until 30 days prior written notice has been given to Owner, (4) a written statement


29

that Construction Manager knows of no substantial reason that the insurance will not be renewable to cover the period required by the Contract Documents, (5) all warranties and guarantees required by the Contract Documents, (6) one copy of “as built” drawings and the other submittals required by this Agreement, and (7) if required by Owner, other data establishing payment of satisfaction of obligations, such as receipts, releases and waivers of liens, claims, security interests or encumbrances arising out of this Contract, to the extent and in such form as may be designated by Owner. Upon receipt of the Final Payment, Construction Manager shall furnish Owner a Full Unconditional Waiver of Lien for itself and from each of its Subcontractors, material suppliers and subconsultants to the extent not previously furnished to the Owner. Acceptance of final payment by Construction Manager, a Subcontractor, Subconsultant or Supplier shall constitute a waiver of claims by that payee except those previously made in writing and identified by that payee as unsettled at the time of the final Application for Payment. Construction Manager shall include a similar waiver provision in each of its subcontracts and purchase orders.

§ 7.2.2 The Owner’s auditors will review and report in writing on the Construction Manager’s final accounting within 30 days after delivery of the final accounting to the Architect by the Construction Manager. Based upon such Cost of the Work as the Owner’s auditors report to be substantiated by the Construction Manager’s final accounting, and provided the other conditions of Section 7.2.1 have been met, the Architect will, within seven days after receipt of the written report of the Owner’s auditors, either issue to the Owner a final Certificate for Payment with a copy to the Construction Manager, or notify the Construction Manager and Owner in writing of the Architect’s reasons for withholding a certificate as provided in Section 9.5.1 of the AIA Document A201–2007. The time periods stated in this Section supersede those stated in Section 9.4.1 of the AIA Document A201–2007. The Architect is not responsible for verifying the accuracy of the Construction Manager’s final accounting.

§ 7.2.3 If the Owner’s auditors report the Cost of the Work as substantiated by the Construction Manager’s final accounting to be less than claimed by the Construction Manager, the Construction Manager shall be entitled to request mediation of the disputed amount without seeking an initial decision pursuant to Section 15.2 of A201–2007. A request for mediation shall be made by the Construction Manager within 30 days after the Construction Manager’s receipt of a copy of the Architect’s final Certificate for Payment. Failure to request mediation within this 30-day period shall result in the substantiated amount reported by the Owner’s auditors becoming binding on the Construction Manager. Pending a final resolution of the disputed amount, the Owner shall pay the Construction Manager the amount certified in the Architect’s final Certificate for Payment.

§ 7.2.4 If, subsequent to final payment and at the Owner’s request, the Construction Manager incurs costs described in Section 6.1.1 and not excluded by Section 6.8 to correct defective or nonconforming Work, the Owner shall reimburse the Construction Manager such costs and the Construction Manager’s Fee applicable thereto on the same basis as if such costs had been incurred prior to final payment, but not in excess of the Guaranteed Maximum Price. If the Construction Manager has participated in savings as provided in Section 5.2.1, the amount of such savings shall be recalculated and appropriate credit given to the Owner in determining the net amount to be paid by the Owner to the Construction Manager.

§ 7.2.5 Pay Application Warranties And Guarantees. The Construction Manager expressly warrants and guarantees to the Owner that:

(i) title to all goods, products, materials, equipment and systems covered by an Pay Application will pass to the Owner either by incorporation into the Work, or upon receipt of payment by the Construction Manager, whichever occurs first;

(ii) all goods, products, materials, equipment and systems covered by a Pay Application are free and clear of liens, claims, security interests or encumbrances; and

(iii) no goods, products, materials, equipment or systems covered by a Pay Application have been acquired by the Construction Manager, or its Subcontractors or suppliers, subject to an agreement under which an interest therein or an encumbrance thereon is retained by the seller or otherwise imposed by the Construction Manager, or its Subcontractors or suppliers, apart from the Construction Manager’s right, and those of its Subcontractors and suppliers, to a Construction Lien.

§ 7.2.6 Construction Manager’s Signature. The signature of the Construction Manager on any Pay Application constitutes the Construction Manager’s certification to the Owner that (i) the Construction Manager’s services listed


30

in the Pay Application have progressed to the level indicated and have been performed as required by this Contract; (ii) the Construction Manager has paid its Subcontractors, Subconsultants and Suppliers their proportional share of all previous payments received from the Owner; and (iii) the amount requested is currently due and owing.

§7.3 OWNER’S RIGHT OF NON-PAYMENT§7.3.1 Any provision hereof to the contrary notwithstanding, Upon written notice with a detailed explanation of the reasons, Owner shall not be obligated to make any full payment to Construction Manager if any one or more of the following conditions exists:

(a) Construction Manager or Subcontractors is/are in default of any of its/their obligations under this Contract or otherwise is/are in default under any of the Contract Documents.

(b) Any part of such payment is attributable to services or Work that is defective or is not performed in accordance with the Contract Documents; provided, however, such payment shall be made as to the part thereof attributable to services or Work that is rendered or performed in accordance with the Contract Documents and is not defective.

(c) Construction Manager has failed to make timely payments due and owing to Subcontractors or for material or labor used in the rendering of services or performance of Work for which Owner has made payment to Construction Manager.

§7.3.2 If Owner, in its reasonable discretion, determines that the portion of the Guaranteed Maximum Price then remaining unpaid will not be sufficient to complete the Work in accordance with the Contract Documents, then no additional payments will be due Construction Manager hereunder unless and until Construction Manager, at no cost to Owner, performs a sufficient portion of the Work so that the portion of the Guaranteed Maximum Price then remaining unpaid is, in Owner’s reasonable judgment, sufficient to complete the Work in accordance with the Contract Documents.

§7.3.3 No partial payment made hereunder shall be construed to be final acceptance or approval of that part of the Work to which such partial payment relates or to relieve Construction Manager of any of its obligations hereunder with respect thereto.

ARTICLE 8 INSURANCE AND BONDSFor all phases of the Project, the Construction Manager and the Owner shall purchase and maintain insurance, and the Construction Manager shall provide bonds as set forth in Article 11 of AIA Document A201–2007.(State bonding requirements, if any, and limits of liability for insurance required in Article 11 of AIA DocumentA201–2007.)

Type of Insurance or Bond Limit of Liability or Bond Amount ($0.00)

§8.1 PERFORMANCE BOND AND PAYMENT BONDS

The Construction Manager shall provide surety bonds as follows:

Type Penal Sum ($0.00) Payment and Performance Bonds

Maintenance & Guarantee BondMaintenance & Guarantee Bond What is a maintenance Bond ? Highly unusual.

Each in the amount of 50100% of the value of the Contract Sum

10% of total construction costs.10% of total construction costs.

§8.1.1 Performance and Payment Bonds. Within fourteen (14) Days after executing this Contract, Construction Manager shall deliver to Owner’s Representative a good and sufficient labor and material payment bond (“Payment Bond”) and a good and sufficient performance bond (‘Performance Bond”), each in the amount of fifty one hundred percent (10050%) of the Contract Sum. First-tier Subcontractors shall furnish Construction Manager both a performance bond and payment bond, each in the amount of fifty percent (50%)one hundred (100%) of the Subcontract Amount.


31

§8.1.2 Changes. The penal amounts of the Performance Bond and Payment Bond shall be increased on account of Change Orders and Unilateral Change Orders increasing the Contract Sum. If requested by Owner’s Representative, Construction Manager shall deliver to Owner evidence of the increases of such penal amounts.

§8.1.3 Replacement. Should any bond required hereunder or any Surety on such bond become or be determined by Owner to be insufficient, it shall be replaced within ten (10) Days by a bond that fully complies with the requirements of this Section 8.1.

§8.1.4 Duration. The Payment Bond shall remain in effect until Acceptance of the Work and all Claims of Construction Manager and the Subcontractors and Subconsultants, of any tier, have been fully and finally resolved. The Performance Bond shall remain in effect and assure faithful performance of all Construction Manager’s obligations under the Contract Documents, including, without limitation, maintenance and warranty obligations following Final Completion.

§8.1.5 Condition of Payment. No payments to Construction Manager for Work performed shall be made or due until there has been full compliance with the requirements of this §8.1.

§8.1.6 Surety Rating. Any Surety company issuing the Payment Bond or Performance Bond shall be, at all times while such bonds are in effect, listed in the latest published United States Treasury Department list of “Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies” and have a current A.M. Best rating of A VIII or better. The penal sum of such bonds shall not exceed the company’s limitations as stated therein. A surety company shall be licensed in the State in which it provides bonds and in the State of Michigan.

§8.1.7 Premiums. The premiums for the Performance Bond and Payment Bonds are included in the Contract Sum and shall be reimbursed as a Cost of the Workpaid by Construction Manager at Construction Manager’s Own Expense.

§8.1.8 Obligee. A Performance Bond shall name Owner as obligee. All performance bonds, if any, purchased by Subcontractors shall name Owner as a dual obligee with Construction Manager.

§8.1.9 No Exoneration. The Performance Bond and Payment Bond shall contain provisions to the effect that Change Orders, Unilateral Change Orders, Field Orders, Modifications, Changes and Contract Adjustments shall in no way release or exonerate Construction Manager or its Surety from their obligations and that notice thereof is waived by the Surety.

§8.1.10 Communications. Owner and Owner’s Representative shall have the right to communicate with Surety with respect to matters that are related to performance of the Work. Construction Manager shall be provided with a copy of all such communications that are in writing. Such communications shall not create or be interpreted as creating any contractual obligation of Owner to Surety.

§8.1.11 No Limitation. The requirements of this §8.1 pertaining to the Performance Bond and the Payment Bond shall be without limitation to any other obligations Construction Manager may have under Applicable Laws to provide bonding for the benefit of, and to assure payment to the Subcontractors performing the Work for, the Project.

§8.1.12 Subcontractor Bonds. Each performance bond, if any, furnished by a first-tier Subcontractor shall include a provision whereby the Surety consents to the contingent assignment of Construction Manager’s rights under such bond to Owner as provided in Article 10. What about Subguard?First-tier Subcontractors shall furnish Construction Manager both a performance bond and a payment bond, each in the amount of fifty percent (50%) of the Subcontract Amount.

§8.2 CONSTRUCTION MANAGER’S INSURANCE REQUIREMENTS The Construction Manager shall obtain and maintain the insurance listed in and as described in this §8.2 below.

§8.2.1 WORKERS' COMPENSATION INSURANCE


32

The Construction Manager shall purchase and maintain Workers' Compensation Insurance as will protect the Construction Manager from claims under workers' or workmen's compensation, disability benefit and other similar employee benefit acts which are applicable to the Work to be performed, whether such operations be by the Construction Manager or by a Subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable.

§8.2.2 EMPLOYER'S LIABILITY INSURANCEConstruction Manager shall purchase and maintain Employer's Liability Insurance covering bodily injury (including death) by accident or disease to any employee that arises out of the employee's employment by Construction Manager. The Employer's Liability Insurance required of Construction Manager hereunder may be obtained by Construction Manager as a separate policy of insurance or as an additional coverage under the Workers' Compensation Insurance required to be obtained and maintained by Construction Manager hereunder. The limits of liability required hereunder shall be as set forth in §8.2.3.6.

§8.2.3 LIABILITY AND PROPERTY INSURANCE

§8.2.3.1 The Construction Manager shall purchase and maintain Commercial General Liability and Property Insurance as set forth below:

§8.2.3.2 Commercial General and Umbrella Liability Insurance. The Construction Manager shall maintain commercial general liability (CGL) and, if necessary, commercial umbrella insurance with a total limit of not less than $5,000,000 each occurrence. If such CGL insurance contains a general aggregate limit, it shall apply separately to this Project. CGL insurance shall be written on ISO occurrence form CG 00 01 12 07 (or a substitute form providing equivalent coverage) and shall cover liability arising from premises, operations, independent contractors, products-completed operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract). “Monroe County Community College District, its elected and appointed officials, employees, agents, students and volunteers” shall be included as an insured under the CGL, using ISO additional insured endorsement CG 20 10 or a substitute providing equivalent coverage, and under the commercial umbrella, if any. This insurance shall apply as primary insurance with respect to any other insurance or self-insurance programs afforded to Owner The status of Owner, as an insured under a CGL obtained in compliance with this paragraph 8.2.3.2 of this agreement shall not restrict coverage under such CGL with respect to the escape of release of pollutants at or from a site owned or occupied by or rented or loaned to Owner There shall be no endorsement or modification of the CGL limiting the scope of coverage for liability arising from pollution, explosion, collapse, underground property damage, employment-related practices, or damage to the named insured's work.

§8.2.3.3 Continuing Completed Operations Liability Insurance. The Construction Manager shall maintain commercial general liability (CGL) and, if necessary, commercial umbrella liability insurance, both applicable to liability arising out of the Construction Manager's completed operations, with a limit of not less than $5,000,000 each occurrence for at least 3 years following substantial completion of the work. Continuing CGL insurance shall be written on ISO occurrence form CG 00 01 12 07 (or a substitute form providing equivalent coverage) and shall, at minimum, cover liability arising from products-completed operations and liability assumed under an insured contract. Continuing CGL insurance shall have a products-completed operations aggregate of at least two times its each occurrence limit. Continuing commercial umbrella coverage, if any, shall include liability coverage for damage to the insured's completed work equivalent to that provided under ISO form CG 00 01. Monroe County Community College District, its elected and appointed officials, employees, agents, students and volunteers” shall be included as an insured during the Completed Operations coverage period.

§8.2.3.4 Business Auto and Umbrella Liability Insurance. The Construction Manager shall maintain business auto liability and, if necessary, commercial umbrella liability insurance with a limit of not less than $5,000,000 each accident. Such insurance shall cover liability arising out of any auto (including owned, hired, and nonowned autos). Business auto coverage shall be written on ISO form CA 00 01, CA 00 05, CA 00 12, CA 00 20, or a substitute form providing equivalent liability coverage. If necessary, the policy shall be endorsed to provide contractual liability coverage equivalent to that provided in ISO form CA 00 01.

§8.2.3.5 Waiver of Subrogation. The Construction Manager waives all rights against “Monroe County Community College District, its elected and appointed officials, employees, agents, students and volunteers” for recovery of


33

http://www.irmi.com/online/frmcai/sc0000ca/ch00ca00/00200306.pdf




http://www.irmi.com/online/frmcli/sc0000cg/ch00cg00/00011207.pdf



damages to the extent these damages are covered by the commercial general liability, business auto liability or under any applicable auto physical damage coverage, or commercial umbrella liability insurance obtained/maintained by the Construction Manager pursuant to this Agreement.

§8.2.3.6 Workers Compensation Insurance. The Construction Manager shall maintain workers compensation and employers liability insurance. The commercial umbrella and/or employers liability limits shall not be less than $5,000,000 each accident for bodily injury by accident or $5,000,000 each employee for bodily injury by disease.

§8.2.3.7 Contractors Pollution Liability Insurance. The Construction Manager shall maintain in force for the full period of this contract insurance covering losses caused by pollution incidents that arise from the operations of the Construction Manager described under the scope of services of this contract. Insurance shall apply to bodily injury; property damage, including loss of use of damaged property or of property that has not been physically injured; cleanup costs; and defense, including costs and expenses incurred in the investigation, defense, or settlement of claims. The policy of insurance affording these required coverages shall be written in an amount of at least $5,000,000 per claim, with an annual aggregate of at least $10,000,000. The policy of insurance shall include as an insured “Monroe County Community College District, its elected and appointed officials, employees, agents, students and volunteers”. If coverage is written on a claims-made basis, The Construction Manager warrants that any retroactive date applicable to coverage under the policy precedes the effective date of this contract; and that continuous coverage will be maintained or an extended discovery period will be exercised for a period of 3 years beginning from the time that work under the contract is completed. If the scope of services as defined in this contract includes the disposal of any hazardous or nonhazardous materials from the job site, The Construction Manager must furnish to the Owner evidence of pollution liability insurance maintained by the disposal site operator for losses arising from the insured facility accepting waste under this contract. Coverage certified to the Owner under this paragraph must be maintained in minimum amounts of $5,000,000 per loss, with an annual aggregate of at least $10,000,000

§8.2.3.8 Should the Construction Manager engage the services of an architect, structural, mechanical, electrical, civil and other professional engineer, landscape architect, and other design consultant (“design consultants”), the Construction Manager shall require each of its design consultants with whom it contracts on this Project to maintain professional liability insurance with a $25,000,000 per claim coverage limit and a $45,000,000 aggregated coverage limit. The professional liability insurance may be written on a claims-made basis with a retroactive date on no later than the date that the architect, engineer, or consultant first performed services in regard to the Project.

§8.2.3.9 Valuable Papers. The Construction Manager will purchase valuable papers and records coverage for plans, specifications, drawings, reports, maps, books, blueprints, and other printed and electronic documents on an all-risk basis in an amount sufficient to cover the cost of research, re-creation or reconstruction of valuable papers or records related to this Project.§8.2.3.8 The Construction Manager shall require each of its architect, structural, mechanical, electrical, civil and other professional engineer, landscape architect, and other design consultant (if any) with whom it contracts on this Project to maintain professional liability insurance with a $5,000,000 per claim coverage limit and a $5,000,000 aggregated coverage limit. The professional liability insurance may be written on a claims-made basis with a retroactive date on no later than the date that the architect, engineer, or consultant first performed services in regard to the Project.

§8.2.3.9 Valuable Papers. The Construction Manager will purchase valuable papers and records coverage for plans, specifications, drawings, reports, maps, books, blueprints, and other printed and electronic documents on an all-risk basis in an amount sufficient to cover the cost of research, re-creation or reconstruction of valuable papers or records related to this Project.

§8.2.3.10 No Representation of Coverage Adequacy. By requiring insurance herein, Owner does not represent that coverage and limits will necessarily be adequate to protect the Construction Manager or its subcontractors, and such coverage and limits shall not be deemed as a limitation on the Construction Manager's liability under the indemnities granted to Owner in this contract.

§8.2.4 BUILDER'S RISK "ALL-RISK" INSURANCE This contradicts Art. 6.9.3. Who provides Builder’s Risk? §8.2.4.1 The Construction Manager, during the progress of the Work and until Final Acceptance of the Work by the


34

Owner upon completion of the entire Contract, shall maintain Builder's Risk "All-Risk" Completed Value Insurance Coverage on all insurable Work included under the Contract Documents which coverage is to provide extended coverage and insurance against, including but without limitation, vandalism, theft and malicious mischief, perils of fire, sprinkler leakage, civil authority, sonic boom, collapse, and flood upon the entire Work which is the subject of the Contract Documents, and including completed Work and Work in progress to the full insurable value thereof. Such insurance shall include the Owner as an additional named insured and any other person with an insurable interest designated by the Owner as an additional named insured.

§8.2.4.2 The Construction Manager shall submit to the Owner for its approval all items deemed to be uninsurable. The risk of damage to the Work due to the perils covered by the Builder's Risk "All Risk" Insurance, as well as any other hazard which might result in damage to the Work, is that of the Construction Manager and the Surety, and no claims for such loss or damage shall be recognized by the Owner, nor shall such loss or damage excuse the complete and satisfactory performance of the Contract by the Construction Manager.

§8.2.5 INSURER QUALIFICATIONS§8.2.5.1 The insurance required of the Construction Manager hereunder shall be written for not less than any limits of liability specified in the Contract Documents, including §8.2.3 and all of its subparts, or required by law, whichever is greater. In the event of any loss or damage covered by a policy of insurance required to be obtained and maintained by the Construction Manager hereunder, the Construction Manager shall be solely and exclusively responsible for the payment of the deductible, if any, under such policy of insurance, without adjustment to the Contract Price on account thereof.

§8.2.5.2 Qualification of Insurers. In order to determine the financial strength and reputation of insurance carriers, all companies providing policies of insurance required hereunder shall be licensed or approved by the Insurance Bureau of the State of Michigan, and shall have a financial rating no lower than VIII and a policyholder’s insurance rating no lower than A by A.M. Best Key Rating Guide, current edition. Companies holding a rating of less than A, VIII will be acceptable only upon written consent of the Owner.

§8.2.6 EVIDENCE OF INSURANCE; SUBCONTRACTOR'S INSURANCE

§8.2.6.1 Prior to commencement of the Work, and thereafter upon renewal or replacement of each certified coverage, Construction Manager shall deliver to the Owner Certificates of Insurance, executed by a duly authorized representative of each insurer, evidencing the insurance coverage required by the Contract Documents. Failure or refusal of the Construction Manager to do so may be deemed by the Owner to be a default of a material obligation of the Construction Manager under the Contract Documents, and thereupon the Owner may proceed to exercise any right or remedy provided for under the Contract Documents or at law. The Certificates of Insurance and the insurance policies required by the Contract Documents shall contain a provision that coverage afforded under such policies shall not be canceled or allowed to expire until at least thirty (30) days prior written notice has been given to the Owner. The words "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives" shall be deleted from the certificate form's cancellation provision. Owner shall have the right, but not the obligation, of prohibiting the Construction Manager or any Subcontractor from entering the project site until such certificates or other evidence that insurance has been placed in complete compliance with these requirements is received and approved by Owner. The words "endeavor to" and "but failure to mail such notice shall impose no obligation or liability of any kind upon the company, its agents or representatives" shall be deleted from the certificate form's cancellation provision. Owner shall have the right, but not the obligation, of prohibiting the Construction Manager or any subcontractor from entering the project site until such certificates or other evidence that insurance has been placed in complete compliance with these requirements is received and approved by Owner. Failure to maintain the required insurance may result in termination of this contract at Owner's option Owner reserves the right to obtain copies of the above-referenced policies, and Construction Manager shall cause copies to be furnished to Owner upon its request.

§8.2.6.2 Should any policy of insurance be canceled before Final Acceptance of the Work by the Owner and the Construction Manager fails to immediately procure replacement insurance as required, the Owner reserves the right to procure such insurance and to deduct the premium cost thereof and other costs incurred by the Owner in connection therewith from any sum then or thereafter due the Construction Manager under the Contract Documents. The Construction Manager shall, from time to time, furnish the Owner, when requested, with satisfactory proof of coverage of each type of insurance required by the Contract Documents; failure of the Construction Manager to


35

comply with such request may be deemed by the Owner to be a default of a material obligation of the Construction Manager under the Contract Documents.

§8.2.6.3 Construction Manager shall require that every Subcontractor, of any tier, performing or providing any portion of the Work, obtain and maintain the policies of insurance set forth in §§8.2.1, 8.2.2, and 8.2.3 above; the coverage and limits of liability of such policies of insurance to be obtained and maintained by Subcontractors shall be as set in amounts customarily obtained by Construction Manager for similar projects. forth in those sections, unless the Owner consents in writing otherwiseshall be in amounts customarily obtained by Construction Manager for similar projects. to be obtained and maintained by Subcontractors shall be as set forth in those sections, unless the Owner consents in writing otherwise. (Limits are way to high for some smaller Subcontractors and requiring them to increase their limits will lead to an increase in Subcontract price). The policies of insurance to be obtained and maintained by Subcontractors hereunder are in addition to, and not in lieu of, Construction Manager obtaining and maintaining such policies of insurance.

§8.2.6.4 Each of the policies of insurance obtained and maintained by a Subcontractor hereunder shall conform to the requirements of this §8.2 Upon request of the Owner, Construction Manager shall promptly deliver to the Owner Certificates of Insurance evidencing that the Subcontractors have obtained and maintained policies of insurance in conformity with the requirements of this §8.2 Failure or refusal of the Construction Manager to provide the Owner with Subcontractors' Certificates of Insurance evidencing the insurance coverage required hereunder shall be deemed a material default of Construction Manager hereunder.

§8.2.6.5 Effect of Submission of Certificates. The Owner shall be under no obligations to review any Certificates of Insurance provided by the Construction Manager under §8.2.6.1, above, or by any Subcontractor under §8.2.6.4, above, or to check or verify the Construction Manager and Subcontractor's compliance with any and all requirements regarding insurance by the this §8.2.6. The Construction Manager is fully liable for the amounts and types of insurance required herein, and is not excused should any policy or Certificate of Insurance provided by the Construction Manager or Subcontractor not comply with any and all requirements regarding insurance imposed by this §8.2.6.

§8.2.7 MAINTENANCE OF INSURANCEAny insurance bearing on the adequacy of performance of Work shall be maintained after the Owner’s Final Acceptance of all of the Work, or from the date of Final Completion as provided in Section 9.10 of A201-2007, for two years and any longer specific guarantee or warranty periods set forth in the Contract Documents. Should such insurance be canceled before the end of any such periods and the Construction Manager fails to immediately procure replacement insurance as specified, the Owner reserves the right to procure such insurance and to charge the cost thereof to the Construction Manager. Nothing contained in these insurance requirements is to be construed as limiting the extent of the Construction Manager's responsibility for payment of damages resulting from its operations or performance of the Work under the Contract Documents, including without limitation the Construction Manager's obligation to pay Liquidated Damages. In no instance shall the Owner's exercise of its option to occupy and use completed portions of the Work relieve the Construction Manager of its obligation to maintain insurance required under this Article until the date of Final Acceptance of the Work by the Owner, or such time thereafter as required by the Contract Documents. The insurer providing any insurance coverage required hereunder shall be to the reasonable satisfaction of the Owner.

§8.2.8 CONSTRUCTION MANAGER'S INSURANCE PRIMARY§8.2.8.1 All insurance and the coverage thereunder required to be obtained and maintained by Construction Manager hereunder, if overlapping with any policy of insurance maintained by the Owner, shall be deemed to be primary and non-contributing with any policy maintained by the Owner and any policy or coverage thereunder maintained by Owner shall be deemed excess insurance. To the extent that the Owner maintains a policy of insurance covering property damage arising out of the perils of fire or other casualty covered by the Construction Manager’s Builder’s Risk Insurance or the Comprehensive General Liability Insurance of the Construction Manager or any Subcontractor, the Owner, Construction Manager and all Subcontractors waive rights of subrogation against the others. The costs for obtaining and maintaining the insurance coverage required herein shall be included in the Contract Price.

§8.2.9 INDEMNITY§8.2.9.1 Unless arising solely out of the active negligence, gross negligence or willful misconduct of one or more of


36

the Indemnified Parties, the Construction Manager shall indemnify, defend and hold harmless the Indemnified Parties who are: (i) Monroe County Community College District, its elected and appointed officials, employees, agents, students, volunteers, and Project representatives (including the Owner’s Project Inspector, and Owner’s Representative); and (ii) the Owner’s Consultants for the Work and their respective agents and employees. The Construction Manager’s obligations hereunder include indemnity, defense and hold harmless of the Indemnified Parties from and against any and all damages, losses, claims, demands or liabilities whether for damages, losses or other relief, including, without limitation costs which arise, in whole or in part, from the Work, the Contract Documents or the acts, omissions or other conduct of the Construction Manager or any Subcontractor or any person or entity engaged by them for the Work. The Construction Manager’s obligations under the foregoing include without limitation: (i) injuries to or death of persons; (ii) damage to property; or (iii) theft or loss of property; (iv) construction lien claims asserted by any person or entity in connection with the Work for which payment has been received; and (v) other losses, liabilities, damages or costs resulting from, in whole or part, any acts, omissions or other conduct of the Construction Manager, any Subcontractor, of any tier, or any other person or entity employed directly or indirectly by Construction Manager in connection with the Work and their respective agents, officers or employees, but excluding in all cases, special, indirect, exemplary, punitive and consequential damages.

§8.2.9.2 If any action or proceeding, whether judicial, administrative, arbitration or otherwise, shall be commenced on account of any claim, demand or liability subject to Construction Manager's obligations hereunder, and such action or proceeding names any of the Indemnified Parties as a party thereto, the Construction Manager shall, at its sole cost and expense, defend the Indemnified Parties in such action or proceeding with counsel reasonably satisfactory to the Indemnified Parties named in such action or proceeding.

§8.2.9.3 In the event that there shall be any judgment, award, ruling, settlement, or other relief arising out of any such action or proceeding to which any of the Indemnified Parties are bound by, Construction Manager shall pay, satisfy or otherwise discharge any such judgment, award, ruling, settlement or relief; Construction Manager shall indemnify and hold harmless the Indemnified Parties from any and all liability or responsibility arising out of any such judgment, award, ruling, settlement or relief. The Construction Manager's obligations hereunder shall survive notwithstanding Construction Manager's completion of the Work or the termination of the Contract.The Construction Manager's obligations hereunder are binding upon Construction Manager's Performance Bond Surety and these obligations shall survive notwithstanding Construction Manager's completion of the Work or the termination of the Contract.

§ 8.3 INSURANCE REQUIRED OF THE OWNER IS THIS THE Builder’s Risk Insurance?During both phases of the Project, the Owner shall purchase and maintain liability and property insurance covering special causes of loss, including waivers of subrogation, as set forth in Sections 11.2 and 11.4 of A201-2007. Such insurance shall be written for not less than the following limits, or greater if required by law:

§ 8.3.1 Property Insurance: One Thousand dollars ($1,000) Deductible Per Occurrence Zero ($0.00) Aggregate Deductible

NEED UNDERSTANDING OF THE PURPOSE OF THIS INSURANCE AND IF CONSTRUCTION MANAGER IS TO BE NAMED AS AN ADDITIONAL INSURED.

ARTICLE 9 ALTERNATIVE DISPUTE RESOLUTION PROCEDURE

The following procedures apply to this Agreement, in lieu of Section 4.6 of the AIA A201-2007.

NEGOTIATION

1. Claims, disputes or matters in question between the parties to this Agreement arising out of or relating to this Agreement or breach thereof (“Claim(s)”) shall initially attempt to resolve the Claims under this negotiation process. Either party may initiate negotiations by writing a certified or registered letter to the other party setting forth the particulars of the dispute or claims, the term(s) of the contract that are involved and a suggested resolution of the problem.

2. The recipient of the letter shall respond within ten days to the proposed solution. The recipient shall either agree to the proposed solution or propose his own resolution.


37

3. If correspondence does not resolve the dispute or claims, the authors of the letters or their representatives shall meet on at least one occasion and attempt to resolve the matter. The meeting should be at a time and place mutually agreeable or, if they cannot agree, at the nearest office of [institution].

MEDIATION

If a dispute or claim arises out of or relates to this contract, or its breach, and if the dispute or claim cannot be settled through negotiation, the parties then agree to try in good faith to settle the dispute by mediation administered by the American Arbitration Association under its current Construction Industry Arbitration Rules, or its most applicable rules, before resorting to arbitration, litigation, or some other dispute resolution procedure. Any party or parties to a dispute or claim may initiate mediation, at any time, by filing with the American Arbitration Association (“AAA”) a Submission to Mediation or a written request for mediation pursuant to these rules, together with the appropriate filing fee.

The mediation process is to be considered settlement negotiation for the purpose of all state and federal rules protecting disclosures made during such conferences from later discovery or use in evidence. The parties understand that the provisions of Michigan Rules of Evidence 408 or Federal Rules of Evidence 408 shall apply to any mediation conducted, and to anything communicated, exchanged, said, done or occurring in the course of mediation, including any private caucus or discussions between the mediator and any party or counsel before or after any joint mediation session.

ARBITRATION

If a dispute arises from or relates to this contract or its breach, and if the matter cannot be settled through direct discussions, or through an amicable mediation, then any unresolved dispute arising from or relating to this contract or its breach shall be settled by arbitration administered by the American Arbitration Association under its current Construction Industry Arbitration Rules, or its most applicable rules, and judgment on the award rendered by the arbitrator may be entered in a court of competent jurisdiction.

FORUM

In the event that either mediation or arbitration is necessary, the forum for the mediation and the arbitration shall be the Regional Office of the American Arbitration Association in Southfield, Michigan.

GOVERNING LAW AND RULES

This contract shall be governed by the laws of the state of Michigan applicable to agreements made to be performed entirely within that state.

ARBITRATOR’S POWERS

The arbitrator shall have full power to make such orders, rules and regulations as he shall deem just and expedient in respect to any procedure or matter involved in this arbitration.

If there is one arbitrator, his decision shall be binding; if there are three, the decision of any two shall be binding.

The arbitrator shall have the authority and power to request the production of any books or records in the possession or control of either of the parties, and to order that either party shall have access to and be permitted to inspect and to make copies.

If either party refuses or neglects to furnish the arbitrator with any papers or information requested by the arbitrator, the arbitrator shall be empowered to make an ex parte award against such party.

The arbitrator shall have the power to order and to direct what he shall deem necessary to be done by either of the parties relating to the matters in dispute.


38

The arbitrator shall have the authority and power to proceed ex parte in the event that either party shall fail, after reasonable notice, to attend hearings before him.

The arbitrator may grant any remedy or relief the arbitrator deems just and equitable and/or within the scope of the agreement of the parties, including, but not limited to, interim awards, provisional remedies, injunctive relief, or specific performance.

CONSOLIDATION

Arbitration proceedings under this agreement may be consolidated with arbitration proceedings pending between other parties if the arbitration proceedings arise from the same transaction or relate to the same subject matter. Consolidation will be by an order of the arbitrator in any of the pending cases or, if the arbitrator fails to make such an order, the parties may apply to a court of competent jurisdiction for such an order.

TIME LIMIT FOR AWARD

The award shall be made promptly by the arbitrator and, unless otherwise agreed by the parties or specified by law, no later than thirty days from the date of closing the hearing, or, if oral hearings have been waived, from the date of the transmittal of the final statements and proofs to the arbitrator.

FORM OF AWARD

The award shall be in writing and shall be signed by a majority of the arbitrator. It shall be executed in the manner required by law. The arbitrator need not render a reasoned award, unless the arbitrator determines that a reasoned award is appropriate.

ATTORNEY’S FEES AND EXPENSES

The arbitrator shall award to the prevailing party all of its costs and fees only if such fees are permitted by a applicable law.. “Costs and fees” mean all reasonable pre-award expenses of the arbitration, including the arbitrator’s fees, administrative fees, travel expenses, out-of-pocket expenses such as copying and telephone, court costs, witness fees and attorney’s fees. “Prevailing” is defined as a party who recovers no less than fifty percent (50%) of the damages it claimed should be awarded by the arbitrator(s) during the proceedings, or if a party is defending a claim and not seeking damages then the arbitrator determines the defense prevails.

In the event it becomes necessary for either party to employ an attorney in the arbitration proceedings, or to enforce an award made by the arbitrator or a judgment based on such award, the other party agrees to pay reasonable attorney’s fees and costs incurred, in addition to any other amount due under this agreement.

FINALITY OF AWARD

The award of the arbitrator shall be final and binding upon the parties without appeal or review except as permitted by the arbitration laws of the state of Michigan. Any party may apply to any court of general jurisdiction for entry and enforcement of judgment based on the award.§ 9.1 Any Claim between the Owner and Construction Manager shall be resolved in accordance with the provisions set forth in this Article 9 and Article 15 of A201–2007. However, for Claims arising from or relating to the Construction Manager’s Preconstruction Phase services, no decision by the Initial Decision Maker shall be required as a condition precedent to mediation or binding dispute resolution, and Section 9.3 of this Agreement shall not apply.

§ 9.2 For any Claim subject to, but not resolved by mediation pursuant to Section 15.3 of AIA Document A201–2007, the method of binding dispute resolution shall be as follows:(Check the appropriate box. If the Owner and Construction Manager do not select a method of binding dispute resolution below, or do not subsequently agree in writing to a binding dispute resolution method other than litigation, Claims will be resolved by litigation in a court of competent jurisdiction.)


39

[ « » ] Arbitration pursuant to Section 15.4 of AIA Document A201–2007

[ « » ] Litigation in a court of competent jurisdiction

[ « » ] Other: (Specify)

« »

§ 9.3 Initial Decision MakerThe Architect will serve as the Initial Decision Maker pursuant to Section 15.2 of AIA Document A201–2007 for Claims arising from or relating to the Construction Manager’s Construction Phase services, unless the parties appoint below another individual, not a party to the Agreement, to serve as the Initial Decision Maker. (If the parties mutually agree, insert the name, address and other contact information of the Initial Decision Maker, if other than the Architect.)

« »« »« »« »

ARTICLE 10 TERMINATION OR SUSPENSION§ 10.1 Termination Prior to Establishment of the Guaranteed Maximum Price§ 10.1.1 Prior to the execution of the Guaranteed Maximum Price Amendment, the Owner may terminate this Agreement upon not less than seven days’ written notice to the Construction Manager for the Owner’s convenience and without cause, and the Construction Manager may terminate this Agreement, upon not less than seven days’ written notice to the Owner, for the reasons set forth in Section 14.1.1 of A201–2007.

§ 10.1.2 In the event of termination of this Agreement pursuant to Section 10.1.1, the Construction Manager shall be equitably compensated for Preconstruction Phase services performed prior to receipt of a notice of termination. In no event shall the Construction Manager’s compensation under this Section exceed the compensation set forth in Section 4.1.

§ 10.1.3 If the Owner terminates the Contract pursuant to Section 10.1.1 after the commencement of the Construction Phase but prior to the execution of the Guaranteed Maximum Price Amendment, the Owner shall pay to the Construction Manager an amount calculated as follows, which amount shall be in addition to any compensation paid to the Construction Manager under Section 10.1.2:

.1 Take the Cost of the Work incurred by the Construction Manager to the date of termination;

.2 Add the Construction Manager’s Fee computed upon the Cost of the Work to the date of termination at the rate stated in Section 5.1 or, if the Construction Manager’s Fee is stated as a fixed sum in that Section, an amount that bears the same ratio to that fixed-sum Fee as the Cost of the Work at the time of termination bears to a reasonable estimate of the probable Cost of the Work upon its completion; and

.3 Subtract the aggregate of previous payments made by the Owner for Construction Phase services.

The Owner shall also pay the Construction Manager fair compensation, either by purchase or rental at the election of the Owner, for any equipment owned by the Construction Manager which the Owner elects to retain and which is not otherwise included in the Cost of the Work under Section 10.1.3.1. To the extent that the Owner elects to take legal assignment of subcontracts and purchase orders (including rental agreements), the Construction Manager shall, as a condition of receiving the payments referred to in this Article 10, execute and deliver all such papers and take all such steps, including the legal assignment of such subcontracts and other contractual rights of the Construction Manager, as the Owner may require for the purpose of fully vesting in the Owner the rights and benefits of the Construction Manager under such subcontracts or purchase orders. All Subcontracts, purchase orders and rental agreements entered into by the Construction Manager will contain provisions allowing for assignment to the Owner as described above.

If the Owner accepts assignment of subcontracts, purchase orders or rental agreements as described above, the Owner will reimburse or indemnify the Construction Manager for all costs arising under the subcontract, purchase


40

order or rental agreement, if those costs would have been reimbursable as Cost of the Work if the contract had not been terminated. If the Owner chooses not to accept assignment of any subcontract, purchase order or rental agreement that would have constituted a Cost of the Work had this agreement not been terminated, the Construction Manager will terminate the subcontract, purchase order or rental agreement and the Owner will pay the Construction Manager the costs necessarily incurred by the Construction Manager because of such termination.

§ 10.2 Termination Subsequent to Establishing Guaranteed Maximum PriceFollowing execution of the Guaranteed Maximum Price Amendment and subject to the provisions of Section 10.2.1 and 10.2.2 below, the Contract may be terminated as provided in Article 14 of AIA Document A201–2007.

§ 10.2.1 If the Owner terminates the Contract without cause after execution of the Guaranteed Price Amendment, the amount payable to the Construction Manager pursuant to Sections 14.2 and 14.4 of A201–2007 shall not exceed the amount the Construction Manager would otherwise have received pursuant to Sections 10.1.2 and 10.1.3 of this Agreement.

§ 10.2.2 If the Construction Manager terminates the Contract after execution of the Guaranteed Maximum Price Amendment, the amount payable to the Construction Manager under Section 14.1.3 of A201–2007 shall not exceed the amount the Construction Manager would otherwise have received under Sections 10.1.2 and 10.1.3 above, except that the Construction Manager’s Fee shall be calculated as if the Work had been fully completed by the Construction Manager, utilizing as necessary a reasonable estimate of the Cost of the Work for Work not actually completed.

§ 10.3 SuspensionThe Work may be suspended by the Owner as provided in Article 14 of AIA Document A201–2007. In such case, the Guaranteed Maximum Price and Contract Time shall be increased as provided in Section 14.3.2 of AIA Document A201–2007, except that the term “profit” shall be understood to mean the Construction Manager’s Fee as described in Sections 5.1 and 5.3.5 of this Agreement.

ARTICLE 11 MISCELLANEOUS PROVISIONS§ 11.1 Terms in this Agreement shall have the same meaning as those in A201–2007.

§ 11.2 Ownership and Use of DocumentsSection 1.5 of A201–2007 shall apply to both the Preconstruction and Construction Phases.

§ 11.3 Governing LawSection 13.1 of A201–2007 shall apply to both the Preconstruction and Construction Phases.

§ 11.4 AssignmentThe Owner and Construction Manager, respectively, bind themselves, their agents, successors, assigns and legal representatives to this Agreement. Neither the Owner nor the Construction Manager shall assign this Agreement without the written consent of the other, except that the Owner may assign this Agreement to a lender providing financing for the Project if the lender agrees to assume the Owner’s rights and obligations under this Agreement. Except as provided in Section 13.2.2 of A201–2007, neither party to the Contract shall assign the Contract as a whole without written consent of the other. If either party attempts to make such an assignment without such consent, that party shall nevertheless remain legally responsible for all obligations under the Contract.

§ 11.5 Other provisions:

§11.5.1 COMPLETION AND STIPULATED DAMAGESSUBSTANTIAL COMPLETION DEFINED: “Substantial Completion” shall mean (i) 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 can occupy or utilize the Work, or designated portion thereof, for its intended use; and (ii) the Construction manager causes the governing authorities to issue a Temporary Certificate of Occupancy, unless the Temporary Certificate of Occupancy is not issued for reasons not within the Construction Manager’s Scope of Work in which case only subparagraph (i) shall govern. “Final Completion” shall mean the stage in the progress of the Work, or designated portion thereof, when the Work is acceptable under the Contract Documents and the Contract fully performed. The deadlines for these milestones, subject to adjustment under duly executed Change Orders, are:


41

Substantial Completion: ___________________

Final Completion: _________________________

§11.5.2 Construction Manager and Owner agree to the following liquidated damage provisions:

THESE SECTIONS NEED TO BE DISCUSSED AS FEE WAS PROPOSED PRIOR TO ANY REFERENCE TO THE EXISTENCE OR AMOUNT OF LIQUIDATED DAMAGES.

§11.5.2.1 If the Construction Manager fails to achieve the Substantial Completion Deadline set forth in §11.5.1, above, then Construction Manager shall be liable to Owner for liquidated damages for each day from that deadline until actually achieving Substantial Completion to the satisfaction of the Owner and in accordance with the Contract Documents. The liquidated damages shall be calculated as follows: (a) For the first 15 days of delay, $0 per day; (b) for the next 15 days, $___per day; and (c) for each day of delay after the 30th day, $_____ per day.

§11.5.2.2 If the Construction Manager fails to achieve the Final Completion Deadline set forth in §11.5.1, above, then Construction Manager shall be liable to Owner for liquidated damages for each day from that deadline until actually achieving Final Completion to the satisfaction of the Owner and in accordance with the Contract Documents. The liquidated damages shall be calculated as follows: (a) For the first 15 days of delay, $0 per day; (b) for the next 15 days, $___per day; and (c) for each day of delay after the 30th day, $_____ per day.

§11.5.3 The parties acknowledge and agree that because of the unique nature of the Project, it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by Owner as a result of Construction Manager’s failure to achieve Substantial Completion, or Final Completion. It is understood and agreed by the parties that (i) Owner shall be damaged by failure of Construction Manager to meet such obligations (for example, loss of revenues, additional interest expenses, advertising expenses, loss of good will, and other costs and expenses), or (ii) it would be impracticable or extremely difficult to fix the actual damages resulting therefrom. Further, any sums that would be payable under §11.5.2 are intended only to cover damages suffered by Owner as a result of delay in completion of the Project. Those sums shall not be deemed to cover the cost of completion of the Work, damages resulting from defective Work or other breaches under the Contract Documents, or damages (other than delay damages) suffered by others who then seek to recover damages from Owner and defense costs thereof.

§ 11.5.4 The Owner may deduct liquidated damages described in Subparagraph 11.5.2 from any unpaid amounts then or thereafter due the Construction Manager under this Agreement. Any liquidated damages not so deducted from any unpaid amounts due the Construction Manager shall be payable to the Owner at the demand of the Owner, together with interest from the date of the demand at the prime rate plus 1.5%. The prime rate shall be determined by reference to the current rate published in the Wall Street Journal in the edition most current to the date the demand for payment.

§11.6 WARRANTY / CORRECTION OF WORK§11.6.1 Construction Manager warrants and guarantees that all material and equipment furnished under this Agreement shall be new unless otherwise specified, and that all Work will be new, of first quality, free from faults or defects in materials or workmanship, and in strict accordance with requirements of the Contract Documents. All Work not conforming to these requirements, including substitutions not properly approved and authorized, shall be considered defective and shall be promptly repaired and/or replaced by Construction Manager. If required by Owner, Construction Manager shall furnish satisfactory evidence as to the kind and quality of materials and equipment. The warranty or guaranty provisions of A201-2007 or other Contract Documents do not limit this warranty and guaranty.

§11.6.2 All warranty and guarantees arising from this section and from other provisions of the Contract Documents shall run directly to Owner. All warranties and guarantees of manufacturers or suppliers shall be either issued directly in the name of Owner or made expressly assignable, and assigned, to Owner. The Construction Manager shall include a provision in all of its Subcontracts that require the Subcontractors to assign to the Owner all warranties and guarantees that they receive. The warranties and guarantees provided in this section shall be in


42

addition to and not in limitation of any other warranty or remedy arising by law or by the Contract Documents.

§11.6.3 On or about the date that is eleven months after the date of Substantial Completion, Construction Manager shall, together with Architect and Owner’s representative, attend a final inspection of the Work to assure that it comports with all warranties and guarantees. Construction Manager shall promptly correct any deficiencies noted during such inspection and is responsible for paying the costs of such corrections.

§11.7 INDEMNIFICATION§11.7.1 To the extent not prohibited by law, Construction Manager hereby indemnifies, defends and holds harmless Owner and Owner’s Representative and their respective officers, directors, members and employees, from and against any and all suits, claims, damages, losses and expenses, including attorneys’ fees, to the extent arising out of or resulting from (a) the rendering of services or performance of Work hereunder, (b) breach of this Agreement, or (c) the negligent act, omission or other tortuous conduct of itself, any Subcontractor, or any agent, servant or employee of any one or more of them or any other person for whose acts they may be liable. The indemnification provisions contained elsewhere in the Contract and in A201-2007 are in addition to this §11.7.1, but subject to the same exclusion in all cases, for special, indirect, exemplary, punitive and consequential damages.

§11.7.2 Construction Manager, its employees, representatives, agents and Subcontractors shall comply with and shall cause any Contractors providing services at the Site to comply with the Due Care Plan prepared for the Site pursuant to Section 20107a of the Michigan Natural Resources and Protection Act (1994 Public Act 451 as amended) (“NREPA”). Provided and to the extent Construction Manager has complied with the Site Due Care Plan, Owner shall indemnify and hold Construction Manager harmless from and against any and all claims, actions, liabilities, damages, losses or expenses (including court costs and reasonable attorney and consultant fees) for bodily injury or personal injury (including death), or loss or damage to tangible property caused or alleged to be caused solely due to the failure of Construction Manager to comply with Section 20107a(1) of NREPA.

§11.8 ADDITIONAL MISCELLANEOUS PROVISIONS§11.8.1 If any provision of this Agreement is held to be unenforceable, no other provision shall be affected thereby, and the remainder of the Agreement shall be interpreted as if it did not contain the unenforceable provision.

§11.8.2 Preparation of the Agreement has been a joint effort of the parties and the resulting document shall not be construed more severely against one of the parties than against the other.

§11.8.3 The captions contained in this Agreement are for convenience and reference only and in no way define, describe, extend or limit the scope of intent of the Agreement or the intent of any provision contained herein.

§11.8.4 Any notice, demand, offer, or other written instrument required or permitted to be given pursuant to this Agreement shall be in writing signed by the party giving such notice and shall be hand delivered or sent by overnight courier, messenger or registered letter or fax, to the other parties at the address set forth below.

(a) If delivered to Owner:

Owner’s Representative: James Blumberg, Director of Physical PlantAddress: 1555 Raisinville Rd., Monroe, MI 48161 Office: 734-384-4249 E-mail: [email protected]

[insert Owner’s Representative and address/contact information]

(b) If delivered to Construction Manager:Owner’s Representative:Address: Office: E-mail:


43

[insert Construction Manager’s Representative and address/contact information]

Each party shall have the right to change the place to which notice shall be sent or delivered by sending a similar notice to the others in like manner. The effective date of any notice issued pursuant to this Agreement shall be as of the addressee’s receipt of such notice.

§11.8.5 All exhibits, schedules or other attachments referenced in this Agreement are hereby incorporated into this Agreement by such reference and are deemed to be an integral part of this Agreement.

§11.8.6 Construction Manager is and shall be an independent contractor and shall not be deemed an agent, employee or partner of Owner. Nothing contained in this Agreement shall be construed as constituting a joint venture or partnership between Construction Manager and Owner.

§11.8.7 The parties may execute this Agreement in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

§11.8.8 All rights and remedies provided in this Agreement are in addition to all other rights and remedies available at law or in equity.

§11.8.9 Owner and Construction Manager each have full power and authority to enter into this Agreement and the persons signing on behalf of them are authorized to do so.

§11.8.10 The term “day” as used in this Agreement shall mean a calendar day, unless otherwise stated herein.

« »

ARTICLE 12 SCOPE OF THE AGREEMENT§ 12.1 This Agreement represents the entire and integrated agreement between the Owner and the Construction Manager and supersedes all prior negotiations, representations or agreements, either written or oral. This Agreement may be amended only by written instrument signed by both Owner and Construction Manager.

§ 12.2 The following documents comprise the Agreement:.1 AIA Document A133–2009, Standard Form of Agreement Between Owner and Construction

Manager as Constructor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price

.2 AIA Document A201–2007, General Conditions of the Contract for Construction

.3 AIA Document E201™–2007, Digital Data Protocol Exhibit, if completed, or the following:

« »

.4 AIA Document E202™–2008, Building Information Modeling Protocol Exhibit, if completed, or the following:

« »

.5 Other documents:(List other documents, if any, forming part of the Agreement.)

« »


44

This Agreement is entered into as of the day and year first written above.

OWNER (Signature) CONSTRUCTION MANAGER (Signature)

« »« » « »« »(Printed name and title) (Printed name and title)


45