HomeMy WebLinkAboutAppendix B - SAMPLE Form of Agreement between Owner and GCCM Pre-Construction Services Conditions – Lindley Center Renovation Project Page 1 of 25
PRE-CONSTRUCTION SERVICES CONDITIONS
Lindley Center Renovation Project
1. ARTICLE 1 – DEFINITIONS
1.1. BASIC DEFINITIONS – The terms below are expressly defined as follows:
1.1.1. Affiliate. Affiliate shall mean any subsidiary of General Contractor/Construction Manager (GC/CM),
and any other entity in which GC/CM has a financial interest or which has a financial interest in
GC/CM (including without limitation parent companies, related businesses under the same holding
company, or any other business controlled by, under common control with, or which controls
GC/CM).
1.1.2. Allowances. Allowances shall mean the allowance amounts shown in the Guaranteed Maximum
Price (GMP) Supporting Documents, together with such further allowances as may be developed
by the parties as the Project progresses.
1.1.3. Amendment. Amendment shall mean a written modification of this Contract (including without
limitation any agreed change to the GMP), identified as an Amendment, and executed by GC/CM
and the Owner.
1.1.4. Change Order. Change Order shall mean a written modification of this Contract identified and
executed by the GC/CM and the Owner. Change Orders shall be issued only for Owner Scope
Changes and unforeseen conditions.
1.1.5. Construction Manager (CM). CM shall have the meaning given herein below as GC/CM and
CM/GC.
1.1.6. Construction Documents. Construction Documents shall include any plans, drawings and
specifications that depict the scope of the Work.
1.1.7. Construction Phase. The Construction Phase shall mean the period commencing on the Owner's
execution of a GMP Amendment or Early Work Amendment, together with the earlier of (i) issuance
by Owner of a Notice to Proceed with any on-site construction or (ii) execution of a subcontract or
issuance of a purchase order for materials or equipment required for the Work.
1.1.8. Construction Phase Services. Construction Phase Services shall mean all of the Work other than
the Preconstruction Phase Services.
1.1.9. Contract Documents. Contract Documents include the pre-construction services conditions
between Owner and Jackson Contracting, the pre-construction services agreement between
Owner and <<Design Firm>>, and any exhibits attached.
1.1.10. Design Development Documents. The Design Development Documents are a set of drawings and
specifications that define the parameters of this project.
1.1.11. Early Work. Early Work shall mean Construction Phase Services authorized by Amendment that
the parties agree should be performed in advance of establishment of the GMP. Permissible Early
Work shall be limited to: early procurement of materials and supplies; early release of bid or
proposal packages for site development and related activities; and any other advance work
related to critical components of the Project for which performance prior to establishment of the GMP
will materially affect the critical path schedule of the Project.
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1.1.12. Early Work Amendment. Early Work Amendment shall mean an Amendment to this Contract
executed by and between the parties to authorize Early Work.
1.1.13. Guaranteed Maximum Cost for Reimbursable expenses for General Conditions Work
(GMCR). Guaranteed Maximum Cost for General Conditions Work or GC Work shall mean
that guaranteed maximum sum identified herein below.
1.1.14. General Conditions Work. General Conditions Work (“GC Work”) shall mean (i) that portion of the
Work required to support construction operations that is not included within overhead or general
expense but is called out as GC Work, and (ii) any other specific categories of Work approved
in writing by the Owner as forming a part of the GC Work. GC Work is defined and submitted
during the GC/CM solicitation phase and is described as Guaranteed Maximum Cost for
Reimbursable (GMCR) expenses for General Conditions.
1.1.15. General Contractor/Construction Manager (GC/CM). GC/CM shall mean the entity contracted for
by the Owner to provide Pre-Construction and Construction Services. Construction
Manager/General Contractor (CM/GC) shall have the same meaning as GC/CM. GC/CM and
CM/GC includes the term “Contractor”.
1.1.16. Guaranteed Maximum Price (GMP). GMP shall mean the Guaranteed Maximum Price of this
Contract, as stated in dollars within the GMP Amendment, as determined herein below and as it may
be adjusted from time to time pursuant to the provisions of this Contract.
1.1.17. GMP Amendment. GMP Amendment shall mean an Amendment to this Contract, issued and
executed by and between the parties, to establish the GMP and identify the GMP Supporting
Documents and Construction Documents for Construction Phase Services.
1.1.18. GMP Supporting Documents. GMP Supporting Documents shall mean the documents referenced
in the GMP Amendment as the basis for establishing the GMP. The GMP Supporting Documents
shall expressly identify the Plans and Specifications, assumptions, qualifications, exclusions,
conditions, allowances, unit prices, and alternates that form the basis for the GMP.
1.1.19. Preconstruction Phase. The Preconstruction Phase shall mean the period commencing on the
date of this Contract and ending upon commencement of the Construction Phase; provided that if
the Owner and GC/CM agree, the Construction Phase may commence before the
Preconstruction Phase is completed, in which case both phases shall proceed concurrently,
subject to the terms and conditions of the Contract Documents.
1.1.20. Preconstruction Phase Services. Preconstruction Phase Services shall mean all services
described herein below, including such similar services as are described in the Request for
Proposals (RFP) and the GC/CM's RFP Response to the extent they are accepted by Owner,
but excluding any Early Work. Early Work shall be considered part of Construction Phase Services.
1.1.21. Schematic Design Documents. Schematic Design Documents shall consist of drawings or other
documents including a site plan, if appropriate, and preliminary building plans that develop concept
design.
1.1.22. Scope Change. Scope Change shall mean only (i) changed site conditions not reasonably
identifiable or inferable from information available to GC/CM at the time of execution of the GMP
Amendment, (ii) significant Work modifications (including additions, substitutions, and deletions)
not reasonably identifiable or inferable from the Documents at every phase of design, and (iii)
application of Allowances and selection of alternates, all as approved by the Owner under this
Contract beyond that identified or inferable from the GMP Supporting Documents (but in the case
of Allowance items, the GMP will increase only if the cost to Owner of the Allowance items exceeds
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the total amount of the Allowances).
2. ARTICLE 2 – CONTRACT DOCUMENTS
2.1. Integration with General Conditions of the Contract for Construction. The requirements of these Pre-
Construction Services Conditions are in addition to, and not in lieu of, the requirements of the
General Conditions of the Contract for Construction, should the parties enter into the General
Conditions of the Contract for Construction.
2.2. Contract Documents. Owner and the GC/CM agree to the terms of the Contract that are set forth in the
Contract Documents as identified above.
2.3. Articles 3.1, 3.2, 11, 13, 14, and 15 of the “General Conditions of the Contract for Construction” also
apply in their entirety to the Pre-Construction Services phase, should the parties enter into the General
Conditions of the Contract for Construction.
3. ARTICLE 3 – SERVICES AND WORK OF THIS CONTRACT
3.1 Preconstruction Phase Services. The GC/CM agrees to provide all of the Preconstruction Phase
Services described below on an ongoing basis in support of, and in conformance with, the time frames
described in the Request for Proposals as updated by the Project Schedule throughout the course of
design and as coordinated with the Owner and Architect/Engineer. The Preconstruction Phase shall
end on or by September 30, 2025. If Preconstruction Phase continues beyond <<XXX XX, XX25>>
through no fault of the GC/CM, additional compensation for extended Preconstruction Services may
be negotiated with the Owner. However, commencement of the Construction Phase shall not excuse
GC/CM from completion of the Preconstruction Phase Services, if such services have not been fully
performed at commencement of the Construction Phase.
3.2 The GC/CM shall provide the following services relating to design and construction tasks:
3.2.1 The GC/CM shall consult with, advise, assist, and provide recommendations to the Owner and
the Architect/Engineer on all aspects of the planning and design of the Work.
3.2.2 The GC/CM shall jointly schedule and attend regular meetings with the Architect/Engineer and
Owner. The GC/CM shall consult with and advise the Owner and Architect/Engineer regarding
site use and improvements, and the selection of materials, building systems and equipment.
3.2.3 The GC/CM shall provide recommendations on construction feasibility; actions designed to
minimize adverse effects of labor or material shortages; time requirements for procurement,
installation and construction completion; and/or factors related to construction cost including
estimates of alternative designs or materials, preliminary budgets and possible economic factors.
3.2.4 The GC/CM may be required to perform exploratory work as a part of the Work. The GC/CM must
conduct any exploratory work in accordance with industry standards and must not interrupt
services. GC/CM must consult and obtain approval from the Architect and Owner prior to
commencing exploratory work.
3.2.5 The GC/CM shall provide continuous in-progress review of design documents, including the
documents generally described in the industry as Schematic Design Documents, Design
Development Documents, and Construction Documents and provide input and advice on
completeness, clarity, construction feasibility, alternative materials, availability of trades and
subcontractors, and availability of labor and materials. The GC/CM shall review Owner design
review comments and provide input on resolution of design comments. Owner acknowledges that
the GC/CM is providing services in its capacity as a Contractor and not as a licensed design
professional.
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3.3 The GC/CM shall provide the following services related to the Project schedule:
3.3.1 The GC/CM shall prepare and periodically update a preliminary Project schedule for the
Architect/Engineer’s review and Owner review and approval.
3.3.2 The GC/CM shall coordinate and integrate the preliminary Project schedule with the services
and activities of the Owner, Architect/Engineer, and GC/CM. As design proceeds, GC/CM shall
update the preliminary Project schedule to indicate proposed activity sequences and durations,
milestone dates for receipt and approval of pertinent information, preparation and advertising
of all bid packages, submittal of a GMP proposal, preparation and processing of shop drawings
and samples, project phasing, delivery of materials or equipment requiring long-lead time
procurement, and Owner’s occupancy requirements showing portions of the Project having
occupancy priority, provided that the date(s) of Substantial Completion shall not be modified
without Owner’s prior written approval. If preliminary Project schedule updates indicate that
previously approved schedules may not be met, the GC/CM shall make appropriate
recommendations to the Owner and Architect/Engineer.
3.3.3 The GC/CM shall make recommendations to Architect/Engineer and Owner regarding the
phased issuance of Plans and Specifications to facilitate phased construction of the Work, if
such phased construction is appropriate for the Project, taking into consideration such factors as
economics, time of performance, availability of labor and materials, and provisions for temporary
facilities.
3.4 Provide the following services relating to cost estimating:
3.4.1 When Schematic Design Documents have been prepared by the Architect and approved by the
Owner, the GC/CM shall prepare for the review of the Architect and approval of the Owner, a detailed
estimate with supporting data.
3.4.2 When 100% Design Development Documents, have been prepared by the Architect and submitted
for review by the Owner and the GC/CM, and approved by the Owner, the GC/CM shall prepare for
the review of the Architect and approval of the Owner, a detailed estimate with supporting data.
During the preparation of the Design Development Documents, the GC/CM shall update and
refine this estimate at appropriate intervals agreed to by the Owner, Architect and GC/CM.
3.4.3 When 50% Construction Documents have been prepared by the Architect and submitted for review
by the Owner and the GC/CM, and approved by the Owner, the GC/CM shall prepare a detailed
estimate with supporting data for review by the Architect and approval by the Owner. During the
preparation of the Construction Documents, the GC/CM shall update and refine this estimate at
appropriate intervals agreed to by the Owner, Architect and GC/CM.
3.4.4 If any estimate submitted to the Owner exceeds previously approved estimates or the Owner’s
budget, the GC/CM shall make appropriate recommendations to the Architect and Owner.
3.4.5 GC/CM shall notify the Owner and the design team immediately if any construction cost
estimate appears to be exceeding the construction budget.
3.5 Perform the following services relating to Subcontractors and suppliers:
3.5.1 The GC/CM shall seek to develop Subcontractor and supplier interest in the Project and shall
furnish to the Owner and Architect for their information a list of possible Subcontractors and
suppliers, including suppliers who may furnish materials or equipment fabricated to a special
design, from whom competitive bids, quotes, or proposals (collectively, "Offers") will be requested
for each principal portion of the Work. Submission of such list is for information and discussion
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purposes only and not for prequalification. The receipt of such list shall not require the Owner or
Architect to investigate the qualifications of proposed Subcontractors and suppliers, nor shall it
waive the right of the Owner or Architect later to object to or reject any proposed Subcontractor,
supplier, or method of procurement.
3.5.2 The GC/CM shall provide input to the Owner and the design team regarding current construction
market bidding climate, status of key subcontract markets, and other local/national economic
conditions. GC/CM shall determine the division of work to facilitate bidding and award of trade and
subcontracts, considering such factors as bidding climate, improving or accelerating
construction completion, minimizing trade jurisdictional disputes, and related issues.
3.5.3 The GC/CM shall recommend to the Owner and Architect/Engineer a schedule for procurement
of long- lead time items which will constitute part of the Work as required to meet the Project
schedule, which shall be procured by the GC/CM upon execution of either a GMP Amendment
or Early Work Amendment covering such procurement, and approval of such schedule by the
Owner. The GC/CM shall expedite the delivery of long-lead time items. The GC/CM shall
investigate, plan, and utilize a “just-in-time” delivery methodology, if feasible.
3.6 The GC/CM shall work with the Owner in identifying critical elements of the Work that may require
special procurement processes, such as prequalification of Offerors, subcontractors, or
alternative contracting methods.
3.7 Construction Phase Services.
3.7.1 Upon execution of an Early Work Amendment or GMP Amendment/Contract, the GC/CM shall
provide Construction Phase Services as provided in the Contract Documents, including without
limitation providing and paying for all materials, tools, equipment, labor and services, and
performing all other acts and supplying all other things necessary to perform and complete the
Work, as required by the Contract Documents, and to furnish to Owner a complete, fully functional
Project in accordance with the Contract Documents, capable of being legally occupied and fully
used for its intended purposes upon completion of the Contract (or, as to an Early Work
Amendment, to furnish such Work as is described in the Early Work Amendment). Construction
Phase Services shall include CM Services performed during the Construction Phase.
3.7.2 Notwithstanding any other references to Construction Phase Services in this Contract, this
Contract shall include Preconstruction Phase Services only unless (i) the parties execute a GMP
Amendment or (ii) the parties execute an Early Work Amendment.
3.7.3 The parties may execute one or more Early Work Amendments identifying specific Construction
Phase Services that must be performed in advance of establishment of the GMP, without exceeding
a not-to- exceed budget, a not-to-exceed guaranteed maximum price, or a fixed price ("Early Work
Price") to be stated in such Amendment, with such Amendment. If the Early Work Price is a not-to-
exceed budget, then GC/CM shall be obligated to perform the Early Work only to the extent that
the Cost of Work thereof, together with the GC/CM Fee, does not exceed the Early Work Price;
however if GC/CM performs Early Work with a cost in excess of the Early Work Price the GC/CM
shall pay such excess cost without reimbursement unless cost overruns are caused by conditions
that constitute a change within the Contract or to incorporate Work not included in the GMP
Amendment. If one or more Early Work Amendments are executed, the GC/CM shall diligently
continue to work toward development of a GMP Amendment acceptable to Owner, which shall
incorporate the Early Work Amendments.
3.7.4 Prior to commencement of any Construction Phase effort, and in any event not later than
mutual execution of the GMP Amendment, GC/CM shall provide to Owner a full performance
bond and a payment security bond in the amount of the GMP. If an Early Work Amendment is
executed, GC/CM shall provide such bond in the amount of the Early Work Price under the Early
Work Amendment. GC/CM shall provide to Owner additional or replacement bonds at the time of
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execution of any subsequent Early Work Amendment or GMP Amendment, in each case prior to
execution of the Amendment and the supplying of any labor or materials for the prosecution of the
Work covered by the Amendment, and in each case in a sufficient amount so that the total bonded
sum equals or exceeds the total Early Work Price or the GMP, as the case may be. In the event
of a Scope Change that increases the GMP, GC/CM shall provide to Owner an additional or
supplemental bond in the amount of such increase prior to performance of the additional Work.
3.8 Construction Management (CM) Services. Throughout the Preconstruction Phase and Construction
Phase of the Project, the GC/CM shall provide CM Services, generally consisting of coordinating
and managing the building process as an independent contractor, in cooperation with the Owner,
Architect/Engineer and other designated Project consultants (the "Construction Principals"),. CM
Services shall include, but are not limited to:
3.8.1 Providing all Preconstruction Phase Services described above;
3.8.2 Developing and delivering schedules, preparing construction estimates, performing
constructability review, analyzing alternative designs, studying labor conditions, coordinating and
communicating the activities of the Construction Principals throughout the Construction Phase to
all Construction Principals;
3.8.3 Continuously monitoring the Project schedule and recommending adjustments to ensure completion
of the Project in the most expeditious manner possible;
3.8.4 Working with the Owner and the Architect/Engineer to analyze the design, participate in
decisions regarding construction materials, methods, systems, phasing, and costs, and suggest
modifications to achieve the goals of providing the Owner with the Project within the budget, GMP
and schedule;
3.8.5 Providing Value Engineering ("VE") services ongoing through the Project. GC/CM shall develop
cost proposals, in the form of additions or deductions from the GMP, including detailed
documentation to support such adjustments and shall submit such proposals to Owner for its
approval. GC/CM acknowledges that VE services are intended to improve the value received by
Owner with respect to cost reduction or life-cycle costs of the Project;
3.8.6 Holding and conducting periodic meetings with the Owner and the Architect/Engineer to
coordinate, update and ensure progress of the Work;
3.8.7 Submitting monthly written report(s) to the Owner. Each report shall include, but shall not be limited
to, Project updates including (i) actual costs and progress for the reporting period as compared
to the estimate of costs; (ii) explanations of significant variations; (iii) work completed; (iv) work in
progress; (v) changes in the work; and (vi) other information as determined to be appropriate
by the Owner. Additional oral or written updates shall be provided to the Owner as deemed
appropriate by the GC/CM or as requested by the Owner;
3.8.8 Maintaining a daily log containing a record of weather, Subcontractors working on the site, number
of workers, Work accomplished, problems encountered, safety violations and incidents of personal
injury and property damage, and other similar relevant data as the Owner may reasonably require.
The log shall be available to the Owner and Architect/Engineer on request;
3.8.9 Developing and implementing a system of cost control for the Work acceptable to Owner,
including regular monitoring of actual costs for activities in progress and estimates for uncompleted
tasks and proposed changes. The GC/CM shall identify variances between actual and estimated
costs and report the variances to the Owner and Architect/Engineer at regular intervals;
3.8.10 Cooperating with any and all consultants hired by Owner;
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3.8.11 At Owner's request, cooperating and performing warranty and inspection Work for the Project
through the expiration date of the applicable warranty period;
3.8.12 Assisting Owner with start-up of the Project. Such start-up may occur in phases due to phased
occupancy;
3.8.13 If applicable, incorporating commissioning and inspection agents' activities into the Project
schedule and coordinating Subcontractors required to participate in the commissioning and
inspection process;
3.8.14 Performing all other obligations and providing all other services set forth in the Contract
Documents; and performing all other acts and supplying all other things necessary to fully and
properly perform and complete the Work as required by the Contract.
4. ARTICLE 4 – CONTRACT SUM AND GMP
4.1 Contract Sum. Owner shall pay the GC/CM the "Contract Sum" which shall equal the sum of the
Preconstruction Fee, Early Work Amendments, the GMP Amendment, plus any Change Orders as
applicable.
4.2 The GMP shall be determined in accordance with the formula set forth below and as described in
4.5. The "Cost of the Work" is defined in Article 5. Costs in excess of the GMP shall be paid by the
GC/CM without reimbursement by Owner. Changes to the GMP shall only be authorized by
Amendment or Change Order.
4.2.1 GMP = [GC/CM Fee X (Guaranteed Maximum Cost for Reimbursable expenses for General
Conditions GMCR + Estimated Cost of the Work (ECoW exclusive of the Contractor’s
Contingency))] + GMCR + Estimated Cost of the Work (ECoW inclusive of the Contractor’s
Contingency)
4.2.2 GC/CM Fee % <see table below> is calculated on the Estimated CoW (excluding GC/CM's %
<see table below> Construction Contingency, or lump-sum Contingency as agreed between
Owner and Contractor) + Guaranteed Maximum Cost for Reimbursable expenses for General
Conditions GMCR.
Estimated Cost of Work GC/CM Fee %
$0-$XM X%
$XM-$XXM X%
$XXM-$XXXM X%
$XXXM-$XXXXM X%
4.2.3 The Contractor will not be due GC/CM Fee on the Construction Contingency.
4.3 Preconstruction Fee. The Preconstruction Fee is a NTE (Not to Exceed) amount for all Pre-
Construction Services and shall be payable to GC/CM on a Time & Material cost reimbursement basis
up to a maximum sum of $XXX.00 (XXX Dollars), which shall cover constructability review, value
engineering, cost estimating, development of GMP, and all other Preconstruction Phase Services,
expenses, reimbursements, and costs. If GC/CM's costs for provision of Preconstruction Phase
Services exceed the maximum Preconstruction Fee, GC/CM shall pay such additional cost without
reimbursement. GC/CM shall not be entitled to any GC/CM Fee upon the Preconstruction Fee. Owner
shall pay the Preconstruction Fee on a cost-reimbursement basis with each application for payment
during the Preconstruction Phase. If the total actual Preconstruction Fee is less than the maximum
Preconstruction Fee used for initial calculation of the GMP as provided above, the GMP shall be
reduced by the difference; provided that Owner may direct instead that any applied portion of the
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maximum Preconstruction Fee be applied to Construction Phase Services, in which case the GMP shall
not be reduced by the portion so applied. Except to the extent the parties may expressly agree to the
contrary in the GMP Amendment, no Preconstruction Fee or other fee, compensation or
reimbursement shall be payable to GC/CM with respect to Preconstruction Services performed after
execution of the GMP Amendment.
4.4 Establishment of GC/CM Fee; Adjustments to GC/CM Fee.
4.4.1 The "GC/CM Fee" shall be a fixed percentage of the Estimated Cost of Work identified in the
GMP Amendment, and shall be calculated as a percentage <see table> of the Estimated Cost of
the Work at the time of establishment of the GMP. In making such calculation, the Estimated Cost
of the Work shall exclude the Preconstruction Fee, the GC/CM Fee itself, but shall include
Allowances, selected alternates, Fixed Cost for GC Work, and GMCR’s. The GC/CM Fee is
inclusive of overhead and profit and all other indirect or non- reimbursable costs. Owner shall
pay the GC/CM Fee ratably with each application for payment during the Construction Phase. In
the case of Early Work, the GC/CM Fee shall be the above percentage multiplied by the actual
Cost of the Early Work.
Estimated Cost of Work GC/CM Fee %
$0-$XM X%
$XM-$XXM X%
$XXM-$XXXM X%
$XXXM-$XXXXM X%
4.4.2 Notwithstanding any provision to the contrary, and unless the parties agree in writing to the
contrary, any Amendment or Change Order that increases or decreases the GMP shall adjust
the GC/CM Fee then in effect by multiplying the percentage shown in 4.4.1 by the change in
the Estimated Cost of the Work reflected in such approved Amendment or Change Order. For any
Amendment or Change Order that increases or decreases the GMP by more than 15%, parties may
negotiate a variance to the contract Fee percentage. In addition, if the Contract is terminated for
any reason prior to full completion of the Work (including, without limitation, termination during
or following performance of Early Work), the GC/CM Fee shall be limited to the total GC/CM Fee
multiplied by the percentage of Work completed and accepted at the time of termination. The
GC/CM Fee percentage shall not be subject to adjustment for any other reason, including,
without limitation, schedule extensions or adjustments, Project delays, unanticipated costs,
negligence, or unforeseen conditions.
4.5 Determination of GMP.
4.5.1 GC/CM shall deliver to Owner a proposed GMP and GMP Supporting Documents at a time
designated by Owner during the Preconstruction Phase. If any actual subcontract Offers are
available at the time the GMP is being established, GC/CM shall use those subcontract Offers as a
basis in establishing the GMP.
4.5.2 As the Plans and Specifications may not be developed to the stage of biddable construction
documents at the time the GMP proposal is prepared, the GC/CM shall provide in the GMP for further
development of the Plans and Specifications by the Architect/Engineer that is consistent with the
Contract Documents and reasonably identifiable and inferable therefrom. Such further development
does not include such things as changes in scope, systems, quantities, kinds and quality of
materials, finishes or equipment, all of which, if required, shall be incorporated by Change Order
or Amendment with a corresponding GMP adjustment, if any.
4.5.3 The GC/CM shall include with its GMP proposal a written statement of its basis (the "GMP
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Supporting Documents"), which shall include at a minimum:
4.5.3.1 A list of the Plans and Specifications, including all addenda thereto and the conditions of the
Contract, which were used in preparation of the GMP proposal.
4.5.3.2 A list of Allowances and a statement of their basis.
4.5.3.3 A list of the clarifications and assumptions made by the GC/CM in the preparation of the GMP
proposal to supplement the information contained in the Plans and Specifications.
4.5.3.4 The proposed GMP, including a statement of the estimated cost organized by trade
categories, allowances, contingency, and other items and the associated fees that
comprise the GMP.
4.5.4 The GC/CM shall meet with the Owner and Architect/Engineer to review the GMP proposal and
the written statement of its basis. If the Owner or Architect/Engineer discovers any
inconsistencies or inaccuracies in the information presented, they shall promptly notify the
GC/CM, who shall make appropriate adjustments to the GMP proposal, its basis or both.
4.5.5 Prior to the Owner's acceptance of the GC/CM's GMP proposal and issuance of a Notice to
Proceed, the GC/CM shall not incur any cost to be reimbursed as part of the Cost of the Work,
except as specifically provided in an Early Work Amendment.
4.5.6 The Owner shall authorize and cause the Architect/Engineer to revise the Plans and Specifications
to the extent necessary to reflect the agreed-upon assumptions and clarifications contained in the
GMP Amendment. Such revised Plans and Specifications shall be furnished to the GC/CM in
accordance with schedules agreed to by the Owner, Architect/Engineer and GC/CM. The GC/CM
shall promptly notify the Architect/Engineer and Owner if such revised Plans and Specifications are
inconsistent with the agreed-upon assumptions and clarifications.
4.5.7 The GMP shall include in the Cost of the Work only those taxes which are enacted at the time the
GMP or Early Work is established.
4.5.8 The Guaranteed Maximum Price shall include the GC/CM's contingency, a sum established
for the GC/CM's use, with Owner approval, to cover costs which are reimbursable as Cost of the
Work but which are not the basis for a Change Order. This contingency is not available for
Owner-directed design or scope changes and unforeseen or differing site conditions. GC/CM
Contingency costs will be reviewed monthly by the Owner for conformance with the Contract.
4.5.8.1 None of the following shall constitute a reimbursable Cost of the Work, or a change order, or
be paid for out of the GC/CM Contingency:
4.5.8.1.1 Means and methods or changes in means and methods;
4.5.8.1.2 Extensions of time for weather delays;
4.5.8.1.3 Extensions of time or delays for other than Owner-directed design or scope
changes, unforeseen conditions, or differing site conditions;
4.5.8.1.4 Damaged work or non-conforming work;
4.5.8.1.5 Out-of-sequence work;
4.5.8.1.6 Work or delays attributable to subcontractors and suppliers; or,
4.5.8.1.7 Delays or costs resulting from GC/CM decisions, management of the project, errors,
omissions, or negligence.
4.5.8.1.8 Under no circumstances will any GC/CM Contingency be used for negligence or
violations of law, building codes, or regulations.
4.5.8.2 All claims for use of GC/CM Contingency shall be subject to Paragraph 4.17 The Owner may,
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at its sole discretion, approve use of the GC/CM Contingency on an individual event, case-by-
case basis, without voiding or waiving the use of Paragraph 4.17
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4.5.8.3 All claims for extension(s) of contract time shall be subject to Paragraph 4.17.
4.5.8.4 The GC/CM shall be liable to the Owner for construction administration expenses, including but
not limited to costs of the Architect/Engineer, as a result of time extensions or delays for other
than Owner-directed design or scope changes, weather delays, unforeseen conditions, or
differing site conditions.
4.5.9 The GC/CM shall work with the Architect/Engineer and Owner to identify and confirm components
and systems not specifically shown but required for a complete, fully functional Project. Owner will
direct the Architect/Engineer to complete the final Construction Documents in accordance with
the Project scope agreed upon by all parties at the time the GMP is established. In so doing, Owner
acknowledges that GC/CM is providing its services as a Contractor and not a design professional.
4.5.10 Notwithstanding the level of detail represented in the GMP Supporting Documents, the GC/CM
shall represent and warrant, at the time that it submits the GMP that the GMP includes the entire
cost of all components and systems required for a complete, fully functional facilities in
accordance with the Project scope agreed upon by all parties at the time the GMP is established.
4.5.11 In developing the GMP, the GC/CM shall include and identify such allowances and clarifications
within the GMP as may be necessary to pay for elements that are required for a complete, fully
functional Project.
4.6 Cancellation of Construction Phase Services. The Owner reserves the sole right at any time, with or
without cause, to terminate or cancel any or all pre-construction services and/or not pursue a GMP
Amendment/Contract with the GC/CM.
4.7 Failure to Furnish an Acceptable GMP. If the GC/CM does not furnish a GMP acceptable to Owner
within Owner's target GMP range, or if Owner determines at any time in its sole discretion that the
parties may fail to reach a timely agreement on a GMP acceptable to Owner, Owner may terminate this
Contract without liability, and the GC/CM shall not receive additional compensation beyond the
Preconstruction Fee under this Contract and sums due under any executed Early Work Amendment.
Termination under this provision shall proceed as a termination for Owner's convenience. GC/CM
further agrees that Owner shall not be liable for any damages whether actual, consequential or
otherwise, for termination of the Contract under this provision.
4.8 Acceptance of GMP. Upon acceptance of the GMP by Owner, the parties shall execute a GMP
Amendment/Contract.
4.9 Owner Savings. If the sum of the remainder of the GC/CM Construction Contingency, plus the actual
and final Cost of the Work, is less than the GMP, the savings shall accrue to the Owner.
4.10 Allowance Work.
4.10.1 GC/CM shall not perform any Allowance Work without prior written approval by Owner for the
Allowance Work and the price thereof.
4.10.2 Owner shall be entitled to apply any Allowance line items that have not been fully expended to
other line item Allowances that have been fully expended, without any resulting increase in the
GMP.
4.10.3 If the total Cost of the Allowance Work exceeds the total Allowances within the GMP, GC/CM shall
not perform any Allowance Work in excess of such amount until either (i) the parties agree
that the additional Allowance work will be performed within the then-current GMP or (ii) a GMP
Amendment or Change Order is executed to increase the GMP by the excess cost of the Allowance
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work.
4.10.4 The Contract Sum shall not include any Allowance items not identified in the GMP Amendment or
the GMP Supporting Documents.
4.10.5 If at the Final Completion of the Project, any portion of the Allowance funds remains unexpended,
the GMP shall be reduced by a corresponding amount via a Change Order or Amendment.
4.11 Reallocating Projected Cost Under-runs after Bid (Offer) Buyout. As soon as possible after the awarding
of the Work to the primary Subcontractors, GC/CM shall review projected costs and provide the Owner
with a buy-out status report showing any projected cost under-runs, reconciling accepted Offers
and other reasonably anticipated costs, to the cost estimate used by GC/CM to establish the GMP.
This report shall be updated on a monthly basis and until such time that the buyout is complete. GC/CM
shall include with its report any underlying documentation requested by Owner used to develop or
support such report. GC/CM shall also consider the reduced risk associated with known
subcontracting costs, and the impact that reduced risk has on the amount of the GC/CM’s
Contingency. The parties shall negotiate in good faith to execute a Change Order transferring an
appropriate portion of any projected cost under-runs to an Owner-controlled contingency fund,
separate from the GC/CM Construction Contingency, to be held within the GMP to pay for additional
costs arising from (a) any Owner-directed or approved change to the Work, (b) schedule changes
that would otherwise entitle GC/CM to an increase in the GMP, (c) Allowance items after exhaustion
of all Allowances, (d) selection by Owner of more expensive alternates than those used for
calculation of the GMP, (e) Owner selection of substitutions that increase the Cost of the Work, or
(f) any other costs which otherwise would entitle GC/CM to an increase in the GMP. Transfer of an
appropriate portion of the under-runs to an Owner-controlled contingency shall occur no earlier than
80% buy-out completion unless agreed to by both parties.
4.12 Notice to Proceed. If Construction Phase Services are added to the Contract, then a notice to proceed
will be issued by the Owner to begin the designated or full Construction Phase Services (“Notice to
Proceed”). It is anticipated that the Notice to Proceed will be issued on or about September 30, 2025,
with the actual date to be provided in the GMP Amendment/Contract. A separate Notice to Proceed shall
be issued for each Early Work Amendment, if any.
4.13 Completion of Project. The GC/CM shall achieve Substantial Completion of the entire Work not later
than the date fixed in the Guaranteed Maximum Price Amendment.
4.14 Time is of the Essence. All time limits stated in the Contract Documents are of the essence.
4.15 Time Extensions. Notwithstanding provisions for Contract time extensions, Owner and GC/CM agree
that timely completion of the Work is essential to the success of the Project, and that approval for time
extension shall be granted only as a last resort.
4.15.1 GC/CM agrees to make reasonable effort to recover time from delays that are the
GC/CM’s responsibility and shall not consider this as a compensable, Owner-directed, or forced
acceleration.
4.15.2 If a compensable time extension is granted by the Owner, the GC/CM shall be limited to $(to be
defined in the GMP Amendment) per day extended overhead (office and field).
4.16 Liquidated Damages. The GC/CM acknowledges that the Owner will sustain damages as a result
of the GC/CM's failure to substantially complete the Project in accordance with the Contract
Documents. These damages may include, but are not limited to delays in completion, use of the Project,
engineering costs to complete the Project, and costs associated with Contract administration and use of
temporary facilities. The GC/CM and the Owner acknowledge that the actual amount of damages would
be difficult to determine accurately and agree that that the following liquidated damages figure
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represents a reasonable estimate of such damages and is not a penalty: $500.00 per day
4.16.1 The GC/CM agrees to pay to the Owner the liquidated damage sums agreed to by the parties for
each day of delay or any fraction thereof and further agrees that Owner may deduct such sums from
payments the Owner otherwise owes to GC/CM under the Contract. If such deduction does not
result in payment to Owner of the assessed liquidated damages in full, GC/CM shall promptly pay
any and all remaining sums due to the Owner upon demand.
4.17. Resolution of Claims, Disputes and Controversies:
4.17.1. Either party may submit a Claim to the other party in accordance with the Contract. After
submission of the Claim, the parties will attempt in good faith to resolve the Claim through
negotiation.
4.17.2 Upon receipt of a Claim against the Contractor or at any time thereafter, the Owner may,
but is not obligated to, notify the surety, if any, of the nature and amount of the Claim. If the Claim
relates to a possibility of a Contractor's default, the Owner may, but is not obligated to, notify the
surety and request the surety's assistance in resolving the controversy.
4.17.3. A Claim subject to or related to liens or bonds shall be governed by applicable law
regarding notices, filing deadlines, and resolution of such Claim prior to any resolution of such
Claim, by mediation, or by arbitration, except for claims made by the Owner against the Contractor’s
bonds.
4.17.4. Pending final resolution of a Claim including mediation, arbitration (if mutually agreed to by
the Parties), or court proceedings, unless otherwise mutually agreed in writing, the Contractor shall
proceed diligently with performance of the Contract and the Owner shall continue to make
payments in accordance with the Contract on Work or amounts not in dispute.
5. ARTICLE 5 – COSTS OF THE WORK (REIMBURSABLE, INCLUDED IN THE GMP)
5.1 Cost of the Work. The term "Cost of the Work" shall mean the costs as described herein. The Cost of
the Work shall include only those items necessarily and reasonably incurred by GC/CM in the proper
performance of the Work and specifically identified in this Article, and only to the extent that they are
directly related to the Project.
5.1.1 Labor Costs.
5.1.1.1 Wages paid for all labor and construction workers directly employed by the GC/CM in
performance of the work.
5.1.1.2 Wages and salaries of the GC/CM's supervisory personnel (i) whether stationed at the site or
district office, but only for that portion of time they are providing services related to the project,
or (ii) engaged at factories, workshops or on the road, in expediting the production or
transportation of materials or equipment required for the Work with Owner, or otherwise
engaged and off the site when specifically related to the Project, in each case under this clause
(iii) only with Owner's prior written approval, and only for that portion of their time directly
required for the Work.
5.1.1.3 Cost of all benefits, taxes, insurance, contributions, assessments and benefits required by law
or collective bargaining contracts and, for personnel not covered by such contracts, customary
benefits such as Social Security, Medicare/Medicaid, 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.
5.1.2 Subcontract Costs. GC/CM's actual payment to Subcontractors pursuant to GC/CM's contract
with such Subcontractor for the Work on the Project. No amount paid by or payable to any
such Subcontractor other than the fixed or cost reimbursement price of its subcontract shall be
included in the Cost of the Work, unless otherwise approved in writing by Owner.
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5.1.3 Costs of Materials, Supplies, and Equipment incorporated in the Work.
5.1.3.1 Costs, including transportation, of materials, supplies, and equipment incorporated or to be
incorporated in the completed Work.
5.1.3.2 Costs for storage on or off site (including applicable insurance), inspection, and testing of
materials, supplies and equipment unless specifically noted to be paid by the Owner.
5.1.3.3 Costs of materials in excess of those actually installed but required to provide reasonable
allowance for waste and for spoilage. Unused excess materials, if any, shall be delivered to
Owner at the completion of the Work or, at Owner's option, shall be sold by the GC/CM. Net
amounts realized, if any, from such sales shall be credited to Owner as a deduction from the
Cost of the Work.
5.1.4 Costs of Miscellaneous Equipment and Other Items; Equipment Rental Charges.
5.1.4.1 Costs, including transportation, installation, maintenance, dismantling, removal, and disposal, of
materials, supplies, temporary facilities, machinery, equipment, and hand tools not customarily
owned by the construction workers, which are provided by the GC/CM in the performance
of the Work; and cost less salvage value on such items if not fully consumed, whether sold to
others or retained by the GC/CM; provided that Owner at Owner's option may require that
GC/CM deliver to Owner (at no charge) at the end of the Project any of such items procured for
this Project. Cost for items previously used by the GC/CM shall mean fair market value. GC/CM
shall charge no additional administrative or other mark-up for purchased items.
5.1.4.2 Rental charges for temporary facilities, machinery, equipment and hand tools not customarily
owned by the construction workers, which are provided by the GC/CM at the site, whether
rented from the GC/CM or others, and costs of transportation, installation, minor repairs and
replacements, dismantling and removal thereof. Rates and quantities of equipment rented
shall be according to industry standards, shall not exceed the standard rate paid at the place of
the project, and shall not exceed acquisition costs, and for individual items exceeding $10,000,
will be subject to Owner's prior approval. GC/CM shall deliver to Owner a list of published rates
from time to time at Owner's request. For all items rented or leased, the GC/CM shall charge
Owner only the rental charge incurred by GC/CM with no additional administrative or other
mark-up. GC/CM shall make efforts and use its best skills and judgment to procure equipment in
the most expeditious and economical manner consistent with the interest of the Owner.
Efforts shall include, but not be limited to, providing Owner with a rent/buy analysis so that
Owner may elect for GC/CM to procure the item in lieu of rental if the facility at issue is
expected to be rented for six months or longer. Such rent/buy analysis shall include, where
available, a leasing rate commensurate with the expected term of rental of the facility at issue.
5.1.5 Costs of removal of debris from the site.
5.1.6 Cost of internet connection, long-distance telephone calls, postage and parcel delivery charges,
telephone service at the site and reasonable petty cash expenses of the site office, computers and
other supporting administrative equipment and furnishings, but only to the extent such costs are for
the benefit of the Work.
5.1.7 That portion of the travel and subsistence expenses of the GC/CM's personnel determined by
Owner to be reasonable and necessary incurred while traveling in discharge of duties connected
with the Work. Main office staff travel shall not be reimbursed unless approved in advance by
Owner.
5.1.8 Other Costs.
5.1.8.1 Premiums and deductibles for insurance directly attributable to this Contract.
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5.1.8.2 Payment and Performance bonds.
5.1.8.3 Sales, use or similar excise taxes imposed by a governmental authority which are directly
related to the Work and for which the GC/CM is liable.
5.1.8.4 Fees and assessments for the trade permits and for other permits, licenses and inspections
for which the GC/CM is required by the Contract Documents to pay. Plan review fees,
assessments, and impact fees are the responsibility of the Owner.
5.1.8.5 GC/CM deposits lost for causes other than the GC/CM's fault or negligence.
5.1.8.6 Costs of drawings, Specifications and other documents required to complete the Work,
except as provided by Owner or Architect/Engineer.
5.1.8.7 Losses, expenses, or damages during construction and warranty that did not arise from
the negligence or wrongful conduct of the GC/CM or its subcontractors.
5.1.8.8 Other costs incurred in the performance of the Work if and to the extent approved in
advance in writing by Owner.
5.1.9 Repairs to Damaged, Defective or Nonconforming Work. The Cost of the Work shall also include
costs which are incurred by the GC/CM in taking action to prevent threatened damage, injury or loss in
case of an emergency affecting the safety of persons and property.
5.2 The Guaranteed Maximum Cost for Reimbursable expenses for General Conditions Work (GMCR).
GC/CM shall be paid a maximum sum as agreed in the GMP Amendment, as payment for
the GC Work, including all labor, materials, and direct and indirect costs thereof. To the extent any GC
Work is otherwise described above in this Article, GC/CM’s compensation for the same is included in
the Cost for GC Work and shall not otherwise be charged as Cost of the Work. The Cost for GC
Work, less 5% retainage thereon, shall be paid in equal installments monthly over the number of
months of the scheduled Construction Phase, commencing with the first progress billing after
commencement of the scheduled Construction Phase. However, no adjustment in the amount
payable for General Conditions Work will be made if the actual construction period is shorter or longer
than the number of months scheduled for the Construction Phase, unless the construction period is
extended because of an Owner delay or due to unforeseeable conditions. Should the GC/CM
spend less than planned on GMCR’s, the GC/CM retains that balance.
5.3 GC/CM Overhead. GC/CM shall be paid in accordance with these Conditions for items including
home office overhead, supervisory labor burden, travel, per-diems and is part of the GC/CM Fee.
6. ARTICLE 6 – COSTS OF THE WORK (NOT REIMBURSABLE, INCLUDED IN THE GMP)
6.1 Costs Excluded from Cost of Work. The following shall not be included in the Cost of the Work:
6.1.1 Salaries and other compensation of the GC/CM's personnel stationed at the GC/CM's principal
office or offices other than the site office except as allowed under Articles 5.
6.1.2 Expenses of the GC/CM's principal office and offices other than the site office.
6.1.3 Any overhead and general expenses, except as may be expressly included in Article 5.
6.1.4 GC/CM's capital expenses, including interest on the GC/CM's capital, employed for the Work.
6.1.5 Rental cost of machinery and equipment, except as provided in Article 5.
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6.1.6 Any cost associated with the Project not specifically and expressly described in Article 5 or not
included in within the Project Cost Matrix.
6.1.7 Costs due to the fault or negligence of the GC/CM, Subcontractors, suppliers, anyone
directly or indirectly employed by any of them, or for whose acts any of them may be liable.
6.1.8 The cost of correction of any repair work, nonconforming or defective work, or warranty work in
excess of the GMP.
6.1.9 Merit, safety, or other incentive payments, bonuses or awards, or any expenses in connection
therewith.
6.1.10 Legal, mediation, or arbitration fees, costs, and expenses except as specifically provided in
the Contract Documents.
6.1.11 Fines and penalties.
6.1.12 Except for Early Work, the cost of Preconstruction Phase Services.
6.1.13 The Cost of the Work for GC Work in excess of the Fixed Cost for GC Work unless such fixed
costs are exceeded by other terms included in this Agreement.
6.1.14 Any costs in excess of the GMP.
7. ARTICLE 7 – CHANGES IN THE WORK
7.1 Price Adjustments. Adjustments to the Guaranteed Maximum Price required by changes in the Work
shall be determined by agreement of the parties in writing. If the adjustment is based upon fixed pricing
or unit pricing:
7.1.1 The overhead and profit markup for the GC/CM shall be limited to the GC/CM Fee adjustment
except for self-performed packages that GC/CM is awarded on a competitive basis consistent with
other Subcontract bid packages which may include overhead and profit associated with the self-
performed work;
7.1.2 The increase or decrease in the Estimated Cost of the Work, other than for subcontract work, shall
be calculated pursuant to Articles 5 and 6 above, instead of being based on GC/CM's direct
costs; and,
7.1.3 In calculating adjustments to subcontracts, unless the parties agree otherwise, the change shall
be limited to the Subcontractor's Direct Costs plus the supplemental mark-up provided in the
General Conditions of the Contract for Construction, and shall not be modified by Articles 5 and 6
above.
7.2 Adjustments to GMP. Adjustments to the GMP after execution of the GMP Amendment may be made
only (i) in the event of Scope Changes or (ii) as otherwise expressly provided in this Contract, and
then only in accordance with the following procedure:
7.2.1 GC/CM shall review subsequent iterations of the Plans and Specifications as they are prepared
to determine whether, in the opinion of GC/CM, they result in a Scope Change so that it can be
determined if an adjustment to the GMP is warranted.
7.2.2 Changes to the GMP shall be initiated by written notice by one party to the other. GC/CM shall
deliver any such GMP Change Request to Architect/Engineer and Owner’s Authorized
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Representative within thirty (30) days after event of any Scope Change if, in GC/CM's opinion,
it constitutes grounds for adjustment of the GMP. Any GMP Change Request shall include a
proposal as to the appropriate GMP adjustment with respect to the Scope Change at issue.
7.2.3 GC/CM shall submit its GMP Change Requests as soon as possible, and GC/CM shall not be
entitled to claim a GMP increase unless GC/CM submitted a GMP Change Request to Owner’s
Authorized Representative and to Architect/Engineer within the earlier of (a) thirty (30) Days after
GC/CM has received the information constituting the basis for the claim, or (b) as to Work already
solicited, prior to commencement of the portion of the Work for which GC/CM intends to claim a
Scope Change; and (c) in any event, prior to GC/CM's signing of a Change Order for the Scope
Change.
7.2.4 Owner may, at any time, submit a GMP Change Request requesting a reduction of the GMP,
which shall include Owner's basis for such request, which may include, for example, reduction of the
GC/CM's Contingency after further development of the Plans and Specifications that form the
basis for the original GMP Amendment, and/or unused Allowances.
7.2.5 GC/CM shall work with Architect/Engineer to reconcile all differences in its GMP Change Request
with Architect/Engineer within seven (7) days from the date of submission of the GMP Change
Request. "Reconciled" means that the GC/CM and Architect/Engineer have verified that their
assumptions about the various categories are the same, and that identifies the reason for
differences in the GMP Change Request and the Architect/Engineer's position. GC/CM shall
submit the Reconciled GMP Change Request to Owner, which submission shall be a condition to
any GC/CM claim for a GMP increase.
7.2.6 If the Reconciled GMP Change Request is not acceptable to Owner, GC/CM agrees to work with
the Owner and the Architect/Engineer to provide a GMP Change Request that is acceptable to
Owner.
7.2.7 GC/CM agrees to make all records, calculations, drawings and similar items relating to GMP
Change Request available to Owner and to allow Architect/Engineer and Owner access and
opportunity to view such documents at GC/CM's offices. Upon Owner's reasonable notice, GC/CM
shall deliver two copies of such documents to Owner and Architect/Engineer at any regular meeting
or at the Site.
7.2.8 GMP increases, if any, shall not exceed the increased Cost of the Work arising from the Scope
Change (whether based on agreed fixed pricing, or the estimated Cost of the Work increase
based on cost- reimbursable pricing), reconciled in accordance with the above provisions, as arising
from the incident justifying the GMP increase, plus or minus the GC/CM Fee applicable to such
change in the Cost of the Work.
7.2.9 Except as provided in this Article 7.2, adjustments to the GMP shall be reconciled in accordance
with the General Conditions of the Contract for Construction.
7.2.10 Execution by Owner. If Architect/Engineer is the Owner’s Authorized Representative, then
notwithstanding any provision in the Contract to the contrary, Architect/Engineer has no authority
to execute Change Orders or Amendments on behalf of Owner, and only duly authorized
personnel of Owner may do so.
8. ARTICLE 8 – SUBCONTRACTS AND OTHER CONTRACTS
8.1 General Subcontracting Requirements.
8.1.1 Other than Work performed by the GC/CM, the GC/CM shall subcontract the Work to
Subcontractors other than the GC/CM and its Affiliates.
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8.1.2 The GC/CM shall comply with the laws of the State of Montana and the City of Bozeman with
regard to the procurement of subcontractors and suppliers.
8.2 GC/CM's Obligations under Subcontracts.
8.2.1 No use of a Subcontractor or supplier shall relieve the GC/CM of any of its obligations or liabilities
under the Contract. Except as may expressly otherwise be provided in this Contract, the GC/CM
shall be fully responsible and liable for the acts or omissions of all Subcontractors and suppliers
including persons directly or indirectly employed by them. The GC/CM shall have sole
responsibility for managing and coordinating the operations of its Subcontractors and suppliers,
including the settlement of disputes with or between the GC/CM and any such Subcontractor or
supplier.
8.2.2 The GC/CM shall include in each subcontract and require each Subcontractor to include in any
lower tier subcontract, any provisions necessary to make all of the provisions of the Contract
Documents, including the GC/CM’s project schedule, fully effective as applied to Subcontractors.
GC/CM shall indemnify Owner for any additional cost based on a subcontractor claim which results
from the failure of GC/CM to incorporate the provisions of this Contract in each subcontract. The
GC/CM shall provide all necessary Plans, Specifications, Hazardous Materials reports and
instructions to its suppliers and Subcontractors to enable them to properly perform their work.
8.2.3 Retainage from Subcontractors. Except with the Owner's prior approval, payments to
Subcontractors shall be subject to retainage of no more than 5%. The Owner and the GC/CM
shall agree upon a mutually acceptable procedure for review and approval of payments and
retainage for Subcontractors.
8.3 Subcontractor Selection.
8.3.1 Unless otherwise provided in the Request for Proposals, this Article, and the direction of the
Owner, the selection of all Subcontractors and suppliers shall be made by competitive offers in a
manner that will not encourage favoritism, bias, or substantially diminish competition.
8.3.2 GC/CM shall submit to the Owner its proposed procurement documents for review and comment
before they are issued for solicitation. GC/CM shall consider and respond to all Owner comments
regarding any proposed offer packages. As offers are received, GC/CM shall submit to the
Owner an offer comparison in a mutually agreeable form together with any specific back-up
requested by Owner. The competitive process used to award subcontracts by the GC/CM may
be monitored by the Owner; provided that such monitoring shall not excuse GC/CM from
compliance with the subcontracting requirements of this Contract. GC/CM shall cooperate in all
respects with Owner's monitoring. The Owner shall be advised in advance of and be given the
opportunity to be present at offer openings, and GC/CM shall provide him or her with a summary
or abstract of all Offers in form acceptable to the Owner, and copies of particular offers if
requested, prior to GC/CM's selection of Offerors. Prior to opening offers, the GC/CM agrees to
disclose in writing to Owner any financial interest it has in any such Subcontractor, supplier or
other contracting party whenever such Subcontractor, supplier or contracting party intends to
compete on any Project work, directly or indirectly, including whether such party is an Affiliate of
GC/CM. GC/CM shall also disclose seven (7) days in advance if they will be providing an offer
as a self-performed scope of work.
8.3.3 The following minimum requirements apply to the Subcontract solicitation process:
8.3.3.1 For procurements with an estimated value of more than $80,000, solicitations will be advertised
by bids as required by 7-5-4302, MCA. The GC/CM shall obtain two written quotes or may
advertise for bids for procurements over five thousand dollars ($5,000.00) up to eighty
Pre-Construction Services Conditions – Lindley Center Renovation Project Page 19 of 25
thousand dollars ($80,000.00).
8.3.3.2 All bid openings for Subcontracting and Self-Performed Work shall be open and available to the
public, the Owner, and the Architect/Engineer, regardless of the bid opening location.
8.3.3.3 Unless specific other prior arrangement has been made with Owner, all offers will be written
(hardcopy, email, or facsimile), and submitted to a specific location at a specific time. GC/CM
shall time-stamp all offers as received. Subcontractors must be qualified to perform the
Work for this Project by being appropriately registered and in compliance with all laws of the
State of Montana.
8.3.3.4 If fewer than three (3) offers are submitted in response to any solicitation (inclusive of any
offer submitted by GC/CM), prior written approval by Owner shall be required to accept the
offer. Field Work and/or Subcontracting/Self-Performed Work by the GC/CM shall be
competitively bid, with solicitations advertised per MCA 7-5-4302, and subject to the same
Owner review and oversight as all other competitively bid subcontractor scopes of work.
8.3.3.5 GC/CM may develop and implement a prequalification process for particular solicitations,
followed by selection of successful offers among those offerors that GC/CM determines
meet the prequalification standards, with Owner’s prior approval of such prequalification
process.
8.3.3.6 GC/CM shall comply, and require Subcontractor compliance with, State of Montana
Department of Labor & Industry prevailing wage rates as follows:
8.3.3.6.1 The Contractor and all subcontractors at any level or tier of the Work shall
give preference to the employment of bona fide Montana residents in the
performance of the Work and shall pay the standard prevailing rate of wages,
including fringe benefits for health and welfare and pension contributions and travel
allowance provisions in effect and applicable to the county or locality in which the
work is being performed. (18-2-403, MCA)
8.3.3.6.2. The Commissioner of The Montana Department of Labor and Industry
(DOLI) has established the standard prevailing rate of wages in accordance with
18-2-401 and 18-2-402, MCA. Contractor shall utilize the "State of Montana,
Prevailing Wage Rates" in effect at the time of execution of the Contract. The
Commissioner of the Montana DOLI has established the resident requirements in
accordance with 18-2-409, MCA. The Contractor and all subcontractors at any
level or tier of the Work shall direct any and all questions concerning prevailing
wage and Montana resident issues for all aspects of the Work to DOLI.
8.3.3.6.3 The Contractor and all subcontractors at any tier or level of the Work, and
as determined by the Montana DOLI, shall classify all workers in the project in
accordance with the State of Montana, Prevailing Wage Rates. In the event the
Contractor is unable to classify a worker in accordance with these rates he shall
contact DOLI for a determination of the classification and the prevailing wage rate
to be paid.
8.3.3.6.4 The Contractor and all subcontractors at any tier or level of the Work shall
be responsible for obtaining wage rates for all workers prior to their performing any
work on the project. The Contractor is required to pay and insure that its
subcontractors at any tier or level and others also pay the prevailing wage
determined by the DOLI, insofar as required by Title 18 of the MCA and the
pertinent rules and standards of DOLI.
8.3.3.6.5. It is not the responsibility of the Owner to determine who classifies as a
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subcontractor, sub- subcontractor, material man, supplier, or any other person
involved in any aspect of the Work at any tier or level. All such determinations shall
be the sole responsibility of the Contractor, subcontractors, sub-subcontractors,
material men, suppliers and others involved in the project at any tier or level. The
Contractor, subcontractors, sub-subcontractors, material men, suppliers and
others involved in the project shall defend, indemnify and hold harmless the Owner
from all claims, attorneys’ fees, damages and/or awards involving prevailing wage
or Montana resident issues. Any changes to wages or penalties for failure to pay
the correct wages will be the sole responsibility of the Contractor and/or his
subcontractors and no further charges or claims shall be made to the Owner. If the
parties mutually agree or an arbitrator or court determines that any change in
wages is due and any part is attributable to the Owner, the Owner's sole liability
shall be for the amount of wages ordered only and not for other expenses, charges,
penalties, overhead, profit or other mark-ups.
8.3.3.6.6. In accordance with 18-2-422(1) MCA, each job classification’s standard
prevailing wage rate, including fringe benefits, that the contractors and employers
shall pay during construction of the project is included herein by both reference to
DOLI’s “Building” or ‘Heavy/Highway” schedules, as applicable to the project, and
as part of these Contract Documents.
8.3.3.6.7. The Contractor and every employer, including all subcontractors at any
tier or level, is required by 18-2-422(2) MCA to maintain payroll records in a manner
readily capable of being certified for submission under 18-2-423 MCA, for a period
of not less than 3 years after the contractor's, subcontractor’s, or employer's
completion of work on the project or the Final Acceptance by the Owner, whichever
is later.
8.3.3.6.8. Each contractor is required by 18-2-422(3) MCA to post in a visible and
accessible location a statement of all wages and fringe benefits in compliance with
18-2-423.
8.3.3.7 Owner may at its sole discretion, require GC/CM to re-solicit for Offers based on the same or
modified documents. If GC/CM does receive a responsive offer within the initial solicitation,
Owner shall be responsible for all cost and schedule overruns due to Owner directed re-
solicitation except where cause of re-solicitation is the fault of the GC/CM.
8.3.3.8 GC/CM shall review all Offers and shall work with Offerors to clarify Offers, reduce exclusions,
verify scope and quantities, and seek to minimize work subsequently awarded via the Change
Order process.
8.3.3.9 The GC/CM will document any and all discussions, questions and answers, modifications
and responses to or from any Offeror and ensure that the same are distributed to all Offerors,
and Owner shall be entitled to inspect such documentation on request.
8.3.3.10 GC/CM shall determine the lowest Offer for each solicitation that meets GC/CM’s
reasonable performance standards for the components of the Work at issue; provided that if
GC/CM determines it is unable to execute a suitable subcontract with such Offeror, GC/CM
may, with Owner’s prior approval, execute a subcontract with the second-lowest Offeror.
This paragraph does not preclude the award of a sub-contract to any Offeror selected as part
of a pre-qualification process.
8.3.4 With authorization by Owner, Work may be subcontracted on other than a low price basis,
including without limitation, through competitive negotiation. As a condition to its authorization,
Owner may require GC/CM's agreement to establish and implement qualification and
performance criteria for Offerors, including a scoring system within requests for proposals.
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Examples include: where there are single fabricators of materials; special packaging requirements
for Subcontractor work; design-build work or, where an alternative contracting method can be
demonstrated to clearly benefit Owner.
8.3.5 GC/CM shall notify Owner in writing in advance before award of any proposed Subcontract,
which notice shall include summaries in a form acceptable to Owner of all Offers received for the
Subcontract at issue. Owner reserves the right to disapprove any proposed Subcontractors,
suppliers and Subcontract or supply contract awards, based on legal standards of responsibility.
Owner shall not unreasonably disapprove any proposed Subcontractor or supplier and increased
costs due to Owner's disapproval shall be cause for an increase in the GMP.
8.3.6 GC/CM's subcontracting records shall not be considered public records; provided, however, that
Owner and other agencies of the State shall retain the right to audit and monitor the subcontracting
process in order to protect the Owner's interests.
8.4 GC/CM Field Work, Subcontracted/Self-Performed Work by GC/CM.
8.4.1 With consent of the Owner, the GC/CM or its Affiliate may bid and compete for Field Work
and/or Subcontracted/Self-Performed Work with its own forces. All field work and/or
subcontracting/self-performed work by the GC/CM shall be competitively bid as provided in Article
8.
8.4.2 Except as provided in Article 8, any other portion of the Work proposed to be field work and/or
subcontracted/self-performed by the GC/CM, including without limitation provision of any
materials, equipment, or supplies, shall be subject to the provisions of Article 8.
8.4.3 When assembling and using bid packages, for those items for which the GC/CM intends to submit
a competing Offer for Self-Performed Work and after approval by the Owner, such intent must be
publicly announced with the solicitation for bids required by this Article, and the Owner notified in
writing that this announcement has been made. Any GC/CM competing Offer shall be forwarded
to the Owner prior to the bid opening. All Offers for this work shall be publicly available by GC/CM
at an announced time, date, and place as all other offers.
8.4.4 For all field work and/or subcontracted/self-performed work, the GC/CM shall at a minimum
provide separate project management, foremen, supervision, accounting, etc. as if it were any other
separate subcontracting entity, unless prior written approval is granted by the Owner. The GC/CM
is expressly prohibited from using the personnel, positions, general conditions costs, and
overhead from directly supervising and managing any field work and/or subcontract/self-performed
work, unless specific prior written approval is granted by the Owner.
8.5 Protests. GC/CM, acting as an independent contractor, shall include in the competitive process to
award all subcontracts, a protest process for Subcontractors and suppliers that are competing Offerors,
which process shall be subject to approval by Owner. GC/CM shall be solely responsible for resolving
procurement protests of Subcontractors and suppliers. GC/CM shall indemnify, defend, protect and
hold harmless Owner from and against any such procurement protests and resulting claims or litigation
unless protest exists in whole or in part by the Owner’s actions, directions, or negligence, who shall then
share its proportionate responsibility for claims or litigation. GC/CM shall act as an independent
contractor, and not an agent of Owner, in connection with any procurement protest. The provisions of
this Article are solely for the benefit of Owner, and do not grant any rights or remedies (including third
party beneficiary rights) to any Offer or other protester, in connection with any procurement protest or
claim.
9. ARTICLE 9 – RECORDS, ACCOUNTING, AUDITING
9.1 Accounting and Audit Access. The GC/CM shall keep full and detailed accounts and exercise such
controls as may be necessary for proper financial management under this Contract; the accounting
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and control systems shall be satisfactory to Owner. Owner and Owner's representatives, including the
City of Bozeman’s accountants and auditors, shall be afforded reasonable and regular access to the
GC/CM's records, books, correspondence, instructions, drawings, receipts, subcontracts, purchase
orders, vouchers, memoranda and other data relating to this Contract, and the GC/CM shall preserve
these for a period of three (3) years after final payment, or for such longer period as may be required
by law.
9.2 Periodic and Final Audits. Owner may, at its discretion, perform periodic audits of the Cost of the
Work and any other reimbursable costs associated with the Project. Owner intends to conduct a final
audit of reimbursable costs prior to the Contract closeout. The GC/CM shall cooperate fully with Owner
in the performance of such audits. Disputes over audit findings or conclusions shall be subject to the
process set forth in the General Conditions.
10. ARTICLE 10 – REPRESENTATIONS AND WARRANTIES
10.1 Representations. GC/CM represents and warrants to Owner as of the effective date of this Contract:
10.1.1 it is qualified to do business as a licensed general contractor under the laws of the State of
Montana, and has all requisite corporate power and corporate authority to carry on its business
as now being conducted;
10.1.2 it has full corporate power and corporate authority to enter into and perform the Contract and
to consummate the transactions contemplated hereby; GC/CM has duly and validly executed and
delivered the Contract to Owner and that the Contract constitutes the legal, valid and binding
obligation of GC/CM, enforceable against GC/CM in accordance with its terms, except as
enforceability may be limited or affected by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally and by general principles of
equity (regardless of whether enforceability is considered in a proceeding in equity or at law);
10.1.3 GC/CM's execution and delivery of the Contract and the consummation of the transactions
contemplated hereby will not conflict with or result in a material breach of any terms or provisions of,
or constitute a material default under, (i) GC/CM's Articles of Incorporation or Bylaws; (ii) any note,
bond, mortgage, indenture, license, lease, contract, commitment, agreement or other instrument or
obligation to which GC/CM is a party or by which GC/CM may be bound; or (iii) any statute, order,
writ, injunction, decree, rule or regulation applicable to GC/CM;
10.1.4 no material consent, approval, authorization, declaration or other order of, or registration or filing
with, any court or regulatory authority or any third person is required for the valid execution,
delivery and performance of the Contract by GC/CM or its consummation of the transactions
contemplated hereby;
10.1.5 there is no action, proceeding, suit, investigation or inquiry pending that questions the validity of
the Contract or that would prevent or hinder the consummation of the transactions contemplated
hereby; and,
10.1.6 the GC/CM's Project Manager and Superintendent (if assigned by GC/CM) are duly appointed
representatives and each has the authority to bind the GC/CM to any and all duties, obligations
and liabilities under the Contract Documents and any Amendments or Change Orders thereto.
11. ARTICLE 11 – MISCELLANEOUS
11.1 Insurance/Indemnification:
Contractor agrees to release, defend, indemnify, and hold harmless the Owner, its agents,
representatives, employees, and officers (collectively referred to for purposes of this Section as the
Owner) from and against any and all claims, demands, actions, fees and costs (including attorney’s
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fees and the costs and fees of and expert witness and consultants), losses, expenses, liabilities
(including liability where activity is inherently or intrinsically dangerous) or damages of whatever kind
or nature connected therewith and without limit and without regard to the cause or causes thereof or
the negligence of any party or parties that may be asserted against, recovered from or suffered by the
Owner occasioned by, growing or arising out of or resulting from or in any way related to: (i) the
negligent, reckless, or intentional misconduct of the Contractor; or (ii) any negligent, reckless, or
intentional misconduct of any of the Contractor’s agents.
Such obligations shall not be construed to negate, abridge, or reduce other rights or obligations of
indemnity that would otherwise exist. The indemnification obligations of this Section must not be
construed to negate, abridge, or reduce any common-law or statutory rights of the Owner as
indemnitee(s) which would otherwise exist as to such indemnitee(s).
Contractor’s indemnity under this Section shall be without regard to and without any right to
contribution from any insurance maintained by Owner.
Should the Owner be required to bring an action against the Contractor to assert its right to defense
or indemnification under this Contract or under the Contractor’s applicable insurance policies required
below the Owner shall be entitled to recover reasonable costs and attorney fees incurred in asserting
its right to indemnification or defense but only if a court of competent jurisdiction determines the
Contractor was obligated to defend the claim(s) or was obligated to indemnify the Owner for a claim(s)
or any portion(s) thereof.
In the event of an action filed against Owner resulting from the Owner’s performance under this
Contract, the Owner may elect to represent itself and incur all costs and expenses of suit.
Contractor also waives any and all claims and recourse against the Owner, including the right of
contribution for loss or damage to person or property arising from, growing out of, or in any way
connected with or incident to the performance of this Contract except “responsibility for [Owner’s] own
fraud, for willful injury to the person or property of another, or for violation of law, whether willful or
negligent” as per 28-2-702, MCA.
These obligations shall survive termination of this Contract and the services performed hereunder.
In addition to and independent from the above, Contractor shall at Contractor’s expense secure
insurance coverage through an insurance company or companies duly licensed and authorized to
conduct insurance business in Montana which insures the liabilities and obligations specifically
assumed by the Contractor in this Section. The insurance coverage shall not contain any exclusion
for liabilities specifically assumed by the Contractor in this Section. The insurance shall cover and
apply to all claims, demands, suits, damages, losses, and expenses that may be asserted or claimed
against, recovered from, or suffered by the Owner without limit and without regard to the cause
therefore and which is acceptable to the Owner and Contractor shall furnish to the Owner an
accompanying certificate of insurance and accompanying endorsements in amounts not less than as
shown below:
Workers’ Compensation – not less than statutory limits;
Employers’ Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate;
Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate;
Products and Completed Operations – $1,000,000;
Automobile Liability - $1,000,000 property damage/bodily injury; $2,000,000 annual
aggregate (all owned, hired, non-owned vehicles);
Builder’s Risk/Property Insurance at least as broad as that provided by the ISO special causes of loss
form (CP10 30) naming at a minimum the Owner in an amount equal to greater of Contractor’s
compensation or full replacement value of the work (covering at a minimum all work, buildings,
materials and equipment, whether on site or in transit, loss due to fire, lightening, theft, vandalism,
malicious mischief, earthquake, collapse, debris removal, demolition occasioned by enforcement of
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laws, water damage, flood if site within a flood plain, repair or replacement costs, testing and start-up
costs) on an all risk coverage basis. This insurance must include waivers of subrogation between the
Owner and Contractor to the extent that damage to the Work or City Hall is covered by other insurance;
Owner’s and Contractor’s Protective Liability: one policy designating the Owner (including its agents,
representatives, employees, and officers) as the insured and another independent policy designated
the Owner’s Representative (including its consultants, consultants, agents and employees) as the
insured on the declarations with both policies covering: (i) operations performed by the Contractor
under this Contract for the Owner; and (ii) the Owner’s and Owner’s Representatives acts or
omissions, including negligent acts, in connection with its general supervision of the work of the
Contractor’s and its subcontractors - $1,000,000 per occurrence; $2,000,000 aggregate;
Contractual Liability Insurance (covering the Contractor’s indemnity obligations described in this
Contract) - $1,000,000 per occurrence $2,000,000 aggregate
The amounts of insurance provided shall be exclusive of defense costs. The City of Bozeman shall be
endorsed as an additional or named insured on a primary non-contributory basis on both the
Commercial General and Automobile Liability policies. The insurance and required endorsements
must be in a form suitable to Owner and shall include no less than a thirty (30) day notice of
cancellation or non-renewal. Contractor shall notify Owner within two (2) business days of Contractor’s
receipt of notice that any required insurance coverage will be terminated or Contractor’s decision to
terminate any required insurance coverage for any reason.
The Owner must approve all insurance coverage and endorsements prior to the Contractor
commencing work.
11.2 Headings. The headings used in the Contract are solely for convenience of reference, are not part
of the Contract and are not to be considered in construing or interpreting the Contract.
11.3 Merger. The Contract Documents constitute the entire contract between the parties. No waiver,
consent, modification or change of terms of the Contract shall bind either party unless in writing and
signed by both parties. Such waiver, consent, modification or change, if made, shall be effective only
in the specific instance and for the specific purpose given. There are no understandings, agreements,
or representations, oral or written, not specified herein regarding the Contract. GC/CM, by signature
of its representative, hereby acknowledges that it has read the Contract, understands it and agrees to
be bound by its terms and conditions.
11.4 Progress Payments.
11.4.1 Progress Payments. Based upon applications for payment submitted, Owner shall make progress
payments on account of the Preconstruction Fee, Cost of the Work, , and GC/CM Fee, less 5%
retainage, to the GC/CM as provided below and elsewhere in the Contract Documents.
Retainage will not be withheld on Preconstruction Services. A progress payment shall not be
considered acceptance or approval of any Work or waiver of any defects therein.
11.4.2 Percentage of Completion. 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 (i) 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 GC/CM on account of that portion of the Work for which the
GC/CM has made or intends to make actual payment prior to the next application for payment by (b)
the share of the GMP allocated to that portion of the Work in the Schedule of Values.
11.4.3 Calculation of Payment. Subject to other provisions of the Contract Documents, the amount of
each progress payment shall be computed as follows:
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11.4.3.1 Take that portion of the GMP properly allocable to completed Work as determined by
multiplying the percentage of completion of each portion of the Work under the Schedule
of Values by the share of the GMP 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;
11.4.3.2 Add that portion of the GMP properly allocable to materials and equipment delivered and
suitably stored and otherwise in compliance with the General Conditions;
11.4.3.3 Add the GC/CM Fee. The portion of the GC/CM Fee payable shall be an amount that
bears the same ratio to GC/CM Fee as the sum of the amounts in the two preceding
Clauses bears to the Cost of the Work, but in no event causing the total GC/CM Fee
payments to exceed the total GC/CM Fee, except as modified by the Amendments and
Change Orders;
11.4.3.4 Subtract the aggregate of previous payments made by and retained by the Owner;
11.4.3.5 Subtract the shortfall, if any, indicated by the documentation required to substantiate prior
applications for payment, or resulting from errors subsequently discovered by the Owner
in such documentation;
11.4.3.6 Subtract any amounts for which the Owner has withheld or nullified payment as provided
in the Contract Documents; and,
11.4.3.7 Subtract 5% retainage on the entire progress payment (with the exception of Pre-
Construction Services).
12. ARTICLE 12 – CONTRACT ATTACHMENTS, APPENDICES, EXHIBITS
Exhibit A – GC/CM Request for Proposal
Exhibit B – General Conditions of the Contract for Construction
Exhibit C – Nondiscrimination and Equal Pay Affirmation