Hi Tech Construction Company - Fix Fee Construction Contract T V
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• FIXED-FEE CONSTRUCTION CONTRACT
This Fixed Fee Construction Contract ("Contract"), which bears the date of August g 2-1,
1999, is entered into between PORTUGUESE BEND CLUB HOMEOWNERS ASSOCIATION
("Owner"), and HI TECH CONSTRUCTION COMPANY ("Contractor") upon the following terms and
conditions in connection with the following described Project:
Name and Address of Project:
Sewer Lift Station Construction and Operation
Portuguese Bend Club Homeowners Association
4100 Palos Verdes Drive South
Rancho Palos Verdes, CA 90275
Name and Address of Contractor's Proiect Manager:
• Mr. Jerry Palmer
Hi Tech Construction Company
10508 Tuxford Street
Sun Valley, CA 91352-2127
Name and Address of Owner's Project Manager:
• Mr. Steve Cummins
Dalcin Cummins Associates
17625 Crenshaw Blvd., Suite 300
Torrance, CA 90504
Section 1
THE CONTRACT DOCUMENTS
1.1 The "Contract Documents" consist of this Contract, the plans, specifications and
drawings ("Drawings and Specifications") and any other documents specifically identified in Exhibit
1 hereto, all addenda to the Drawings and Specifications issued prior to the execution of this
Contract and also listed on Exhibit 1 hereto, the construction schedule identified in Section 3 of this
Contract, any Agreement to Commence Construction hereafter be entered into between Owner and
Contractor, and any Modifications issued after the execution of this Contract. The Contract
Documents do not include such documents, if any, as a Notice to bidders, Instructions to Bidders,
sample forms, proposal forms, Contractor's bid, or any other documents not specifically enumerated
in Exhibit 1 or in this Contract. Conflicts or discrepancies among the Contract Documents shall be
resolved in the following order of priority:
a. Agreement to Commence Construction;
b. Addendum or Modification to this Contract;
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c. The Exhibits to this Contract;
d. This Contract (without Exhibits);
e. Drawings and Specifications; Drawings govern specifications for quantity and
location, and Specifications govern Drawings for quality and performance. In the event of ambiguity
in quantity and quality, the greater quantity and the better quality shall govern.
f. Figured dimensions govern scale dimensions and large scale Drawings govern
small scale Drawings; and
g. Submittals, as defined in Section 17 hereof.
Amendments to Contract Documents and revisions of later date take precedence over those of
earlier date.
Section 2
CONTRACTOR'S DUTIES AND RESPONSIBILITIES
2.1 Contractor, for the Contract Price forth in Section 4 below, shall perform all work
required to complete the Project in accordance with the Contract Documents and all applicable
governmental codes, regulations, laws and ordinances, as they may apply to performance of the
Project (collectively, the "Work" or the "work"), including, but not limited to, the following:
•
a. All materials, supplies, apparatuses, appliances, equipment, fixtures, tools,
implements, and all other facilities and all labor, supervision, transportation, utilities, storage and all
other services as and when required for or in connection with the performance of the Work.
b. Erection of street barricades; providing of necessary project security; if
necessary, removing and replacing fire hydrants, street signs, street lights, and traffic lights,
removal of abandoned utilities and any required location of existing utilities; all insurance required in
this Contract; paying for all appropriate permits; paying all sales, use and any other tax applicable to
the Work; complying with and giving all notices required by laws, ordinances, rules, regulations and
lawful orders of public authorities bearing on performance of the Work.
c. Providing for all facilities such as sanitary facilities, drinking water,
temporary lighting, temporary protection, fences and/or barricades around the Project site,
construction water, temporary or permanent power and distribution lines, grades and layout,
temporary heating and temporary closed openings, continuous clean-up including removal of debris
upon completion of each phase of the Project, final clean-up upon completion of Project;
communications, and material and personnel hoisting equipment for Contractor and all
subcontractors. The use of any hoisting equipment shall be scheduled through and under the
exclusive control of Contractor.
d. The scope of the Work shall include all work specifically called for in the
Contract Documents and applicable governmental codes and regulations, and all items necessary,
incidental, required by, or implied by the Contract Documents as necessary to complete the Work,
except for those items that are specifically and expressly excluded. Items need not be specifically
listed in Contractor's schedule of values in order to be deemed items within the scope of the Work.
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2.2 Contractor shall require all subcontracts to contain unit prices, separate prices, or
alternate prices for certain portions of the Work covered by such subcontracts. Contractor shall be
liable for the enforcement and administration of such unit prices, separate prices or alternate prices
until completion of the Work. All unit prices will include all labor, materials, taxes, overhead and
profit and any other costs required to install one unit of work. These unit prices may also be used
by Owner to deduct a unit of work if Owner so desires. Contractor shall also require subcontracts
to contain a schedule of values of the work to be performed under each subcontract, in detail
satisfactory to Owner and Owner's Project Manager so as to enable Owner to estimate fairly the
percentage of work performed by each such subcontractor, and the value of such work, for
purposes of progress payment requests. Owner shall not be required to make progress payments to
Contractor until Owner has approved the schedule of values required hereunder.
2.3 Owner may change portions of the Work, add to the Work, or delete portions of the
Work and cause such portions of the Work so changed, added, or deleted to be performed by other
contractors or subcontractors and the Contract Price shall be adjusted accordingly. If Owner
exercises such right, such portions of the Work shall be performed pursuant to a contract between
Owner and other parties, and Contractor shall not have any further liability with respect to such
portions of the Work performed by such other parties, provided, however, Contractor shall fully
cooperate with such other parties to insure that the work performed by them is completed at the
lowest possible cost to Owner. In addition, Owner may use non-union contractors to perform such
changed, added, or deleted portion of the Work, in which-case Contractor shall, if necessary to
permit continued performance of the Work, set up a dual-gate system of ingress and egress at the
Project site, and further insure that the integrity of the dual-gate system is maintained, so that both
union and non-union contractors and subcontractors, and their employees, agents, suppliers, and
visitors will have free and unfettered access to the Project.
1111 2.4 The Work shall be done in a professional and competent manner, consistent with the
Owner's Project Manager's design requirements, and all the materials furnished and used in
connection therewith shall be new and in accordance with the Contract Documents. Contractor
shall cause all materials to be readily available as and when required or needed in accordance with
timely completion of the Project. The Contractor shall be responsible to the Owner for acts and
omissions of the Contractor's employees, subcontractors, and their agents and employees
performing portions of the Work under a contract with the Contractor.
2.5 Contractor shall continuously remove from all areas of the Project site all rubbish,
debris, or surplus materials which may accumulate from prosecution of the Work. If, in the opinion
of Owner, Contractor is not fulfilling this obligation, Owner, upon twenty-four (24) hours written
notice to Contractor, may order the removal of the rubbish, debris, or surplus materials, and
backcharge Contractor for the cost of this portion of the Work.
2.6 All subcontracts shall contain a clause, approved by Owner, for direct assignment of
all subcontracts from Contractor to Owner.
2.7 Contractor shall submit to Owner in a form acceptable to Owner, each month, and
attached to the Request for Payment, a detailed report reflecting the previous month's activities and
the next month's anticipated activities.
2.8 Contractor and Owner both recognize the need to have experienced and qualified
Contractor personnel assigned to this Project. In recognition of this requirement, Contractor agrees
that Owner will have the right to approve the assignment of the Project Manager, Project Engineer,
Project Superintendent and any other key Contractor personnel that will be required to effectively
manage the Project. If, after approving these key individuals, Owner determines that they are not
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qualified, or are not responsive to the needs of Owner and/or the Project, Contractor will replace
such individuals with more qualified personnel, subject to Owner's approval. In no way will
Owner's approval or disapproval of Contractor personnel relieve Contractor of any responsibilities
for managing the Project or fulfilling any obligation required by this Contract.
2.9 If Owner determines that Contractor's administrative procedures are not
satisfactory, Owner can compel Contractor to employ more suitable administrative procedures, as
recommended by Owner.
2.10 Notwithstanding anything to the contrary in this Contract, it is understood and
agreed that Owner shall have the right to assign this Contract, if required, to a construction lender
for the purpose of obtaining financing for the construction and/or completion of the Project.
Contractor shall cooperate fully with Owner in effecting any such assignment and shall execute
such consents to assignment, estoppel certificates or other documentation as such construction
lender may reasonably require in connection therewith.
2.11 Contractor shall be fully liable to Owner for the quality of all work performed and
materials and equipment furnished in connection with the Project, whether performed and furnished
by Contractor or through subcontractors, sub-subcontractors (of all tiers) and suppliers.
2.12 Owners/members will occupy homes along the entire construction site and will use
the roads in the construction site during the entire construction period. Contractor acknowledges
that the location of the Work within a residential community requires special levels of cooperation
and attention to the safe and quiet use and occupancy of the homes within the proximity of the
construction site. Accordingly, Contractor shall cooperate with Owner during construction
operations to minimize conflicts and facilitate safe and quiet use and occupancy of the homes within
• the proximity of the construction site, and shall perform the Work so as not to interfere with or
endanger occupants and visitors of the homes within the proximity of the construction site. All
Work shall be arranged so as not to cause unnecessary inconvenience or danger to such occupants
and their visitors in their regular activities and all Work shall be done as quietly as possible. All
parties understand and acknowledge that the nature of construction work necessarily causes
inconvenience. Without limiting the foregoing:
a. Contractor shall at all times provide the best possible public relations. All
construction and storage areas shall be maintained in a neat and orderly fashion. All workmen shall
be courteous and helpful to the public at all times.
b. In performing Work adjacent to occupied buildings, care shall be taken to
disturb occupants as little as possible.
c. Pedestrian walkways, vehicular access driveways and loading areas shall not
be used for parking or storage of materials, unless otherwise provided in the Contract Documents or
Owner provides prior written consent to the contrary. Deliveries shall be scheduled in order to
minimize the storage of materials and equipment on-site to the extent reasonably possible.
d. Each street and curb cut shall be open for a period not to exceed five (5)
calendar days and shall be promptly closed after the segment of the Project under such road is
complete. All open street cuts shall be covered with steel plates during periods when construction
is not being performed.
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• e. Contractor shall coordinate and arrange with Owner's Project Manager any
shut-downs of existing utility systems required during the Work. All such Work shall be approved
by the Owner not less than seventy-two (72) hours prior to performing such operations.
f. Not later than three (3) full working days prior to commencement of any
Work in or adjacent to existing structures, Contractor shall advise Owner of any anticipated Work
activity which Owner might consider to be an inconvenience or a nuisance, including, but not
limited to, Work involving significant noise or vibration.
g. Upon notice from Owner, Contractor shall immediately cease any Work
which the Owner perceives presents an unreasonable inconvenience or hazard to the occupants or
visitors of the homes within the proximity of the construction site and shall cooperate with Owner
in establishing an alternate method of performing or scheduling the Work. This paragraph shall in
no way relieve Contractor of responsibility for construction safety and the protection of persons and
property as described herein.
h. Upon completion of that portion of the Project upon an individual lot,
Contractor shall promptly restore such lot to the same condition as existed prior to the
commencement of the Work.
Section 3
TIME OBLIGATIONS AND SCHEDULES
111 3.1 Time is of the essence in the performance of this Contract.
3.2 The Project work to be performed under this Contract shall be,c9Inmenced on the
date specified in the Notice to Proceed, and shall be completed within 90 working days
after the date Contractor receives the required sewage pumps, pump control panel and other
specially manufactured equipment (the "Completion Date"), as provided in the Schedule described in
Section 3.8 below. Contractor shall promptly order such specially manufactured equipment as soon
as possible, subject to Contractor's receipt of the advance payment described in Section 5.2 below.
However, only in the event of delay to Contractor in performing the Work resulting from the
conduct or lack of conduct by Owner or Owner's Project Manager, or their officers, employees,
agents or consultants; or resulting from delay or failure of Owner in making the site available, or in
furnishing any items required to be furnished to Contractor pursuant to the Contract Documents; or
resulting from changes to the Project ordered by Owner; or resulting from (i) extraordinary, adverse
conditions of weather for the area and time of year, (ii) war or national conflicts or priorities arising
therefrom, (iii) fires beyond the reasonable control of Contractor or earthquakes, (iv) strikes or other
labor disruptions, except for the first five working days of any strike or labor disruption, or (v) any
other cause beyond Contractor's reasonable control (but not including delays caused by Contractor,
subcontractors of any tier or suppliers), Contractor shall.be entitled to an extension of time with
regard to the time for completion of the Project, by the amount of time Contractor is actually
delayed thereby in the performance of the Project. Contractor shall not be entitled to any such
extension of time for such delay from any such causes unless Contractor notifies Owner in writing
within five (5) calendar days of the commencement of each such cause, together with essential
supporting data, and thereafter promptly gives written notice of the termination thereof. A time
extension shall be Contractor's sole remedy and compensation for all such delays other than those
resulting from the acts or negligence of Owner or Owner's Project Manager, or their officers,
employees, agents or consultants (collectively, "Owner-Caused Delays"). For Owner-Caused
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Delays, Contractor shall be entitled to reimbursement for its reasonable additional costs, including
reasonable overhead expenses associated therewith, resulting from such delays but not for any
additional profit or fee.
3.3 Work hours shall be limited to 7:00 a.m. to 7:00 p.m. on "working days", which
shall include Monday through Friday (excluding legal holidays observed in the City of Rancho Palos
Verdes), with no work allowed on Saturday or Sunday. Work hours may be altered under certain
emergency circumstances, as agreed to by Owner and approved in writing by the City of Rancho
Palos Verdes. •
3.4 If Contractor claims entitlement to an extension of time to complete the Work, it
shall be Contractor's responsibility to prove to Owner that the delay in completion of the Work was
caused specifically by a delay in a portion of the Work that was on the critical path of the
Construction Schedule (as identified on the Schedule) caused by one or more of the permitted
causes set forth in Section 3.2 above.
3.5 Contractor recognizes it is imperative that the Work proceed uninterrupted and shall
endeavor to prevent and shall promptly cure any work stoppage caused by any labor or jurisdictional
disputes arising out of the assignment of Work to be performed by Contractor or its subcontractors
or sub-subcontractors of any tier.
3.6 The completion time contemplated by this Contract anticipates a certain number of
lost days due to normal weather conditions. Only unusual or extreme and adverse weather
conditions for the time of year will be considered as justification for an extension of time to
complete the Work.
3.7 For purposes of this Contract the terms "complete" and "completion" shall mean
and refer to actual final completion of the Work, including all corrective and remedial work, in a
condition acceptable to Owner and Owner's Project Manager; and, specifically, the Work will not be
considered complete prior to the time that the Work is accepted by the governing city building
department as complete.
3.8 "Substantial Completion" is the stage in the progress of the Work when the Work is
sufficiently complete in accordance with the Contract Documents so the Owner can occupy or
utilize the Work for its intended purpose, subject only to completion of minor punchlist items.
When the Contractor considers that the Work is substantially complete, the Contractor shall prepare
and submit to the Owner a comprehensive punchlist of items to be completed or corrected. The
Contractor shall proceed promptly to complete and correct the items on the punchlist, but in no
event shall such punchlist items be completed later than thirty (30) calendar days after Substantial
Completion. Failure to include an item on the punchlist does not alter the responsibility of the
Contractor to complete all Work in accordance with the Contract Documents. Upon receipt of the
Contractor's punchlist, the Owner will make an inspection to determine whether the Work is in
accordance with the Contract Documents, and will notify Contractor of any additional items needing
completion or correction prior to issuance of a Certificate of Substantial Completion. Thereafter,
upon completion or correction of all items on the Contractor's punchlist, and any additional items
identified by Owner, Owner or Owner's designee shall issue a Certificate of Substantial Completion
for the Work. Such issuance of a Certificate of Substantial Completion shall not alter the
responsibility of the Contractor to complete all Work in accordance with the Contract Documents
and to correct deficiencies in the Work as provided in the Contract Documents.
3.9 A complete and detailed graphic and tabular construction schedule ("Schedule")
41 defining reasonable unitary and total times for all portions of the Work is attached hereto as a part
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410
410 of Exhibit 1. The total number of working days shown on the Schedule shall not exceed the
number of working days called for in Section 3.2 of this Contract, and said Contract time can only
be extended in accordance with the formal extension procedures described herein. No changes in
the final or milestone completion dates shall be incorporated into the Schedule without Owner's
written approval.
3.10 Contractor shall submit monthly with its Request for Payment a report which shows
the percent of the Work completed versus the percent of the Work scheduled for completion.
3.11 Contractor shall maintain the Schedule and meet all critical dates. Should Contractor
fail to meet any of the critical dates (unless failure to meet such critical dates is the result of causes
set forth in Section 3.2 of this Contract) or should it become apparent that critical dates will not be
met, then upon written notice from Owner, Contractor shall cause its employees, subcontractors,
and all other parties covered by this Contract to perform and work at hours and on days, in addition
to the normal working hours and normal working days, whatever overtime work or shift work is
necessary to return to the original Schedule. Contractor shall not be reimbursed for any additional
compensation paid to its employees or its subcontractors' employees or for any cost resulting from
such overtime work or shift work, and no adjustment shall be made to the Contract Price.
Section 4
CONTRACT PRICE
4.1 In full consideration for the full and complete performance of the work necessary to
complete the Work and all other obligations of Contractor set forth in this Contract, Owner shall pay
to Contractor a sum of money (the "Contract Price") equal to the sum of One Hundred Fifty-Five
Thousand and No/100 Dollars ($155,000.00). In the event the scope of the Work changes due to
the addition or deletion of Work by Owner, the change in the Contract Price shall be determined in
accordance with Section 7 hereof.
4.2 Contractor has thoroughly reviewed and inspected the Drawings and Specifications,
all Contract Documents and all other information and documents provided by Owner to Contractor
and agrees that these documents are complete and properly coordinated. Contractor accepts full
responsibility for coordinating and supervising the installation of the Work as shown on the
Drawings and Specifications to ensure that the intent of the Contract Documents is met, that
conflicts between the various trades are minimized, and that the quality of the Work meets the
highest standards of the industry.
4.3 Contractor has informed Owner, and hereby represents to Owner, that it has had
extensive experience in constructing projects similar to the Project called for in the Contract
Documents, and that it is well acquainted with the components that are properly and customarily
included in such a project, including the requirements of federal and state laws, local building codes,
local building officials, ASTMs, manufacturers' recommendations, building standards, trade
practices and custom and usage in the construction industry as to the types and quantities of
components, items, systems, materials, and methods of construction to be included in the Project in
order to produce a first-class Project that will operate with utility and efficiency. The Contractor has
included in the Contract Price all work, materials, equipment and operations that are likely to be
included in the Project (or the portion thereof described in the Contract Documents) in accordance
with such laws, codes, officials, ASTMs, recommendations, standards, practices and customs and
•
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usages. Contractor represents that it has inspected the Project site and has satisfied itself as to the
condition thereof and that the Contract Price is just and reasonable compensation for the Work.
4.4 When Contractor becomes aware of errors, omissions or discrepancies in the
Drawings and Specifications or other Contract Documents, or discrepancies between the Contract
Documents and the actual Project site and surveys, or any variance from applicable laws, codes or
regulations, Contractor must, within five (5) calendar days after such discovery, notify Owner in
writing of the errors, omissions or discrepancies. If Contractor shall fail to notify Owner of such
errors and omissions, (1) Contractor shall thereby waive any right to seek additional compensation
for additional or different work that is necessary or required as a result of such errors, omissions or
discrepancies, and (2) Contractor shall be liable for damage, loss or expense to Owner resulting
from Contractor's failure to report such discovery or its performance of any construction activity if
it knows or should have known of such error, inconsistency, omission or violation. Furthermore,
this requirement of notification of discovered errors, omissions or discrepancies shall be made a part
of each and every subcontract that Contractor shall enter into; and, further, the knowledge and
discovery by any such subcontractor of errors, omissions or discrepancies shall be imputed to
Contractor within five (5) calendar days after any such discovery by a subcontractor. When
discrepancies exist in the Contract Documents due to more than one method or material being •
specified for the same Work, it is assumed that the Contract Price is based upon the most costly
method or material.
4.5 Approval of all subcontractors and subcontracts is hereby reserved as an absolute
right of Owner, notwithstanding any provisions to the contrary elsewhere contained in the Contract
Documents. Within a reasonable time, but not later than thirty (30) calendar days from the Contract
date, Contractor shall provide to Owner's Project Manager and Owner a list showing the name of
the manufacturer proposed to be used for each of the products identified in the Drawings and
11 Specifications, and, where applicable, the name of the installing subcontractor. Owner's Project
Manager will, within a reasonable time, reply to Contractor stating whether Owner or Owner's
Project Manager has any objection to any proposed product or installing subcontractor. If adequate
data regarding the proposed manufacturer or installer is not available, Owner's Project Manager may
defer its reply until Contractor provides further reasonable data. The approval of the manufacturer
or installer shall not constitute a waiver of any of the requirements of the Contract Documents, and
all products and information furnished by the manufacturer and installer must conform to such
requirements. In no way will approval of a subcontractor, supplier or manufacturer by Owner or
Owner's Project Manager relieve Contractor of any responsibility for managing the Work or fulfilling
any obligation required by this Contract.
4.6 Contractor shall not substitute any materials without the prior written consent of
Owner's Project Manager or Owner. If Contractor desires to substitute any materials or
manufacturer for those previously approved, Contractor shall, by making a reasonable request for
substitution, be deemed to have:
a. Represented that Contractor has investigated the proposed substitute
product or manufacturer and determined that it is equal or superior in quality;
b. Represented that Contractor can provide a warranty for the substitution
comparable to that which would have been provided for the products specified;
c. Certified that the cost represented for such substitution is complete and
includes all related costs under the Contract, and Contractor waives all claims for additional costs
relating to the substitution; and
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d. Contractor agrees to coordinate the installment of the accepted substitute,
making such changes to the Work which may be required to complete the Work in all respects in
accordance with the terms of the Contract Documents, and at no additional cost to Owner.
4.7 Contractor shall check all materials and labor entering into the Project and shall keep
such full and detailed accounts as may be necessary to determine the Cost of the Work. Owner
shall have access to the Project site at all reasonable times and have the right to audit, upon
demand, all of Contractor's books, records, correspondence, instructions, drawings, receipts,
vouchers and memoranda, relating to the Work, and Contractor shall preserve such records for a
period of five (5) years after final payment under this Contract.
Section 5
PROGRESS PAYMENTS
5.1 Prior to the submission of the first Request for Payment, Contractor shall submit for
the Owner's Project Manager's and Owner's approval an itemized schedule of values ("Schedule of
Values") in whatever detail reasonably required by Owner's Project Manager, Owner and Project
construction lender, if any ("Lender"). The Schedule of Values shall pertain to both work performed
by Contractor's own forces, as well as those of its subcontractors.
5.2 Promptly after the execution of this Contract, Contractor shall order any supplies
and materials that require long lead times and shall submit copies of the original invoices for such
orders to Owner and to Gilbert & Associates (the "Payment Agent"). Within forty-eight (48) hours
after Owner's and Payment Agent's receipt and approval of the invoices, Payment.Agent will
disburse to Contractor the amount of any required deposits for such specially manufactured
equipment, which amount shall constitute a part of the Contract Price and shall be applied solely for
the purchase of such supplies and materials described in the invoices.
5.3 On or before the fifth (5th) day of each month, Contractor shall submit to the
Payment Agent and Owner for approval a request for payment ("Request for Payment") in a form
acceptable to Owner and the Payment Agent. Each Request for Payment shall set forth that part of
the Contract Price which is attributable to that portion of the Work performed by Contractor
(including subcontractors) through the last day of the preceding calendar month based on the
Schedule of Values and the value of materials safely stored at the Project. Materials stored off the
Project site shall only be included on the Request for Payment with the prior written approval of
Owner. Each Request for Payment shall be accompanied by lien waivers of Contractor,
subcontractors of all tiers and suppliers of materials, for services, labor, equipment and materials for
the period up to and including the date through which payment is sought, and other documents
reasonably requested by Owner, the Owner's Project Manager and the Payment Agent. Each
Request for Payment shall also be accompanied with an updated Schedule, the report showing the
completed percent of the Work to date, and all other schedules required under the Contract
Documents. Each monthly Request for Payment, when approved by Owner and the Payment
Agent, shall be used as the basis for Contractor's progress payment less a ten percent (10%)
deduction on account of the advance paid to Contractor pursuant to Section 5.2 above and the ten
percent (10%) retention amount identified below. Provided Contractor's properly prepared and
adequately documented Request for Payment is timely received as provided above, Owner shall
cause the Payment Agent to make the appropriate progress payment no later than the twentieth
(20th) day of the month during which the Request for Payment was received.
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5.4 Ten percent (10%) of the amount identified in each properly prepared and approved
Request for Payment (the "Retention Amount") shall be retained from each progress payment made
to Contractor, and then released to Contractor at the time and subject to the terms identified in
Section 6 below.
5.5 If, at any time, Owner or the Payment Agent, in their good faith judgment,
determines that the portion of the Contract Price then remaining unpaid will not be sufficient to
complete the Work in accordance with the Contract Documents, no additional payment will be due
Contractor unless and until the Contract Price then remaining unpaid is determined by Owner and
the Payment Agent to be sufficient to complete the Work in accordance with the Contract
Documents.
5.6 No progress 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 Contractor of
any of its obligations hereunder with respect to such portion of the Work.
5.7 Contractor warrants and guarantees that title to all work, materials, and.equipment
covered by a progress payment, whether incorporated in the Work or not, will pass to Owner upon
the receipt of such progress payment by Contractor, free and clear of all liens, claims, security
interests or encumbrances. The foregoing shall apply to materials stored on-site and, if permitted
by Owner, materials stored off-site. If materials are stored off-site, the storage area must be
approved in writing by Owner, and Contractor must provide other certificates of adequate insurance
against fire and other losses. These materials will be stored separate from other materials and will
be clearly identified to be the property of Owner. Any materials or equipment stolen or damaged,
either on-site or off-site, will be replaced by Contractor at no cost to Owner.
5.8 Any provision hereof to the contrary notwithstanding, Owner shall not be obligated
to make any payment to Contractor hereunder if any one or more of the following conditions exist:
a. Contractor has failed to perform its obligations hereunder or otherwise is in
default under this Contract;
b. if any part of such payment is attributable to a portion of the Work which is
not performed in accordance with the Drawings and Specifications; provided, however, payment
shall be made as to the part thereof attributable to the Work which have been performed in
accordance with the Drawings and Specifications;
c. Contractor has failed to make payments promptly to subcontractors or for
materials or labor used in the Work or third party claims have been filed or reasonable evidence
indicates the likely filing of such claims;
d. Contractor has failed to provide the revised Schedule with the Request for
Payment or other reports which are required by this Contract;
e. Defective Work has not been remedied by Contractor;
f. There is reasonable evidence that the Work will not be completed within the
time required by this Contract;
g. There is a failure by Contractor to carry out the Work in accordance with the
Contract Documents which extends for a period of ten (10) working days after written notice from
11111 Owner to Contractor of such failure; or
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h. Contractor has failed to update as-built record drawings.
5.9 Contractor shall not permit any mechanic's liens to be recorded in connection with
the Project. Should any Subcontractor, supplier or other person or any of them make or maintain an
action on or respecting any claim of mechanic's lien, stop-notice, equitable lien, payment or
performance bond, or a lis pendens, relating to the Work, the Contractor shall immediately and at its
own expense procure, finish and record appropriate statutory release bonds which will extinguish or
expunge such claim, stop-notice or lis pendens. If any mechanic's lien or stop-notice or any other
demand for payment or security therefor, including claims and demands upon any performance and
any payment bond sureties for this Contract, is made or filed with the Owner or Project by any
person claiming that the Contractor or Subcontractor or supplier or any other person claiming under
any of them has failed to perform its contractual obligations or make payment for any labor,
services, trust fund contribution, materials, equipment, taxes or other item furnished or obligation
incurred for, or in connection with, the Work, or if at any time there shall be evidence of such non-
performance or non-payment of any claim of lien or stop-notice or other demand for which, if
established, the Owner of the Project might become liable, then the Owner shall have the right to
retain from any payment then due or thereafter to become due under the Contract or to be
reimbursed by the Contractor for an amount sufficient to (i) satisfy, discharge or defend against any
such claim or lien or stop-notice or other demand, or any action or proceeding thereon which may
be brought to judgment or award; (ii) make good any such non-payment, non-performance, damage,
failure or default; and (iii) compensate the Owner for and indemnify it against any and all loss,
liability, damage, cost and expense, including attorneys' and consultants' fees and expenses, which
may be sustained or incurred in connection therewith.
5.10 Contractor shall use the sums advanced to it, except that portion attributable to
11 Contractor's fee, solely for the purpose of the performance of the Work. Upon request from Owner,
Lender or the Payment Agent, Contractor shall furnish to Owner, Lender or the Payment Agent
satisfactory proof as to the disposition of any monies advanced to Contractor hereunder; provided,
however, no provisions hereof shall be construed to require Owner, Lender or the Payment Agent to
see to the proper disposition or application of the monies so advanced to Contractor.
5.11 To the extent that a Request for Payment seeks payment for work performed by
subcontractors, or materials or equipment furnished by suppliers, Contractor shall, within ten (10)
calendar days of receipt of payment from Owner (unless the law requires a shorter period, in which
case the shorter period shall be applicable), pay to the subcontractors and/or suppliers all sums of
money allocable to the work, materials and equipment encompassed by the Request for Payment. If
Contractor claims a right to withhold from the subcontractors or suppliers any or all of the monies
included in the Request for Payment, Contractor shall provide prompt written notice to Owner and
the Payment Agent of Contractor's intent to withhold monies and the reasons therefor.
Following the occurrence of any event specified in Section 5.8, Owner may, with the prior
written consent of Contractor (which shall not be unreasonably withheld) elect to pay any
subcontractors and/or suppliers directly for the amounts specified in a Request for Payment which is
allocable to the Work, materials and equipment provided by such subcontractors and/or suppliers
(less the ten percent (10%) retention).
111
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• Section 6
FINAL PAYMENT
6.1 After Contractor has fully performed all of the Work, and upon receipt of written
notice from Contractor that the Work is ready for final inspection and acceptance, and upon receipt
of a final Request for Payment, Owner, Owner's Project Manager and the Payment Agent will
promptly make such inspection and, when Owner, Owner's Project Manager and the Payment
Agent find the Work acceptable under the Contract Documents and the Contract fully and timely
performed, including all punch list items, and after the matters set forth in this Section 6 are fully
complied with, Owner shall make final payment under the Contract.
6.2 Final payment (which sum shall include all retention withheld pursuant to this
Contract) shall not become due until Contractor submits to Owner and the Payment Agent: (a) an
affidavit that all payrolls, fringe benefits, taxes, insurance, bills for materials and equipment, and
other indebtedness connected with the Work for which Owner or its property might in any way be
responsible, have been paid or otherwise satisfied (with the exception, where applicable, of
retention owed to subcontractors and suppliers), (b) final lien waivers, (c) consent of surety, if any,
to final payment, (d) if required by Owner or the Payment Agent, other data establishing payment or
satisfaction of all such obligations, such as receipts and releases, to the extent and in such form as
may be designated by Owner or the Payment Agent, (e) a full and accurate set of as-built drawings,
(f) a three-ring binder containing installation, operation and maintenance manuals, including all
manufacturer's literature, for Project equipment and systems, (g) all written guarantees and
warranties required by the Contract Documents, (h) a complete list of subcontractors, sub-
subcontractors and suppliers of all tiers (collectively, "Subcontractors") and principal vendors on the
111 Project, including addresses and phone numbers, (i) a three-ring binder containing all inspection
reports, permits, notice of completion, and temporary and final certificates of occupancy or
acceptance issued by the applicable city building department and licenses necessary for the use
and/or occupancy of the Project, (j) a certificate evidencing that any insurance required by the
Contract Documents to remain in force after final payment is currently in effect and will not be
canceled or allowed to expire unless at least thirty (30) calendar days' prior written notice has been
given to the Owner, and (k) all other documentation required by the Contract Documents. If any
subcontractor or material supplier refuses to furnish a release or waiver required by Owner,
Contractor may furnish a bond satisfactory to Owner to indemnify Owner against such lien. If any
such lien remains unsatisfied after all payments are made, Contractor shall refund to Owner all
monies that the latter may be compelled to pay in discharging such lien, including all costs and
reasonable attorneys' fees.
6.3 Notwithstanding any other provision in this Contract to the contrary, in no event will
Owner be required to make final payment sooner than (a) sixty-five (65) calendar days shall have
passed from the time the valid Notice of Completion has been recorded with respect to the Project
or (b) submission by the Contractor to Owner and the Payment Agent of properly completed
Unconditional Waiver and Release Upon Final Payment forms in conformance with California Civil
Code Section 3262, executed by the Contractor and all Subcontractors and suppliers of all tiers,
with any supporting documentation reasonably requested by the Owner or the Payment Agent, and
there shall have been no (i) liens recorded against the Project or the real property on which the
Project is situated which have not been discharged (by bonding or otherwise), or (ii) threats of any
claims or lawsuits against the Owner for alleged failure to make payment by the Contractor, or (iii)
failure by the Contractor to fulfill any indemnities provided by the Contract Documents. The
Contractor shall submit, as a condition precedent to final payment, a written report and/or
1111 endorsement from a title insurance company acceptable to Owner, bonding company and the
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Payment Agent, that no mechanic's lien has been filed against the real property which has not been
discharged and removed, the cost of which report and endorsement shall be included in the
Contract Price.
6.4 In no event shall final payment by Owner be deemed to be a waiver by Owner of
any claims that Owner may have against Contractor for Contractor's failure to properly perform the
Work or fully perform the Contract pursuant to the requirements of the Contract Documents.
6.5 The acceptance of final payment shall constitute a waiver of all claims by Contractor
except those expressly made in writing by the Contractor at the time it submits its final Request for
Payment.
Section 7
•
CHANGES IN THE WORK
7.1 Owner, without nullifying any portion of the Contract Documents, may make as
many changes in the Work as it desires, either to decrease, increase or modify the Work ("Change
in the Work"), by giving Contractor a written change order request ("Change Order Request"). The
amount to be paid to Contractor pursuant to the Contract shall, where applicable, be increased or
decreased in the manner hereinafter set forth; provided, however, that if Contractor should proceed
with a Change in the Work upon an oral order, by whomsoever given, it shall constitute a waiver by
Contractor of any claim for additional compensation for the work so performed. Upon receipt of a
Change Order Request, Contractor shall promptly proceed to perform the Change in the Work, even
though the amount of any resultant increase or decrease in the Contract Price has not yet been
determined or agreed upon. All Changes in the Work shall be performed in accordance with the
Contract Documents. All Changes in the Work, when mutually agreed upon between Owner and
Contractor as to method and/or amount of pricing and the effect, if any, upon the time to complete
the Project, shall be reduced to written agreement and executed by Owner and Contractor ("Change
Order"). Change Orders shall be the only acceptable way to modify the Contract Price, Schedule or
Completion Date.
7.2 All Changes in the Work which result in an increase in the Contract Price shall be
performed on a time and material basis, all as hereinafter more particularly described. Such
Changes in the Work shall be performed, whether by Contractor's forces or the forces of any of its
subcontractors, at actual cost to the entity performing the Change in the Work (without any charge
for administration, clerical expense, supervision or superintendence of any nature whatsoever,
except foremen directly involved in the Change in the Work, or any charge for the cost, use or
rental of small tools or plant), plus ten percent (10%) of gross wages of jobsite labor and direct
material costs and six percent (6%) of rental costs (other than small tools or plant) as the total
overhead and profit. Only the entity actually performing the Change in the Work or a portion
thereof shall be entitled to a mark-up as aforesaid for overhead and profit. Contractor shall submit
to Owner daily time and material tickets, to include the identification number assigned to the
Change in the Work, the location and description of the Change in the Work, the classification of
labor employed (and names and social security numbers), the materials used, the equipment rented
(not tools) and such other evidence of cost as Owner may require. Owner may require
authentication of all time and material tickets and invoices by persons designated by Owner for such
purpose. The failure of Contractor to secure any required authentication shall, if Owner elects to
treat it as such, constitute a waiver by Contractor of any claim for the cost of that portion of the
Change in the Work covered by a non-authentication of any such ticket or invoice; provided,
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however, that the authentication of any such ticket or invoice by Owner shall not constitute an
acknowledgment by Owner that the items thereon where reasonably required for the Change in the
Work.
7.6 Owner shall have no obligation or liability on account of a Change in the Work
except as specifically provided in this Section 7. Overhead and profit, as allowed under this Section
7, shall be deemed to cover all costs and expenses of any nature whatsoever, including without
limitation those for general condition items such as clean-up, protection, supervision, estimating,
field operations, small tools and security, which Contractor or any of its subcontractors may incur in
the performance of or in connection with a Change in the Work and which are not otherwise
specifically recoverable by them pursuant to this Section 7.
7.7 Unless Owner agrees in writing to the contrary, Contractor thall only be permitted to
perform Changes in the Work with its own forces if Contractor was the entity that performed, or
was contemplated to perform, the original work of the trade in question.
7.8 If the Change in the Work will result in a decrease in the Work to be performed on
the Project, the Contract Price will be decreased by an amount equal to the actual cost of such
decreased portion of the Work (and "actual cost" shall include any overhead and profit that a
subcontractor has built into its price to Contractor) plus a proportionate share of the Contractor's
markup in the original Contract Price. Further, if such decrease in the Work will result in a decrease
in the time required to complete the Work, then the time for completion of the Work will be reduced
by the length of time fairly attributable to such decrease in the work.
7.9 If the Change in the Work will result in an extension or contraction of the time
• necessary to complete the Work, and the parties are unable to agree as to the number of days by
which the time for performance will be extended or contracted, then the matter shall be submitted
to the Owner's Project Manager for its advisory (i.e., non-binding) determination. In the event of a
Contractor-claimed extension of the time for performance, the Owner's Project Manager shall not be
required to make its determination until the Work has been completed, at which time his
determination shall be based on review of Contractor's books and records relating to the time
involved in performing the Change in the Work and on the Owner's Project Manager's judgment as
to whether Contractor diligently performed the same.
7.10 If Owner and Contractor disagree as to the scope of the Work required to be
performed under the Contract Documents, or if any dispute should arise between Owner and
Contractor with respect to an increase or decrease in the Contract Price, or with respect to an
expansion or contraction of the time for performance of the Work as a result of a Change in the
Work, Contractor will promptly and diligently perform the Work, and the Change in the Work, as
directed by Owner, and Contractor will not slow or stop the progress of the Work or the Change in
the Work. Such disputes will be settled after the completion of the Work by the Owner's Project
Manager, in its reasonable professional opinion.
Section 8
INSURANCE AND INDEMNIFICATION
8.1 Contractor, all subcontractors and sub-subcontractors shall maintain, at its own
expense, throughout the life of this Contract and the additional time periods specified below, the
minimum types and amounts of insurance set forth below, which insurance shall be placed with
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• insurance companies rated, at a minimum, "B+, VIII" or better by Best's Key Rating Guide, and
licensed to do business in the State of California. Such policies shall incorporate the provisions
requiring the giving of written notice to Owner at least thirty (30) calendar days prior to the
cancellation, non-renewal, or material modification of any policies as evidenced by return receipt of
United States certified mail:
a. Workers' Compensation and Employer's Liability Insurance affording thirty
(30) calendar days written notice of cancellation to Owner. The amount and scope of such
insurance shall be the greater of (1) any amounts and scope required by statute or other governing
law, or (2) the following:
Bodily Injury by accident - $1,000,000 each accident
Bodily Injury by disease - $1,000,000 policy limit
Bodily Injury by disease - $1,000,000 each employee
b. Commercial Liability Insurance must be issued on a comprehensive form and
on an occurrence basis in an amount equal to the greater of (1) the insurance currently maintained
by Contractor or (2) $2,000,000 each occurrence; and such insurance shall include the following
coverages: (i) premises and operations, (ii) productions and completed operations coverage, (iii)
blanket contractual coverage, including both oral and written contracts, (iv) broad form property
damage, (v) personal injury coverage, and (vi) explosion, collapse and underground hazards. Such
insurance shall provide for an aggregate policy limit of at least $2,000,000 for the coverages listed
herein. No endorsement limiting or excluding a required coverage is permitted. Claims-made
coverage is not acceptable.
c. Business Automobile Liability Insurance in an amount equal to the greater of
(1) the insurance currently maintained by Contractor or (2) $1,000,000 each accident, bodily injury
and property damage single limit; and including the following coverages: (i) owned autos, (ii) hired
or borrowed autos, and (iii) nonowned autos. No endorsement limiting or excluding a required
coverage is permitted.
d. Contractor shall deliver to Owner written evidence of the above insurance
coverages, including the required endorsements prior to commencing work under this Contract; and
the production of such written evidence shall be an express condition precedent, notwithstanding
anything to the contrary in this Contract, to Contractor's right to be paid any compensation or
expenses under this Contract. Moreover, Owner, Portuguese Bend Beach Club and Lender shall be
named as express additional insureds on the above-referenced policies of Commercial General
Liability Insurance and Comprehensive Automobile Liability Insurance. The additional insureds
endorsement MUST be attached to the Contractor's Comprehensive General Liability and
Automobile Liability policies. Statements that Portuguese Bend Club Homeowners Association and
Portuguese Bend Beach Club are additional insureds on the insurance certificate only are NOT
acceptable. Coverage MUST be evidenced by separate additional insureds endorsement which
becomes part of the actual policy. A copy of this endorsement MUST be attached to the insurance
certificate.
e. Such insurance shall be primary and non-contributing as to any other
insurance covering or available to Contractor.
f. If Contractor fails to furnish and maintain the insurance required by this
Section 8, Owner may (but is not required to) purchase such insurance on behalf of Contractor, and
Contractor shall pay the cost thereof to Owner upon demand and shall furnish to Owner any
information needed to obtain such insurance. Moreover, at its discretion, Owner may pay for such
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•
• insurance with funds otherwise due Contractor under this Contract.
8.2 Contractor's Comprehensive General Liability and Automobile Liability insurance
policies shall contain a "Waiver of Subrogation" endorsement stating the following: "It is agreed
that insurance company waives any right of subrogation against Portuguese Bend Club
Homeowners Association and Portuguese Bend Beach Club which may arise by reason of any
payment under this policy." Stating that a "Waiver of Subrogation" is in effect on insurance
certificate only is NOT acceptable. Coverage MUST be evidenced by separate "Waiver of
Subrogation" endorsements which become part of the actual policy. A copy of this endorsement
MUST be attached to the insurance certificate.
8.3 Owner shall purchase and maintain property insurance for the full insurable value of
the Project which covers loss resulting from fire and other perils typically covered by all-risk
insurance, but said coverage is not required to include damage or loss resulting from flooding or
earthquake.
8.4 To the fullest extent permitted by law, the Contractor shall indemnify, protect,
defend and hold harmless Owner and Lender, and any subsidiary, parent or affiliate corporations of
Owner, and Lender, and all of their directors, officers, shareholders, partners, representatives,
agents and employees (collectively, "Owner Indemnitees") from all losses, claims, demands, causes
of action, damages, liabilities, injuries, costs and expenses, including, without limitation attorneys'
and consultants' fees and expenses, arising out of or resulting from the performance or
nonperformance of the Work, breach of Contract by Contractor or the acts and omissions of the
Contractor, its Subcontractors, sub-subcontractors, suppliers or anyone directly or indirectly
employed by any of them or anyone for whose acts they may be liable regardless of whether or not
such loss, claim, demand, cause of action, damage, liability, injury, cost or expense is caused in
• part by an Owner Indemnitee. Such obligation shall not extend to losses, claims, demands, causes
of action, damages, liabilities, injuries, costs and expenses to the extent such result from the gross
negligence, bad faith or wilful misconduct of an Owner Indemnitee. Nothing herein shall be deemed
to abridge the right of the Owner or the Contractor to seek contribution where appropriate.
8.5 Owner shall indemnify, defend and hold Contractor harmless from any and all claims,
liabilities, including attorneys' and consultants' fees and expenses, and causes of action for injury or
death to any person (including employees of Owner) or damage to any property that occurs as a
result of Owner's act or omission constituting gross negligence, bad faith or wilful misconduct
(which includes, without limitation, any intentional breach of this Agreement by Owner) by Owner
or its employees while engaged in the performance of the Work unless taken by or on behalf of
Owner at Contractor's written direction. The indemnity rights and obligations identified in this
Contract shall be, and are, the only indemnity rights and obligations between the parties, in law or
equity, arising out of or related to the Project or any claims asserted in relation thereto.
Section 9
PROTECTION OF WORK AND ADJACENT PROPERTY
9.1 Contractor shall protect and prevent damage to all finished and unfinished portions
of the Work, including but not limited to the protection thereof from damage by the elements, theft
or vandalism. Restoration of such damage and replacement of stolen materials shall be the sole
responsibility of Contractor and shall not be cause for any increase in the Contract Price.
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_
9.2 If any adjacent property is damaged to any extent, then Contractor shall repair and
restore the adjacent property to the condition which exists on the date hereof. Such repair or
restoration shall be the sole responsibility of Contractor and shall not be cause for an increase in the
Contract Price, nor shall it result in any extension of time for completion of the Work.
9.3 Contractor shall perform periodic evaluation surveys around the perimeter of the
Project site at whatever frequency is necessary to prevent excessive settlement of off-site facilities
and to provide timely notice of any settlement affecting the Work.
Section 10
REPRESENTATIVES
10.1 Contractor's Project Manager for the Work shall have authority to communicate on
behalf of Contractor and enter into written modifications, if any, to the Contract. The Project
Manager shall be approved by the Owner, which approval shall not be unreasonably withheld, and
shall not be replaced without the Owner's prior written consent. Contractor's designation of its
Project Manager shall continue in full force and effect until Contractor gives Owner a written notice
setting forth the name of a successor representative and Owner provides its written consent
thereto.
10.2 The only person(s) who shall have authority to enter into written modifications
(including Change Orders) on behalf of Owner shall be the Owner's Project Manager. Owner's
• designation of its Project Manager shall continue in full force and effect until Owner gives
Contractor a written notice setting forth the name of a successor representative.
Section 11
PERMITS AND LICENSES
11.1 Contractor shall obtain, at its expense, all necessary licenses from governmental or
other authorities required in order to perform the Work, and shall give notices required by, and
otherwise comply with, all applicable laws, ordinances, rules, regulations, and restrictions as they
apply to the performance and completion of the Work. Owner shall obtain, at its expense, all
necessary building and occupancy permits, and similar authorizations from governmental or other
authorities required in order to perform the Work. Contractor shall notify Owner of all conflicts of
which it is aware, between the Contract Documents and any laws, ordinances, rules, regulations
and restrictions. If Contractor (or any subcontractors) knowingly performs any portion of the
Project contrary to such laws, ordinances, rules, regulations or restrictions, as they apply to the
performance of the Project, Contractor shall bear all costs arising therefrom.
11.2 Contractor shall pay all taxes and all contributions imposed or required by any law
for any employment insurance, pensions, old age retirement funds, or similar purposes.
11.3 Contractor accepts liability for all taxes and contributions required of it and, to the
extent imposed upon Contractor by law, its subcontractors, by the Federal Social Security Act and
the unemployment compensation law the laws of the State of California.
4110
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Section 12
NOTICES
12.1 All notices required to be given under this Contract shall be in writing and shall be
served by depositing the notice in the United States mail addressed to the party to be notified,
postage prepaid, registered or certified mail, with return receipt requested, or by delivering the
notice in person to such person. Notice deposited in the mail in accordance with these provisions
shall be effective, unless otherwise stated in such notice or in this Contract, from and after the
second day following the date the notice is mailed. Notice given in any other manner shall be
effective only if and when received by the party to be notified.
12.2 All notices to be given to Contractor shall be sent to or made at:
Mr. Jerry Palmer
Hi Tech Construction Company
10508 Tuxford Street
Sun Valley, CA 91352-2127
Phbne No.: (818) 767-9624
Facsimile No.: (818) 767-5602
12.3 All notices to be given to Owner shall be sent to Owner's Project Manager at:
Mr. Steve Cummins
Dalcin Cummins Associates
17625 Crenshaw Boulevard, Suite 300
Torrance, California 90504
Phone No.: (310) 327-0018
Facsimile No.: (310) 327-0175
with a copy to: Ms. Gale Lovrich
Portuguese Bend Club Homeowners Association
4100 Palos Verdes Drive South
Rancho Palos Verdes, California 90275
Phone No.: (310) 377-3667
Facsimile No.: (310) 541-2426
and a copy to: Timi A. Hallem, Esq.
Tuttle &Taylor
355 South Grand Avenue, 40th Floor
Los Angeles, California 90071
Phone No.: (213) 683-0600
Facsimile No.: (213) 683-0225
12.4 Copies of all invoices or requests for payment shall be sent to:
Ms. Meg Gilbert
Gilbert & Associates
3631 Oakfield Drive
Sherman Oaks, California 91423
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•
•
Phone No.: (310) 476-5447
Facsimile No. (818) 990-6065
12.5 By giving the other party at least ten (10) days written notice thereof, the parties
shall have the right to change their respective addresses, or to whom notices are to be sent.
Section 13
DISPUTE RESOLUTION
13.1 Any dispute, claim or controversy arising out of or connected with: (i) performance
of this Contract; (ii) interpretation of this Contract; (iii) any other contract, subcontract or sub-
subcontract relating to the same work of improvement as this Contract; or (iv) the breach or alleged
breach of this Contract or any such contract, subcontract or sub-subcontract, including all claims
arising as a consequence of such breach, shall be heard by a referee pursuant to the provisions of
Sections 638, et seq. of the California Code of Civil Procedure. The parties shall agree upon a
single referee who shall be a retired judge. The referee shall try all issues, whether of fact or law,
and report a finding and judgment thereon. If the parties are unable to agree upon a referee, either
party may seek to have one appointed, pursuant to Section 640 of the California Code of Civil
Procedure. The cost of such proceeding shall be borne equally by the parties.
13.2 Owner, Contractor and all other subcontractors, sub-subcontractors, material
suppliers, sureties, and other parties concerned with the Work are bound, each to the other, by this
dispute resolution clause, provided the party has signed this Contract or another contract or surety
bond containing this dispute resolution clause or incorporating it or this Contract by reference, or
signs any other agreement to be bound by this dispute resolution clause.
13.3 In the event Owner becomes a party to any proceeding involving any controversy or
claim arising out of the work of improvement which controversy or claim relates to or involves any
question concerning this Contract, the rights and obligations of Owner and Contractor under the
terms of this Contract, any act or omission of the Contractor, or the Drawings and Specifications,
Contractor will, at the demand of Owner, become a party to such proceedings and shall submit to
any award that may be rendered therein.
Section 14
PROTECTION OF PERSONS AND PROPERTY
14.1 Contractor shall be responsible for initiating, maintaining, and supervising all safety
precautions and programs in connection with the Work. Contractor understands that Owner and its
consultants may from time to time be on the jobsite to observe progress or make inspections for
quality considerations. Contractor also understands and specifically agrees that the presence of
Owner, Owner's Project Manager, the inspector of record, the Owner's Project Manager and/or
consultants in no way relieves Contractor of the responsibility for setting up, administering, and
enforcing an on the job safety program that is described below. All responsibility, labor, materials
and equipment covered by this Contract and used in its execution must conform with all local,
State and Federal safety laws, orders, regulations and standards.
• Page 19 of 26
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14.2 Contractor shall take all reasonable precautions for the safety of, and shall provide
all reasonable protection to prevent damage, injury or loss to all employees engaged on the Work,
and all other persons who may be affected thereby; and all materials and equipment incorporated,
and to be incorporated in, the Work, whether in storage on or off the site, under the care, custody
or control of the Contractor, or any of his subcontractors, or subcontractors of any tier; and other
property at the site or adjacent thereto, including trees, shrubs, lawns, walks, pavements,
roadways, structures and utilities not designated for removal, relocation or replacement in the
course of construction.
14.3 Contractor shall give all notices and comply with all applicable laws, ordinances,
rules, regulations and lawful order of any public authority bearing on the safety of persons or
property or their protection from damage, injury or loss. All work performed on the Work shall be
considered to be under the care, custody and control of Contractor until completion and acceptance
by Owner.
14.4 Contractor shall erect and maintain, as required by existing conditions and progress
of the Work, all reasonable safeguards for safety and protection, including posting danger signs and
other warnings against hazards, promulgating safety regulations and notifying owners and users of
adjacent utilities.
14.5 When the use or storage of explosives or other hazardous materials or equipment is
necessary for the execution of the Work, Contractor shall exercise the utmost care and shall carry
on such activities under the supervision of properly qualified personnel.
14.6 Contractor shall designate a responsible member of its organization at the site whose
duty shall be the prevention of accidents. This person shall be Contractor's superintendent, unless
otherwise designated by Contractor in writing to Owner and Owner's Project Manager. `Contractor
will hold weekly safety meetings with its personnel and representatives of all subcontractors
working on the Work.
14.7 Contractor shall not, and Contractor shall not permit any subcontractors or other
persons, to use, store, or incorporate into the Work any hazardous material, including but not
limited to asbestos. Contractor shall comply with, and shall require all subcontractors to comply
with, any and all governmental regulations, rules and ordinances regarding all dangerous and
hazardous materials.
Section 15
UNCOVERING AND CORRECTION OF WORK
15.1 If any portion of the Work should be covered contrary to the request of Owner, the
Owner's Project Manager, or the inspector of record, or to requirements specifically set forth in the
Contract Documents, it must, if required by Owner, the Owner's Project Manager, or the inspector
of record, be uncovered for observation by Owner or the Owner's Project Manager, and shall be
replaced at Contractor's sole expense.
15.2 If any other portion of the Work has been covered which Owner, the Owner's
Project Manager, or the inspector of record have not specifically requested to observe prior to being
covered, Owner, the Owner's Project Manager or the inspector of record may request to see such
111 portion of the Work and it shall be uncovered by Contractor. If such portion of the Work is found to
Page 20 of 26
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• be in accordance with the Contract Documents, the cost of uncovering and replacement shall, by
appropriate Change Order, be charged to Owner. If such portion of the Work is found not to be in
accordance with the Contract Documents, Contractor shall pay for all such costs of uncovering and
replacement.
15.3 Contractor shall promptly upon written demand from the Owner correct all portions
of the Work rejected by Owner, the Owner's Project Manager, or the inspector of record as
defective or as failing to conform to the Contract Documents, whether observed before or after
completion of the Work, and whether or not fabricated, installed or completed. Contractor shall
bear all costs of correcting, including, without limitation, retesting, such rejected Work, including
compensation for the Owner's Project Manager's additional services made necessary thereby. If
Contractor, after having received Owner's demand to correct defective or non-conforming Work,
fails to correct such condition, Owner may correct such condition and charge Contractor for all
costs and expenses incurred by Owner.
15.4 Contractor shall bear the cost of making good all Work of Owner or separate
contractors destroyed or damaged by such correction or removal.
15.5 If, within two (2) years after the date of completion of the Work, any of the Work is
found to be not in accordance with the requirements of the Contract Documents, the Contractor
shall correct it promptly after receipt of written notice from the Owner to do so unless the Owner
has previously given the Contractor a written acceptance of such condition. This two-year period
shall be extended with respect to portions of the Work first performed after completion by the
period of time between completion and the actual performance of the Work. This obligation shall
survive acceptance of the Work under the Contract and termination of the Contract. The Owner
shall use its best efforts to give such notice promptly after Owner's actual discovery of the
defective condition.
Section 16
DOCUMENTS AND SAMPLES AT THE SITE
16.1 Contractor shall maintain at the Project site for the Owner's Project Manager, the
engineering consultants, the inspector of record, and Owner, one copy of all Drawings,
Specifications, Addenda, approved Submittals, as that term is defined in Section 17 hereof, Change
Orders and other modifications in good order and marked to record all changes made during
construction and otherwise. A set of transparent sepias of the drawings shall be corrected by
Contractor to record all changes made during construction, and otherwise, and to show final
locations of all piping, conduit, and other portions of the Work buried underground. These shall be
available to Owner and shall be delivered to Owner upon completion of the Work.
16.2 Contractor shall maintain at its offices complete and accurate records of all Requests
for Payment, together with copies of all backup materials for each such Request for Payment,
including, without limitation, payroll records, statements, invoices, bills, bids, contracts, and lien
waivers of Contractor and all Subcontractors. These shall be available to Owner, the Owner's
Project Manager and the inspector of record through completion of the Work and acceptance of the
Project by Owner.
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Section 17
SHOP DRAWINGS, PRODUCT DATA AND SAMPLES
17.1 "Shop Drawings" are drawings, diagrams, schedules and other data specifically
prepared for the Work by Contractor or any subcontractor, manufacturer, supplier or distributor to
illustrate some portion of the Work.
17.2 "Product Data" are illustrations, standard schedules, performance charts,
instructions, brochures, diagrams and other information furnished by Contractor to illustrate a
material, product or system for some portion of the Work.
17.3 "Samples" are physical examples which illustrate materials, equipment or
workmanship and establish standards by which the Work will be judged.
17.4 Contractor shall review, approve and submit, with reasonable promptness and in
such sequence as to cause no delay in the Work, all Shop Drawings, Product Data and Samples
(collectively, "Submittals") required by the Contract Documents.
17.5 By approving and submitting Submittals, Contractor represents that it has
determined and verified all materials, field measurements, and field construction criteria related
thereto, or will do so, and that it has checked and coordinated the information contained within
such submittal with the requirements of the Work and of the Contract Documents.
17.6 Contractor shall not be relieved of responsibility for any deviation from the
• requirements of the Contract Documents by the Owner's approval of Submittals unless Contractor
has specifically informed the Owner in writing of such deviation at the time of submission and the
Owner has given written approval to the specific deviation. Without such written approval,
Contractor shall bear all costs which result from such deviation. Contractor shall not be relieved
form responsibility for errors or omissions in the Submittals by the Owner's approval thereof. The
Contractor shall require all Subcontractors, sub-subcontractors, and suppliers of all tiers to submit
Submittals to Contractor promptly. The Contractor shall promptly submit such items to the Owner
for the Owner's approval.
17.7 Contractor shall direct specific attention, in writing or on resubmitted Submittals, to
revisions other than those requested by the Owner on previous Submittals.
17.8 No portion of the Work requiring submission of a Submittal shall be commenced until
the Submittal has been approved by the Owner. All such portions of the Work shall be in
accordance with approved Submittals.
Section 18
TESTS
18.1 If the Contract Documents, law, ordinances, rules, regulations or orders of any
public authority having jurisdiction require any portion of the Work to be inspected, tested or
approved, Contractor shall give the Owner timely notice of its readiness so the Owner may observe
such inspection, testing or approval. Contractor shall bear all costs of such inspections, tests or
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i
approvals conducted by public authorities. Unless otherwise provided, Owner shall bear all costs of
other inspections, tests or approvals.
18.2 If the Owner determines that any portion of the Work requires special inspection,
testing, or approval which paragraph 18.1 does not include, the Owner's Project Manager will, upon
written authorization from Owner, instruct Contractor to order such special inspection, testing or
approval, and Contractor shall give notice as provided in paragraph 18.1. If such special inspection
or testing reveals a failure of the Work to comply with the requirements of the Contract Documents,
Contractor shall bear all costs thereof, including compensation for the Owner's Project Manager's
additional services made necessary by such failure; otherwise Owner shall bear such costs, and an
appropriate Change Order shall be issued.
18.3 Required certificates of inspection, testing or approval shall be secured by
Contractor and promptly delivered to the Owner.
Section 19
TERMINATION
19.1 If Contractor should fail to commence construction of the Work in accordance with
the provisions of this Contract, fail to prosecute the Work to completion in a diligent, efficient,
workmanlike, skillful and careful manner and in accordance with the provisions of this Contract, fail
to use an adequate amount or quality of personnel or equipment to complete the Work without
delay, fail to correct any Work which is not in accordance with the requirements of the Contract
Documents as required herein, fail to perform any of its obligations under this Contract, make a
general assignment for the benefit of its creditors, permit a receiver to be appointed on account of
its insolvency, become insolvent otherwise, fail to make prompt payments to its subcontractors,
suppliers, or laborers, Owner shall have the right after giving Contractor five (5) calendar days
written notice, and upon such default continuing, to (i) terminate this Contract, (ii) take possession
of and use all or any part of Contractor's materials, equipment, supplies and other property of every
kind used by Contractor in the performance of the Work, and to use such property in the manner it
deems desirable to complete the Work including engaging the services of other parties, (iii) accept
assignment of subcontracts hereunder, and (iv) finish the Work by whatever reasonable method the
Owner may deem expedient. Any such action by Owner shall not be deemed a waiver of any other
right or remedy of Owner. If, after exercising any such remedy the cost to Owner in the
performance of the balance of the work is in excess of that portion of the Contract Price which has
not yet been paid to Contractor, Contractor shall be liable for and shall reimburse Owner for such
excess. Reimbursement of such excess amount shall be in addition to any and all other damages
resulting from Owner's termination of Contractor under this Section 19.
19.2 In addition to the causes for termination set forth in paragraph 19.1 above, Owner
shall have the right to terminate this Contract for Owner's convenience and without cause at any
time by giving Contractor fifteen (15) calendar days' written notice. Termination by Owner under
his Section shall specify the extent of termination and the effective date. Upon receipt of such
notice, Contractor immediately shall terminate performance of the Work and make every reasonable
effort to mitigate Owner's losses as a result of such termination; provided, however, in connection
with such termination, Contractor shall perform such acts as may be necessary to preserve and
protect that part of the Work then under construction. Contractor shall complete the performance
of Work not terminated. Upon such termination without cause, Contractor shall retain all sums of
money paid to Contractor through the date of notice of termination, and Owner shall pay to
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Contractor (i) all retention, if any, then held by Owner with respect to the terminated portion of the
Work, (ii) a sum of money equal'to the cost of all work performed by Contractor with respect to the
terminated portion of the Work for which payments have not then been made, (iii) reasonable costs
directly related to such termination as described in detail in invoices and descriptions provided by
the Contractor and approved by the Owner, and (iv) a pro rata portion of Contractor's fee based
upon the percentage of completion of the Work as of the effective date of termination; and Owner
shall be entitled to assume the obligations of Contractor under all its subcontracts and purchase
orders covering the unperformed parts of the Work. In determining amounts due the Contractor
under this Section, Owner shall be credited for payments previously made to the Contractor for the
terminated portion of the Work and claims which the Owner has against the Contractor under the
Contract, and for the value of materials, supplies, equipment and other items to be disposed of by
Contractor that are covered under the Contract price. Following the effective date of such
termination, Contractor shall have no further liability under this Contract other than with respect to
matters which occurred and work which was performed prior to such effective date.
Section 20
MISCELLANEOUS PROVISIONS
20.1 Integrated Agreement. This Contract constitutes the entire agreement between the
parties hereto with respect to the matters covered hereby. All prior negotiations, representations
and agreements with respect hereto not incorporated herein are hereby canceled. This Contract
shall be modified or amended only by a document duly executed on behalf of the parties hereto.
Owner and Contractor shall both be deemed to have participated in the drafting of this Contract;
hence, in the event any provision of this Contract is deemed to be ambiguous, it shall not be
construed against any party.
20.2 Compliance With Laws. Contractor shall observe and abide by and perform all of its
obligations hereunder in accordance with all applicable laws, rules and regulations of all
governmental authorities having jurisdiction.
20.3 Captions and Titles. The captions of sections, divisions, articles, paragraphs,
subparagraphs, clauses and the like in the Contract Documents are for convenience only and shall in
no way define the content or limit the meaning or construction of the wording of the sections,
divisions, articles, paragraphs, subparagraphs, clauses and the like.
20.4 Governing Laws, Severable Provisions. If any section, paragraph, subparagraph or
clause of this Contract shall be found by a court of competent jurisdiction to be void, unenforceable,
or to be of such effect as to render this Contract illusory, that section, paragraph, subparagraph or
clause shall be deemed to be separable from the rest of the Contract, and shall in no way render the
remaining terms of the Contract void or unenforceable, or render the Contract illusory. This
Contract shall be governed by the laws of the State of California.
20.5 Discrepancies. In the event of a discrepancy between any provision of the Contract
Documents, the most stringent requirements for the execution of the Work shall apply. In the case
of a conflict between this Contract and any other provision of the Contract Documents, which is
unrelated to the execution of the work, the provisions of this Contract shall apply.
20.6 Bonds. Contractor shall, at any time requested by Owner, obtain and thereafter at
all times during the performance of the Work maintain, a performance bond and a labor and material
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, I ► `
•
0 0
0 bond, each in form and substance, and with sureties, satisfactory to Owner and Lender, and
Contractor agrees to exert its best efforts to obtain such bonds at the lowest cost to Owner.
20.7 Independent Contractor. The Work shall be performed by Contractor as an
independent contractor at its sole risk, cost and expense. Owner shall have the right to insist that
all the provisions and requirements of the Contract are carried out by Contractor, but Contractor
shall have the complete and exclusive control, supervision and direction over the method and
manner of obtaining results.
20.8 No Third Party Beneficiaries. Nothing contained in this Contract shall be deemed to
create any third party contract rights in any subcontractor, supplier or other provider of labor,
services, materials or equipment to the Work.
20.9 Assignments and Subcontracts. Except with the express written consent of Owner,
Contractor shall not assign, subcontract or otherwise transfer any of its obligations hereunder. This
Contract shall inure to the benefit of, and be binding on, the parties hereto and their respective
. successors and assigns. The Owner shall be free to assign the Contract to the Owner's lender, or
to a partnership, joint venture or other entity.
20.10 Waiver. No consent or waiver, express or implied, by either party to this Contract or
any breach or default by the other in the performance of any obligations hereunder shall be deemed
or construed to be a consent or waiver to or of any other breach or default by such party
hereunder. Failure on the part of any party hereto to complain of or any act or failure to act of the
other party, or to declare the other party in default hereunder, irrespective of how long such failure
continues, shall not constitute a waiver of the rights of such party hereunder. Inspection or failure
• of Owner to perform any inspection hereunder shall not release Contractor of any of its obligations
hereunder.
20.11 Signs. Owner shall have the right to place on the Project site such signs as it may
elect. Contractor shall not place any signs on the Project site without Owner's permission.
Section 21
LIQUIDATED DAMAGES
21.1 IF COMPLETION OF THE PROJECT IS DELAYED BEYOND THE COMPLETION DATE,
THE PARTIES AGREE THAT OWNER WOULD SUFFER DAMAGES AND BE ENTITLED TO
COMPENSATION FOR SUCH DAMAGE. BOTH CONTRACTOR AND OWNER AGREE THAT IT WILL
BE EXTREMELY DIFFICULT AND IMPRACTICAL TO FIX THE EXTENT OF SUCH DAMAGES. TO
AVOID THESE PROBLEMS, BY PACING THEIR I ALS IN THE SPACE PROVIDED IN THIS
PARAGRAPH, CONTRACTO AND OWNER GREE TO LIQUIDATE DAMAGES IN THE
EVENT OF SUCH DELAY AS FOLLOWS: CONTR TOR SHALL PAY OWNER THE SUM OF
$500.00 FOR EACH WORK DAY DURING WHICH COMPLETION OF THE PROJECT IS DELAYED
BEYOND THE COMPLETION DATE, PROVIDED THAT SUCH PAYMENT OBLIGATION SHALL NOT
APPLY TO ANY DELAY CAUSED BY OWNER OR BEYOND THE CONTROL OF THE CONTRACTOR
AS SET FORTH IN SECTION 3.2 OF THIS AGREEMENT. ANY AMOUNTS PAYABLE BY
CONTRACTOR TO OWNER UNDER THIS PARAGRAPH MAY BE WITHHELD BY OWNER FROM
AMOUNTS OTHERWISE PAYABLE BY OWNER TO CONTRACTOR UNDER THE TERMS OF THIS
AGREEMENT.
Ill
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OWNER: CONTRACTOR:
PORTUGUESE BEND CLUB HOMEOWNERS HI TECH CONSTRUCTION COMPANY
ASSOCIATION, a California corporation
r.
By: /1'11VheeBy:
Its: Its:
Gen. Contractors License No.: 473174
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