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Exhibit 10.14
ENGINEER, PROCURE AND CONSTRUCT CONTRACT
BETWEEN
LEVEL 3 COMMUNICATIONS, LLC
AND
NATIONAL NETWORK TECHNOLOGIES, LLC.,
CONTRACT NUMBER EAST 21-NE-EPC
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TABLE OF CONTENTS
<TABLE>
<S> <C>
RECITALS 1
1 DEFINITIONS; INTERPRETATION 1
2 PROJECT 8
3 CONTRACTOR OBLIGATIONS 9
4 INFORMATION SUPPLIED TO CONTRACTOR AND DISCLAIMER; REPRESENTATIONS AND WARRANTIES 15
5 ENFORCEABILITY; LOSS OR DAMAGE; TITLE 15
6 PAYMENT 17
Appendix "A" Description of Project
Appendix "B" Not Used
Appendix "C" Confidentiality Agreement
Appendix "D" Award Fee Computation
Appendix "E" Program Management
Appendix "F" Safety
Appendix "G" Quality
Appendix "H" Cost
Appendix "I" Schedule
Appendix "J" Response Times for Owner's Approval
Appendix "K" TBD Travel and Assignment Policy
Appendix "L" Charge Schedule
</TABLE>
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ENGINEER, PROCURE AND CONSTRUCT CONTRACT
THIS ENGINEER, PROCURE AND CONSTRUCT CONTRACT, is dated as of the ____ day of
__________, 1998 the ("Effective Date"), by and between Level 3 Communications,
LLC, located at 14023 Denver West Parkway, Golden, Colorado 80401, telephone
number: (303) 215-8500, a Delaware limited liability corporation ("Owner"), and
National Network Technologies, LLC., located at 26 Broadway, Suite 400, New
York, New York 10004, telephone number: (212) 847-7770, federal tax I.D.:
13-3990223, a Delaware corporation ("Contractor").
RECITALS
A. Owner desires to have constructed numerous multi-conduit fibre optic
cable systems and other facilities (each, a "Network") in certain
geographical areas.
B. Owner was procured or will procure rights of way, or other necessary
interests in real property, for the permanent placement of each
Network.
C. Owner desires to engage and the Contractor desires to be engaged to
serve as the program manager which will provide program management,
design, engineering, procurement and construction services for each
Network described herein (the "Project", as hereinafter defined).
NOW, THEREFORE, in consideration of the sums to be paid to Contractor by Owner,
the foregoing premises and the covenants and agreements set forth herein, the
parties hereby agree as follows:
1 DEFINITIONS; INTERPRETATION
1.1 Definitions. As used herein with capitalization of the initial
letter of each word, the following terms shall have the
following respective meanings:
1.1.1 "Additional Rights of Way" shall have the meaning
assigned to such term in Section 10.1.2.2.
1.1.2 "Award Fee" shall have the meaning assigned to such
term in Section 6.3.2.
1.1.3 "Base Fee" shall have the meaning assigned to such
term in Section 6.12.
1.1.4 "Business Day" shall mean any day on which commercial
banks are not authorized or required to be closed in
Denver, Colorado.
1.1.5 "Change in Law" shall mean any controlling change in
the judicial or administrative interpretation of, or
adoption of, any Governmental Rule,
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which is inconsistent with any Governmental Rule in
effect on the execution date of this Contract.
1.1.6 "Change in the Work Form" shall have the meaning
assigned to such term in Section 11.1.2.3.
1.1.7 "Change Order" shall mean a written order to
Contractor issued and signed by Owner authorizing an
addition to, deletion from, suspension of or other
modification to the Work, the Warranties or any other
requirement of this Contract.
1.1.8 "Claim" shall mean any claim by any Subcontractor or
Vendor of Contractor for any compensation due or
alleged to be due in connection with the Work.
1.1.9 "Completion Date" shall refer to the date specified
in the relevant Construction Schedule for Substantial
Completion of the Network or Segment.
1.1.10 "Construction Certificate" shall mean a Construction
Certificate delivered by Contractor in accordance
with Section 6.2.2 and duly completed and signed by
Contractor.
1.1.11 "Construction Schedule" shall mean a schedule,
prepared by the Contractor and for which Owner's
Approval has been obtained, that specifies dates and
milestones for the timely completion of each Network.
1.1.12 "Construction Work" shall refer to all Work other
than engineering, program management, procurement and
inspection Work.
1.1.13 "Contract" shall have the meaning assigned to such
term in Section 1.3.
1.1.14 "Contract Budget" shall have the meaning assigned to
such term in Section 3.2.1.
1.1.15 "Contract Price" shall have the meaning assigned to
such term in Section 6.1.
1.1.16 "Contractor" shall have the meaning assigned to such
term in the introductory paragraph of this Contract.
1.1.17 "Cost of Work" shall have the meaning assigned to
such term in Section 6.
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1.1.18 "Coverages" shall have the meaning assigned to such
term in Section 15.2.
1.1.19 "CPM" shall have the meaning assigned to such term in
Section 9.1.
1.1.20 "Day" shall mean a calendar day.
1.1.21 "Documents" shall mean, without limitation, all
written, recorded, graphic or printed matter, in
whatever form, including all originals, copies, and
drafts including without limitation, all letters,
e-mails, telegrams, memoranda, statements, drawings,
graphs, photographs, reports, notes, diaries, charts,
work papers, recordings, and computer printouts, and
all data compilations from which information can be
obtained or translated through detection devices into
reasonably usable form.
1.1.22 "Drawings" shall mean all graphic and pictorial
descriptions of the Work that must be accomplished in
accordance with this Contract showing the design,
location and dimensions of the Work including plans,
elevations, sections, details and diagrams.
1.1.23 "Effective Date" shall have the meaning assigned to
such term in the introductory paragraph of this
Contract.
1.1.24 "Event of Default" shall have the meaning assigned to
such term in Section 17.
1.1.25 "Final Acceptance" shall have the meaning assigned to
such term in Section 20.3.2.
1.1.26 "Final Acceptance Date" shall mean the date on which
Final Acceptance of all Work related to the Network
or Segment thereof and shall have occurred in
accordance with Section 20.3.
1.1.27 "Force Majeure Event" shall mean any cause beyond the
control and not due to an act or omission of the
party claiming the existence of the Force Majeure
Event, and which could not have been avoided by due
diligence and use of reasonable efforts by such
party, as a result of which it is not possible for
such party to avoid a delay in the performance of its
obligations under this Contract or to avoid an
increase in the cost to such party of the performance
of its obligations under this Contract including:
1.1.27.1 an earthquake, fire, epidemic,
blockade, rebellion, war, riot,
civil disturbance, sabotage,
explosion, act of God, act of public
enemy or other similar occurrence;
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1.1.27.2 a strike, labor dispute, work
slowdown, work stoppage, secondary
boycott, walkout or other similar
occurrence;
1.1.27.3 Owner interference or failure of
Owner to perform its obligations
hereunder;
1.1.27.4 an expropriation, confiscation or
condemnation of all or any portion
of the Network or the Site; or
1.1.27.5 a Change in Law.
1.1.28 "G&A Fee" shall have the meaning assigned to such
term in Section 6.
1.1.29 "Governmental Approval" shall mean any authorization,
consent, approval, order, action, license, lease,
ruling, permit, certification, exemption, filing or
registration by or with any Governmental Person.
1.1.30 "Governmental Person" shall mean any federal, state,
local or foreign government, any political
subdivision or any governmental, quasi-governmental,
judicial, public or statutory instrumentality,
administrative agency, body or entity.
1.1.31 "Governmental Rule" shall mean any statute, law,
regulation, ordinance, rule, license, permit,
judgment, order, decree, concession, grant,
franchise, agreement, directive, guideline, policy
requirement, or other governmental restriction or any
similar form of decision of or determination by, or
any interpretation or administration of any of the
foregoing by, any Governmental Person, whether now or
hereafter in effect.
1.1.32 "Hazardous Substance" shall mean any "hazardous
substances" as defined in the Comprehensive
Environmental Response, Compensation and Liability
Act of 1980, as amended by the Superfund Amendments
and Reauthorization Act of 1986, 42 U.S.C. Section
9601 et seq., as amended, and any "hazardous waste"
as defined in the Resource Conservation and Recovery
Act of 1976, 42 U.S.C. Section 6901 et seq., as
amended, any regulated substance under subtitle 1 of
The Resource Conservation and Recovery Act of 1976 or
the Colorado Underground Storage Tank Act or any
substance the presence of which requires
investigation, remediation or other action under any
federal or state law, regulation or order. Hazardous
Substance does not include any of the foregoing
described substances which is or has been introduced
by Contractor, Subcontractors, Vendors, or anyone for
whom any of them may be liable.
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1.1.33 "Implementation Plan" shall have the meaning assigned
to such term in Section 3.1.1.
1.1.34 "Initial Rights of Way" shall have the meaning
assigned to such term in Section 10.1.2.1.
1.1.35 "Network" shall have the meaning assigned to such
term in Recital A, as more specifically described in
Appendix "A", as may be modified from time to time.
1.1.36 "Notice" shall mean a written communication between
the parties in substantial compliance with the
requirements of Section 22.8.
1.1.37 "Notice of Termination" shall have the meaning
assigned to such term in Section 12.1.
1.1.38 "Notice to Proceed" shall mean a Notice issued by
Owner to Contractor to commence the Work or any
portion thereof.
1.1.39 "OCIP" shall have the meaning assigned to such term
in Section 15.1.
1.1.40 "Oversight Engineer" shall mean such consultant or
consultants as Owner may engage to review the design
Documents, Specifications and other Documents
prepared by Contractor, to make periodic inspections
of the Work and the Project, to review Change Orders
and to render advice to and prepare reports for Owner
on such matters as Owner may from time to time
request, the identity of which Oversight Engineer(s)
shall be the subject of a Notice by Owner to
Contractor. An Oversight Engineer may, at Owner's
option, be an employee or independent contractor of
Owner.
1.1.41 "Owner" shall have the meaning assigned to such term
in the introductory paragraph of this Contract.
1.1.42 "Owner-Supplied Items" shall mean those materials,
equipment or other items supplied by Owner for use or
incorporation in the Work, identified in Section 8.
1.1.43 "Owner's Approval" shall mean, with respect to
information, Documents, Drawings, Specifications, or
other items to be provided by the Contractor to the
Owner under this Contract, that Owner has, in Owner's
sole discretion, approved such item. When Owner's
Approval is specified for an item, Contractor shall
provide the same to Owner in such quantities and
format as specified by Owner, and in sufficient time,
in accordance with
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this Contract, to enable Owner or the Oversight
Engineer, as required, to review the same and respond
to Contractor. In the event Owner or Oversight
Engineer, as appropriate, does not approve an item
submitted by Contractor for Owner's Approval on first
or subsequent submission, Contractor shall revise the
same and resubmit until Owner's Approval is obtained.
Contractor shall not be entitled to an extension of
the Contract Time for delays in receiving Owner's
Approval where Contract has failed to comply with the
requirements for Owner's Approval. Owner's Approval
shall not constitute acceptance of Work not in
accordance with the Contract, nor shall it constitute
a representation or certification that the submittal
is accurate or adequate, or that the Work described
therein will be sufficient to satisfy the
requirements of the Contract. Owner's Approval shall
be effective only if in writing; verbal approval
shall not constitute Owner's Approval. Unless
otherwise specified, anticipated response times for
items submitted for Owner's Approval are set forth in
Appendix "J".
1.1.44 "Partial Acceptance" shall have the meaning assigned
to such term in Section 20.2.
1.1.45 "Payment Date" shall have the meaning assigned to
such term in Section 6.2.3.
1.1.46 "Person" shall mean individual, corporation, company,
voluntary association, partnership, trust,
unincorporated organization or Governmental Person.
1.1.47 "Preliminary Estimate" shall have the meaning
assigned to such term in Section 3.2.1.
1.1.48 "Project" shall mean the total design, engineering,
procurement and construction of all the Networks,
including appurtenances thereto such as manholes,
handholes, and end user sites, as described more
fully in Appendix "A".
1.1.49 "Project Headquarters" shall mean the location of any
of Contractor's central office task force.
1.1.50 "Project Manager" shall man the project manager
designed by Contractor pursuant to Section 3.2.10.
1.1.51 "Punchlist" shall mean the list of Work, which is
limited to minor incidental items of work necessary
to correct imperfections which have no adverse effect
on the safety or operability of the Network or
Segment,
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which remains to be completed after achievement of
Substantial Completion of the Network or Segment.
1.1.52 "Quality Control Plan" or "QCP" shall have the
meaning assigned to such term in Section 9.4.1.
1.1.53 "Rights of Way" shall man those geographic areas
which Owner provides to the Contractor for the
permanent installation of the Project, regardless of
whether Owner's interest therein is fee title,
easement or otherwise, and includes Initial Rights of
Way and Additional Rights of Way.
1.1.54 "Safety Program" shall have the meaning assigned to
such term in Section 3.3.1.
1.1.55 "Site" shall mean those areas designed in writing by
Owner for performance of the Work and such additional
areas as may, from time to time, be designated in
writing by Owner for Contractor's use hereunder.
1.1.56 "Specifications" shall mean the written requirements
for materials, equipment, construction systems,
standards and workmanship for the Work, and
performance of related services, all in accordance
with the Contract, to be prepared and furnished by
Contractor. Contractor must obtain the Owner's
Approval of Specifications.
1.1.57 "Subcontractor" shall mean any Person with whom
Contractor has entered into any subcontract to
perform any part of the Work, or provide any
materials, equipment, supplies or services on behalf
of Contractor (and any other Person with whom any
Subcontractor has further subcontracted any part of
the Work).
1.1.58 "Substantial Completion" shall have the meaning
assigned to such term in Section 20.1.3.
1.1.59 "Surety" shall mean each Person executing a payment
and performance bond with a Subcontractor, which
Person must be acceptable to Owner and listed in the
National Registry.
1.1.60 "Vendor" shall mean any Person not performing Work at
the Site that supplies machinery, equipment,
materials or systems to Contractor or any
Subcontractor in connection with the performance of
the Work and completion of the Project.
1.1.61 "Warranties" shall mean the warranties of Contractor
under Section 21.
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1.1.62 "WBS" shall have the meaning assigned to such term in
Section 9.1.1.
1.1.63 "Work" shall mean all design, engineering,
procurement, program management, construction, labor,
supervision, testing, and other services, equipment,
systems and materials provided or to be provided by
Contractor necessary to achieve Final Acceptance of
the Project and satisfy the obligations of this
Contract.
1.2 Interpretation. In this Contract, the singular includes the
plural and the plural the singular; references to statute or
regulations are to be construed as including all statutory or
regulatory provisions consolidating, amending or replacing the
statute or regulation referred to; references to "writing"
include printing, e-mail, typing, lithography and other means
of reproducing words in a tangible visible form; the words
"including," "includes" and "include" shall be deemed to be
followed by the words "without limitation" or words of similar
import; references to articles, sections (or subdivisions of
sections), exhibits, annexes, appendices, or schedules shall
be construed to be to this Contract unless otherwise
indicated; references to agreements, exhibits, appendices,
hereto and other contractual instruments shall, unless
otherwise indicated, be deemed to include all subsequent
amendments and other modifications to such instruments, but
only to the extent such amendments and other modifications are
not prohibited by the terms of this Contract; words not
otherwise defined which have well-known technical or
construction industry meanings, unless the context otherwise
requires, are used in accordance with such recognized
meanings; and references to Persons include their respective
permitted successors and assigns, and, in the case of
Governmental Persons, Persons succeeding to their respective
functions and capacities. References to a section of the
Contract include all subsections or parts thereof unless
otherwise specified.
1.3 The Contract. This Contract shall include this Engineer,
Procure and Construct Contract by and between Owner and
Contractor and all exhibits, appendices, attachments,
amendments, supplements and modifications hereto and all
Change Orders (collectively, this "Contract"). This Contract
shall not be construed to create a contractual relationship of
any kind between Owner and a Subcontractor or Vendor or any
other Person other than Contractor.
2 PROJECT
2.1 The Project is more fully described in Appendix "A". Owner
will further define and communicate to the Contractor Work of
the Project including:
2.1.1 objectives for the Project;
2.1.2 Network infrastructure design criteria;
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2.1.3 environmental and cultural resource policy,
guidelines, reporting protocols, and permits
conditions checklists;
2.1.4 tax payment, cost accounting and insurance policies
and procedures.
2.2 Owner may change the Work at any time.
3 CONTRACTOR OBLIGATIONS
3.1 Design and Construction. Contractor's Work shall include the
following:
3.1.1 Within thirty (30) Days of execution of the Contract,
Contractor shall develop and submit for Owner's
Approval a plan for the implementation
("Implementation Plan") of the design, engineering,
procurement and construction of the Project as
required to achieve Final Acceptance of the entire
Project (including all Segments) and all Work in
accordance with this Contract.
3.1.2 Contractor shall provide, for Owner's Approval,
complete with accurate Drawings and Specifications
for the Project that fulfill the requirements of the
Contract and any requirements specified by Owner and
that are in accordance with all Governmental Rules
and industry standards.
3.1.3 Contractor shall make site visits on Rights of Way
and shall design each Network route endeavoring to
provide the optimum route by taking into
consideration environmental concerns and sub-grade
obstacles, as well as ease of construction,
endeavoring to ensure cost effectiveness. Contractor
shall then provide Drawings that adequately and
accurately depict the Network route for Owner's
Approval and in a manner to subdivide the Project
into manageable Segments of Work. Contractor shall
provide such Drawings in a sequence to promote the
earliest start of construction in priority areas.
3.1.4 Except for Owner-Supplied Items, Contractor shall
furnish, be responsible for and pay (subject to the
reimbursement provisions of this Contract) the cost
of all labor, materials, tools, equipment, insurance,
taxes, supervision and all other incidentals
necessary perform the Work and achieve Final
Acceptance of the entire Project in accordance with
the provisions of this Contract.
3.1.5 Contractor shall execute the Work in accordance with
the Construction Schedules and all Governmental
Approvals, using methods and equipment
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that are approved by the Owner and are prudent
engineering and construction practices and
operations.
3.1.6 Contractor shall comply in all respects with all
applicable permits, Governmental Rules, Government
Approvals or requirements of parties with interests
in the Rights of Way and pay at Contractor's own
expense, all charges, fees, taxes, damages, fines,
and penalties which may arise because of
non-compliance by Contractor, Subcontractors, Vendors
or other agents or employees of Contractor.
3.1.7 Contractor shall remove from the Site and maintain
the Site free of waste material and rubbish, clear
the Site of temporary structures, surplus material,
equipment and tools prior to the Final Acceptance
Date.
3.1.8 Contractor shall be solely responsible for and have
control over construction means, methods, techniques,
sequences, and procedures and for coordinating all
portions of the Work under this Contract. Contractor
shall evaluate and develop construction methods that
effect the efficient and thorough performance of the
Work, minimizing float in the Construction Schedule,
and reducing the Cost of the Work.
3.1.9 Contractor shall be responsible to Owner for acts and
omissions of Contractor's employees, Subcontractors,
Vendors and their agents and employees, and other
Persons performing portions of the Work under a
contract with Contractor.
3.1.10 Contractor shall not be relieved of obligations to
perform the Work in accordance with this Contract by
tests, inspections, or approvals performed by persons
other than Contractor.
3.1.11 Contractor shall not self-perform any portion of the
Construction Work without Owner's Approval.
3.1.12 To the extent Contractor deems necessary in
accordance with prudent engineering practices,
Contractor shall inspect the Site and surrounding
locations, including surface and subsurface
conditions for performing its obligations under this
Contract, and become familiar with the physical
requirements of the Work and hereby accepts them for
such performance.
3.2 Program Management.
3.2.1 Within thirty (30) Days of issuance of a Notice to
Proceed with respect to a Network or portion thereof,
Contractor shall submit a Preliminary
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Estimate of the Cost of the Work for such Network
("Preliminary Estimate") for Owner's Approval. Upon
issuance of Owner's Approval, the Preliminary
Estimate will become the "Contract Budget", which
will be used as a tool for measurement of
Contractor's performance.
3.2.2 Within thirty (30) Days issuance of a Notice to
Proceed with respect to a Network or portion thereof,
Contractor shall establish an aggressive but
achievable Construction Schedule for such Work for
Owner's Approval. The time stated in a Construction
Schedule in which Contractor agrees to achieve
Substantial Completion of the Work or any portion
thereof will be reasonable, adequate and sufficient.
On a monthly basis, Contractor shall prepare and
submit updates on schedules, budgets, forecasts and
variance reports that accurately portray the
Project's progress and budget financial standing in a
format that is acceptable to Owner. At Owner's sole
discretion, more frequent updates may be required
from time to time.
3.2.3 Contractor shall utilize an Internet based web page
reporting system provided by Owner that will contain
all Project Documents, Drawings, schedules and
reports. This system shall be developed such in a
manner that upon completion of the Project, it will
serve as the permanent archive for Project records
and as-built Drawings to be utilized by Owner's
operations and maintenance personnel.
3.2.4 Contractor shall, with the full cooperation of the
Owner, obtain, furnish, be responsible for, pay the
cost of and maintain in full force and effect all
Governmental Approvals required under applicable
Governmental Rules in connection with the execution,
performance and obligations as contemplated by this
Contract. Contractor shall furnish Owner a written
list of all Governmental Approvals required for
performance of the Work and the proper completion of
the Project and clearly identify the type of
Governmental Approvals that must be obtained before
applicable Work on any particular Network or Segment
can be started. The Work can and shall be performed
in conformity with all relevant building codes,
Governmental Approvals, Governmental Rules and this
Contract.
3.2.5 Contractor shall develop and implement a Quality
Control Plan that ensures the design of a lasting and
durable Network including verification, testing and
documentation of the design, materials and
installation of the Network in accordance with
Section 9.4.
3.2.6 Contractor shall develop and implement a material
control and purchasing plan incorporating the
logistics necessary for the distribution of all
Owner-Supplied Items and Contractor-furnished
materials, equipment and
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construction equipment and including inspection,
expediting, shipping, unloading, receiving, customs
clearance and claims in accordance with the
Construction Schedule. The material control systems
shall be capable of populating the Network inventory
system.
3.2.7 Contractor shall provide to Owner, on a monthly
basis, a list of all Subcontractors, Vendors and
agents of Contractor, including all relevant contact
information, and provide timely advice to Owner
concerning the status of negotiations with
Subcontractors and Vendors concerning any suspension
or termination charges related to any major component
of the Work. At Owner's sole discretion more frequent
updates may be required from time to time.
3.2.8 Contractor shall obtain, to the extent permitted by
law, waivers of liens and Claims from all
Subcontractors, Vendors and suppliers as of the
execution of each agreement with each such Person,
and in each case on a form approved by Owner.
3.2.9 Contractor shall prepare and provide to Owner final
geotechnical reports, including the performance of
all inspections, field and Site explorations and
testing work related thereto prior to submittal of
final design documents, and update the reports to
reflect the as-built condition of the Work.
3.2.10 Contractor shall designate a Project Manager,
acceptable to Owner, who will have full
responsibility for the execution of the Work and will
act as a single point of contact in all matters on
behalf of Contractor. Contractor shall not change the
Project Manager or any other key member of
Contractor's Project staff without the prior written
consent of Owner.
3.2.11 Contractor shall provide such assistance as is
reasonably requested by Owner in dealing with any
Governmental Person in any and all matters relating
to the Work and the Project.
3.2.12 Contract shall pay all taxes generated as a result of
the Work and administer taxing and cost accounting
plans furnished by Owner.
3.2.13 Contractor shall provide such data, reports,
certifications, and other documents or assistance as
may be reasonably requested by Owner in connection
with the financing of the Project provided, that the
provision of this information shall not in any manner
diminish Contractor's rights or obligations under any
other provision of this Contract.
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3.2.14 Contractor shall cooperate with Owner and Oversight
Engineer in the review of design of the Project, the
conduct of inspections, the development,
implementation and review of the Construction
Schedule and QCP, and other matters relating to the
Work.
3.2.15 Contractor shall allow Owner to audit all
documentation reasonably requested by Owner
pertaining to any dispute related to the Work.
Contractor shall not be required to provide access to
those records and documentation relating to any sum
which is not to be directly reimbursed as a Cost of
the Work, which are included in the G&A Fee or Base
Fee, or costs expressed as a percentage of other
costs.
3.2.16 Contract shall provide and maintain field offices at
locations to be determined by Owner, which facilities
shall be in place and operational prior to the
commencement of construction Work to be supervised
through such office. Such facilities shall be for the
exclusive use of the Project and shall contain copies
of all relevant Documents, Drawings and
Specifications necessary to perform the Work
supervised from that office.
3.2.17 Contractor shall maintain a Project headquarters
office where Contractor's Program Manager,
engineering manager, QCP manager and other Owner
approved key personnel maintain full-time offices,
and original Documents, Drawings and Specifications
are maintained.
3.2.18 Contractor shall, no later than execution of the
Contract, provide Owner an organization chart
identifying the Program Manager through Contractor's
chief executive officer, which shall also specify the
business address and work and home telephone numbers
for key personnel.
3.2.19 contractor shall provide as-built Drawings to Owner
within the time specified in the Contract.
3.3 Safety.
3.3.1 Within thirty (30) Days of execution of the Contract,
Contractor shall submit a safety program ("Safety
Program") for Owner's Approval. Such program shall
include procedures that satisfy all Governmental
Rules and Governmental Approvals and Rights of Way
owner requirements on railroads, highways, roads and
other Sites where the Work will be performed.
3.3.2 The Safety Program procedures shall be maintained and
amended as necessary to comply with newly obtained
Rights of Way requirements.
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3.3.3 Contractor shall give Notices and Comply with all
applicable Governmental Rules or rules and
regulations of Rights of Way owners bearing on the
safety of persons and property and their protection
from damage, injury or loss, including providing any
safety training requirement by such Rights of Way
Owners.
3.3.4 Contractor shall be responsible for initiating,
maintaining and providing supervision of safety
precautions and programs in connection with the Work.
3.3.5 Contractor shall take all necessary precautions and
be solely responsible for the safety of, and shall
provide protection to prevent damage, injury or loss
to: (i) all employees of Contractor, its
Subcontractors and Vendors performing the Work and
other Persons who may be affected thereby; (ii) the
Work and materials and equipment to be incorporated
therein; and (iii) other property at or adjacent to
the Site that may be affected by the Work. Owner
shall have no liability or responsibility for safety
procedures.
3.3.6 Contractor shall provide, erect, and maintain
barricades, suitable and sufficient light, pavement
markings, signs and other traffic control devices as
required to protect the Work and safety of the
public. Barricades shall protect roadways closed to
traffic, and obstructions shall be illuminated during
hours of darkness. Signs shall be provided to control
and direct traffic. Contractor shall erect signs at
locations where operations may interfere with the use
of the road by traffic, and at all intermediate
points where the Work crosses or coincides with an
existing road. Signs shall be constructed, erected
and maintained as required to protect the Work and
the safety of the public. Barricades, warning signs,
lights, temporary signals, and other protective
devices shall conform with the latest revision of the
"Manual on Uniform Traffic Control Devices for
Streets and Highways" published by the Federal
Highway Administration and any local version or
supplement thereto.
3.3.7 Contractor shall observe all applicable rules and
regulations of federal, state, county and local
health officials. Contractor shall not require any
worker to work in surroundings or under conditions
that are unsanitary, hazardous or dangerous to health
or safety. Contractor shall conduct the Work to
minimize obstruction to traffic. Contractor shall
provide for the safety and convenience of the general
public and the residents along the Rights of Way and
the protection of person and property.
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<PAGE> 17
4 INFORMATION SUPPLIED TO CONTRACTOR AND DISCLAIMER;
REPRESENTATIONS AND WARRANTIES
4.1 Information Supplied. Owner has made and will make available
to Contractor certain information acquired in the course of
planning for the Project.
4.2 Reliance. Contractor may rely on information provided by
Owner, provided that Contractor shall verify any information
in accordance with the appropriate standard of care.
4.3 Representations and Warranties. Contractor represents,
warrants and covenants that:
4.3.1 It has the required expertise, ability, skills and
capacity to, and shall, perform the Work in a manner
consistent with this Contract.
4.3.2 Contractor is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Delaware and has all requisite power to own
its properties and assets and carry on its business
as now conducted or proposed to be conducted.
Contractor is duly qualified and registered to do
business in each state where the Work will be
performed.
4.3.3 The execution, delivery and performance of this
Contract and the consummation of the transactions
contemplated hereby have been duly authorized by all
necessary corporation action and do not and will not
(i) require any consent or approval of the board of
directors or any shareholders of Contractor or any
other Person that has not been obtained and each such
consent and approval that has been obtained is in
full force and effect or (ii) result in a breach of
or a default under the certificate of incorporation
or by-laws of Contractor or any indenture or loan or
credit agreement or other material agreement or
instrument to which Contractor is a party or by which
its properties and assets may be bound or affected.
4.3.4 This Contract constitutes the legal, valid, and
binding obligations of Contractor, enforceable in
accordance with its respective terms.
5 ENFORCEABILITY; LOSS OR DAMAGE; TITLE
5.1 Enforceability. Notwithstanding any other provision set forth
in this Contract, performance by a Surety of any of the
obligations of Contractor shall not relieve Contractor of
liability for or breach of its obligations hereunder.
5.2 Loss or Damage.
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<PAGE> 18
5.2.1 Until the date of Substantial Completion of a Network
or a portion thereof, Contractor assumes full
responsibility for replacement or repair of any
damage to such Network including materials,
equipment, supplies and maintenance equipment
purchased for permanent installation or use during
construction, regardless of whether Owner has title
thereto under this Contract. Such costs to repair or
replace damage shall be a Cost of the Work, subject
to the following:
5.2.1.1 to the extent any such damage is not covered
by insurance and is attributable to the
negligence or willful misconduct of
Contractor, it shall be at Contractor's sole
cost and expense; and
5.2.1.2 to the extent any such damage is covered by
insurance and is attributable to the
negligence or willful misconduct of
Contractor, any deductible shall be at
Contractor's cost and expense.
From and after the date of the transfer of the care, custody,
and control of a Network or portion thereof, Owner shall
assume all risks of physical loss or damage thereto and Owner
will and shall cause its insurers to waive rights of
subrogation against Contractor for loss or damage to the Work
which may thereafter occur, provided that this shall not limit
Contractor's obligations under the Warranties.
5.2.2 Contractor shall ensure the safe delivery of all
materials, equipment, supplies and other items to the
Site and for maintaining, insuring, storing and
transporting Owner-Supplied Items.
5.3 Title. Contractor warrants that it will own and have good and
marketable title to all materials, equipment, tools and
supplies furnished by it and its Subcontractors and Vendors
that become part of the Network or are purchased for Owner for
the operation, maintenance or repair thereof, free and clear
of all liens. Title to all of said materials, equipment, tools
and supplies which shall have been delivered to the Site shall
pass to Owner upon the sooner of (i) incorporation into the
Network or (ii) payment by Owner to Contractor under Section
6.2 of invoiced amounts pertaining thereto. Such transfer of
title shall in no way affect Owner's rights as set forth in
any other provision of this Contract. For the purpose of
protecting Owner's interest in all materials, equipment, tools
and supplies with respect to which title has passed to Owner
but which remain in possession of another party, Contractor
shall take or cause to be taken all commercially reasonably
steps necessary under the laws of the appropriate jurisdiction
to protect Owner's title and to protect Owner against claims
by other parties with respect thereto.
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<PAGE> 19
6 PAYMENT
6.1 Contract Price. As full compensation for the Work and all
other obligations to be performed by Contractor under this
Contract, Owner shall pay Contractor the Contract Price, which
consists of the following three components:
6.1.1 the Cost of the Work as detailed in Section 6.4;
6.1.2 the G&A Fee as described in Section 6.7;
6.1.3 an Award Fee as described in Section 6.8; and
6.1.4 a Base Fee as described in Section 6.12.
6.2 Progress Payments. Payment to Contractor of the Contract Price
shall be made as follows:
6.2.1 By the tenth (10th) day of each month, Contractor
shall submit an invoice to Owner for the Cost of the
Work for Work performed during the preceding month
plus the G&A Fee and Base Fee. Such Contractor's
invoice shall clearly specify the Networks which it
relates to and provide documentation, as required by
Owner, to substantiate the Cost of the Work.
Contractor shall not invoice Owner for any amount,
such as retainage, which Contractor does not intend
to pay to Subcontractors or Vendors upon receipt.
Invoices shall be addressed to the following person
and location or shall be deemed invalid:
Todd Christianson
Contracts Manager
Level 3 Communications, LLC
14023 Denver West Parkway
Golden, Colorado 80401
With each invoice, Contractor shall include a
conditional lien waiver for amounts payable to
Contractor (exclusive of Subcontractors' and Vendors'
costs).
6.2.2 Contractor shall submit with each such invoice a
Construction Certificate describing in sufficient
detail for independent verification, all approved
materials to which it holds title and which were
obtained in the preceding month, the Work that has
been invoiced, and stating that such Work has been
performed in compliance with the requirements of this
Contract. The Construction Certificate shall be in a
form acceptable to Owner. The
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<PAGE> 20
invoice, Construction Certificate and supporting
documentation shall be subject to audit on demand by
Owner. Should any audit of such records discover the
cost invoiced is in excess of the actual cost,
Contract shall reduce the invoice in the amount of
five (5) times the audited excess amount and such
amount shall not be part of the Cost of Work and
shall be borne by the Contractor.
6.2.3 Owner shall promptly notify Contractor concerning any
invoiced amount which is in dispute and any Work
which Owner believes was not performed in accordance
with the Contract (all such Work and invoiced amounts
in respect thereof shall be deemed in dispute until
otherwise agreed). Owner shall pay Contractor the
amount then payable and not in dispute within fifteen
(15) Days after receipt by Owner of Contractor's
invoice, all required supporting information and the
related Construction Certificate, which fifteenth
(15th) day shall be the date payment is due (the
"Payment Date").
6.2.4 Failure by Owner to pay any amount in dispute shall
not alleviate, diminish or modify in any respect
Contractor's obligation to achieve Final Acceptance
of the Work, and Contractor shall not cease or slow
down its performance hereunder on account of any such
amount.
6.2.5 Amounts not paid by Owner by the Payment Date which
are not disputed or the subject of withholding as
allowed hereunder shall begin to accrue interest at
the rate of one and one-tenth (1.1) of the current
prime rate of the Chase Manhattan Bank as follows:
6.2.5.1 for amounts for Work self-performed by
Contractor, fifteen (15) Days after the
Payment Date; and
6.2.5.2 for amounts payable to Subcontractors and
Vendors, but only for the period for which
Contractor was required to expend
unreimbursed funds.
6.2.6 The portion of the G&A Fee payable each month shall
be the amount determined by multiplying the Cost of
the Work for such month times the G&A Fee. The
portion of the Base Fee payable each month shall be
the amount determined by multiplying the Cost of the
Work for such month times the Base Fee.
6.2.7 As a condition to final payment to a Subcontractor or
Vendor, Contractor shall provide to Owner full and
final waivers and releases of liens and, if the
Subcontractor or Vendor is bonded, a consent of
surety.
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<PAGE> 21
6.2.8 Payments may be withheld on account of:
6.2.8.1 defective Work not remedied;
6.2.8.2 claims filed by third parties arising out of
the Work for which Contractor is liable
under this Contract;
6.2.8.3 failure of the Contractor to make payments
to Subcontractors or Vendors for labor,
materials or equipment for Work;
6.2.8.4 damage to the Owner or another contractor
arising out of the Work for which Contractor
is liable under this Contract; or
6.2.8.5 persistent failure to carry out the Work in
accordance with the Contract.
6.2.9 Contractor shall, as and when requested, furnish
evidence satisfactory to the Owner that all amounts
due for labor and material furnished the Contractor
in connection with performance of this Contract have
been paid or are being paid in the normal course,
including union health, welfare and pension fund
payments and payroll taxes where applicable. Such
evidence shall be furnished in such form and manner
as requested by Owner and all statements relative
thereto shall, if called for by Owner, be made by
sworn affidavit.
6.3 Award Fee Payments.
6.3.1 On a monthly basis, Owner shall meet with Contractor
to provide Owner's assessment of Contractor's
performance of the Work.
6.3.2 Contractor shall be eligible to receive from Owner a
fee ("Award Fee") which Owner, acting in its sole and
absolute discretion, determines is due in accordance
with the criteria specified in Section 6.8 and
Appendix "D". The Award Fee due the Contractor, if
any, shall be determined on a monthly basis and
invoiced in the following month.
6.4 Cost of the Work. The "Cost of the Work" shall mean costs
necessarily and reasonably incurred by the Contractor in the
proper performance of the Work. Such costs shall be at rates
not higher than the standard paid at the place of the Network
except with prior consent of the Owner. The Cost of the Work
shall include only the items set forth in this Section 6.4.
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<PAGE> 22
6.4.1 Labor Costs.
6.4.1.1 Wages of construction workers directly
employed by the Contractor to perform the
construction of the Work at the Site, or
with the Owner's written approval, at
off-Site workshops.
6.4.1.2 Base compensation (wage + time off with pay)
of the Contractor's supervisory and
administrative personnel, who are
Owner-approved, when stationed at the Site
or at Project Headquarters.
6.4.1.3 Base compensation (wage + time off with pay)
of the Contractor's supervisory or
administrative personnel, who are
Owner-approved, engaged at factories,
workshops or on the road, in expediting the
production or transportation of materials or
equipment required for the Work, but only
for that portion of their time required for
the Work.
6.4.1.4 Costs paid or incurred by the Contractor for
taxes, insurance, assessments and benefits
required by law or collective bargaining
agreements and, for personnel not covered by
such agreements, customary benefits such as
sick leave, medical and health benefits,
holidays, vacations and pensions, provided
such costs are based on wages and salaries
included in the Cost of the Work under
Section 6.4.1.1 through 6.4.1.3. These costs
include retirement plans, 401(k)
contributions, group health, life long and
short-term disability, and public duty pay.
Burden costs include FICA, FUI, SUI,
workers' compensation (if applicable), and
GL insurance costs (if applicable). For home
office personnel, the burden and benefit
cost is * of base compensation. For
field employees in the OCIP, the burden and
benefit cost is * of base
compensation. For field employees not in the
OCIP, the burden and benefit cost is
* . These rates and burdens will be
fixed for the term of the Contract, except
as impacted by Change in Law.
6.4.2 Subcontract, Material and Equipment Costs. Payments
to be made by Contractor to Contractor's
Subcontractors and Vendors in accordance with Project
requirements and Owner-approved subcontracts and
purchase
* Portions of this exhibit marked with a "*" have been filed
confidentially with the Commission pursuant to a
confidential treatment request filed by Registrant.
Page 20 of 72
<PAGE> 23
orders, inclusive of any duties, taxes or licensing
fees arising directly out of or that are applicable
thereto, other than taxes on net income.
6.4.3 Cost of Shared Resources. Costs associated with
resources that are not fully assigned to the Project,
costs that require accruals with periodic adjustments
and costs related to the use of Contractor equipment
will be reimbursed by the Owner as described below.
Examples of these costs include: Contractor owned
vehicles, construction equipment and test equipment;
Contractor owned or separately leased office,
warehouse, shop or laydown space; insurance and wage
add-ons such as workers' compensation.
6.4.3.1 Contractor shall develop and propose for
Owner's Approval cost allocation
methodologies for shared resources which
represent a fair approximation of the actual
cost to compensate Contractor for shared
resources used in the Work. Contractor's
proposal shall include supporting analysis.
Upon Owner's Approval of such methodologies,
Contractor shall administer them.
6.4.3.2 Contractor and Owner shall have the right at
any time to request a review of the cost
allocation methodologies if
6.4.4 Costs of Other Materials and Equipment. Temporary
Facilities and Related Items.
6.4.4.1 Costs, including transportation,
installation, maintenance, dismantling and
removal of materials, supplies, temporary
facilities, machinery. equipment, and hand
tools not customarily owned by the
construction workers, which are provided by
the Contractor at the Site and are fully
consumed in the performance of the Work.
Cost less salvage value on such items if not
fully consumed, whether sold to others or
retained by the Contractor.
6.4.4.2 Rental charges for temporary facilities,
machinery, equipment, and hand tools not
customarily owned by the construction
workers, which are provided by the
Contractor at the site, whether rented from
the Contractor or others, and costs of
transportation, installation, minor repairs
and replacements, dismantling and removal
thereof. Rates and quantities of equipment
rented shall be subject to the Owner's prior
approval.
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<PAGE> 24
6.4.4.3 Costs of removal of debris from the Site.
6.4.4.4 Costs of business-related (non-personal)
telegrams and long-distance telephone calls,
postage and parcel delivery charges,
telephone service at the site and reasonable
petty cash expenses of Project Headquarters.
6.4.4.5 That portion of the reasonable travel and
subsistence expenses of the Contractor's
personnel incurred while traveling in
discharge of duties connected with the Work.
Such expenses shall not exceed Contractor's
Travel and Assignment policy attached hereto
as Appendix K.
6.4.5 Miscellaneous Costs.
6.4.5.1 That portion directly attributable to this
Contract of premiums for insurance and
bonds, except to the extent any coverage
obtained is provided as part of the OCIP.
6.4.5.2 Sales, use, gross receipts, business and
occupation or similar taxes imposed by a
Governmental Person which are related to the
Work and for which the Contractor is liable
or required by any Governmental Person to
charge the Owner in connection with any
materials or Work.
6.4.5.3 Fees and assessments for building permits
and for other permits, licenses and
inspections which the Contractor is required
to pay or charge as required by the
Contract.
6.4.5.4 Fees of testing laboratories for tests
required by the Contract, except those
related to defective or nonconforming Work.
6.4.5.5 Royalties and license fees paid for the use
of a particular design, process or product
required by the Contract.
6.4.5.6 Deposits lost for causes other than the
Contractor's fault or negligence.
6.4.5.7 Other costs specified in Appendix L.
6.4.6 Other Costs. Other costs incurred in the performance
of the Work if and to the extent approved in advance
in writing by the Owner.
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<PAGE> 25
6.4.7 Emergencies; Repairs to Damaged Work.
6.4.7.1 Costs incurred by the Contractor for the
emergency repair of damaged Work.
6.4.7.2 Costs incurred taking action to prevent
threatened damage, injury or loss in case of
an emergency affecting the safety of persons
or property.
6.4.8 Equipment for Project. Construction equipment,
vehicles, testing equipment, computers and other
equipment and services (e.g. office space,
maintenance, etc.) which will be used solely for the
Project and will be required by Contractor shall be
leased or purchased from third party vendors using
the following guidelines:
6.4.8.1 The equipment or services shall be acquired
on behalf of Owner unless otherwise directed
by Owner.
6.4.8.2 For equipment or service that Owner desires
the Contractor to lease or purchase from
third party vendors, Owner shall retain
title/ownership. Upon completion of the
Project (or at the point the service or
equipment is no longer needed for the
Project), Owner will determine whether to
keep the equipment or service for its
ongoing in the disposal as needed and the
salvage value shall accrue to Owner.
6.4.8.3 Generally, lease or purchase from third
party vendors is preferred unless it is
demonstrated that leasing equipment or
service from Contractor is more efficient.
Owner shall retain the right to approve the
method of acquisition for equipment or
services.
6.5 Costs Not to Be Reimbursed. The Cost of the Work shall not
include:
6.5.1 Salaries and other compensation of the Contractor's
personnel stationed at the Contractor's principal
office or offices other than the Site office, except
as specifically provided in Sections 6.4.1.2 and
6.4.1.3.
6.5.2 Expenses of the Contractor's principal office and
offices other than the Site office, except as
otherwise specified.
6.5.3 Overhead and general expenses, except as may be
expressly included in Section 6.4.
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<PAGE> 26
6.5.4 The Contractor's capital expenses, including interest
on the Contractor's capital employed for the Work,
except as otherwise provided herein.
6.5.5 Rental costs of machinery and equipment except as
specifically provided in Section 6.4.4.2.
6.5.6 Costs incurred due to the fault, negligence, error or
omission of the Contractor, Subcontractors, Vendors
or anyone directly employed, indirectly employed or
representing any of them, including costs for
correction of damaged, defective or nonconforming
Work, disposal and or replacement of materials and
equipment incorrectly ordered or supplied, and making
good damage to property not forming part of the Work.
6.5.7 Any cost not specifically and expressly described in
Section 6.4.
6.5.8 The cost of Owner-Supplied Items or Rights of Way or
anything else provided by Owner.
6.6 Discounts, Rebates and Refunds. Cash discounts obtained in
payments made by the Contractor shall accrue to the Owner.
Trade discounts, rebates, refunds and amounts received from
sales of surplus materials and equipment shall accrue to the
Owner, and the Contractor shall make provisions so that they
can be secured.
6.7 The G&A Fee shall be * of the Cost of the Work and shall
compensate Contractor for the general and administrative
expenses, services and Work performed under this Contract.
6.8 The maximum Award Fee payable shall be * of the Cost of the
Work. The amount of the Award Fee which Contractor will
receive will be based on Contractor's performance of the Work,
as weighted and determined by Owner in accordance with
Appendix "D", in the following areas:
6.8.1 Program Management: Timely and accurate reporting,
estimating, drawing completion, material control,
permitting and cooperation with Owner and the
Oversight Engineer. See Appendix "E".
6.8.2 Safety: Preparation, coordination and compliance with
all safety requirements of federal, state, local
laws, rules and regulations and Rights of Way owners
to ensure an accident free work environment. See
Appendix "F".
* Portions of this exhibit marked with a "*" have been filed
confidentially with the Commission pursuant to a
confidential treatment request filed by Registrant.
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<PAGE> 27
6.8.3 Quality: Development, maintenance and reporting the
evidence of a Quality Control Plan to ensure the
integrity and durability of the Network.
See Appendix "G".
6.8.4 Cost: Timeliness and accuracy of estimates, cost
projections, cost management, application of
effective cost accounting and Contract Budget
compliance. See Appendix "H".
6.8.5 Schedule: Timely preparation and maintenance of the
Construction Schedule with the greatest emphasis on
meeting or beating all milestones and Completion
Dates. See Appendix "I".
6.9 Owner's evaluation of the foregoing criteria shall be in
Owner's sole and absolute discretion and not subject to
determination by any other party or tribunal. If Contractor
does not agree with Owners performance rating, Owner will
re-evaluate the rating, but Owner's revised rating (if
revised) is final.
6.10 Upon completion of each Segment and as may be more frequently
required by Owner, Contractor shall provide waivers and
releases of lien and bond rights for itself, Subcontractors
and Vendors.
6.11 Within ten (10) Days of execution of the Contact, Contractor
shall provide a labor rate schedule, specifying name and
hourly/weekly rates and any addons, for key personnel of
Contractor performing any Work. Charges which become part of
the Cost of the Work for each such person shall be consistent
with such schedule.
6.12 The Base Fee shall be * of the Cost of the Work.
7 PROJECT COMPLETION TIMEFRAME
7.1 Contractor shall perform all Work necessary so that the Final
Acceptance of each Network in accordance with Section 20 is no
later than the Completion Date specified in the relevant
Construction Schedule, as approved by Owner. Time is of the
absolute essence of this Contract. Completion Dates may be
changed only with Owner's Approval.
7.2 As the design and engineering progresses, Contractor shall
subdivide the Work of each Network into manageable Segments as
shown in the Construction Schedule approved by Owner. Each of
these Segments shall have a Completion Date as they are
incorporated into the Construction Schedule.
8 ITEMS FURNISHED BY OWNER
* Portions of this exhibit marked with a "*" have been filed confidentially
with the Commission pursuant to a confidential treatment request filed by
Registrant.
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<PAGE> 28
8.1 Owner will furnish Rights of Way and real estate for the
Project infrastructure.
8.2 Owner will furnish the design criteria for the fiber optic
cable and conduit system, and facilities.
8.3 Owner will execute purchase agreements or otherwise procure
the following materials in sufficient quantities to complete
the Project, but reserves the right to direct Contractor to
perform the bid and purchasing process for such items
("Owner-Supplied Items"):
8.3.1 duct;
8.3.2 fiber optic cable;
8.3.3 handholes;
8.3.4 manholes;
8.3.5 splice cases;
8.3.6 fiber splice panels;
8.3.7 fiber locate system; and
8.3.8 such other items as Owner determines to provide.
8.4 With respect to any Owner-Supplied Items for which Owner has
executed purchase agreements, Contractor shall issue delivery
orders against said purchase agreements and incorporate these
materials into the material control system required under
Section 3.2.6 to ensure compliance with the Construction
Schedule.
8.5 Owner will comply with Appendix "J" Response Times for Owners
Approval attached hereto.
9 SCHEDULING AND QUALITY CONTROL
9.1 Scheduling.
9.1.1 Scheduling of Construction. It shall be the
obligation of Contractor to develop, assemble,
coordinate and obtain Owner's Approval of a
Construction Schedule for each Network or portion
thereof as provided
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<PAGE> 29
herein, which shall provide for Substantial
Completion thereof and all Work related thereto by
the Completion Date. Contractor shall prepare the
Construction Schedule and prepare monthly updates and
other reports specified herein. The critical path
method ("CPM") type progress schedule shall be used
to schedule the Work. Each Construction Schedule
shall include a full definition of Work to be
performed by Contractor, Subcontractors and Vendors
and showing utilization of Owner-Supplied Items and
Rights of Way. Each Construction Schedule shall be a
fully resource and cost loaded precedence network
plan utilizing a work breakdown structure ("WBS") for
defining the scheduling hierarchy and provide for the
planning and the execution of the Work. Each
Construction Schedule shall be a resource-leveled
schedule, which defines target dates in place of
initially developed early/late start dates. Each
Construction Schedule shall, in addition, be used for
planning and monitoring the progress of the. All CPM
Construction Schedules shall be done in the latest
version of MS Project. Unless otherwise approved by
Owner, all duration of activities for which Owner is
responsible shall be the duration specified in this
Contract.
9.1.2 Construction Schedule. Within thirty (30) Days after
issuance by Owner of a Notice to Proceed with a
Network or a portion thereof, Contractor shall submit
each Construction Schedule in CPM format, in hard
copy and on 3.5 inch data diskettes, which shall
contain all data used to produce the Construction
Schedule in accordance with Section 9.1. The
Construction Schedule shall provide information to
Owner detailing and describing all activities
required to complete the Work, their duration and
location. The type, WBS element, duration, location
where the activity will be performed and its
relationship to other elements of the Work shall be
stated for each activity shown on the Construction
Schedule. The Construction Schedule shall be prepared
such that each activity is controlled, is capable of
being measured and is provided with a sorting
capability to the established WBS elements,
performing organizations, dates, float and activity
numbers. Each Construction Schedule shall incorporate
as activities, Governmental Approvals, permits,
submittals, samples and shop drawings that will be
required for the Work. Design and construction
activities shall be scheduled separately and
preliminary and final design submittals shall be
indicated as milestone events.
9.1.3 Allocation of Contract Budget and Cost of the Work.
Contractor shall allocate such amounts among the
scheduled activities defined by the Construction
Schedule such that each activity has an allocation
that accurately indicates the Contract Budget and
Cost of the Work for such activity.
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9.1.4 Representations. Review of Construction Schedules and
updates by Owner shall not constitute a
representation by Owner that the Work can be
completed as shown on the Construction Schedule or
updates. Construction Schedules and updates shall
constitute a representation by Contractor as to how
it envisions the Work to be accomplished.
9.1.5 Schedule Authorization. After each Construction
Schedule has been developed and received Owner's
Approval, Contractor shall use each Construction
Schedule for the performance and completion of the
Work and by both parties to this Contract for
monitoring and determining actual progress and Cost
of the Work. Each Construction Schedule shall be used
to evaluate time impacts to the critical path of
those events for which an adjustment of time is
allowed under Section 11. A Construction Schedule may
not be amended or modified without the prior written
consent of Owner, except as provided in Section
9.1.6.
9.1.6 Revisions to the Construction Schedules. No change to
a Completion Date for a Network may be made other
than pursuant to Section 11. If Owner does not agree
to an updated or revised Construction Schedule, and a
dispute ensues, Contractor may upon notification to
Owner, in the interim while the dispute is pending,
amend or modify such Construction Schedule to
correspond to the resources and rates of production
to be used by the Contractor, but only for the
purpose of Contractor's scheduling of its effort. The
final resolution of the dispute shall be reflected in
such Construction Schedule, and, if necessary, a
recovery schedule will be prepared.
9.1.7 Orderly Progression of Work. Contractor shall at all
times schedule and direct its Work so that it
provides an orderly progression of the Work to
completion within the specified time for completion
and in general conformance with the Construction
Schedule and revisions accepted by Owner.
9.1.8 Updates. Contractor shall review and update the
progress of its Work each month for the duration of
the Project. A Construction Schedule update meeting
will be held each month by Owner and shall be
attended by Contractor. At Owner's sole discretion
more frequent updates may be required from time to
time. Actual progress of the previous month will be
recorded and future activities will be reviewed. Each
Construction Schedule shall be updated for the
purpose of determining:
9.1.8.1 actual physical percentage of completion of
each Network;
9.1.8.2 proposed revisions to logic, duration, unit
cost or unit productivity rates;
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9.1.8.3 projected future start and Completion Dates;
and
9.1.8.4 delays affecting the Completion Date for a
Network;
9.1.9 Progress Summary. Contractor is responsible for
having information and data at each monthly meeting
to provide the verifications set out above. As a part
of the monthly updating process, Contractor shall
prepare a narrative progress summary describing the
physical progress during the report period, plans for
the forthcoming month, potential delays and problems,
their estimated effect on performance and overall
Project completion and an explanation of corrective
action taken or proposed. Contractor shall submit two
(2) copies of the narrative progress report to Owner
five (5) Business Days before each schedule update
meeting.
9.1.10 Additional Information. At the monthly schedule
meeting, Contractor shall also provide to Owner a
copy of the following:
9.1.10.1 a ninety (90) Day computer look
ahead tabular listing and bar chart
schedule sorted by WBS component and
activity start dates;
9.1.10.2 a bar chart schedule reflecting the
activities shown on each
Construction Schedule for the
immediately succeeding six (6) month
period;
9.1.10.3 an updated report that shows actual
progress in obtaining permits as
compared to each Construction
Schedule;
9.1.10.4 a report, which shows Contractor's
actual material and labor progress,
as compared to each Construction
Schedule;
9.1.10.5 a copy of data diskettes (3.5 - inch
DS/HD) from which the monthly
reports were prepared;
9.1.10.6 an updated design submittal schedule
detailing submittals for the
succeeding ninety (90) Days.
9.1.10.7 Additional information as may be
requested to address questions that
may arise.
9.1.11 A three (3) week look ahead schedule will be
submitted for each Network on a weekly basis that
indicates the two (2) forthcoming weeks and the
previous week. If Contractor fails to meet the
previous week's schedule,
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Contractor shall provide a written explanation
describing the cause of any deviation from the
planned progress.
9.1.12 Recovery Schedule. Contractor shall furnish
employees, materials, facilities and equipment to
work such hours, including extra shifts, overtime,
Sundays and holidays, as necessary to ensure the
completion of Work in accordance with the
Construction Schedule. If Contractor falls fifteen
(15) Days behind on any critical path activity shown
on the Construction Schedule, or it becomes apparent
that the Work may not be completed as scheduled, or
that milestone dates may not be achieved as
scheduled, Contractor shall prepare and submit a
recovery schedule demonstrating Contractor's program
and proposed plan to regain the lost schedule
progress. After Owner and Contractor agree upon a
recovery schedule, it will become a part of the
Construction Schedule.
9.2 Review by Owner. Contractor shall produce and Owner shall
review all design and construction Documents. Owner's review
of or comment upon or lack of review of or comment upon any
Documents does not relieve Contractor from its obligation to
complete the Project in accordance with this Contract. Review
or release by Owner of any of the design and construction
Documents shall not relieve Contractor of any of its
obligations under this Contract.
9.3 Design and Construction Documents. All design Documents
required for the Work shall be sufficiently complete to allow
Owner to review the design and authorize the start of
construction of all elements of the Work. Owner's responses
shall be delivered in accordance with Appendix "J".
9.4 Quality Control Program.
9.4.1 Plan. Contractor shall establish and maintain
procedures to ensure the quality of Work and the
completed Project. The procedures shall apply to
design, engineering, construction and procurement of
the Work. The procedures shall be implemented by
Contractor as a "Quality Control Plan" ("QCP") and
shall contain information as specified herein or
required by Owner. The QCP shall be submitted to
Owner for Owner's Approval within forty-five (45)
Days of the date of execution of this Contract. After
Owner's Approval of the QCP, Contractor shall notify
Owner in writing of any proposed changes. Proposed
changes shall be subject to Owner's Approval in its
sole discretion. The QCP shall include at a minimum
the following:
9.4.1.1 a description of the quality control
organization;
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9.4.1.2 the name, qualifications, duties,
responsibilities and authorities of each
person assigned a quality control function;
9.4.1.3 a description of the responsibilities and a
resume of experience of the QCP manager;
9.4.1.4 procedures for preparing, reviewing and
presenting submittals, including those of
Subcontractors, Vendors, offsite
fabricators, suppliers and purchasing
agents, to ensure they conform to Contract
requirements;
9.4.1.5 testing frequencies and procedures for each
specific test, to be submitted
incrementally, as technical specification
sections are prepared;
9.4.1.6 reporting procedures, including proposed
reporting formats;
9.4.1.7 document control system and procedures
showing how design, quality and discipline
coordination will be achieved; and
9.4.1.8 names of testing firms to be used, with
licenses as appropriate.
9.4.2 Documentation. Contractor shall maintain current
records of quality control operations, activities,
and tests performed including the Work of Vendors and
Subcontractors. These records shall be in a form
acceptable to Owner and indicate a description of
Subcontractors and Vendors working on the Project,
the number of personnel working, the weather
conditions encountered, any delays encountered, and
acknowledgment of deficiencies noted along with the
corrective actions taken on current and previous
deficiencies. In addition, these records shall
include factual evidence that required activities or
tests have been performed, including but not limited
to the following:
9.4.2.1 type and number of quality control
activities and tests involved;
9.4.2.2 results of quality control activities or
tests;
9.4.2.3 nature of defects, causes for rejection,
etc;
9.4.2.4 proposed remedial action; and
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9.4.2.5 corrective actions taken.
Such records shall cover both conforming and
defective or deficient features and shall include a
statement that supplies and materials incorporated in
the Work comply with this Contract. Legible copies of
such records shall be furnished weekly to Owner.
9.4.3 Contractor shall not commence Work until Owner has
accepted the QCP for that Work element.
9.4.4 Owner retains the right, but not the obligation, to
direct the location and the timing of testing
additional to that planned by Contractor.
10 NOTICE TO PROCEED, RIGHTS OF WAY.RELEASE AND CONSTRUCTION
PROCEDURES
10.1 Notice to Proceed.
10.1.1 Owner will issue a Notice to proceed ("Notice to
Proceed") to authorize Contractor to proceed with the
Work, or portions of the Work in respect of a
Network, in numerous separate stages as Owner deems
proper. Issuance of a Notice to Proceed shall
constitute a release to Contractor of the Rights of
Way described therein. Contractor shall not be
authorized or obligated to proceed to perform or
incur any Cost of the Work to perform any Work for
which a Notice to Proceed has not been issued.
Contractor shall review and inspect the Rights of Way
and Immediately advise Owner of any inadequacy of
which Contractor is aware or reasonably should be
aware.
10.1.2 Owner may provide a Notice to Proceed with respect to
Additional Rights of Way as they become available.
Nothing in Section 10.1 shall limit Contractor's
obligations to obtain all necessary licenses, permits
and approvals, including without limitation
Governmental Approvals, including without limitation
all access permits necessary to construct on, under
and over Rights of Way of other Governmental Persons
or owners of Rights of Way to comply with the
Construction Schedule. Contractor agrees to take or
allow no action, which may impair or delay Owner in
obtaining Rights of Way or which may tend to increase
the cost for obtaining the Rights of Way or the
compensation Owner may pay for Rights of Way. Owner
shall advise Contractor of any Rights of Way issues
of which it is aware which may impact the Cost of the
Work.
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10.1.2.1 Initial Rights of Way. The "Initial
Rights of Way" are those Rights of
Way selected and procured by Owner
for the Project. Contractor shall
design, engineer and plan its Work
so that it can be constructed within
the Initial Rights of Way whenever
possible.
10.1.2.2 Additional Rights of Way. If, in
order to accommodate Contractor's
design, Rights of Way additional to
Initial Rights of Way are desired,
and if, in Owner's sole discretion,
Owner agrees to acquire such
additional Rights of Way, Owner
shall provide them at Owner's
expense whereupon they shall become
"Additional Rights of Way."
10.1.2.3 Owner reserves the right to at its
own discretion, to direct in writing
Contractor to secure Additional
Rights of Way on behalf of Owner.
10.1.2.4 If Contractor desires to incur Cost
of the Work with respect to Rights
of Way prior to Owner obtaining the
requested Rights of Way, Contractor
may request such access, which Owner
may grant in its sole discretion.
10.1.2.5 Notices to Proceed with construction
will be issued separately from
Notices to Proceed with engineering
and procurement.
10.1.3 Contractor acknowledges that as of the Effective
Date, Owner has not secured Rights of Way for all
portions of the Network.
10.2 Commencement of Construction Work. Contractor will not perform
any construction Work until all Governmental Approvals
necessary for construction have been obtained, and Owner has
determined that adequate Drawings and Specifications exist to
allow observation of the Work by the Oversight Engineer and
Owner.
10.3 Review Period. Owner will issue a Notice to Proceed for
Construction Work when all Governmental Approvals necessary
for such Construction Work have been obtained, and Owner has
determined that adequate Drawings and Specifications exist to
allow observation of the Construction Work by the Oversight
Engineer and Owner.
10.4 Character of Employees. Contractor shall employ resources for
completing the Work to full completion in the manner and time
required by this Contract. All
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employees shall have the skill and experience and any licenses
required to perform the Work assigned to them. Any Person
employed by Contractor or by any Subcontractor who does not
perform the Work in a proper and skillful manner or conducts
himself or herself in a non-professional manner shall, at the
written request of Owner, be removed by Contractor or such
Subcontractor and shall not be employed on the Project without
the approval of Owner.
10.5 Inspection and Testing. All materials and every part of the
Work shall be subject to inspection and testing by Owner.
Owner and the Oversight Engineer shall be allowed access to
all parts of the Work and shall be furnished with information
and assistance by Contractor as required to make a complete
and detailed inspection and perform any testing that such
entity may deem appropriate. Prior to Substantial Completion,
Contractor shall remove or uncover such portions of the
finished Work as directed. After examination by Owner or the
Oversight Engineer, Contractor shall restore the Work to the
standard required by this Contract. If the Work thus exposed
or examined conforms to the requirements of the Contract,
uncovering, removing, and restoring the Work will be paid for
as part of the Cost of the Work. If the Work exposed or
examined does not conform to the requirements of the Contract,
uncovering, removing, and restoring the Work shall not be part
of the Cost of the Work. Any Work done or materials used
without inspection by an authorized Owner representative may
be ordered uncovered, removed, or restored at Contractor's
expense unless Owner's representative failed to inspect the
Work after having been given, reasonable notice in writing
that the Work was to be performed. All inspections and all
tests conducted by Owner or the Oversight Engineer are for the
convenience and benefit of the Owner or the Oversight
Engineer. These inspections, tests or any payment do not
constitute acceptance of the materials, Work tested or Work
inspected. Owner may reject or accept any Work or materials at
any time prior to Substantial Completion whether or not
previous inspections or tests were conducted by Owner or the
Oversight Engineer.
10.6 Removal of Unacceptable Work. Unacceptable Work is Work that
does not conform to the requirements of this Contract.
Unacceptable Work shall be removed and replaced so as to be
acceptable to Owner at Contractor's expense and shall not be
included in the Cost of the Work. The fact that Owner may not
have discovered the unacceptable Work shall not constitute an
acceptance of such unacceptable Work. Owner may cause
unacceptable Work to be remedied or removed and replaced.
Owner may deduct the cost of doing so from any monies due or
to become due to Contractor.
10.7 Utilities, Railway and Highway Crossings.
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10.7.1 Contractor is responsible for the provision of all
utilities necessary for construction and operation of
the Project when completed. Contractor is also
responsible for the relocation and the temporary
provision of all utilities necessary to supply
utility service to Contractor and other utility
customers while existing utilities are being
relocated by Contractor. Contractor shall honor and
perform all obligations of Owner under all relocation
agreements to the extent Owner advises Contractor of
the same.
10.7.2 Where Contractor's operations are adjacent to utility
property, which if damaged might result in any
expense, loss, or inconvenience, Work shall not
commence until Contractor shall have made
arrangements for the protection of such property.
Contractor shall make arrangements for the temporary
use of railway and roadway crossings. Work performed
by Contractor on railroad or roadway Rights of Way
shall be performed to avoid interference with the
movement of trains or traffic on the railroad tracks
or traffic on the roadways. Contractor shall use care
and caution in order to avoid accidents, damage, or
unnecessary delay or interference with the railway
company's trains or property or with public or
private roadway traffic or property. Any loss of the
nature to be prevented as described in this section
shall be a Cost of the Work, subject to the
following:
10.7.2.1 to the extent any such loss is not
covered by insurance and is
attributable to the negligence or
willful misconduct of Contractor, it
shall be at Contractor's sole cost
and expense; and
10.7.2.2 to the extent any such loss is
covered by insurance and is
attributable to the negligence or
willful misconduct of Contractor,
any deductible shall be at
Contractor's cost and expense.
10.7.3 Owner shall be entitled to and receive all rebates
and recoveries of any nature and type arising from
construction and relocation of utilities. When
securing temporary and permanent utilities for the
Project, Contractor shall arrange for the utilities
based on usage indicated by Owner.
10.8 Subcontracting and Purchasing.
10.8.1 Contractor shall pre-qualify all proposed
Subcontractors and Vendors for submittal to Owner for
Owner's Approval and obtain the Owner's Approval of
all proposed Subcontractor and Vendor selections and
agreements with a value greater than ten thousand
dollars ($10,000). All Work to be
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subcontracted or purchased shall be in accordance
with Owner-approved procedures. Contractor shall keep
Owner advised of all of its bidding activities for
subcontracts or purchase orders.
10.8.2 Each instruction evidencing any agreement of
Contractor with any Subcontractor or Vendor shall
provide that, pursuant to terms in form and substance
satisfactory to Owner, the rights of Contractor under
such instrument are assignable to Owner, its assigns,
and their respective successors and assigns upon
Owner's written request following default by
Contractor and termination or expiration of this
Contract, and all warranties of such Subcontractor or
Vendor shall run to Owner and its assigns.
Notwithstanding any subcontract or agreement with any
Subcontractor or Vendor, Contractor is solely
responsible for the Work, and no portion thereof
shall be unfinished or incomplete and the Project
milestones identified in each Construction Schedule
shall not be delayed due in whole or in part to any
disagreement between or among Subcontractors or
between any Subcontractor or Vendor and Contractor.
No subcontract or purchase order shall bind or
purport to bind Owner. Contractor shall include in
each of its subcontracts and material supply
agreements terms that are substantially similar to
those contained in Sections 11, 12 and 13. Contractor
shall provide to Subcontractors and Vendors, as
appropriate, copies of those provisions of this
Contract which the Subcontractor or Vendor shall be
bound on a flowdown basis, as they relate to such
Person's portion of the Work.
10.8.3 Contractor shall not utilize as a Subcontractor or
Vendor any Person whom Contractor owns or controls or
with which it is affiliated without specific advance
written approval by Owner.
10.8.4 Unless waived by Owner, Contractor shall require each
Subcontractor to provide a payment and performance
bond in a format acceptable to Owner and executed by
a Surety.
10.9 Use of Explosives. Explosives shall not be used in the
prosecution of the Work without prior written approval of
Owner.
10.10 Protection and Restoration of Property and Landscape.
Contractor shall preserve private and public property and
protect it from damage. Land monuments and property marks
shall not be disturbed or moved until their location has been
witnessed or referenced and their removal approved. Contractor
shall restore damaged or injured property, at Contractor's
expense, to a condition similar or equal to that existing
before the damage or injury occurred, by repairing,
rebuilding, or restoring the property.
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10.11 Limitation on Work Hours. Contractor shall comply with state
and local laws and policy with respect to work hours.
11 CHANGES IN THE WORK
11.1 Change Order.
11.1.1 Owner may, at any time and from time to time and
without notice to any Surety, authorize changes in
the Work, including but not limited to changes to the
Warranties or increase the Work or decrease the Work,
through issuance of a "Change Order".
11.1.2 In the event that Owner issues a Change Order, Owner
shall advise Contractor of same and Owner and
Contractor shall then promptly consult concerning the
estimated cost and impact on the relevant Contract
Budget and Construction Schedule of implementing the
Change Order. Any Change Order for engineering or
design Work will be issued separately from a Change
Order for Construction Work.
11.1.2.1 Following such consultation, Owner may
request, and Contractor shall promptly
prepare, a detailed estimate relating to the
contemplated change including, a
modification to the Work, projected
modification of the relevant Contract
Budget, a detailed identification of the
effect on the Cost of the Work.
11.1.2.2 Contractor shall notify Owner of any effect
such change could be expected to have on any
Completion Dates for a Network, on the
relevant Construction Schedule, on any other
relevant Construction Schedule and on
Contractor's ability to comply with any of
its obligations hereunder, including the
Warranties.
11.1.2.3 Contractor shall provide the information
required in Sections 11.1.2.1 and 11.1.2.2
in a form acceptable to Owner which shall be
referred to as a "Change in the Work Form."
If the parties reach agreement on the
matters listed in a Change in the Work Form,
such form shall be amended, if necessary, to
reflect such agreement and Owner shall
endorse the same "Accepted by Owner."
Contractor shall promptly adjust (with
approval of Owner) the relevant Construction
Schedule and any other exhibits and
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Construction Schedule requiring adjustment
to indicate the effect of the change so
agreed. Each Change in the Work Form, once
approved in accordance with this Section
11.1.2, shall become a part of the relevant
Change Order.
11.1.3 Owner and Contractor shall use their best efforts to
agree upon the change to the relevant Contract Budget
as a result of any Change Order. Contractor shall
proceed with a change as ordered by Owner. No change
in a Contract Budget shall result from a change which
does not materially affect the Cost of the Work. In
the event Owner and Contractor are unable to agree on
whether a change will materially affect the Cost of
the Work or the applicable Completion Date for a
Network, Contractor shall separately record such
costs and the time associated therewith. Nothing in
this Section 11.1.3 shall alleviate, diminish, or
modify in any respect Contractor's obligations under
this Contract.
11.1.4 Contractor may request that Owner consider a Change
Order for the Work. A request by Contractor for a
Change Order shall be made by written Notice.
Supporting data in the form of a Change in the Work
Form shall be delivered within ten (10) Business Days
of the request. The Change in Work Form shall be
accompanied by a written statement that the amount
requested includes all known costs amounts including
direct, indirect, and consequential costs, and all
impacts to the relevant Construction Schedule and any
Completion Dates. Contractor shall not make any
changes in the Work (including such changes that have
no net cost effect on the Contract Budget) without
the prior written consent of Owner. Owner may
withhold its consent in its absolute discretion.
11.2 Extensions of Time.
11.2.1 The Completion Date for a Network may only be changed
as a result of the existence or occurrence of a Force
Majeure Event if such event results in a change in
the duration of the critical path as set forth in the
relevant Construction Schedule. All requests pursuant
to Section 11.2.1 for changes to a Completion Date
shall include an analysis showing the actual impact
of the event on the Construction Schedule and
affected Completion Date or Final Acceptance Date. No
adjustments to a Completion Date pursuant to this
Section 11.2.1 shall be allowed if the event did not
directly affect the critical path indicated in the
Construction Schedule. As a condition precedent to
Owner providing an adjustment in accordance with this
Section 11.2.1, Contractor must notify Owner in
writing of any such request within seven (7) Days of
the first discovery of the occurrence of said Force
Majeure Event and must update this notification in
writing every
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five (5) Days. Within ten (10) Days of the
termination of the said Force Majeure Event,
Contractor shall submit a written request for change.
If notification and request for change to the
relevant Completion Date is not received within the
time limits identified above, the critical path shall
be considered unaffected by the occurrence or
existence of the Force Majeure Event, and Contractor
shall forfeit all rights to an adjustment to such
Completion Date.
11.2.2 Rights of Way Release Delay. Adjustments to a
Completion Date shall not be allowed if a delay did
not affect the critical path indicated on the
relevant Construction Schedule. Contractor shall not
be entitled to any extension of a Completion Date to
the extent that the release of Rights of Way is
delayed by reason of the fault, negligence, act or
failure to act of Contractor, any Subcontractor, any
Vendor or any other Person for whom any of them may
be responsible. As a condition precedent to Owner
providing an adjustment other than a day-for-day
extension to a Completion Date in accordance with
this Section 11.2.2, Contractor must notify Owner in
writing of any such request within seven (7) Days of
first discovery of a delay in issuance of a Notice of
proceed with respect to Rights of Way affecting the
critical path and resulting in a seasonal restraint.
Within ten (10) Days of the termination of the
seasonal restraint, Contractor shall submit a written
request for change. If notification and request for
change to a Completion Date is not received within
the time limits identified above, the critical path
shall be considered unaffected by the occurrence of
the seasonal restraint and Contractor shall forfeit
all rights to an adjustment to such Completion Date.
11.2.3 Notwithstanding any other provision contained herein,
no Completion Date shall be adjusted for normal
inclement weather. Contractor shall be entitled to an
extension of time only if Contractor can substantiate
that there was greater than normal inclement weather
considering the full term of this Contract and using
a ten-year average of accumulated record mean values
from climatological data compiled by the U.S.
Department of Commerce National Oceanic and
Atmospheric Administration for the locale of the
relevant Network, and that such alleged greater than
normal inclement weather lengthened the critical path
indicated in the relevant Construction Schedule. The
time for completion shall be extended by the
appropriate number of calendar days as determined
from the aforesaid data and schedule analysis.
11.3 Additional Costs
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11.3.1 Change in Law: Scope. If, as a result of any Change
in Law requiring a material change in the Work, the
Cost of the Work for a Network will exceed the
relevant Contract Budget, the Contract Budget with
respect thereto may be increased in accordance with
this Section 11.3.l. All requests for increases in a
Contract Budget under this Section 11.3.1 shall
include an analysis showing the actual impact of the
Change in Law on the Cost of the Work. No increase in
a Contract Budget shall be allowed if the Change in
Law did not directly increase the Cost of the Work.
As a condition precedent to Owner providing such an
increase, Contractor must notify Owner in writing of
any such request within ten (10) Days of obtaining
knowledge of such Change in Law. Within thirty (30)
Days of the date of such request, Contractor shall
provide Owner with the analysis of the actual impact
of such Change in Law referenced above. If
notification and the analysis are not received within
the time limits identified above, the Contract Budget
will be considered unaffected by the Change in Law
and Contractor shall forfeit all rights to an
increase in the Contract Budget with respect thereto.
Any increase in a Contract Budget in accordance with
this Section 11.3.1 shall be limited to the
additional costs reasonably incurred by Contractor
which are directly attributable to and which would
not have been incurred but for the Change in Law
giving rise to such request.
11.4 Hazardous Substances. In the event the Contractor encounters
on the Site material reasonably believed to be a Hazardous
Substance which has not been rendered harmless, the Contractor
shall immediately stop Work in the area affected and report
the condition to the Owner in writing. Work in the affected
area shall not thereafter be resumed except by written
agreement of the Owner and Contractor if in fact the material
is a Hazardous Substance and has not been rendered harmless.
The Work in the affected area shall be resumed in the absence
of a Hazardous Substance or when it has been rendered harmless
by written agreement of the Owner and Contractor. Owner shall
provide Contractor information in its possession or of which
it is aware concerning Hazardous Materials at the Site.
Contractor shall not be required to perform Work in connection
with Hazardous Substances absent mutual agreement of Owner and
Contractor with respect thereto.
11.5 Acceleration. Notwithstanding any other provisions herein, in
the event any extension of a Completion Date is properly due
under this Contract, regardless of the provision of this
Contract under which such extension arises, Owner shall have
the right, in its sole discretion, to decide whether to permit
the extension, relief or to require Contractor to implement a
recovery schedule which does not include any time extension or
relief. At Owner's request, Contractor shall prepare and
submit to Owner with its request for time extension or relief
at least two (2)
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alternative Change in the Work Forms setting forth the
proposed cost of additional Work to implement the recovery
schedule, both with and without a time extension or relief. If
Owner elects to implement the recovery schedule in lieu of an
extension of the affected Completion Date or relief, Owner
shall issue a Change Order adjusting the relevant Contract
Budget to account for additional costs resulting from all
steps necessary to accelerate the Work and implement the
recovery schedule.
11.6 Failure of Owner and Contractor to agree to any adjustment
under this Section 11 shall be a dispute under Section 18.
However, nothing in this Section 11 shall excuse Contractor
from expeditiously proceeding with the Work required under
this Contract as changed pursuant to a Change Order.
12 TERMINATION FOR CONVENIENCE
12.1 Owner may, in its sole discretion, terminate this Contract and
the performance of the Work in whole or, from time to time, in
part, if Owner determines that a termination is in Owner's
best interest. Owner shall notify Contractor of its decision
to terminate by delivering to Contractor a written Notice of
such termination (a "Notice Of Termination") specifying the
extent of termination and the effective date.
12.2 Contractor may, in its sole discretion, terminate this
Contract if Contractor determines that a termination is in
Contractor's best interest. Contractor shall notify Owner of
its decision to terminate by delivering to Owner a written
Notice of such termination (a "Notice Of Termination") at
least sixty (60) Days prior to the effective date.
12.3 In the event either party has given a Notice of Termination,
and except as directed by Owner, Contractor shall immediately
proceed with the following obligations, regardless of any
delay in determining or adjusting any amounts due under this
clause:
12.3.1 stop Work as specified in the Notice.
12.3.2 issue no further subcontracts or purchase orders for
materials, services, or facilities, except as
necessary to complete the continued portion of the
Contract.
12.3.3 terminate all subcontracts and purchase orders to the
extent that they relate to the Work terminated.
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12.3.4 with approval of and at the direction of Owner,
settle all outstanding liabilities and termination
settlement proposals arising from the termination of
subcontracts and purchase orders or assign to Owner,
all of Contractors rights, titles, and interests in
the subcontracts terminated, in which case Owner
shall have the right to settle or to pay any
termination settlement proposal arising out of those
terminations.
12.3.5 as directed by Owner, Contractor shall transfer title
and deliver to Owner the fabricated parts,
unfabricated parts, Work in process, completed Work,
supplies, other material produced or acquired for the
Work terminated, completed or partially completed
plans, drawings, information, and other property
that, if this Contract had been completed, would be
required to be furnished to Owner.
12.3.6 complete performance in accordance with this Contract
of all of the Work not terminated.
12.3.7 take any action that may be necessary, or that Owner
may direct, for the protection and preservation of
the property related to this Contract that is in the
possession of Contractor and in which Owner has or
may acquire an interest.
12.3.8 use its best efforts to sell, only as authorized by
Owner, any property of the types referred to in
subparagraph 12.3.5 above provided. However,
Contractor is not required to extend credit to any
purchaser and may acquire the property under the
conditions prescribed and at prices approved by
Owner. The proceeds of any transfer or disposition
will be applied to reduce any payments to be made by
Owner under this Contract or paid in any other manner
directed by Owner.
12.4 Contractor shall submit to Owner a list of termination
inventory not previously disposed of and excluding items
authorized for disposition by Owner. Within forty-five (45)
Days of receipt of this list, Owner will accept title to those
items.
12.5 After termination, Contractor shall submit a final termination
settlement proposal to Owner, which includes wind down cost,
pro-rata portions of the G&A Fee and Base Fee and an adjusted
Award Fee in the form and with the certification prescribed by
Owner. Contractor shall submit the proposal promptly, but no
later than ninety (90) Days from the effective date at
termination, unless extended in writing by Owner upon written
request of Contractor within such ninety (90) Day period.
However, if Owner determines that the facts justify it, a
termination settlement proposal may be received and acted on
after ninety (90) Days or any reasonable extension thereof. If
Contractor fails to submit the proposal within the time
allowed, Owner may determine, on the basis of information
available, the
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amount, if any, due Contractor because of the termination and
shall pay the amount determined.
12.6 With respect to terminated Work, Contractor shall be paid the
Cost of the Work, the G&A Fee and Base Fee applicable thereto
incurred prior to the effective date of the termination, and
such amount of the Award Fee as Owner deems proper in its sole
and absolute discretion. However, the total amount paid to
Contractor for the Cost of the Work may not exceed the
Contract Budget with respect thereto as reduced by the amount
of payments previously made. The Contract shall be amended,
and Contractor paid the agreed amount.
12.7 In no event shall Contractor be entitled to any lost profits
or other consequential or indirect damages as a result of a
partial or complete termination, or any breach of this
Contract by Owner.
13 SUSPENSION OF ALL OR PART OF WORK
13.1 Owner may at any time and for any reason, order, in writing,
Contractor to suspend, all or any part of the Work required
under this Contract for the period of time that Owner
determines appropriate for the convenience of Owner.
13.2 If the performance of all or any part of the Work is suspended
pursuant to Section 13.1 by an act of Owner in the
administration of this Contract and affects the critical path
of Work, by Owner's failure to act within the time specified
in this Contract (or within a reasonable time if not
specified), an adjustment in the relevant Contract Budget or
Completion Date shall be made pursuant to a Change Order for
any increase in the cost or time for the performance of this
Contract necessarily caused by the suspension by Owner.
13.3 No change of a Contract Budget or Completion Date shall be
made under this Section 13 based on any suspension caused by
Owner if Contractor's performance would have been so suspended
by any other cause, including the fault or negligence of
Contractor, a Subcontractor, a Vendor or anyone for whom any
of them may be responsible, or for which a price adjustment or
extension of any Completion Date is provided for or excluded
under any other term or condition of this Contract.
13.4 During periods that Work is suspended, Contractor shall be
responsible for the Work under this Contract and shall prevent
damage to the Project, provide for drainage, and shall erect
necessary temporary structures, signs, or other facilities
required to maintain the Project. During any suspension
period, Contractor shall maintain in a growing condition all
newly established plantings, seedlings, and
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soddings furnished under the Contract, and shall protect new
tree growth and other vegetative growth against injury.
14 [NOT USED]
14.1 Not Used.
15 INSURANCE
15.1 Owner Controlled Insurance Program. Owner, through its Owner
Controlled Insurance Program ("OCIP"), will provide at its
expense (which shall not be part of the Cost of the Work)
certain insurance coverages for Contractor and certain
Subcontractors, after completion of the enrollment process for
Contractor and eligible Subcontractors. In addition to any
insurance provided by Owner, Contractor shall be responsible
for providing certain insurance as specified below.
15.2 Coverage to be Provided by Owner. The coverages to be provided
through the OCIP (the "Coverages") include builders' risk
property insurance, commercial general liability insurance
(excluding automobile liability), railroad protective
liability as required by the railroads and statutory workers'
compensation insurance and employer's liability insurance, as
more specifically described below. The Coverages provided will
apply to the operations of Contractor and each eligible and
enrolled (as hereinafter described) Subcontractor and other
insureds at the Site. Off-Site operations of Contractor and
eligible Subcontractors in performance of Work will be covered
only if all operations at such site are identified and solely
dedicated to the Work. Contractor shall be responsible for
advising Owner of its intention to establish a dedicated
off-site location, and to request OCIP coverage approval for
such sites or operations. The coverage provided by Owner will
be subject to terms, conditions and other provisions,
including exclusions and limitations, contained in the
insurance policies issued to Owner.
15.2.1 Liability Coverage. The OCIP will provide the
following liability coverage to Contractor and all
eligible and enrolled Subcontractors during the
period starting on the date of issuance of the Notice
to Proceed for Contractor (or such other date as
mutually agreed) and for each eligible and enrolled
Subcontractor starting on the date of commencement of
Work by such Subcontractor, and ending on the Final
Acceptance Date (or other period specified below):
15.2.1.1 Commercial general liability
(including umbrella or excess
liability coverage as necessary to
achieve required limits) for bodily
injury, property damage, personal
injury and advertising injury,
including contractual liability,
completed
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operations and products liability:
Limits will be $100,000,000 per
occurrence; with general aggregate
limits of $100,000,000 and
products/completed operations
aggregate limits of $100,000,000.
Limits are annual limits of
liability shared by all insureds.
Primary coverage will use Insurance
Services' Office commercial general
liability "occurrence" form CG 0001
(or its equivalent) specifically
including coverage for liability
arising out of an agreement or
contract in connection with
construction or demolition
operations on or near any railroad,
with no exclusion for explosion,
collapse or underground hazards. No
coverage will be provided for
products liability for any product
manufactured, assembled, or
otherwise worked upon away from the
Site, unless such manufacturing or
assembly is expressly required by
the terms of the Contract.
Products/completed operations
coverage will remain in effect for
ten (10) years from the date of
Final Acceptance. The limit of
liability for the extended
products/completed operations
coverage applies as a one (1) time
separate aggregate limit for the
entire period of the ten-year
extension. The addition of insureds
shall not operate to increase such
limit. Coverage also includes sudden
and accidental pollution occurrences
subject to compliance with certain
notification requirements.
15.2.1.2 Railroad protective liability: as
required by the railroad agreements.
Owner shall demand reinstatement of any limits of liability,
which have been exhausted due to claim of Owner's other
contractors. Owner shall use best efforts to notify Contractor
in the event annual aggregate reserves are less than
$50,000,000.
15.2.2 Workers' Compensation Coverage. During the period
commencing on the date of issuance of the Notice to
Proceed (or such other date as mutually agreed) and
ending on the Final Acceptance Date, Contractor and
all eligible and enrolled Subcontractors will, at
Owner's expense, be covered under the applicable laws
relating to workers' compensation and employer's
liability insurance, for all of their employees
performing construction Work at the Site and at
dedicated off-Site locations approved by Owner and
its insurer except as specified below. Contractor and
each eligible and enrolled Subcontractor will be
issued a separate workers' compensation employer's
liability policy which will continue until the
earlier to occur of
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the Final Acceptance Date or until all Site
activities have been completed. No coverage will be
provided for any warranty or other Work performed
following Final Acceptance. In no event shall the
provision of the Coverages or the OCIP render Owner
an employer with respect to Contractor or
Subcontractor.
15.2.2.1 Owner will not provide workers' compensation
coverage in any of the monopolistic state
fund states, or Canada. Contractor must
provide its own workers' compensation
coverage in these states or Canada.
15.2.3 Property Insurance. The OCIP will include builder's
risk property insurance, which shall protect against
property loss as specified below during the period
starting on the date of issuance of the Notice to
Proceed and ending on the Final Acceptance Date.
15.2.3.1 Minimum Scope. The property insurance will
cover all real and tangible personal
property to be incorporated into the Work
for "all risks" of loss, subject to standard
policy terms, conditions and exclusions,
covering all buildings, structures,
fixtures, materials and supplies at the Site
including inland transit and off-Site
storage.
15.2.3.2 Exclusions. The OCIP property insurance will
not cover any personal property of
Contractor or Subcontractor, including
tools, equipment, scaffolding, staging
towers, and forms, rented or owned by
Contractor or any Subcontractor, the capital
value of which is not included in the Cost
of the Work or any shanties or other
structures erected for the sole convenience
of the workers. Owner will not be
responsible for any loss or damage to said
excluded items, and the indemnifications by
Contractor set forth in the Contract shall
include any claims or causes of actions
brought by any Person as a result of loss or
damage to such excluded items.
15.2.4 Contractor and Owner Responsibility for Deductibles and
Self-Insured Retentions. Owner will be responsible for
deductibles or self-insured retentions with respect to the
Coverages. However, Owner's responsibility will apply only
after Contractor has paid any amounts for loss or damage
specified below, irrespective of the actual insurance policy
deductible. Contractor's obligation to pay these amounts
(which shall not be part of the Cost of the Work) shall remain
uninsured and will not be covered by the OCIP Coverages.
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15.2.4.1 Commercial General Liability Policy. With
respect to any claims under the policy
described in Section 15.2.1.1, Contractor
shall pay the first $5,000 per occurrence to
the extent losses payable are attributable
to acts or omissions of Contractor, its
employees, agents, officers or
Subcontractors or any other Persons
performing any of the Work for whom
Contractor may be contractually or legally
responsible.
15.2.4.2 Builders' Risk. With respect to any claims
under the policy described in Section
15.2.3, Contractor shall pay the first
$25,000 per occurrence for all perils to the
extent losses payable are attributable to
acts or omissions of Contractor, its
employees, agents, officers or
Subcontractors or any other Persons
performing any of the Work for whom
Contractor may be contractually or legally
responsible.
15.2.5 Eligibility of Subcontractors for Coverage.
Subcontractors shall be eligible for coverage under
the OCIP only if they perform Work at the Site and/or
a pre-approved dedicated off-Site location. With
respect to the worker's compensation and employer's
liability policies, coverage will be provided only
for certain workers, as specified in Section 15.2.2.
No insurance coverage provided by Owner under the
OCIP shall extend to the activities or products of
the following:
15.2.5.1 any person and/or organization that
fabricates and/or manufactures products,
materials and/or supplies away from the
Site;
15.2.5.2 any architect, engineer, soil tester, or
surveyor and their consultants except where
required by Contract;
15.2.5.3 truckers, material dealers, vendors,
suppliers, and owner/operators (independent
contractors), whose operations(s) and/or
employee(s) is/are engaged solely in the
loading, hauling and/or unloading of
material, supplies and/or equipment to or
from the Site;
15.2.5.4 unless such employee(s) is/are dedicated
full time to the Work, as evidenced by
payroll records, any employee(s) of an
enrolled Contractor or Subcontractor of any
tier, which is/are engaged solely in the
loading, hauling and/or
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unloading of material, supplies and/or
equipment to or from the Site;
15.2.5.5 any employee(s) of an enrolled Contractor
and Subcontractor of any tier, that does not
work and/or generate payroll at the Site;
15.2.5.6 any employee(s) of an enrolled Contractor
and Subcontractor of any tier, that
occasionally visits the Site to make
deliveries, pick up supplies and or
personnel, to perform supervisory and/or
progress inspection, or for any other
reason,
15.2.5.7 any day labor employees (labor service
employees whose coverage is provided by
their employer); or
15.2.5.8 any other entity specifically determined by
Owner to be excluded.
15.2.6 Cooperation. Contractor and all Subcontractors shall
cooperate fully in the implementation and
administration of the OCIP and provide any
information or records requested by Owner or its
insurance representative regarding all aspects of the
OCIP, including claims, audit, payroll records and
safety procedures. Delays in reporting information to
Owner or its insurance representative will result in
delays in payment to Contractor. Contractor and all
Subcontractors shall comply with the terms and
conditions of the Coverages.
15.2.7 Verification of Coverage. Contractor shall
acknowledge that it has received copies of binders or
other appropriate evidence of coverage with respect
to the OCIP. Owner will deliver copies of each
original workers' compensation policy to Contractor
promptly upon Owner's receipt thereof.
15.3 Insurance Coverage to be Provided by Contractor and
Subcontractors. Contractor shall provide insurance as
described herein and ensure that all Subcontractors provide
insurance as described herein, and shall ensure that all such
insurance is maintained in full force and effect as specified
herein from the date of issuance of the Notice to Proceed to
the date of expiration of the warranty period hereunder. All
insurance is to be placed with insurers admitted as such at
the locations of the Work with an A.M. Best and Company rating
level of A- or better, Class VII or better, or as otherwise
approved by Owner in its sole discretion.
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<PAGE> 51
15.3.1 Required Coverage. Contractor and Subcontractors
shall provide and maintain liability insurance as
specified below. Contractor's commercial general
liability insurance for off-Site exposures,
automobile liability and aircraft liability (if
applicable) policies shall protect Contractor, and to
the extent of Contractor's indemnity obligations
contained in the Contract protect Owner, and any
other persons required in writing to be added as
additional insureds to Contractor's coverage.
15.3.2 Minimum Scope. Liability insurance shall include the
following (or broader) coverage.
15.3.2.1 Insurance Services Office commercial general
liability coverage "occurrence" form CG 0001
(Ed. 11/88), or its equivalent, with no
exclusion for explosion, collapse or
underground hazards, only as respects
Contractor operations and exposures
off-Site;
15.3.2.2 Insurance Service Office form number CA 0001
(Ed. 1/87) or equivalent covering Automobile
Liability, including hired and non-owned
automobile liability;
15.3.2.3 workers' compensation insurance complying
with the applicable worker's compensation
laws, including employer's liability,
specifically limiting coverage to exclude
payroll covered under the OCIP. Contractor
and Subcontractors must supply workers'
compensation coverage in all monopolistic
state fund states and Canada;
15.3.2.4 aircraft liability insurance in all cases
where any aircraft is used on the Project
that is owned, leased or chartered by
Contractor or any of its employees, agents,
officers, or Subcontractors or other Persons
for whom Contractor may be legally or
contractually responsible, protecting
against claims for damages resulting from
such use. The policy shall include coverage
for hull damage covering the aircraft hull,
engines and all aircraft equipment for "all
risks" of damage for the full replacement of
the aircraft, and liability insurance for
bodily injury (including death), passenger
liability and property damage liability. Any
aircraft intended for use in performance of
the Work, the aircraft crew, flight path and
altitude, including landing of any aircraft
on the Site or on any property owned by
Owner shall be subject to review and
acceptance by Owner prior to any such usage
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occurs. If any aircraft are leased or
chartered with crew and/or pilot, evidence
of non-owned aircraft liability insurance
will be acceptable but must be provided
prior to use of the aircraft;
15.3.2.5 professional liability insurance policy
(including errors and omissions). Such
coverage shall be continued for a period of
not less than three (3) years after
acceptance of the completed Project by Owner
and evidence to this effect will be provided
to Owner in the form of annual certificates
of insurance. Contractor shall cause its
insurer for this coverage to notify Owner of
any reduction in coverage or material change
within thirty (30) Days of such change.
Where professional services are performed by
a Subcontractor, evidence of coverage from
Subcontractor shall satisfy this
requirement.
15.3.3 Limits. The limits for such policies are:
15.3.3.1 commercial general liability (for bodily
injury, property damage, personal injury and
advertising injury): $5,000,000 per
occurrence and in the aggregate for
Contractor and $1,000,000 per occurrence and
in the aggregate for Subcontractors.
Contractor shall provide this policy on a
project specific basis, and the cost thereof
shall not be a Cost of the Work.
15.3.3.2 automobile liability (for bodily injury and
property damage): $5,000,000 per accident
for Contractor and $1,000,000 per accident
for Subcontractors.
15.3.3.3 workers' compensation and employer's
liability (for bodily injury or disease):
Statutory limits for workers' compensation
and $1,000,000 per accident for employer's
liability.
15.3.3.4 aircraft liability: $50,000,000 per
occurrence.
15.3.3.5 professional liability: $10,000,000 per
claim.
15.4 Additional Coverage to be Provided by Contractor and
Subcontractor. During (i) the period prior to
Contractors/Subcontractors enrollment into the OCIP and (ii)
the period following the Final Acceptance Date and prior to
expiration of the warranty period hereunder, Contractor and
Subcontractors shall maintain in full
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force and effect all insurance as specified in Section 15.3,
covering all Work performed during such periods.
15.5 Other Insurance Requirements.
15.5.1 Endorsements and Waivers. Liability insurance
policies required to be provided by Contractor
hereunder shall contain or be endorsed to contain the
following provisions:
15.5.1.1 Owner, its members, directors, officers,
employees and agents and such other parties
as may be designated in writing shall, to
the extent of Contractor's indemnity
obligations contained in the Contract, be
covered as additional insureds under
Contractor's and Subcontractor's commercial
general liability policies, up to the limits
required in Section 15.3.3.l.
15.5.1.2 Contractor's and Subcontractor's commercial
general and automobile liability insurance
shall apply separately to each insured
against whom a claim is made or suit is
brought, except with respect to the limits
of the insurer's liability.
15.5.1.3 Each policy (including the workers
compensation and employer's liability
policies) shall include a waiver of any
right of subrogation against Owner, (and its
members, directors, officers, employees and
agents).
15.5.1.4 Each policy (including the worker's
compensation and employer's liability
policies) shall be endorsed to state that
coverage shall not be suspended, voided,
canceled or reduced in coverage or in limits
except after sixty (60) Days' prior written
notice by certified mail, return receipt
requested, has been given to Owner. Such
endorsement shall not include any limitation
of liability of the insurer for failure to
provide such notice.
15.5.2 Verification of Coverage.
15.5.2.1 Contractor agrees to deposit with Owner, on
or before the date of issuance of the Notice
to Proceed, certificates of insurance and
required endorsements for all policies
required to be provided under Section 15.3.
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<PAGE> 54
15.5.2.2 Not less than fifteen (15) Days prior to the
expiration date of any policy of insurance
required by Section 15.3, Contractor shall
deliver to Owner a binder or certificate of
insurance with respect to each renewal
policy. Required endorsements and
certificates of insurance applicable to each
renewal policy shall be delivered to Owner
within thirty (30) Days of the renewal date.
15.6 Owner's Right to Remedy Breach by Contractor. If Contractor
fails to provide insurance as required herein, Owner shall
have the right but not the obligation, to purchase such
insurance. In such event Owner shall be entitled to withhold
any premiums paid from such amount which may currently be due
Contractor or which shall become due Contractor in the future.
15.7 Disclaimer. Contractor acknowledges that Owner is not an
agent, partner or guarantor of the OCIP insurers, and is not
responsible for any claims or disputes between Contractor or
its Subcontractors and the OCIP insurers. Contractor shall
obtain a similar acknowledgment from all Subcontractors
covered by the OCIP. Any type of insurance coverage or
increase in limits not provided by the OCIP which Contractor
or its Subcontractors require for their own protection or on
account of statute, will be the responsibility of Contractor
and each Subcontractor at its own expense. The Coverages are
set forth in full in the respective insurance policy forms and
the description of such policies contained herein or in
Owner's project insurance manual are not intended to be
complete or to alter or amend any provision of the actual
insurance policies and in matters, if any, in which the
description herein conflicts with such policies, the
provisions of the actual insurance policies shall govern.
15.8 Owner's Right to Modify Insurance Program. Owner reserves the
option to exclude Contractor or any Subcontractor from the
OCIP or to terminate the OCIP, in whole or in part, at any
time upon ninety (90) Days' written notice to Contractor, and
also reserves the option, at any time, to require additional
insurance to be provided by Contractor/Subcontractor or to
revise the requirements for Contractor/Subcontractor-provided
insurance. Any such action shall be deemed an Owner directed
change entitling Contractor/Subcontractor to an increase for
the costs incurred by Contractor/Subcontractor due to such
change (with an appropriate change to the Contract Budget)
(i.e., the cost of procuring substitute coverage for the OCIP
coverage no longer being provided and the cost of any
additional insurance required to be provided by
Contractor/Subcontractor. Contractor/Subcontractor shall
provide to Owner all such information or records as may be
required or helpful in determining Contractor's/
Subcontractor's costs.
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<PAGE> 55
15.9 Subcontractor Insurance Requirements. Each subcontract with a
Subcontractor eligible for OCIP coverage shall provide that
the Subcontractor agrees to participate in the OCIP.
Contractor shall ensure that all Subcontractors are required
to comply with all applicable insurance requirements contained
in the Contract and with all requirements imposed by the
insurance policies. Contractor shall have sole responsibility
for monitoring Subcontractor's compliance with such
requirements. Contractor shall require each Subcontractor to
include Owner and such other persons who are identified in
writing to be added as additional insureds to Subcontractor's
coverage. Owner and its designated agent shall have the right
to contact Subcontractors directly in order to verify the
above coverages.
15.10 Other Conditions.
15.10.1 Dividends or Return Premiums. The cost of premiums
for the Coverages will be paid by Owner. Owner will
receive and pay, as the case may be, all adjustments
in such costs by way of dividend, return premium,
retrospective adjustment or otherwise. Contractor
hereby relinquishes any claims to such dividends,
retentions, retrospective premium adjustments or
other form of return premium, and agrees to execute
and deliver to Owner any and all instruments of
assignment as may be requested by Owner to confirm
its right to receive the same. Contractor shall
obtain a similar relinquishment and agreement to
provide further assurances from all Subcontractors
eligible for OCIP coverage. Rights of cancellation of
all policies provided to Contractor and Subcontractor
by Owner are assigned to Owner.
15.10.2 Property Loss Insurance Proceeds. Contractor agrees,
and shall obtain a similar agreement from all
Subcontractors, that any insurance recoveries for
property loss covered under the property insurance
shall be for the account of Owner and payable to
Owner.
15.10.3 Due Care Required. Nothing contained in this Section
shall relieve Contractor or any Subcontractor of its
obligation to exercise due care in the performance of
the Work and to complete the Work in strict
compliance with this Contract.
15.10.4 Disclaimer. Nothing contained in this Section shall
in any way act as a limitation of the liability of
Contractor, Subcontractor or anyone for whom any of
them may be liable legally or contractually, for
damage or injury, including death, which arises out
of the obligations of Contractor, Subcontractor or
any one for whom any
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of them may be liable legally or contractually, under
this Contract or the applicable subcontract. Further,
in no event shall the OCIP or Owner's decision to
include or exclude any Work, Contractor or
Subcontractors from or in the OCIP create any
liability on Owner's part.
15.11 Contractor Obligations.
15.11.1 Contractor shall enroll in the OCIP by obtaining the
necessary information and forms from Owner or its
designee. In addition, Contractor shall notify its
Subcontractors of the procedure for enrolling in the
OCIP. Contractor and its Subcontractors, of any tier,
shall not commence work until all insurance
requirements are met. These requirements in part
include: Contractor furnishing (and causing each of
its Subcontractor's at any tier to furnish) to Owner
or its designee, in a form satisfactory to Owner, an
estimate of labor costs (listed by Standard Workers'
Compensation Insurance classification) to be incurred
in connection with Work at the Site, other insurance
related information that Owner or the insurer may
need to effect and maintain Owner provided coverage.
15.11.2 Contractor shall not violate any conditions of the
Coverages. All requirements imposed by the Coverages
upon, and to be performed by, Contractor shall
likewise be imposed on, assumed and performed by each
of the Subcontractors. The Contractor agrees and will
require each Subcontractor to agree to keep and
maintain an accurate and classified record of its
payroll data and information in accordance with the
requirements of the insurance company or companies
issuing the Coverages or as otherwise required. The
Contractor and their Subcontractors agree to permit
their books and records to be examined and audited
periodically by the insurance company or companies
issuing the Coverages, Owner or their respective
representatives.
15.11.3 Contractor shall furnish each bidding and negotiating
Subcontractor eligible for coverage under the OCIP, a
copy of this Section 15 of the Contract and shall
make the same requirement of their eligible
Subcontractors.
15.11.4 Contractor will be required to participate in the
claim reporting procedures of the OCIP. Contractor
agrees to assist and cooperate in every reasonable
manner possible in connection with the adjustment of
all claims arising out of operations within the scope
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of the Work provided for by the applicable Contract,
and to cooperate with the insurer in all claims and
demands which Owner's insurers are called upon to
adjust or to defend against. Contractor shall take
all necessary action to assure that its
Subcontractors, of all tiers, comply with any such
request for assistance and cooperation.
15.11.5 Monthly Payroll Reports. All Contractors and their
Subcontractors of all tiers shall submit monthly
payrolls and worker-hour reports to Owner and/or its
designee on the OCIP-3: OCIP Monthly On-site Payroll
Report. The OCIP-3 reporting form will be provided to
all Contractors and Subcontractors at time of
enrollment into the OCIP. Failure to submit these
reports may result in funds being held or delayed
from monthly progress payments. An OCIP-3 must be
submitted for each month, including zero (0) payrolls
if applicable, until completion of the work under
each contract. For those Contractors/Subcontractors
performing Work under multiple Contracts, a separate
Payroll Report is required for each Contract under
which Work is being performed.
15.12 Audit and Adjustment of Insurance Credits.
15.12.1 Owner, at its option and as applicable, may adjust
the amount and monies due the Contractor as
summarized below:
15.12.2 Initial Insurance Credit Eliminated from Bid.
15.12.2.1 Contractor and Subcontractors of any tier
shall submit their bids excluding all cost
for the Coverages described in Section 15.2.
Contractor shall also identify those costs
for insurance, which would be added back to
its bid price should Owner elect to not
include Contractor and/or Subcontractor in
the OCIP. Contractor shall summarize its
alternate cost for the Coverages to be
provided by the OCIP, including
Subcontractors of all tiers on the attached
OCIP-1 and OCIP-2 forms.
15.12.2.2 If Owner elects to not include Contractor
or any Subcontractor in the OCIP,
Contractor's and/or Subcontractor's contract
amount will be amended to include the
insurance costs as indicated on the OCP-1
form.
15.12.3 Cost per Payroll Dollar Rate.
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15.12.3.1 Upon acceptance of the Contractor in the
OCIP, Owner and/or its designee will
determine a cost per payroll dollar rate for
the average cost of project site insurance
based upon the information submitted on the
OCIP-1 form. The cost per payroll dollar
rate will be established by the following
formula for the Work of each Contractor and
each Subcontractor, of any tier, performed
under this Contract.
[Total Contractor Insurance Premiums
multiplied by plus Award Fee percentage,
Base Fee percentage & G&A Fee percentage)]
divided by total payroll for the Contract
cost = per payroll dollar rate.
16 INDEMNIFICATION
16.1 To the fullest extent permitted by law, Contractor shall
defend, indemnify and hold harmless Owner and the Oversight
Engineer and any owner of Rights of Way required to be
indemnified by Owner, their successors and assigns and their
shareholders, officers, directors, agents and employees and
any affected third party or political subdivision, from and
against any and all claims, damages, losses, liabilities,
costs and expenses, including attorneys' fees, resulting from
claims of third parties to the extent such claims, damages,
losses, liabilities, costs and expenses, including attorneys'
fees arise out of, relate to or result from Contractor's
breach or failure to perform in accordance with the Contract,
or the negligence or willful misconduct of Contractor or
anyone for whom it is responsible or liable. Such obligation
shall not be construed to negate, abridge, or reduce other
rights or obligations of indemnity, which would otherwise
exist under this Contract.
16.2 To the fullest extent permitted by law, Contractor shall
defend, indemnify and hold harmless Owner, the Oversight
Engineer and any owner of Rights of Way required to be
indemnified by Owner, their successors and assigns and their
shareholders, officers, directors, agents and employees, from
and against any and all claims by any governmental or taxing
Owner claiming taxes based on income of Contractor or any of
its Subcontractors or Vendors or any of their respective
agents or employees with respect to any payment for the work
made to or earned by Contractor or any of its Subcontractors
or Vendors or any of their respective agents or employees
under this Contract.
16.3 To the fullest extent permitted by law, Contractor shall
defend and hold harmless Owner, the Oversight Engineer and any
owner of Rights of Way required to be indemnified by Owner,
their successors and assigns and their shareholders, officers,
directors, agents and employees and any affected third party
or political
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subdivision, from and against any and all claims, damages,
losses, liabilities, costs and expenses, including attorneys'
fees, arising out of or relating to the failure of Contractor,
its employees, agents, officers, Vendors or Subcontractors or
any other Persons performing any of the Work to comply with
any applicable Governmental Rule.
16.4 Contractor shall properly guard the Work and areas affected by
the Work to prevent any person or persons from being injured
by it or by the condition of the site, and shall in all
respects comply with any and all provisions of the law and of
local ordinances relating to the maintenance of danger
signals, barriers, lights, and similar safeguards respecting
falling materials and in and about all excavations,
protruding nails, hoists, openings, scaffolding, stairways,
other parts of the Work and adjacent areas where the same are
required.
16.5 To the fullest extent permitted by law, Contractor shall
defend, indemnify and hold harmless Owner, the Oversight
Engineer and any owner of Rights of Way required to be
indemnified by Owner, their successors and assigns and their
shareholders, officers, directors, agents and employees and
any affected third party or political subdivision from and
against any and all claims for infringement resulting from the
use of any patented design, device, material or process, or
any trademark or copyright, and shall indemnify Owner for any
claims, damages, losses, liabilities, costs and expenses,
including attorneys' fees, which it may become obligated to
pay by reason of any infringement, during the prosecution or
after the completion of the Project, except to the extent such
claim arises out of Owner-Supplied Items. If Owner is enjoined
from completion of the Project or any part thereof, or from
the use, operation or enjoyment of the Project or any part
thereof as a result of such claim or legal action or any
litigation based thereon, Contractor shall promptly arrange to
have such injunction removed at no cost to Owner. Owner's
acceptance of Contractor's engineering design and/or proposed
or supplied materials and equipment shall not be construed to
relieve Contractor of any obligation hereunder.
16.6 To the fullest extent permitted by law, Contractor shall
defend, indemnify and hold harmless Owner, the Oversight
Engineer and any owner of Rights of Way required to be
indemnified by Owner, their successors and assigns and their
shareholders, officers, directors, agents and employees from
and against any and all Claims for non-payment filed in
connection with the Work, including all expenses and
attorneys' fees incurred in discharging any Claims for
non-payment.
16.7 The foregoing obligations shall not be construed to negate,
abridge, or reduce other rights or obligations, which would
otherwise exist in favor of a party indemnified hereunder.
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16.8 In claims against any person or entity indemnified under this
Section 16 by an employee of Contractor, a Subcontractor, a
Vendor, anyone directly or indirectly employed by them or
anyone for whose acts they may be liable, the indemnification
obligation under this section shall not be limited by a
limitation on amount or type of damages, compensation or
benefits payable by or for Contractor or a Subcontractor under
workers' or workmen's compensation acts, disability benefit
acts or other employee benefit acts.
16.9 In no event shall either party be liable to the other for any
indirect, consequential, special, punitive or exemplary
damages or lost profits, except to the extent such claims are
included in third party claims for which indemnification is
due hereunder. Without limiting Contractor's obligations with
respect to the Work, Owner waives and releases Contractor for
any damages for delay arising out of Contractor's failure to
achieve a Completion Date.
16.10 Indemnities against, releases from, assumptions of and
limitations on liability expressed in this Contract, as well
as waivers of subrogation rights, shall apply even in the
event of the fault, negligence (whether active, passive, joint
or concurrent) or strict liability of the party indemnified or
released or whose liability is limited or assumed or against
whom rights of subrogation are waived and shall be effective
to, and only to, the maximum extent allowable by law and in
the event such provision is determined to exceed the maximum
scope allowed by law, said provision shall be interpreted and
enforced so as to preserve the indemnity, release or
limitation to the maximum extent allowable. Such indemnities
against, releases from, assumptions of and limitations on
liability expressed in this Contract, as well as waivers of
subrogation rights, shall extend to the officers, directors,
employees, licensors, agents, partners and related entities of
such party and its partners and related entities.
17 DEFAULT
17.1 Default of Contract by Contractor. Contractor shall be
immediately in default hereunder (an "Event of Default") upon
the occurrence of any one or more of the other events or
conditions set forth below and continuation thereof for ten
(10) Days following delivery to Contractor of a Notice from
Owner to cure such event or condition; provided that if such
event or condition is susceptible of being cured but cannot
reasonably be cured within such ten (10) Day period and
Contractor commences to cure such event or condition within
such ten (10) Day period and continues to diligently prosecute
such cure then Contractor shall be entitled to a reasonable
period of time not exceeding ninety (90) Days to complete such
cure:
17.1.1 Contractor fails to promptly begin the Work under
the Contract; or
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17.1.2 Contractor fails to perform the Work with
sufficient workers and equipment or with
sufficient materials so as to give reasonable
assurance that Final Acceptance of all Work will
be achieved by the respective Completion Date; or
17.1.3 Contractor performs the Work not in accordance
with the requirements of this Contract or refuses
to remove and replace rejected materials or
unacceptable Work; or
17.1.4 Contractor refuses to remove any worker not
acceptable to owner; or
17.1.5 Contractor discontinues the prosecution of the
Work; or
17.1.6 Contractor fails to resume Work which has been
discontinued within a reasonable time after
Notice to do so; or
17.1.7 Contractor shall have become insolvent, or
generally does not pay its debts as they become
due, or admits in writing its inability to pay
its debts, or makes an assignment or the benefit
of credits; or
17.1.8 Contractor allows any final judgment against it
arising out of the prosecution of the Work to go
unsatisfied for more than thirty (30) Days; or
17.1.9 insolvency, receivership, reorganization, or
bankruptcy proceedings shall have been commenced
by or against Contractor; or
17.1.10 Contractor breaches any material agreement,
representation or warranty contained in this
Contract; or
17.1.11 Contractor shall have assigned or transferred
this Contract or any right or interest herein,
except as expressly permitted under Section 22.2;
or
17.1.12 any representation or warranty made by Contractor
in this Contract or any certificate, schedule,
instrument or other document delivered by
Contractor pursuant to this contract shall have
been false or materially misleading when made; or
17.1.13 Contractor shall have failed to make payment when
due for labor, equipment or materials in
accordance with its agreements with
Subcontractors or Vendors or shall have failed to
comply with any Governmental Rule or failed to
reasonably comply with the instructions of Owner
consistent with this Contract; or
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17.1.14 Contractor fails to achieve Final Acceptance of a
Network or Segment and all Work related thereto
by the relevant Completion Date.
17.2 Remedies Upon Default by Contractor.
17.2.1 If an Event of Default shall have occurred and be
continuing that either is not curable under this
Contract or has not been cured within the period
allowed by the Contract, Owner or its assignee
shall have the following rights and remedies that
may be available to Owner, or such assignee, at
law or in equity, and Contractor shall have the
following obligations subject to the
reimbursement provisions of Section 6:
17.2.1.1 Owner, without prejudice to any of
its other rights or remedies, may
terminate this Contract forthwith by
delivery of a Notice of Termination
to Contractor.
17.2.1.2 Owner shall have the right to
require Contractor to withdraw from
the Site, assign Contractor's
subcontracts or purchase agreements
to Owner and remove materials,
equipment, tools, instruments,
debris, or waste materials from the
site as Owner may direct, and Owner
may take possession, without
incurring any liability to
Contractor, of any or all designs,
drawings, and Site facilities of
Contractor that Owner deems
necessary to completion of the Work.
17.2.1.3 Owner shall have the right to take
the prosecution of the Work from
Contractor and Owner may appropriate
or use Contractor's materials,
equipment, tools and instruments
located at the site of the Project
which are to be consumed or
incorporated in the Work as may be
suitable and acceptable and may
enter into an agreement for the
completion of the Work in accordance
with the terms and provisions of
this Contract, or use other methods,
as in the opinion of Owner, will be
required for the completion of the
Project.
17.2.1.4 Owner shall have the right to use
all design and construction
Documents and Specifications that
have been prepared by Contractor.
17.3 Default of Contract by Owner. If Owner fails to pay Contractor
any properly invoiced amount finally determined in a binding
proceeding to be due and payable in accordance with Section 6
hereof, Contractor may, upon thirty (30) Days'
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written notice to Owner, terminate this Contract and recover
from Owner payment for all Work performed and reasonable
termination expenses. If Owner cures its default by making
full payment of sums finally determined to be due and payable
before or during the Notice period, then Contractor shall not
be entitled to terminate the Contract. Payment of interest
shall not excuse or cure any default in payment.
17.4 Upon a determination by a court of competent jurisdiction that
termination of Contractor or its successor in interest
pursuant to any provision of this Contract was wrongful, such
termination will be deemed converted to a termination for
convenience and the Contractor's remedies shall be limited to
those set forth in Section 12.5.
18 DISPUTE RESOLUTION
18.1 In the event a dispute arises between Owner and Contractor
regarding the application, interpretation or breach of any
provision of this Contract, the aggrieved party shall promptly
notify the other party to this Contract of its intent to
invoke this dispute resolution procedure within fifteen (15)
Business Days after the dispute arises. If the parties shall
have failed to resolve the dispute within fifteen (15)
Business Days after delivery of such notice, each party shall,
within fifteen (15) Business Days thereafter nominate a senior
officer of its management to meet at any mutually agreed
location, to resolve the dispute in an amicable and peaceful
manner. Should the parties be unable to resolve the dispute to
their mutual satisfaction within fifteen (15) Business Days
after such nomination, each party shall have the right to
pursue litigation.
18.2 Continuance Of Work During Dispute. At all times during the
course of the dispute resolution process and during the course
of litigation, Contractor shall continue with the Work as
directed, in a diligent manner and without delay, or conform
to Owner's decision or order, and shall be governed by all
applicable provisions of the Contract.
19 COOPERATION BETWEEN CONTRACTORS
19.1 Owner reserves the right to contract for and perform other or
additional work, on or near the Work covered by this Contract.
19.2 If other separate contracts are awarded within the limits of
the Work, Contractor shall conduct its Work without
unreasonably interfering or hindering the progress or
completion of the work being performed by other contractors.
All contractors working on the Project shall cooperate with
each other as directed by Owner.
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20 COMPLETION AND ACCEPTANCE
20.1 Substantial Completion.
20.1.1 Contractor shall provide Notice to Owner when
Contractor has completed an entire Network or a
portion thereof, except for Punchlist items and final
clean up. Owner or the Oversight Engineer will
approve a Punchlist of items remaining to be
completed for Final Acceptance. By providing a Notice
of completion, Contractor has ensured that the
Network or Segment has been constructed in accordance
with the requirements of this Contract, may be
operated without damage to the Network, Segment, or
any other property on or off the Site, without injury
to any Person, and is ready for initial operation.
20.1.2 Within thirty (30) Days after receipt of Notice
pursuant to Section 20.1.1, Owner shall advise
Contractor in writing of any defects, deficiencies or
deviations from the Contract requirements or
workmanship. Contractor shall, at its own cost and
expense, correct such defects, deficiencies and/or
deviations immediately. As soon as any such defects,
deficiencies and/or deviations are corrected (or as
soon as the thirty (30) Day period for such notice
has expired if Owner does not advise Contractor of
any such items within the period), Owner shall accept
such Work in writing or they shall be deemed
accepted.
20.1.3 Substantial Completion of a Network or any Segment,
as the case may be, and the Work with respect thereto
("Substantial Completion") shall be deemed to have
occurred on the earlier of
20.1.3.1 beneficial use or occupancy by Owner; or
20.1.3.2 when all of the following have occurred:
20.1.3.2.1 Contractor has corrected,
pursuant to the provisions
of Section 20.1.2, all
defects, deficiencies
and/or deviations in
respect of the Network or
Segment, as the case may
be, and Owner has accepted
such corrections in
writing;
20.1.3.2.2 Contractor has received all
the required Governmental
Approvals pursuant to
Section 3.1.2;
20.1.3.2.3 Owner's Approval has been
given to a Punchlist in
respect of the Network or
Segment;
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20.1.3.2.4 all authorities having
jurisdiction over the
Network or Segment, as the
case may be, have given
their approval of the
Network or Segment, as the
case may be, for use for
its intended purpose; and
20.1.3.2.5 the entire Network or
Segment, as the case may
be, is fully operational
and available to be
utilized by Owner for its
intended purposes.
20.2 Partial Acceptance. If at any time during the prosecution of
the Project, Contractor achieves, in regard to a Network or
Segment, satisfaction with respect to the Network or Segment,
of all conditions and terms set forth in regard to Segments in
Section 20.3, and upon written notice requesting same, Owner
may, but shall not be required to, accept said Network or
Segment ("Partial Acceptance").
20.3 Final Acceptance of a Segment.
20.3.1 Promptly after Substantial Completion of a Network or
Segment, Contractor shall perform all Work, if any,
which was waived for purposes of Substantial
Completion, and shall satisfy all other of its
obligations under this Contract, including ensuring
that the Network or Segment has been completed and
all components have been properly adjusted and
tested.
20.3.2 Final acceptance ("Final Acceptance") of a Network or
Segment shall be deemed to have occurred when all of
the following have occurred:
20.3.2.1 all requirements of the Contract with
respect thereto shall have been fully
satisfied and all requirements for
Substantial Completion of the subject
Network or Segment shall have been fully
satisfied; and
20.3.2.2 Owner shall have received all Drawings
(including as-built drawings of the subject
Segment), Specifications, test data, and
other technical information required
hereunder related to the subject Network or
Segment; and
20.3.2.3 all special tools purchased by Contractor
as, provided herein shall have been
delivered to Owner and all replacement spare
parts shall have been purchased for delivery
to Owner free and clear of liens; and
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20.3.2.4 all Contractor's and Subcontractor's
personnel, supplies, equipment, waste
materials, rubbish and temporary facilities
shall have been removed from the Site; and
20.3.2.5 Contractor shall have delivered to Owner a
certification to the effect that Contractor
claims no additional charges or adjustments
pursuant to Section 11 or otherwise, other
than those charges or adjustments of which
Contractor has notified Owner; and
20.3.2.6 the Punchlist items shall have been
completed to the reasonable satisfaction of
Owner and all of Contractor's other
obligations under this Contract shall have
been satisfied in full or waived, provided
that Contractor may delay completion of any
landscaping and planting contained in the
Punchlist in accordance with generally
recognized forestry and landscaping
practices, but in no case longer than nine
(9) months, and Owner shall have delivered
to Contractor a Notice of Final Acceptance
to the effect of the foregoing.
20.3.3 The occurrence of the Final Acceptance Date shall not
relieve Contractor from any of its continuing
obligations hereunder.
20.3.4 The date which Final Acceptance of the Network or
Segment or a specified portion thereof occurs shall
be the "Final Acceptance Date".
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21 WARRANTY
21.1 Contractor's warranties in respect of the Work (the
"Warranties") are as follows. Contractor warrants to Owner
that:
21.1.1 all Construction Work shall be performed in a good
and workmanlike manner and be free from defects;
21.1.2 materials and equipment furnished under this Contract
shall be of good quality and new and be free from
defects;
21.1.3 all professional services Work will be consistent
with the standard of care and diligence practiced by
recognized professionals performing similar services,
and be free from material defects; and
21.1.4 all Work shall meet all of the requirements of this
Contract.
21.2 Owner shall look to the vendor or manufacturer for warranty
claims on Owner-Supplied Items or items specifically required
by Owner, provided Contractor shall provide reasonable
assistance in enforcement of same.
21.3 Contractor shall, for the protection of Owner, demand from all
Vendors and make available to Owner warranties satisfying the
requirements of this Section 21. Contractor's liability with
respect to such equipment and materials obtained from vendors
shall be limited to procuring such warranties and rendering
reasonable assistance in enforcement of same.
21.4 Work not conforming to the Warranties, including substitutions
not properly approved and authorized, shall be considered
defective. Contractor shall furnish satisfactory evidence as
to the kind and quality of materials and equipment.
21.5 Contractor shall promptly correct Work rejected by Owner for
failing to conform to the Warranties, whether observed before
or after Substantial Completion and whether or not fabricated,
installed or completed. Contractor shall bear all costs of
correcting such rejected Work, including additional testing
and inspections and compensation for Owner's expenses made
necessary thereby.
21.6 Warranties shall commence on Substantial Completion of such
Work except for items completed and accepted on an earlier
date in accordance with Section 20.2, and for items completed
later with the express written consent of Owner, when such
Work is accepted by Owner. Notwithstanding the forgoing
provisions of this Section 21, if this Contract is terminated
in accordance with Sections 12 or 18, Warranties in respect of
all Work performed by Contractor under this Contract
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prior to such termination shall be deemed to commence the
effective date of such termination.
21.7 If at any time within one (1) year after the date on which the
Warranties commenced on a Network or Segment or any portion
thereof, such Segment, Sub- Segment or portion thereof is
found to be not in accordance with the Warranties, Contractor
shall correct it promptly after receipt of written Notice from
Owner unless Owner has previously given Contractor a written
acceptance of such condition. This one (1) year period shall
be extended with respect to portions of Work first performed
after the applicable Partial Acceptance Date or Final
Acceptance Date by the period of time between the applicable
Partial Acceptance Date or Final Acceptance Date and the date
of completion of such Work. Owner shall give such Notice
promptly after discovery of any such condition. Work required
under this Section 21.4 shall, unless necessitated by
Contractor's failure to perform as required under the Contract
or negligence or willful misconduct, be a Cost of the Work.
21.8 Contractor's Warranties shall apply to any such re-done Work
and shall last as to the re-done Work until the latest of: (i)
the expiration of the relevant original Warranty Period; (ii)
the expiration of any Warranty Period with respect to
repurchased equipment; or (iii) one (1) year after completion
of any re-done Work.
21.9 Without in any way derogating Contractor's own representations
and warranties (including Warranties) and Contractor's other
obligations with respect to all of the Work, Contractor shall
obtain from all Subcontractors or Vendors and cause to be
extended to Owner prudent representations, warranties,
guarantees and obligations with respect to design, materials,
workmanship, equipment, tools and supplies furnished by such
Subcontractors or Vendors. All representations, warranties,
guarantees and obligations of Subcontractors or Vendors shall
be: (i) so written as to survive all Owner and Contractor
inspections, tests and approvals; and (ii) run directly to and
be enforceable by Owner, its successors and assigns.
Contractor shall deliver to Owner promptly following execution
thereof duly executed copies of all contracts containing such
representations, warranties, guarantees and obligations.
Contractor shall assign to Owner, at no additional cost, all
of Contractor's rights and interest in all extended warranties
for periods exceeding the applicable warranty period which
were received by Contractor from any of its Subcontractors or
Vendors.
21.10 Upon receipt from Owner of a Notice of failure of any of the
Work to satisfy any Subcontractor or Vendor warranty,
representation or guarantee obtained by Contractor, Contractor
shall be responsible for enforcing or performing any such
representation, warranty or guarantee. Owner's rights under
this Section 21.1 shall commence at the time such
representation, warranty or guarantee is furnished and
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shall continue until the expiration of Contractor's relevant
Project Warranty (including extensions for re-warranties).
Until such expiration, the cost of any equipment, material,
labor (including re-engineering) or shipping shall be for the
account of Contractor if such cost is covered by such a
Project Warranty and Contractor shall be required to replace
or repair defective equipment, material or workmanship
furnished by Subcontractors.
21.11 Commencing on the expiration of each of the respective
Warranties, or such later date as is provided with respect to
re-done Work, Owner shall be responsible for enforcing all
representations, warranties and guarantees from Subcontractors
and Vendors, but Contractor shall provide reasonable
assistance to Owner in enforcing such representations,
warranties and guarantees, when and as reasonably requested by
Owner.
21.12 Except in cases of an emergency requiring immediate curative
action by Contractor, within five (5) Days of receipt by
Contractor of a Notice from Owner specifying a failure of any
of the Work to satisfy Contractor's Warranties, or of any
Subcontractor or Vendor representation, warranty or guarantee
which Contractor is responsible to enforce, Contractor and
Owner shall mutually agree when and how Contractor shall
remedy said violation; provided, however, that in case of
emergency requiring immediate curative action, Contractor and
Owner shall so agree on such remedy immediately upon Notice by
Owner of such emergency. If Contractor does not use its best
efforts to proceed to complete said remedy within the time
agreed to, or should Contractor and Owner fail to reach such
an agreement within such five (5) Day period (or immediately,
in the case of emergency conditions), Owner, after Notice to
Contractor, shall have the right to perform or have performed
by third parties the necessary remedy and the costs thereof
shall be borne by Contractor.
21.13 The obligations contained in this Section 21 WARRANTY, govern
and supersede any other terms in this Contract which address
warranties, guarantees, or the quality of the Work and are
Contractor's sole warranty and guarantee obligations and
Owner's exclusive remedies with respect thereto. Contractor
shall have no warranty obligation or liability for defects in
the Work unless Owner demonstrates the warranty claim is not
attributable to Contractor's reliance upon or use of data,
design criteria, drawings, specifications or other information
furnished by Owner.
21.14 Contractor makes no representations, covenants, warranties, or
guarantees, express or implied, other than those expressly set
forth herein. The parties' rights, liabilities,
responsibilities and remedies with respect to the Work shall
be exclusively those expressly set forth in this Contract.
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22 MISCELLANEOUS PROVISIONS
22.1 Governing Law and Venue. THE PARTIES AGREE THIS CONTRACT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
STATE OF COLORADO. THE PARTIES FURTHER AGREE THAT ANY
LITIGATION ARISING OUT OF THIS CONTRACT SHALL BE TRIED IN
DENVER COUNTY, COLORADO, OR THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO AND NOT ELSEWHERE.
22.2 Successors and Assigns. This Contract shall be binding upon
and inure to the benefit of Owner and Contractor and their
successors, assigns, and legal representatives. Without the
prior consent of Contractor, Owner may, upon reasonable
advance written notice, assign all or part of its right,
title, and interest in this Contract. Contractor shall not
assign this Contract or any right to receive payment hereunder
without the prior written consent of Owner. Contractor may not
delegate any of its duties hereunder except as expressly
otherwise permitted herein. Contractor's assignment or
delegation of any of its Work hereunder, whether permitted
hereunder or not, shall relieve Contractor of its
responsibility for the Work assigned or delegated.
22.3 Third Party Beneficiary. It is specifically agreed between the
parties executing this Contract that it is not intended by any
of the provisions of any part of this Contract to create in
the public or any member thereof a third party beneficiary
hereunder, or to authorize anyone not a party to this Contract
to maintain a suit for personal injuries or property damage
pursuant to the terms or provisions of this Contract. The
duties, obligations and responsibilities of the parties to
this Contract with respect to third parties shall remain as
imposed by law.
22.4 Designation of Representatives. Owner and Contractor shall
each designate an individual or individuals that shall be
authorized to make decisions and bind the parties on matters
relating to this Contract. These representatives shall live in
the general vicinity of the Work. Such designation shall be in
writing and may be changed by a subsequent writing. The
parties may also designate technical representatives who shall
be authorized to investigate and report on matters relating to
the Project and negotiate on behalf of each of the parties but
who do not have authority to bind Owner.
22.5 Entire Agreement: Amendments. This Contract, including its
exhibits, appendixes and attachments contains the entire
understanding of the parties with respect to this subject
matter. This Contract supersedes all prior agreements and
understandings between the parties with respect to its subject
matter. This
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Contract may be amended only by a written instrument duly
executed by the parties or their respective successors or
assigns.
22.6 Independent Contractors. Contractor is an independent
contractor and nothing lien shall be construed as constituting
any relationship with Owner other than that of owner and
independent contractor, nor shall it be construed as creating
any relationship whatsoever between Owner and Contractor's
employees. Neither Contractor, nor any of its employees, are
or shall be deemed employees of Owner. Contractor has sole
liability and responsibility as a principal for its agents,
Subcontractors, Vendors and all others it hires to perform or
assist in performing the Work.
22.7 Liens and Claims. If Contractor shall fail promptly to
discharge any nothing contained herein or claim upon the
Project, or upon any materials, equipment or structures
encompassed therein, or upon the premises upon which they are
located, Owner shall promptly notify Contractor in writing and
Contractor shall then satisfy or defend any such liens or
Claims. If Contractor either does not promptly satisfy such
liens or Claims or does not give Owner reasons in writing
satisfactory to Owner for not causing the release of such lien
or paying such Claims, Owner shall have the right, at its
option, after written Notice to Contractor, to cause the
release, pay or settle such lien or Claims by agreement and
Contractor shall within five (5) Days of request by Owner,
reimburse Owner for all costs incurred by Owner to discharge
such lien or Claims including administrative costs, attorneys'
fees and other expenses. Contractor shall have the right to
contest any such lien provided it first provides to Owner a
bond or other assurances of payment reasonably satisfactory to
Owner, in the amount of such lien or Claim in form and
substance satisfactory to Owner.
22.8 Notice and Communications. Any Notice pursuant to the terms
and conditions of this Contract shall be in writing and: (i)
delivered personally; or (ii) sent by certified mail, return
receipt requested; or (iii) sent by a recognized overnight
mail or courier service, with delivery receipt requested, to
the following addresses (or to such other address as may from
time to time be specified in writing by Contractor or Owner):
If to Contractor:
National Network Technologies, LLC.
26 Broadway, Suite 400
New York, NY 10004
Attn: Daniel Corbett, VP of Engineering
Ph: (212) 837-7700
Fax: (212) 837-7917
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If to Owner:
Raouf Abdel
Level 3 Communications, LLC
14023 Denver West Parkway
Golden, Colorado 80401
Ph: (303) 215-8554
Fax: (303) 218-8388
with a copy to:
Level 3 Communications, LLC
1450 Infinite Drive
Louisville, Colorado 80027
Attention: General Counsel
Fax: (303) 926-3467
Notices shall be effective when received by the party to whom
addressed. Any technical or other communications pertaining to
the Work shall be between designated representatives appointed
by the parties. Each party shall notify the other in writing
of the name of such representatives. Contractor's
representatives shall be satisfactory to Owner, have knowledge
of the Work and be available at all reasonable times for
consultation. Each party's representative shall be authorized
to act on behalf of such party in matters concerning the Work.
22.9 Ownership of Documents. All design and construction Documents
and Specifications shall become Owner's property upon
preparation and Contractor shall retain and furnish Owner with
copies of all such design and construction Documents and
Specifications as they are completed. Notwithstanding anything
to the foregoing, Owner shall not receive title to proprietary
Contractor or third party property. All Documents,
Specifications and information prepared or obtained by
Contractor in connection with the performance of its
obligations under this Contract such as, by way of
illustration and not limitation, studies, technical and other
reports, shop drawings, record drawings and the like, shall
also be retained and become the property of Owner upon
preparation or receipt. Copies of all such Documents,
Specifications and information shall be furnished, in a form
and manner acceptable to Owner, upon receipt or completion
thereof by Contractor.
22.10 Severability. The invalidity or unenforceability of any
portion or provision of this Contract shall not affect the
validity or enforceability of any other portion or provision.
Any invalid or unenforceable portion or provision shall be
deemed severed from this Contract and the balance of this
Contract shall be construed and
Page 70 of 72
<PAGE> 73
enforced as if this Contract did not contain such invalid or
unenforceable portion or provision.
22.11 Survival. Certain obligations of Contractor shall survive the
termination of this Contract including the obligations of
Contractor under Sections 16, 19, and 21 and terms which by
their very nature extend beyond termination or completion of
the job.
22.12 Waiver. Either party's waiver of any breach or failure to
enforce any of the terms, covenants, conditions or other
provisions of this Contract at any time shall not in any way
affect, limit, modify or waive that party's right thereafter
to enforce or compel strict compliance with every term,
covenant, condition or other provision, any course of dealing
or custom of the trade notwithstanding.
22.13 Headings. The headings contained herein are included solely
for the convenience of the parties.
22.14 Confidentiality. If Owner and Contractor have not done so
prior to execution of this Contract, each agrees to execute a
Confidentiality Agreement contemporaneously with the execution
of this Contract in a form substantially similar to the form
attached hereto as Appendix "C". The provisions of the
Confidentiality Agreement shall survive the expiration or
termination of this Contract. Contractor shall require
Subcontractors and Vendors to execute and abide by similar
confidentiality requirements.
22.15 Publicity. Neither party shall publish or use any advertising,
sales, promotions, press releases or other publicity matters
which use the other party's logo, trademarks or service marks
without the prior written approval of the other party. Neither
party is licensed hereunder to conduct business under any
logo, trademark, service mark, or trade name (or any
derivative thereof) of the other.
22.16 Solicitation of Employment. Neither party shall, during the
term of this Agreement or for a period of one hundred eighty
(180) days thereafter, directly or indirectly for itself or on
behalf of, or in conjunction with, any other person,
partnership, corporation, business or organization, solicit
employment of an employee of the other with whom that party or
its personnel have had contact during the course of the
Project under this Contract, unless that party has obtained
the written consent of the other to such solicitation.
Page 71 of 72
<PAGE> 74
IN WITNESS WHEREOF, the parties have caused this Contract to be duly executed
and delivered as of the date and the year above written.
LEVEL 3 COMMUNICATIONS, LLC
By: _______________________________
Title: ____________________________
Attest: ________________________________________________
NATIONAL NETWORK TECHNOLOGIES, LLC.
By: _______________________________
Title: ____________________________
Attest: ________________________________________________
Page 72 of 72
<PAGE> 75
APPENDIX "A"
DESCRIPTION OF THE PROJECT
Upon Issuance, Notices to Proceed shall be sequentially numbered under the
appropriate city.
A.1 New York, NY
A.2 Boston, MA
A.3 Philadelphia, PA
A.4 Northern New Jersey
A.5 Stamford, CT
<PAGE> 76
APPENDIX "C"
NON-DISCLOSURE AGREEMENT
This Agreement is made and entered into by and between
NATIONAL NETWORK TECHNOLOGIES, LLC, a Delaware limited liability company, and
its affiliates (collectively "NNT"), and LEVEL 3 COMMUNICATIONS, LLC a Delaware
limited liability company, and its affiliates (collectively "LEVEL 3") (each
being a "party" or collective "parties").
1. DISCLOSURE. The parties intend to engage in discussions concerning a
potential business relationship (the "Proposed Relationship"). In connection
therewith, Level 3 and NNT may disclose to each other technical, financial
and/or other information, material, or data which is written, oral or in any
other form, electronic or otherwise (collectively "Data") which is considered
confidential and proprietary.
2. CONFIDENTIAL DATA. "Confidential Data" means (a) any Data disclosed by or on
behalf of a party ("disclosing party") to the other party ("receiving party"),
including, without limitation, (i) any materials, trade secrets, know-how,
formulas, processes, algorithms, ideas, strategies, inventions, data, network
configurations, system architecture, designs, flow charts, drawings, proprietary
information, business and marketing plans, financial and operational
information, and all other non-public information, material or data relating to
the current and/or future business and operations of the disclosing party, and
(ii) any information, material or data provided by third party vendors of the
disclosing party; and (b) any analyses, compilations, studies, summaries,
extracts or other documentation prepared by the receiving party based on the
Data disclosed by the disclosing party.
3. PUBLIC DATA. Notwithstanding any other provision of this Agreement, Data
shall not be, or shall cease to be, Confidential Data hereunder: (a) if such
Data is known to the receiving party prior to disclosure thereof by the
disclosing party; (b) after such Data is published or becomes available to
others, without restriction and without breach of this Agreement by the
receiving party; (c) after such Data becomes available to the receiving party
from others having no obligation to hold such Data in confidence; or (d) if such
Data is developed by the receiving party independently of any disclosure of such
Data by the disclosing party.
4. NON-DISCLOSURE OBLIGATION. Unless otherwise agreed to in writing by the
disclosing party, the receiving party agrees (a) not to disclose the
Confidential Data; (b) use the same degree of care and diligence to protect such
Confidential Data from disclosure to others as such party employs or should
reasonably employ to so protect its own information of like importance (but in
no event less than reasonable care); and (c) not to reproduce or copy the
Confidential Data, in whole or in part, except as necessary for the evaluation
or conduct of the Proposed Relationship. Notwithstanding the foregoing, the
receiving party may disclose the Confidential Data, to such of the receiving
party's consultants, agents and affiliates (collectively "receiving party
representative") which the receiving party reasonably and in good faith believes
should be
<PAGE> 77
involved in the evaluation or performance of the Proposed Relationship, provided
such receiving party representative is informed of this Agreement and agrees to
be bound by the terms hereof, and the receiving party uses best efforts to cause
the receiving party representative to observe the terms of this Agreement. The
receiving party agrees that a breach of this Agreement by a receiving party
representative shall constitute a breach by the receiving party. In the event
that the receiving party is required by applicable law, rule, regulation or
lawful order or ruling of any court, government agency or regulatory commission
to disclose any Confidential Data, the receiving party agrees that it will
provide the disclosing party with prompt notice of such request(s) to enable the
disclosing party to seek an appropriate protective order or to take steps to
protect the confidentiality of such Confidential Data.
5. NO ADDITIONAL RIGHTS. The receiving party shall not have any rights or
obligations respecting the Confidential Data other than those specifically set
forth in this Agreement. Without limiting the generality of any other provision
of this Agreement: (a) no license is hereby or otherwise granted, directly or
indirectly, under any patent, copyright or other proprietary right of the
disclosing party or its third party vendors; and (b) neither party shall be
obligated to disclose Data to the other party or to enter into any further
agreements relating to the Proposed Relationship or Data. A party may terminate
discussions regarding the Proposed Relationship at any time. The receiving party
shall, upon written request of the disclosing party, return to the disclosing
party all Confidential Data, including all copies thereof, disclosed hereunder.
The receiving party's obligations under this Agreement respecting the
Confidential Data shall survive termination of said discussions.
6. INJUNCTIVE RELIEF. Both parties acknowledge and agree that the disclosing
party and/or its third party vendors (as the case may be) own all rights, title
and interest in the Confidential Data. Both parties further acknowledge and
agree that the unauthorized disclosure of the Confidential Data will cause
irreparable harm to the disclosing party. As a result of the unique nature of
the Confidential Data, in addition to all other remedies available, the
disclosing party shall be entitled to seek injunctive and other extraordinary
relief in a court of competent jurisdiction in order to enforce the receiving
party's obligations hereunder.
7. OTHER PROVISIONS. The parties further agree that: (a) this Agreement shall be
governed by the laws of the State of Nebraska; (b) this Agreement sets forth the
entire agreement and understanding between the parties with respect to the
subject matter hereof, and none of the terms of this Agreement may be amended or
modified except by a written instrument signed by both parties; (c) a party may
waive any rights under this Agreement only by written waiver duly signed by such
party, and no failure to exercise or delay in exercising a right under this
Agreement shall constitute a waiver of such right; (d) this Agreement shall
inure only to the benefit of the parties hereto, and the rights and obligations
of each party under this Agreement may not be assigned or delegated without the
consent of the other party; (e) no provision of this Agreement shall affect,
limit or restrict either party's right to engage in any business in any place
and at any time, whatsoever, provided the receiving party does not disclose the
Confidential Data in violation of this Agreement; (f) each party agrees not to
advertise, or otherwise make known to others, any
<PAGE> 78
information regarding this Agreement or the Proposed Relationship except as may
be required by law; (g) neither party makes any representations or warranties as
to the accuracy or completeness of any Data disclosed hereunder; (h) the
invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement;
(i) all notices under this Agreement must be in writing and shall be deemed to
have been delivered to and received by a party, and will otherwise become
effective, on the date of actual delivery thereof (by personal delivery, express
delivery service or certified mail) to the Notice Address of such party set
forth below; (j) this Agreement may be executed in counterparts; and (k) this
Agreement is dated for all reference purposes October 14, 1998.
LEVEL 3 COMMUNICATIONS, LLC NATIONAL NETWORK
("LEVEL 3") TECHNOLOGIES, LLC ("NNT")
By: _______________________________ By: ______________________________
Name: _____________________________ Name: ____________________________
Notice Address: Notice Address:
3555 Farnam Street 26 Broadway
Suite 200 Suite 400
Omaha, Nebraska 68131 New York, New York 10005
Attn: General Counsel Attn: Larry Lundy
<PAGE> 79
APPENDIX "D"
AWARD FEE COMPUTATION
*
Award Fee Scoring Table:
Rating Possible Score
Outstanding *
Very Good *
Good *
Average *
Needs Improvement *
<TABLE>
<CAPTION>
Weighted
Instruction Score Weight Score
<S> <C> <C> <C>
A Determine score in area of Program Management
and multiply by weight *
B Determine score in area of Work on the basis of
Safety and multiply by weight *
C Determine scare in area of Quality and multiply by
weight *
D Determine score in area of Cost and multiply by
weight *
E Determine score in area of Schedule and multiply
by weight *
F Total the weighted scores (maximum * ) *
</TABLE>
* Portions of this exhibit marked with a "*" have been filed confidentially
with the Commission pursuant to a confidential treatment request filed by
Registrant.
<PAGE> 80
Step 3. Determine Award Fee due for month.
<TABLE>
<S> <C> <C>
1 2 3
* * *
</TABLE>
* Portions of this exhibit marked with a "*" have been filed confidentially
with the Commission pursuant to a confidential treatment request filed by
Registrant.
<PAGE> 81
APPENDIX "E"
PROGRAM MANAGEMENT
Program Management is the timely, efficient and systematic management and
execution of the design, engineering, procurement and construction for the
Project. Owner's expectations for a successful Program Management effort for the
Project will be directly linked to: 1) timely and accurate reporting, estimating
and scheduling; 2) thorough and detailed execution of the permitting and design
process; 3) proactive and aggressive cost and schedule reduction techniques; 4)
high level of accuracy in development of allocation methodologies for Allocated
Costs when compared to actual costs; 5) innovative and efficient management of
material procurement and control; 6) sound and safe construction techniques; 7)
efficient reporting and subcontract administration; and 8) cooperative and
efficient communication with the Owner and Oversight Engineer.
Program Management scoring is as follows:
Outstanding:
Consistently far exceeds Owner's expectations for the criteria.
Very Good:
Generally exceeds Owner's expectations for the criteria.
Good:
Meets Owner's expectations for the criteria.
Average:
Does not regularly meet or exceed Owner's expectations for the criteria.
Needs Improvement:
Typically below Owner's expectations for the criteria.
<PAGE> 82
APPENDIX "F"
SAFETY
Safety of Persons, property and equipment is a primary concern in executing the
Project. All Work shall be performed during hours acceptable to Owner,
Governmental Persons and private land owners and in a safe and workmanlike
manner. In addition to complying with Contractor's internal safety policies, the
latest requirements of the Occupational Safety and Health Act ("OSHA") of 1970,
the Construction Safety Act of 1969, and all standards and regulations which
have been or shall be promulgated Governmental Persons shall be followed in
every case. Contractor shall operate and maintain all equipment in a manner
which ensures the safety of Persons, surrounding property and the equipment
itself. Contractor's safety rating shall be based on the criteria specified
below, which shall apply to all Work, including Work performed by
Subcontractors, Vendors or others. However, the rates for "recordable
occupational injuries or illnesses" shall apply only to Work performed by
contractor with its own forces.
Outstanding
- Always maintains an exemplary level of safety with zero tolerance for
unsafe acts.
- Continually takes steps to raise employee awareness of safety through
extensive hazard analysis and training; always complies with Governmental
rules; and employees, subcontractors, vendors and agents awareness of
maintaining zero (0) safety related incidents is extremely high.
- Contractor experiences a rate of less than 1.6 for OSHA "recordable
occupational injuries or illnesses" in its performance of the Project.
Very Good:
- Well above average in nearly all established parameters for safety with
zero tolerance for unsafe acts.
- Periodically takes steps to raise employee awareness of safety through
hazard analysis and training; almost always complies with Governmental
Rules; and employees, subcontractors, vendors and agents awareness of
maintaining zero (0) safety related incidents is well above average.
- Contractor experiences a rate of 1.6 and greater to less than 2.0 for OSHA
"recordable occupational injuries or illnesses" in its performance of the
Project.
Good:
- Above average in a majority of established parameters for safety with zero
tolerance for unsafe acts.
- Usually takes steps to raise employee awareness of safety through hazard
analysis and training; typically complies with Governmental rules; and
employees, subcontractors, vendors and agents awareness of maintaining zero
(0) safety related incidents is above average.
<PAGE> 83
- Contractor experiences a rate of 2.0 and greater to less than 2.5 for OSHA
"recordable occupational injuries or illnesses" in its performance of the
Project.
Average:
- Average performance across the established parameters for safety, and/or
exhibits some tolerance for unsafe acts.
- Periodically (but not frequently) takes steps to raise employee awareness
of safety through hazard analysis and training; regularly complies with
Governmental rules; and employees, subcontractors, vendors and agents
awareness of maintaining zero (0) safety related incidents is average.
- Contractor experiences a rate of 2.5 and greater to less than 3.0 for OSHA
"recordable occupational injuries or illnesses" in its performance of the
Project.
Needs Improvement:
- Well below average performance across the established parameters for safety
and or exhibits tolerance for unsafe acts.
- Infrequently takes steps to raise employee awareness of safety through
hazard analysis and training; is lax in complying with Governmental rules:
and employees, subcontractors, vendors and agents awareness of maintaining
zero (0) safety related incidents is extremely low.
- Requires Program management commitment to correct.
- Contractor experiences a rate of 3.0 and greater for OSHA "recordable
occupational injuries or illnesses" in its performance of the Project.
<PAGE> 84
APPENDIX "G"
QUALITY
Quality is essential to ensuring capital investment Yields lasting and durable
assets. All installation work shall be performed in accordance with the
Specifications of the Owner, Governmental Persons, private land owners and
Contractor's internal quality policies. Achieving high quality will require, at
a minimum, that: 1) minimal re-engineering be done; 2) specifications are
adhered to; 3) ROW restoration requires few return trips; 4) damage to private
property is minimized; 5) damage to public property including another utilities
is minimized; 6) Facilities are turned over with short punch lists; 7) outside
plant inventory records are well maintained and accurate; and 8) as-built
drawings are highly accurate. Additionally, effective Program Management will
require that: the website information provided by Contractor is accurate and can
be used for daily progress monitoring, minimizing permit application
re-submittals and governmental agency impacts / issues. Contractor's quality
rating shall be based on the following criteria:
Outstanding:
Always maintains an exemplary level of quality with all expectations exceeded.
For example, engineering drawings are error free; construction is performed in
full compliance with permit requirements and specifications.
Very Good:
Well above average in nearly all established parameters for quality with all
expectations met. For example, permits are nearly always applied for correctly
and re-submittals, if any, do not cause delays or extra expenses; ROW
restoration is excellent with very few return trips required to do additional
cleanup.
Good:
Above average in a majority of established parameters for quality with most
expectations met. For example, facilities are completed with short punch-lists
and minimal delays are incurred; a few unnecessary specification deviations are
made, but are corrected promptly.
Average:
<PAGE> 85
APPENDIX "H"
COST
Contractor will be substantially evaluated based on the total cost of the
Project (excluding Award Fee but including G&A Fee and all Owner provided
materials). Prior to actual costs being available, Owner will evaluate
Contractor's performance based on budget projections (including the likelihood
of achieving budget projections). As actual costs become available, they will be
factored into the evaluation.
The Owner's expectations for the per mile cost of the Scope of the Work are
specified below. They are based on comparable work as of the Effective Date. In
the event actual costs are significantly different from those below through no
fault of Contractor, Owner may elect to change the per mile costs stated below
in its sole discretion.
Owner will use the costs specified below as general guidelines but will also
consider other factors as part of the subjective evaluation. Factors such as a
change in conditions, directions of Owner which impact the cost and the
effectiveness of Contractor's cost management program will be considered.
Owner's estimated costs and the respective ratings as shown below for each
Network will be determined within thirty (30) Days after the respective Contract
Budget is approved.
<TABLE>
<CAPTION>
Rating Cost
------ ----
<S> <C>
Outstanding <$ per mile
Very Good $________________ to $______________ per mile
Good $________________ to $______________ per mile
Average $________________ to $______________ per mile
Needs Improvement >$ per mile
Outstanding <$ per building
Very Good $________________ to $______________ per building
Good $________________ to $______________ per building
Average $________________ to $______________ per building
Needs Improvement >$_______________ per building
</TABLE>
When applying these targets during each month, Owner will take into account the
Segments that have been completed and the performance targets will be applied
accordingly.
<PAGE> 86
APPENDIX "I"
SCHEDULE
Contractor will be evaluated based on completion of route miles and buildings
and completion of the overall Project.
Owner will use the performance targets below as general guidelines but will also
consider other factors such as a change in conditions, directions of Owner which
impact the schedule and the effectiveness of Contractor's schedule management
program.
The performance levels for route miles and buildings completion are:
<TABLE>
<CAPTION>
Percentage of Route Miles Completed
Rating [date] [date] [date] [date] [date] [date]
------
<S> <C> <C> <C> <C> <C> <C>
Outstanding 20-25% 50-60% 95-100% 100% x x
Very Good 15-20% 40-50% 80-95% 95-100% x x
Good 10-15% 30-40% 70-80% 90-95% 100% x
Average 5-10% 25-30% 60-70% 80-90% 95-100% 100%
Needs 0-5% <25% <60% <80% <95% <100%
Improvement
</TABLE>
<TABLE>
<CAPTION>
Percentage of Route Buildings Completed
Rating [date] [date] (date] (date] (date] [date]
------
<S> <C> <C> <C> <C> <C> <C>
Outstanding 20-25% 50-60% 95-100% 100% x x
Very Good 15-20% 40-50% 80-95% 95-100% x x
Good 10-15% 30-40% 70-80% 90-95% 100% x
Average 5-10% 25-30% 60-70% 80-90% 95-100% 100%
Needs 0-5% <25% <60% <80% <95% <100%
Improvement
</TABLE>
The Owner will consider changes to the performance levels if there is a
significant variation from the initial planned approach.
<PAGE> 87
APPENDIX "J" RESPONSES TIMES FOR OWNER'S APPROVAL
The Owner will pass to the Contractor as much information Owner can provide at
the time of the execution of the contract, items 2.1.1 through 2.1.4 as
specified in section 2 PROJECT within five (5) days. If the Contractor deems
that the information the Owner supplied is insufficient for items 2.1.1 through
2.1.4 as specified in section 2 PROJECT. The Contractor will notify the Owner
within five (5) business days of the impact that may affect items 2.1.1 through
2.1.4 in section 2 PROJECT.
<TABLE>
<CAPTION>
Contractors' Action Owners Response
-------------------------------------------------------------------------------
<S> <C>
Implementation Plan 15 business days
-------------------------------------------------------------------------------
Drawings and Specifications 10 business days
-------------------------------------------------------------------------------
Re-Submittals 10 business days
-------------------------------------------------------------------------------
Pre-qualification of Subcontractors/Vendors 10 business days
-------------------------------------------------------------------------------
Subcontractor/Vendor Award Letter 5 business days
-------------------------------------------------------------------------------
Subcontractor/Vendor Notice to Proceed 5 business days
-------------------------------------------------------------------------------
Material Purchase Orders 5 business days
-------------------------------------------------------------------------------
</TABLE>
The Contractor shall submit one (1) original and two *(2) copies of design
Drawings or Documents for the review and approval by the Owner. These design
Drawings or Documents shall be free of all extraneous pencil, ink crayon of
other markings and are to be of a quality which will produce clear and legible
copies. Within 10 business days of receipt by Owner, Owner will transmit one (1)
set of Drawings or Documents to the Contractor with corrections and changes
noted thereon or indicating approval.
Where such Drawings or Documents have been indicated as "approved" or "approved
as noted" no resubmission is required. Where such Drawings or Documents have
been indicated as "approved as noted-resubmit" or disapproved" the Contractor
shall make corrections and changes indicated and resubmit (1) original and two
(2) copies of design Drawings or Documents for the review and approval by the
Owner. Within 10 working days of receipt by Owner, Owner will transmit one (1)
set of Drawings or Documents to the Contractor with corrections and changes
noted thereon or indicating approval.
No work shall commence until the Contractor has received "approval" or "approved
as noted" Drawings or Documents.
<PAGE> 88
No changes or corrections other than the changes and corrections noted by the
Owner shall be made to any Drawings or Documents except by resubmission of such
Drawings or Documents with the revisions appropriately noted.
The Owner shall notify the Contractor within five (5) business days by a copy of
the Award letter for subcontractor services. The Owner shall notify the
Contractor within five (*5) business days with a copy of the Notice to proceed
including the approved CPM construction schedule for subcontractor services.
The Owner shall notify the Contractor within five (5) business days by
submitting copies of all purchase orders for permanent materials as specified in
section 8. The purchase orders shall identify description of item, quantities,
project identification and delivery date with delivery location.
If Contractor falls fifteen (15) days behind on any critical path activity shown
on the approved Construction Schedule, the Owner shall review and comment within
five (5) business days the Contractor's Recovery Schedule as specified in
section 9.1.12.
<PAGE> 89
APPENDIX K
NATIONAL NETWORK TECHNOLOGIES LLC
TRAVEL POLICY
General: Employees shall be reimbursed for reasonable travel and subsistence
expenses incurred while traveling on company business, provided that such travel
has been authorized in advance by the employee's supervisor. The most
cost-effective means of travel and subsistence shall be used in all
circumstances. Reimbursements shall be made only for expenses incurred in
accordance with the following guidelines.
Airline Tickets: All air travel shall be by Economy Class. The lowest-cost
Economy Fare for whichever specific destination at the approximate time required
by the employee shall be purchased, regardless of possible frequent flyer
mileage considerations. If an employee chooses to upgrade to Business Class or
First Class, only the lowest-cost Economy Class fare available for that route
shall be reimbursed. Airline tickets shall be obtained from travel agents
approved by the company, except for emergency travel, in which case the nature
of the emergency shall be described in a memo by the employee attached to his
expense statement.
Local Transportation: Employees shall use public transportation wherever
practical. Rental cars may be used only if public transportation is not
available, or if the use of public transportation would substantially increase
the amount of time required to travel between local destinations. If an
employee's personal automobile is used for business travel, the company shall
reimburse the employee at the rate of 32.5 cents per mile. That mileage rate
reimbursement is intended to cover all costs related to the automobile including
gas, oil, insurance, depreciation, and repairs, both routine and emergency,
including collision and comprehensive damage. If an employee uses his personal
automobile for business travel, he shall carry adequate automobile liability,
________ and comprehensive insurance coverage, and the company shall not
reimburse any costs related to the automobile other than the 32.5 cents per
mile, plus parking and tolls.
Hotel: Hotels shall be utilized which are of moderate cost (e.g. Hampton Inns),
based on the locality. Laundry charges are not reimbursable unless the employee
is out of town for six consecutive nights. Pay-TV and Movie charges will not be
reimbursed.
Meals: The cost of meals will be reimbursed if the employee is required to stay
out of town overnight. The cost of meals shall be reasonable based on the
locality, and in general should not exceed $35 per day. The cost of alcoholic
beverages is not reimbursable. If an employee pays for meals for another
employee, the employee who incurs the cost shall show the name(s) of the other
employee(s) on his expense report.
<PAGE> 90
Receipts: Original receipts (not copies) shall be attached to the employee's
expense report for all expenses over $25. Credit cards must be used for air
fare, hotel, and rental cars, and should also be used for all other expenses
wherever possible.
