1-06. FR2X Section 4 Special Provisions.pdf

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SECTION 4: SPECIAL PROVISIONS

JULY 1, 2025

Utah Department of Transportation 20253 / Project No. S-ST99(835)

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SECTION 4: SPECIAL PROVISIONS

Table of Contents Section 4: SPECIAL PROVISIONS

SP 1. General SP 1.1 Interpretation SP 1.2 Use of English SP 1.3 Reserved

SP 2. Reserved SP 3. Schedule

SP 3.1 Period of Performance and Delivery Schedule SP 3.1.1 Early Work SP 3.1.2 Notices to Proceed SP 3.1.3 Notice to Proceed 1 SP 3.1.4 Notice to Proceed 2 SP 3.1.5 Limited Notice(s) to Proceed for Other Work SP 3.1.6 Schedule of Mandatory Milestones

SP 3.2 CPM Schedule and Progress Reports SP 3.2.1 CPM Schedule SP 3.2.2 Monthly Progress Report

SP 3.3 Liquidated Damages (LDs) SP 3.3.1 Liquidated Damages for Late Delivery SP 3.3.2 Liquidated Damages: Warranty

SP 4. Payment SP 4.1 Payment Terms/Procedures

SP 4.1.1 General SP 4.1.2 Advance Payment

SP 4.2 Milestone Payment Schedule SP 4.2.1 Payment for Spare Parts and Special Tools

SP 4.3 Prompt Payments SP 4.3.1 Department Prompt Payment SP 4.3.2 Subcontractor Prompt Payment

SP 4.4 Units of Currency/Currency Adjustment/Cost Escalation SP 4.5 Reserved SP 4.6 Payment of Taxes SP 4.7 Completion of Mandatory Milestones SP 4.8 Final Payment and Claims

SP 5. Performance Security/Insurance SP 5.1 Performance Security Requirements SP 5.2 Insurance

SP 5.2.1 Evidence of Coverage SP 5.2.2 Continuation or Change in Coverage SP 5.2.3 Requirements SP 5.2.4 Required Policies

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SP 6. Shipping, Delivery and Acceptance SP 6.1 Shipment Authorization SP 6.2 Shipment SP 6.3 Evidence of Delivery and Shipping Destination (FOB point) SP 6.4 Unloading SP 6.5 Acceptance Testing SP 6.6 Delivery of Special Tools, Test Equipment, Spare Parts and Manuals SP 6.7 Title to Special Tools, Test Equipment, Spare Parts and Manuals SP 6.8 Conditional Acceptance, Final Acceptance and Non-Acceptance

SP 6.8.1 Conditional Acceptance SP 6.8.2 Final Acceptance SP 6.8.3 Non-Acceptance and Repairs after Non-Acceptance

SP 7. Project Management SP 7.1 Contractor’s Personnel

SP 7.1.1 Contractor’s Project Manager SP 7.1.2 Other Key Personnel

SP 7.2 Reserved SP 7.3 Subcontractors and Suppliers SP 7.4 Department’s Personnel

SP 7.4.1 Department Project Manager SP 7.4.2 Department's Inspectors

SP 7.5 Project Meetings SP 7.6 Pre-Award and Post-Delivery Buy America Certification SP 7.7 Ownership and Use of Department Documents SP 7.8 Review of Drawings, Data and Designs SP 7.9 Partnering

SP 7.9.1 Department Partnering Policy SP 7.9.2 Reserved SP 7.9.3 Reserved SP 7.9.4 Reserved SP 7.9.5 Reserved

SP 7.10 Value Engineering SP 7.11 Quality Assurance / Contractor’s Plans

SP 8. Options SP 8.1 Options for Additional Diesel Multiple Units SP 8.2 Prices of Optional Diesel Multiple Units (Including Escalation)

SP 8.2.1 Manufacturing Escalation SP 8.2.2 Currency Exchange Rate

SP 8.3 Milestone Payments for Optional Diesel Multiple Units SP 8.4 Options for Additional Spare Parts, Tools and Materials SP 8.5 Prices for Additional Spare Parts, Tools and Materials SP 8.6 Milestone Payments for Additional Spare Parts, Tools and Materials SP 8.7 Assignability of Options

SP 9. Testing SP 9.1 General

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SP 9.2 Use of Designated Facilities SP 9.2.1 Care of Premises

SP 10. Safety and Security Requirements SP 10.1 Contractor Safety Training SP 10.2 Safety Compliance SP 10.3 Pre-Employment Background Requirements

SP 11. Service and Parts SP 11.1 Parts Availability Guarantee SP 11.2 Interchangeability SP 11.3 Department-Furnished Equipment

SP 12. Reserved SP 13. Mutual Waiver of Consequential Damages

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SP 1. General

SP 1.1 Interpretation In the Contract Documents, where appropriate, the singular includes the plural, and vice versa.

References to statutes or regulations means statutes and regulations as amended, and the version of the statute or regulation in effect at the time of an act or omission governs that act or omission.

The words “including," “includes," and “include” are to be deemed to be followed by the words “but not limited to." Words such as “herein," “hereof,” and “hereunder” refer to the entire Contract and not to any particular provision or section. Words not otherwise defined which have well-known technical or industry meanings are used in accordance with such recognized meanings. Words of any gender used herein include each other gender where appropriate.

References to persons include their respective properly authorized successors and assigns. Unless otherwise specified, lists contained in the Contract Documents defining the Project or the Work are not to be deemed all-inclusive.

SP 1.2 Use of English All documents delivered by the Contractor shall be in English.

SP 1.3 Reserved

SP 2. Reserved

SP 3. Schedule

SP 3.1 Period of Performance and Delivery Schedule

SP 3.1.1 Early Work Contractor shall only be entitled to payment for Work that commences after Notice to Proceed to perform such Work has been provided. Any work that the Contractor commences before the Contractor receives a Notice to Proceed for the Work to be performed, and any Work that the Contractor performs in excess of the monetary amount authorized under a Notice to Proceed, shall be at the sole risk of the Contractor and the Department has no obligation to pay for it or accept it. Time is of the essence in the Contract.

SP 3.1.2 Notices to Proceed

SP 3.1.3 Notice to Proceed 1 The Department will issue NTP 1 authorizing Contractor to perform the Work scope that is stated in such NTP, and all Work authorized under NTP 1 will not exceed sixty-three million dollars ($63,000,000). In no event will the Contractor be entitled to payment for Work performed under NTP 1 exceeding sixty-three million dollars ($63,000,000). Any Work performed by Contractor that exceeds sixty-three million dollars ($63,000,000) shall be at Contractor’s sole risk and Contractor shall not be entitled to any payment for such Work.

SP 3.1.4 Notice to Proceed 2 The Department will issue NTP 2 for the remaining Work as the Department may determine in its discretion.

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SP 3.1.5 Limited Notice(s) to Proceed for Other Work Notwithstanding NTP 1, NTP 2, and Section SP 3.1.3 Schedule and Mandatory Milestones, the Department, at any time and in its sole discretion, may issue one or more Notices to Proceed for limited or discreet elements of the Work as the Department may determine.

SP 3.1.6 Schedule of Mandatory Milestones Diesel Multiple Unit Commuter Rail Procurement: Schedule of Mandatory Milestones

Milestone Dates

NTP 1 (anticipated date) February 13, 2026

Limited NTP for Other Work To be determined by the Department, in its discretion

NTP 2 (anticipated date) January 1, 2027

Conditional acceptance of unit one (1) and unit two (2) No later than 42 months from NTP1

Conditional acceptance of units three (3) through nine (9) To be determined by the Department

Conditional acceptance of the last (10th) DMU No later than 52 months from NTP 1

Contractual delivery of one-half of all Spare Parts To be determined by the Department

Contractual delivery of remaining Spare Parts No later than Conditional Acceptance of first DMU

Completion of contractual training Consistent with TS 22.5.1

Delivery of final draft of all manuals To be determined by the Department

Contractual delivery of completed manuals No later than 36 months from NTP 1

Contractual delivery of Special Tools and test equipment No later than Conditional Acceptance of first DMU

Contractual delivery of all as-built drawings No later than Conditional Acceptance of last (10th) DMU

SP 3.2 CPM Schedule and Progress Reports Within 30 days after NTP 1, the Contractor shall furnish to the Department for the Department’s approval a detailed written Critical Path Method Schedule (CPM), which once approved shall become the schedule for the Project and the basis for evaluating changes in accordance with GC 8 Changes. During the entire term of Contract performance, the Contractor shall report to the Department in writing at least monthly on the progress of performance as set out in SP 3.2.2 Monthly Progress Report. If any of the Contractor’s monthly reports indicate any potential delay in the Critical Path identified on the schedule, the Contractor shall submit with the report a detailed statement of action it intends to take to avoid the delay.

SP 3.2.1 CPM Schedule The CPM Schedule shall include a narrative introduction describing the approach to the Project and CPM Schedule, design and engineering processes, fabrication, manufacturing and assembly plants and methods, shipping method, coding structure, other schedule systems used by the Project, and their relations to the CPM Schedule. Activities shall be discrete items of Work that must be accomplished under the Contract and that when complete, produce definable, recognizable entities or stages within the Project. The CPM Schedule shall have all Critical Paths indicated, showing all major Work tasks, including but not limited to the following:

• Payment milestones

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• Contractor and Subcontractor/Supplier Submittals including review cycles

• Design review meetings

• Drawing packages requiring approval

• Major on-site and off-site inspections and acceptance tests

• Major steps of DMU body fabrication

• Major subsystem deliveries

• Assembly milestones

• All progress payments

• Deliveries of the DMUs

• Training

• Delivery of special tools and diagnostic test equipment

• Conditional Acceptance and Final Acceptance of DMUs

The CPM Schedule shall show the Project milestones in calendar days, with NTP 1 as the starting date and Project activities with durations shown in working days. The Project milestones and activities shall be logically connected with NTP 1 as a start date and Final Completion as an end date.

The CPM Schedule shall be in the form of a CPM schedule report, be time scaled, have a clearly marked Critical Path, and include the following: activity identification number, activity description, original duration, remaining duration, percent complete, early and late start, total float, and activity area with bars.

The Contractor shall provide supplementary written information sufficient to describe the methods to be used and the resource constraints applied.

The Contractor shall revise and resubmit the schedule, including update of the CPM precedence network diagram when any of the following conditions occur:

a. A change or delay significantly affects any specified intermediate milestone date or completion date or the sequence of activities by more than one month.

b. The Contractor elects to change any sequence of activities affecting the Critical Path or to significantly change the previously approved Work plan.

c. It is the Department’s opinion that the status of the Work is such that the detailed network diagram and supporting analysis are no longer representative of planning and evaluation of the Work.

SP 3.2.2 Monthly Progress Report The Contractor shall prepare a progress report each month for the Department, starting with the first full month after the CPM Schedule is approved. The monthly progress report shall contain an updated CPM Schedule, in addition to the other elements required by TS 20.3.2(1)(a). The monthly progress report, including the CPM Schedule update, shall be due 5 Days after the reporting month. At the kickoff meeting, the Contractor shall present for the Department’s approval a monthly progress report format. The monthly progress report shall be based upon actual progress of the Work and shall include all items specified in TS

20.3.7.4 Progress Meetings Reports.

SP 3.3 Liquidated Damages (LDs) The Department will sustain significant damages as a result of the Contractor’s failure to complete the Contract milestones listed within the time period stated in SP 3.1.6 Schedule of Mandatory Milestones.

These damages may include, but are not necessarily limited to, the following damages to the Department and to UTA as the owner of the system:

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• Delays in completion and operation of the transit system.

• Increased costs of Contract administration.

• Cost resulting from delays to interfacing Contractors

• Loss of revenue

• Loss of reputation and goodwill

The total amount for liquidated damages in this Section shall not exceed the Total Contract Price. The Department may deduct the sum of liquidated damages from payments due or to become due under the Contract.

The parties agree that liquidated damages shall be the sole and exclusive remedy for the issue they address.

SP 3.3.1 Liquidated Damages for Late Delivery Because the actual amount of these damages is and will be difficult to accurately quantify, the parties mutually agree that each of the liquidated damages specified below is a fair and reasonable estimate of the damages that the Department may incur for each of the matters specified below. Dates for completion of all liquidated damages milestones will be as specified in SP 3.1.6 Schedule of Mandatory Milestones.

Milestones Amount Per Day

LD1: Conditional Acceptance of DMU one (1) to two (2): $4,000 per day per DMU.

LD2: Conditional Acceptance of DMU three (3) to ten (10): $2,000 per day per DMU.

LD3: Contractual delivery of one-half of all Spare Parts: $225.00 per day.

LD4: Contractual delivery of remaining Spare Parts: $225.00 per day.

LD5: Completion of contractual training: $450.00 per day.

LD6: Delivery of final draft of all manuals: $225.00 per day.

LD7: Contractual delivery of completed manuals: $225.00 per day.

LD8: Contractual delivery of Special Tools and test equipment: $450.00 per day.

LD9: Contractual delivery of all as-built drawings: $225.00 per day.

The Department reserves the right, without obligation and in its sole discretion, to waive the liquidated damages for late completion where circumstances causing the late completion are clearly beyond the control of the Contractor or where it is in the interest of the Department to do so. In addition, the Department reserves the right, without obligation and in its sole discretion, to waive liquidated damages due to delays caused by damages in transit which are of a significant enough nature to preclude a unit from either Conditional Acceptance or Final Acceptance. If the damage sustained is through no fault of the Contractor, then the Department in its discretion may waive the liquidated damages for a reasonable period of time to enable the Contractor to undertake the repairs.

SP 3.3.2 Liquidated Damages: Warranty The same payment for damages that is stated in SP 3.3.1 Liquidated Damages for Late Delivery for LD1 shall apply in the event that DMUs previously accepted by the Department are out of service due to Contractor-caused delays that are discovered after title to a DMU has transferred to UTA, as described in WR 1.1.5 Extension of Warranty and WR 1.5 Latent Defects.

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SP 4. Payment

SP 4.1 Payment Terms/Procedures

SP 4.1.1 General The Department shall pay and the Contractor shall accept the amounts set forth in Section SP 4.2 Milestone Payment Schedule, as full compensation for all costs and expenses of completing the Work in accordance with the Contract, including but not limited to all labor, equipment and material required, supplies, training, technical support, Special Tools, Spare Parts, overhead, duties, expenses, storage and shipping, risks and obligations, taxes (as applicable), fees and profit, and any unforeseen costs.

The Contractor shall submit invoices to the Department according to Section SP 4.2 Milestone Payment Schedule. The Contractor shall not submit more than one invoice in any 30-calendar day period and each invoice may include any number and combination of milestone payments that are payable that period.

Invoices need not be based on sequential milestones.

Invoice Format

In order to process the submitted invoices in a timely manner, each invoice shall be in a format approved by the Department, and shall include the following information:

1. Contractor name

2. Contract/PIN number

3. Invoice number

4. Purchase order number

5. Invoice date

6. Milestone(s) invoiced

7. Model and serial number of the DMU invoiced

8. Unit and total prices by milestone number

9. Total invoice amount

10. The Contractor shall certify on each invoice that the total costs invoiced do not exceed the total milestone payment allowed Invoicing and Payment Procedures

The Department will make payments to the Contractor for Work satisfactorily completed as set forth in the Contract Documents. To be considered for payment, an invoice must be in a form approved by the Department’s PM. Each invoice must set forth a specific description of the Work performed, deliverable(s) provided or other event(s) triggering entitlement to payment pursuant to Section SP 4.2 Milestone Payment Schedule. Each invoice must provide supporting documentation demonstrating the Contractor’s entitlement to payment including, for example, the following:

1. Documentation evidencing that the Department’s PM has reviewed and accepted a deliverable in accordance with the Payment Milestone Schedule;

2. Subcontracts and purchase orders entered with Subcontractors or Suppliers and invoices paid under such subcontracts and purchase orders;

3. Bills of lading with a common carrier evidencing the shipment of materials; or

4. Other evidence showing that a Milestone Payment Schedule event has been satisfied.

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All invoices must be accompanied by:

a. A Milestone payment approval letter from the Department’s PM; and

b. A certificate stating that all Subcontractors and Suppliers have been or will be paid in full for all labor performed and materials furnished and that the Work is not subject to liens or claims on account thereof.

Invoices meeting the requirements set forth in this Section SP 4.1.1 General shall then be submitted to accounts payable in the Department at payablescomplex@udot.gov for processing and payment.

The determination of whether the invoice is accurate and correct will be made solely by the Department.

The Department shall have the right to request additional documentation and explanation in connection with any invoice. The Department shall have the right to disapprove specific elements of each invoice provided that the Department will not withhold its approval unreasonably. The Department shall also have the right to offset (against payments) amounts reasonably reflecting the value of any claim which the Department has against Contractor, including but not limited to any unpaid liquidated damages owed by the Contractor under the Contract. The Department will provide the Contractor’s Project Manager with notice of the reasons for which payment for any portions of the invoice was withheld.

No payment will constitute an acceptance of any Work that fails to comply with the Contract Documents, and the Department and UTA shall not release any claims or disputes against the Contractor unless an authorized representative of the Department or UTA has entered a written release for the same with the Contractor.

SP 4.1.2 Advance Payment Advance payments are not allowed by the Department.

SP 4.2 Milestone Payment Schedule The Department will make payment of certain percentages of the Contract Price consistent with the following payment schedule as modified by and subject to the following:

a. the limitations on payment for the value of Work authorized by NTP 1;

b. any other applicable NTP payment limitations as provided in SP 3.1.2 Notices to

Proceed;

c. the CPM Schedule;

d. any Change Order affecting the Work; and

e. Spare Parts and Special Tools shall be invoiced and paid outside of the Milestone

Payment Schedule as per SP 4.2.1 Payment for Spare Parts and Special Tools.

Title to material included in any milestone payment request shall pass to the Department upon payment by the Department. Said title shall be free of all encumbrances. However, such transfer of title shall not relieve the Contractor of its responsibility for the furnishing, installation, fabrication or inclusion of said materials as a deliverable element of DMUs or other Equipment procured in accordance with the requirements of the Contract. Such transfer of title also shall not relieve the Contractor of any part of its obligations and responsibilities for the material and the Work (including but not limited to storage, protection and maintenance) and shall not waive any of the Department’s rights in connection with the material and the Work, including but not limited to those set forth in GC 2 Materials and Workmanship.

It is anticipated that milestones 1 to 6 will be included in NTP1, and NTP2 will include milestones 7 to 17.

However, all milestone payments shall be contingent upon the Contract Price and Contractor’s actual performance of the Work, and subject to the limitations of each applicable NTP.

mailto:payablescomplex@udot.gov

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Contract Milestone Payment Schedule: Management, Engineering, Tooling, Testing, Delivery, Acceptance and Completion1

Milestone Payment Milestone Description

1 5% Approved Project Management Plan and Project Schedule

2 5% Approved Quality and Safety Plans

3 3% Conceptual Design Review (CDR) Completed and Accepted

4 2% Reserve Production Space for Raw Materials

5 10% Order Long Lead Items (14 Major Systems)

6 5% Preliminary Design Review (PDR) Completed and Accepted

7 8% Final Design Review (FDR) Completed and Accepted

8 10% Completion and Acceptance of All Subsystem First Article Inspections (FAIs)

9 10% Delivery of Pilot Vehicles, as per SP 6

10 5% Completion of Pilot Vehicle / Type Testing

11 10% Delivery of Vehicles 3-10, as per SP 6 (Prorated by Vehicle)

12 10% Completion of Vehicle Qualification Test

13 2% Approval of Manuals & Training

14 5% Conditional Acceptance (Prorated by Vehicle)

15 5% Final Acceptance (Prorated by Vehicle)

16 2% Successful Completion of Reliability Demonstration

17 3% Conclusion of all Warranty periods and Resolution of All Warranty Claims

1. Payment is expressed in percentage of Contract Price for management, engineering, tooling, testing, delivery, mock-up, acceptance and completions. “Approval” means specific written approval or acceptance for that Milestone by the Department.

SP 4.2.1 Payment for Spare Parts and Special Tools Upon delivery and acceptance of Spare Parts and Special Tools, payment may be invoiced for those Spare Parts and Special Tools accepted by the Department.

SP 4.3 Prompt Payments

SP 4.3.1 Department Prompt Payment The Department will pay all undisputed amounts of each correct invoice within sixty (60) calendar days after receipt by the Department’s accounts payable (AP). The Department’s payments to the Contractor will be by mail, electronic funds transfer or purchasing card.

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SP 4.3.2 Subcontractor Prompt Payment The Contractor shall pay any Subcontractor approved by the Department for Work that has been satisfactorily performed no later than thirty (30) days from the date of the Contractor’s receipt of milestone payments by the Department. Any delay or postponement of payment may take place only for good cause and with the Department’s prior written approval. This clause applies to both DBE and non-DBE Subcontractors.

In the event the Contractor does not make progress payments to the Subcontractors in accordance with the time periods in this section, the Contractor may be subject to other penalties as outlined in the Contract or available at law.

SP 4.4 Units of Currency/Currency Adjustment/Cost Escalation All Contractor invoices for payment shall be accounted in U.S. dollars, and all Department payments to the Contractor shall be in U.S. dollars.

There shall be no adjustments to Contract Price for currency fluctuations, or for an escalation in any costs (such as material, labor, supply chain or other costs), through the term of the Contract, except for option DMU orders as described in SP 8.2 Prices of Optional Diesel Multiple Units (Including Escalation).

SP 4.5 Reserved

SP 4.6 Payment of Taxes Prices are to be quoted inclusive of federal excise taxes and Utah sales, use and transaction taxes.

All non-taxable charges, including all labor and shipping costs, shall be clearly separated from other charges on all invoices presented by the Contractor for payment.

SP 4.7 Completion of Mandatory Milestones Completion of a Mandatory Milestone as provided in SP 3.1.6 Schedule of Mandatory Milestones will occur as the Contractor completes each Mandatory Milestone. The Contractor shall complete and shall deliver to the Department designated portions of the Work as provided in SP 3.1.6 Schedule of Mandatory Milestones as implemented in the CPM Schedule. When a Mandatory Milestone has been performed and delivered, the Work will be inspected by the Department’s PM and/or other designated representative.

If the Department’s PM finds that the Work has been completed, in all aspects, in accordance with SP 3.1.3 Schedule of Mandatory Milestones as implemented in the approved CPM Schedule and in accordance with the Contract Documents, then the Department will issue a Notice of Completion and make payment for that portion of the Work in accordance with the payment provisions.

The designated portion of the Work must also include:

1. Correction of all fleet defects and non-conforming Work, if applicable;

2. Completion of previously identified warranty work, if applicable;

3. Delivered written release of liens and any other encumbrances from all Subcontractors, Suppliers, lenders, and any and all other persons or entities asserting such, if applicable; and

4. Provided all training, technical support, Spare Parts, Special Tools, vehicle history books, manuals, and other items required under the Contract Documents, if applicable.

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SP 4.8 Final Payment and Claims Before applying for Final Payment, the Contractor shall complete all Work and shall correct any deficiencies in the Work (including but not limited to any Work rejected by the Department pursuant to Section SP 4.7 Completion of Mandatory Milestones. The invoice for Final Payment is subject to the review and concurrence of the Department's PM).

Within thirty (30) days after the date of Notice of Completion for Final Completion is issued by the Department, the Contractor shall prepare and present to the Department’s PM a proposed final invoice in writing. The proposed final invoice shall show the proposed total amount of compensation under the Contract, including therein an itemization of said amount segregated as to Contract item quantities, and other basis for payment. It shall also show all deductions or adjustments made or to be made for: (i) prior payments; (ii) amounts to be withheld or retained under the provisions of the Contract; and (iii) amounts proposed in connection with any and all Claims that the Contractor made in connection with the Work that the Contractor made in compliance with the requirements of this Contract and that have not yet been resolved, or a statement that no Claims will be filed. All prior invoices and payments shall be subject to correction in the proposed final invoice. No Claim for which a Notice of Intent to Claim is required will be considered unless the Contractor has strictly complied with the Contract, including but not limited to the Claim and notice provisions in GC 9.10 Claims.

Acceptance of any Final Payment by the Contractor will constitute a full and complete release of all obligations of the Department under the Contract Documents, excepting only Claims by the Contractor that have been previously made in writing in compliance with this Contract and recognized by the Department, and only if such Claims are identified in the final invoice as a Claim that the Department has recognized and such Claim is noted in the Final Payment correspondence as unsettled at the time of Final Completion.

The Department’s Final Payment is without prejudice to any and all claims that the Department or UTA may have against the Contractor.

SP 5. Performance Security/Insurance

SP 5.1 Performance Security Requirements The Contractor shall furnish, at its own expense, a performance security in the form of one of the following to guarantee complete and proper performance in accordance with the Contract:

1. A letter of credit in the amount of 100 percent of the Contract Price in a form approved by the Department. The security shall be an irrevocable letter of credit issued by a bank with an underlying rating of AA- or better by Standard & Poor’s or Aa3 or better by Moody’s Investor Service.

2. A performance bond from a surety duly licensed to do business in the State of Utah having a financial rating from A.M. Best Company of “A VIII” or better, in the amount of 100 percent of the Contract Price.

In the case that a security guarantor becomes insolvent, its license is revoked or suspended, or its rating is downgraded, the Contractor shall notify the Department promptly and shall substitute other and sufficient performance security. If the Contractor fails to do so, such failure may be an event of default at the sole discretion of the Department.

The Contractor shall maintain the performance security required by SP 5.2.4 Required Policies at all times through Final Completion and the expiration of all applicable warranty periods. The Department may choose, in its sole discretion, to allow the Contractor to reduce the required security during the warranty periods. The Department reserves the right to require an adjustment to the performance security if the

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Department reasonably believes that a security guarantor is not capable of performing if called upon, and if the Contract Price increases or decreases.

SP 5.2 Insurance

SP 5.2.1 Evidence of Coverage Contractor shall deliver to the Department an ACORD form (Certificate of Liability Insurance) and, upon request by the Department, a copy of the policy, evidencing the required insurance coverage stated below.

A Notice to Proceed will not be issued until all required insurance documentation is in place.

SP 5.2.2 Continuation or Change in Coverage The Contractor shall maintain in effect during the term of the Contract, including any warranty period, at least the coverage and limits of insurance set forth below. Prior to the cancellation, modification or expiration of any insurance during the Contract performance, the Contractor shall furnish evidence of such to the Department’s PM.

SP 5.2.3 Requirements Policies of insurance shall include the following:

1. The Department and UTA, and their officials, representatives and employees acting in connection with the Work, shall be additional insureds with respect to all of the Contractor’s policies of insurance except for statutory workers compensation and employers' liability insurance. On insurance policies where the Department is named as an additional insured, the Department shall be an additional insured to the full limits of liability purchased by the Contractor. Insurance limits stated in this Contract are minimum limits. Larger limits may be pursued after the Contractor’s assessment of the exposure for this Contract; for their own protection and the protection of the Department.

2. The Contractor’s policies of insurance are primary insurance and noncontributory with respect to all other available sources. No insurance or self-insurance of the Department or UTA will be called upon to contribute to a loss, and to the extent the same are otherwise applicable, any insurance or self-insurance maintained by the Department or UTA shall be excess of the Contractor’s insurance and shall not contribute with it.

3. Notice of Cancellation. Each insurance policy required by the insurance provisions of this Contract shall provide the required coverage and shall not be suspended, voided or canceled except after thirty (30) days prior written notice has been given to the Department, except when cancellation is for non-payment of premium, then ten (10) days prior notice may be given. Such notice shall be sent directly to the Department’s Project Manager.

4. Insurance shall be maintained at all times in connection with this Contract, and the Contractor must file a certificate of insurance, showing up-to-date coverage, with the Department before the Contractor may commence Work. Contractor shall furnish the Department with certificates of insurance (on standard ACORD form) as required by this Contract. The certificates for each insurance policy are to be signed by a person authorized by that insurer to bind coverage on its behalf.

5. All insurance companies must be placed with insurers duly licensed or authorized to do business in the State and with an “A.M. Best” rating of not less than A-VII. The Department in no way warrants that the above-required minimum insurer rating is sufficient to protect the Contractor from potential insurer insolvency.

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6. The Department reserves the right to require higher or lower insurance limits where warranted.

Failure to provide proof of insurance as required will be deemed a material breach of this Contract and an event of default in connection with the termination of this Contract.

7. All certificates required by this Contract shall be sent directly to the Department’s PM. The Department project/contract number shall be stated on the certificate of insurance. The Department reserves the right to require complete, certified copies of all insurance policies required by this Contract at any time.

8. If the Contractor requests any variation from the insurance requirements of this Contract, the Department has sole discretion to determine whether to approve them, and a variation must be approved in writing by the UDOT Risk Manager.

SP 5.2.4 Required Policies The Contractor shall provide and maintain at all times the following policies of insurance:

1. Workers compensation and employers liability insurance, and/or qualified self-insurance program, for all of the Contractor’s employees and any Subcontractor employees related to this Contract to cover full liability under the workers’ compensation laws of the jurisdiction in which the Work is performed at the statutory limits required by said jurisdiction, but not less than $1,000,000.00, covering Contractor and Subcontractor’s employees while on property that is owned, leased or licensed by the Department or UTA.

2. Commercial general liability insurance covering bodily injury and property damage, including contractual liability covering the indemnification contained herein, in the amount of $10,000,000 combined single limits per person per occurrence and $10,000,000 aggregate. The commercial general liability insurance policy shall not contain “X, C and U” (explosion, collapse, and underground) exclusions.

3. Products and completed operations liability coverage in the amount of $5,000,000 per occurrence and $10,000,000 annual aggregate that extends for a period of five years after acceptance of the last DMU delivered under the Contract.

4. Commercial automobile liability insurance covering bodily injury and property damage liability that is applicable to all vehicles used in the performance of the Contractor’s Work under this Contract whether owned, hired, leased or non-owned in the amount of $1,000,000 combined single limits per occurrence and $3,000,000 aggregate.

5. Railroad liability insurance in the amount of $100,000,000 will be required if any testing takes place within a rail corridor shared between UTA and Union Pacific Railroad.

SP 6. Shipping, Delivery and Acceptance

SP 6.1 Shipment Authorization Each DMU shipped from the Contractor’s plant to the place for delivery designated by the Department shall be complete and in compliance with all provisions of the Contract, except as may be noted below. Prior to shipment of each DMU, the Contractor shall obtain a shipping release signed by the Department. In the Contractor’s request for a shipping release, the Contractor shall certify that the DMU is complete, has passed all pre-shipment tests described in the Technical Specifications and complies with approved Drawings and samples, is accompanied by an up-to-date vehicle history book, and meets other agreed-upon conditions for shipping. To accommodate any and all tests that may be necessary, the Contractor shall provide a minimum of ten (10) days’ notice to the Department prior to each shipment. The Department, at its sole discretion, may permit shipment of a DMU with minor Defects or open items approved by the Department that will not affect testing and can easily be corrected after shipment. All known Defects and

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Mott MacDonald Restricted open items shall be submitted by the Contractor with the request for shipping release. When the Department provides a shipping release, it only authorizes transportation, and it shall neither be construed nor inferred to constitute DMU acceptance by the Department.

SP 6.2 Shipment All shipments shall be packaged and packed in a manner to ensure the integrity of the product during transportation, handling and temporary storage. Due regard shall be given to protection from loss and pilferage, physical damage, and the effect of the elements and environmental conditions. The Department reserves the right to review and approve a shipping plan.

If shipped by sea, every effort will be made to provide below-deck shipping and storage for all DMUs or DMU components to provide enclosed protection against damage from handling and from exposure to the marine environment and adjacent shipments.

During shipment, each DMU shall be equipped with an impact recorder provided by the Contractor and approved by the Department. The recorder shall record all handling impacts. All records shall become the property of the Department and shall be appended to the Vehicle History Book.

The Contractor shall require shippers to log and record any incidents of damage or potential damage to the DMUs and DMU components, and interruption of shipments. The Contractor shall report such shipment incidents to the Department promptly upon the Contractor’s receipt of such information, describing the nature of the shipment damage, potential damage or interruption, and the actions taken and to be taken to complete the shipment and repair any damage.

The Contractor shall assume full responsibility for determining the haul routes to be utilized and confirming that the jurisdiction through which its haul routes will pass will permit the hauling operations with respect to laden weights, type of vehicle, frequency and dimension of loads, required traffic control, and hours of operation. All necessary permits, licenses or bonds shall be obtained and paid for by the Contractor.

SP 6.3 Evidence of Delivery and Shipping Destination (FOB point) Delivery of the DMUs and other Equipment shall be freight on board (FOB) destination as that term is described and applied in this Section SP 6.3 and elsewhere in the Contract. Contractor is responsible for all delivery costs, including risk of loss, to the Department’s final destination on board the carrier’s conveyance to the Department’s location specified below.

Delivery shall be evidenced by a signed receipt by the Department’s PM or other designated representative as described in SP 6.4 Unloading, at the following designated point of delivery, or as otherwise designated by the Department:

Warm Spring Rail Service Center

900 N 500 W

Salt Lake City, UT 84116

A receipt signed by the Department or Utah Transit Authority upon delivery of the DMU does not constitute the Department’s acceptance of either the condition of the DMU or its conformance with the terms of the Contract. Risk of loss and title to material shall not pass to the UTA until delivery, inspection, and Conditional Acceptance has occurred. The Department shall not accept risk of loss or title to the DMU at any time. For each DMU or other Equipment, the Contractor shall provide to UTA all documents that are necessary and desirable to transfer clear title to UTA at the time when the Contractor receives Conditional Acceptance. A transfer of title and risk of loss shall not relieve the Contractor of responsibility for Defects or fraud.

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Mott MacDonald Restricted

SP 6.4 Unloading The Contractor shall be responsible for the unloading of DMUs and other Equipment at the designated delivery point as instructed by the Department.

After arrival at the Department’s designated facility, each DMU shall be examined concurrently by the Department (or UTA if designated by the Department) and the Contractor for shipping damage. The Department then will issue a receiving notice to the Contractor, which will acknowledge receipt of the DMU and describe any missing parts or visible damage that may have occurred during shipment.

SP 6.5 Acceptance Testing The Department has designated UTA to assist the Contractor to conduct commissioning and acceptance tests on each delivered DMU. These tests shall be completed after delivery and shall be conducted in accordance with approved written Test Plans consistent with the Technical Specifications. The purpose of these tests is to identify Defects that have become apparent between the time of DMU release and delivery to the Department and observe performance to demonstrate whether it complies with the Contract terms.

The acceptance tests shall include visual inspection and DMU operations. No acceptance test shall apply criteria that are different from the Technical Specifications.

The Department shall record details of all Defects on the appropriate test forms and shall notify the Contractor of acceptance or non-acceptance of each DMU after completion of the tests. The Defects detected during these tests shall be repaired according to procedures defined in SP 6.8.3 Non-Acceptance and Repairs after Non-Acceptance.

SP 6.6 Delivery of Special Tools, Test Equipment, Spare Parts and Manuals Spare Parts shall be of production configuration and successfully tested. Delivery shall be completed in accordance with SP 3.1.6 Schedule of Mandatory Milestones and the CPM Schedule.

Acceptance of Spare Parts will be deemed to have occurred after delivery, successful completion of Department receiving inspection, relevant functional testing, and written notification of acceptance by the Department pursuant to SP 4.7 Completion of Mandatory Milestones

Delivery of Special Tools and test equipment shall be completed in accordance with SP 3.1.3 Schedule of Mandatory Milestones and the CPM Schedule.

Delivery of manuals shall be made in two stages as stated in SP 3.1.6 Schedule of Mandatory Milestones with interim deliverables required to ensure that manuals remain up to date with DMU production and delivery. The initial delivery of draft manuals is shown in the CPM Schedule and shall consist of full sets of all manuals in the quantities indicated. The final delivery of manuals shall consist of the complete updated manuals and the electronic media in the quantities indicated. Acceptance of the manuals will be deemed to have occurred after delivery of the final manuals in the quantities indicated and upon written notification of acceptance by the Department pursuant to SP 4.7 Completion of Mandatory Milestones.

The Department reserves the right to refuse delivery of DMUs if Spare Parts, Special Tools, test equipment or manuals are not delivered in accordance with the Mandatory Milestone Schedule and pursuant to SP 4.7 Completion of Mandatory Milestones.

SP 6.7 Title to Special Tools, Test Equipment, Spare Parts and Manuals Upon receipt of a Notice of Completion from the Department pursuant to SP 4.7 Completion of Mandatory Milestones title in the Special Tools, Test Equipment, Spare Parts or Manuals, covered by the Notice of Completion, shall vest in the Utah Transit Authority (UTA). The title received by UTA shall be considered full legal title with rights to unconditional possession and ownership. The Contractor, shall, within five (5)

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Mott MacDonald Restricted days after receipt of the Notice of Completion, with respect to any Special Tools, test equipment, Spare Parts or manual, deliver to the Department a bill of sale or other instrument that shall be evidence that UTA has acquired full title to such Component free and clear of all liens, claims, security interests or encumbrances of any kind. Contractor shall execute such further documents or perform such further actions as may be necessary to affect this transfer of title.

SP 6.8 Conditional Acceptance, Final Acceptance and Non-Acceptance

SP 6.8.1 Conditional Acceptance Conditional Acceptance of a DMU is defined as a completely assembled DMU at the delivery location designated by the Department subject to the provisions outlined below. The DMU shall have all requirements successfully verified consistent with TS 21 Requirements Management, Design Validation and Verification, and be ready to run in revenue service except for minor Defects that require corrective action but will not materially affect revenue service operations. Conditional Acceptance requires that all documentation for the DMU, including the vehicle history book conforming to TS 22.2.15 Vehicle History Book (VHB) has been delivered to and accepted by the Department in the manner set forth in this Contract.

The Contractor shall submit a punch list and schedule for each Conditionally Accepted DMU for the Department’s approval. The Department approved punch list (including additional punch list items from the Department) must be fully performed before the Contractor may receive a Final Acceptance of a DMU.

If the Contractor fails to complete all Work in accordance with the approved CPM Schedule, the Department may, but is not required to, approve the completion of Work specified by the Department in writing in accordance with the procedures outlined in WR 2 Repair Procedures (and under the Warranty Agreement, UTA also has that right and other rights).

The Department will issue a DMU Conditional Acceptance and Inspection form to the Contractor for each DMU when the DMU meets the conditions specified in this section.

SP 6.8.2 Final Acceptance The Department will issue Final Acceptance of a DMU to the Contractor for each DMU when the following has been achieved:

1. The DMU has been completed in full accordance with the Technical Specifications and all other Contract requirements, including all testing, approved engineering Submittals and Change Orders.

2. The DMU has had all punch list items identified at the Conditional Acceptance stage completed.

3. All required documentation for the DMU has been received and approved by the Department.

SP 6.8.3 Non-Acceptance and Repairs after Non-Acceptance If a DMU fails any inspection or test, the Department shall provide the Contractor with a notice of non-acceptance. Such notice shall be effective until Contractor corrects the Defects, and the Department accepts the DMU after retest and inspection. The Department, at its option, may require the Contractor to return the DMU to the Contractor’s production or assembly plant for corrective work necessary for the DMU to conform to the Contract Documents.

1. Responsibility: The Contractor shall at all times be responsible for the correction of the Defects.

2. Work by the Department: The Contractor may request that the Department perform limited

Work related to correction of Defects. Such Work shall be subject to full reimbursement of the Department’s costs by the Contractor. Even if the Department agrees to perform such limited Work, it shall remain the sole obligation of the Contractor to ensure proper correction of the

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Mott MacDonald Restricted

Defects. The Department’s responsibility will be strictly limited to performing the limited Work designated by the Contractor that the Department consents to perform.

3. Time for correction: The Contractor shall have two days to correct the Defect specified in a notice of non-acceptance or to request, in writing, an extension of time, and any request for extension of time must include a definition of the problem, solution, and a timeline to correct the Defect.

SP 7. Project Management

SP 7.1 Contractor’s Personnel

SP 7.1.1 Contractor’s Project Manager During performance of the Contract, the Contractor shall assign a competent Project Manager who shall have full authority to act on behalf of the Contractor and all of the Contractor’s Subcontractors in all matters within the scope of the Contract. The Contractor shall furnish the Department with a written confirmation of its Project Manager’s authority to act for the Contractor. The Contractor’s Project Manager shall have experience acceptable to the Department. The Project Manager must be thoroughly familiar with all procedures involved in DMU production.

With NTP 1, the candidate submitted with the Proposal shall become the Contractor’s Project Manager. If for any reason, and at any time, the candidate submitted by the Contractor is not acceptable to the Department, or becomes unacceptable, the issue will be referred to the Contractor’s senior management and the Contractor will determine how to provide arrangements that comply with this Contract.