3-Attachment B - CMGC Agreement Exhibit 2.2 General Conditions 2026-04.pdf

SCHOOL

, UTAH

AGREEMENT FOR CONSTRUCTION MANAGEMENT

AND

GENERAL CONTRACTOR SERVICES

(“Construction Manager”)

Nebo School District

(“Owner”)

Nebo School District CM/GC – _______________________ - ________, Utah Version Date: January 2019 ______________20__ i

TABLE OF CONTENTS

ARTICLE 1 CONTRACT DOCUMENTS

ARTICLE 2 SCOPE OF SERVICES AND WORK

2.1 General

2.2 Preconstruction Services

2.3 Construction Phase Work

2.4 Work All-Inclusive

2.5 Standard of Care

2.6 Self-Performed Work

2.7 Payment and Performance Bonds

ARTICLE 3 FIXED LIMIT OF CONSTRUCTION COST

3.1 Amount of Fixed Limit

3.2 Fixed Limit as Ultimate Limitation

3.3 Fixed Limit Reasonable

ARTICLE 4 SUBCONTRACTORS

4.1 Subcontractors

4.2 Supervision and Responsibility for Subcontractors

4.3 Terms of Subcontracts

4.4 Default by Subcontractor

ARTICLE 5 COMPENSATION; PAYMENT

5.1 Preconstruction Compensation

5.2 Contract Price

5.3 Guaranteed Maximum Price

5.4 Lump Sum Price

5.5 Contract Price All-Inclusive

5.6 Contract Price/Lump Sum Price

ARTICLE 6 PAYMENT

6.1 Payment

6.2 Payment of the Contract Price

6.3 Offset

6.4 Application of Funds

6.5 Cost Control

ARTICLE 7 MODIFICATIONS

7.1 Modifications

7.2 Justification for Modifications; Procedure

7.3 Effect of Modification

ARTICLE 8 PROGRESS AND PERFORMANCE

8.1 Time of Completion; Delay Remedy

8.2 Project Schedule

8.3 Progress of the Work

8.4 Liquidated Damages

8.5 Delays; Extensions

8.6 Project Coordination; Modifications to Existing Facilities

ARTICLE 9 SUBSTANTIAL COMPLETION

9.1 Punch List

9.2 Substantial Completion

9.3 Final Completion

9.4 Liability of the Construction Manager After Substantial Completion

ARTICLE 10 COORDINATION OF WORK

Nebo School District CM/GC – _______________________ - ________, Utah Version Date: January 2019 ______________20__ ii

10.1 Project Organization

10.2 Project Representative

10.3 Damage to Owner's Property

10.4 Authorization

10.5 Independent Contractor

Nebo School District CM/GC – ________________________ – ___________, Utah Version Date: January 2019 _____________20__

AGREEMENT FOR CONSTRUCTION MANAGEMENT

AND

GENERAL CONTRACTOR SERVICES

THIS AGREEMENT FOR CONSTRUCTION MANAGEMENT AND GENERAL CONTRACTOR SERVICES

(the “Agreement”), is made effective as of the ____ day of __________, 20___, by and between ___________________, a Utah Corporation (the “Construction Manager”) and NEBO SCHOOL DISTRICT, a political subdivision of the State of Utah (“Owner”).

WHEREAS, Owner intends to have certain Services and Work (as defined herein) performed in connection with the following project(s) (individually or collectively, the “Project”):

____________________ School _________, Utah _______

WHEREAS, the Construction Manager is in the business of furnishing the services and work of the type desired by

Owner, and has the expertise and know-how to complete the Services and Work in a timely and workmanlike manner.

NOW, THEREFORE, in consideration of the covenants, promises, terms, and conditions set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Owner and the Construction Manager agree as follows:

ARTICLE 1 CONTRACT DOCUMENTS

As used herein, the term “Contract Documents” means this Agreement, the Owner's Construction General

Conditions, Version Date: November 2018 (the “General Conditions”), Drawings, Specifications, Addenda, and any Modifications issued after execution of this Agreement. The Contract Documents shall also include the proposal documents (the “Proposal Documents”), including the Request for Proposals and all Proposal forms, to the extent not in conflict with the other above-stated Contract Documents. All terms used in this Agreement shall have the meanings ascribed to such terms in the Contract Documents, and in particular, the General Conditions. References in the Contract Documents to “Contractor” shall be deemed to refer to the Construction Manager except where the context clearly provides otherwise. In the event of an inconsistency between any of the Contract Documents and this Agreement, this Agreement shall control. The Construction Manager agrees to be bound to Owner by the terms and provisions of the Contract Documents.

ARTICLE 2 SCOPE OF SERVICES AND WORK

2.1 General. The Construction Manager accepts the relationship of trust and confidence established by this

Agreement. The Construction Manager agrees to: (a) cooperate with Owner and the Architect selected by Owner for the design and engineering services for the Project; (b) use the Construction Manager’s best skills, efforts, and judgment in furthering the interest of Owner; (c) furnish efficient business administration and supervision; and (d) furnish at all times an adequate supply of workers, the appropriate materials and equipment, and perform the Services and Work in the best and most expeditious and economic manner in accordance with the Contract Documents. The Construction Manager agrees that the Work shall be subject to inspection and approval of Owner or its authorized representatives. The Work to be performed by the Construction Manager shall be performed in two phases: (a) the Preconstruction Work; and (b) the Construction Phase Work, as provided in Sections 2.2 and 2.3 below.

2.2 Preconstruction Services. Commencing with the written request of Owner after the date of this Agreement (the “Preconstruction Services Notice”), the Construction Manager shall perform all the preconstruction services described in the Contract Documents, including, but not limited to, Section 1.1 of Exhibit 2.2 hereto (collectively, the “Preconstruction Services”), all of which are included in the scope of the Work to be performed pursuant to the Contract Documents. The Construction Manager shall not perform any portion of the Preconstruction Services prior to receiving a Preconstruction Services Notice from Owner. Concurrently with the signing of this Agreement, the Construction Manager shall provide to Owner the payment and performance bonds required by Sections 11.3(1) and 11.3(3) of the General Conditions in the full amount of the Preconstruction Compensation.

2.3 Construction Phase Work. Commencing with the issuance of a notice to proceed with the construction of the entirety of the Work (a “Notice to Proceed”), the Construction Manager shall provide and perform all of the Work described in the Contract Documents, including, but not limited to the General Conditions Work and Section 1.2 of Exhibit

2.2 hereto (collectively, the “Construction Phase Work”). The Construction Manager shall not perform any portion of the Construction Phase Work prior to receiving a Notice to Proceed with such Work from Owner. Concurrently with receiving such Notice to Proceed, the Construction Manager shall provide to Owner the payment and performance bonds required by Sections 11.3(2) and 11.3(4) of the General Conditions in the full amount of the Contract Price, and thereafter the Construction Manager shall commence faithfully and diligently executing the Construction Phase Work in accordance with the Contract Documents.

2.4 Work All-Inclusive. The Work to be performed pursuant to this Agreement shall be in accordance with the Drawings and Specifications prepared by _________________________________. The Drawings are entitled ___________________, dated ______________, Project No. ________, Sheet Nos. _____________________________ (the “Drawings”). The Specifications are entitled _____________________, containing _______________________ (the “Specifications”). The Drawings and Specifications are fully incorporated into this Agreement. It is intended by the parties that, except as specifically provided in the Contract Documents, the Work to be performed by the Construction Manager and Subcontractors pursuant to the Contract Documents, and shall include all work, labor, equipment, materials, and services necessary for or incidental to produce the intended result and a functionally complete and operational Project. The Construction Manager shall carefully study and compare the Contract Documents and shall at once report to Owner any error, inconsistency, or omission it may or reasonably should discover and seek a written interpretation or clarification from the Architect before proceeding with any Work affected thereby. The Construction Manager agrees to furnish all necessary and incidental labor, equipment, materials, and services required by or reasonably inferable from the Contract Documents to properly and completely perform and to perform all Preconstruction Services and General Condition Work and, through Subcontractors selected in accordance with this Agreement (except as authorized pursuant to Section 2.6 below), the balance of the Work in connection with the Project strictly in accordance with the Contract Documents. The Construction Manager shall review the Drawings and Specifications and any modifications or refinements thereto as they are being finalized and recommend alternative solutions whenever design details affect construction feasibility or schedules without, however, assuming the Architect's responsibilities for design. At or before the conclusion of the Preconstruction Services, Owner may in its sole discretion terminate this Agreement as provided for in the Contract Documents and the Construction Manager shall be entitled to payment only for that portion of the Preconstruction Services completed in accordance with the Contract Documents.

2.5 Standard of Care. In performing the Preconstruction Services, the Construction Manager and all those for whom the Construction Manager is liable at any tier shall exercise the degree of skill and diligence as is exercised by licensed members of their respective professions having substantial experience providing similar services on projects similar in type, magnitude, and complexity to the Project that is the subject of this Agreement. The Construction Manager shall be liable to Owner for all Owner costs, damages, Claims, liabilities, additional burdens, judgments, fines, penalties, damages, demolition, removal, or modification of Work, any Architect or Owner delay damages, increased material costs, or third-party Claims, to the extent caused by acts, failure to act, negligence, errors or omissions that do not meet this standard of care. Owner reserves the right to deduct from any payment, otherwise due under this Agreement, the amount related to any such error or omission.

2.6 Self-Performed Work. Pursuant to applicable Utah law, the Construction Manager may request that it be allowed to self-perform portions of the Construction Phase Work (the “Self-Performed Work”) for the benefit of the Project.

Owner shall have the right in its sole discretion to approve or reject any proposal for Self-Performed Work. Self-Performed Work may be allowed as follows:

(a) When the proposal for the self-performed Construction Phase Work is approved by Owner as part of the Construction Manager selection process; or

(b) When the Construction Manager has been selected for the self-performed Construction Phase

Work through a selection process that is similar to the selection of Subcontractors as provided in Article 3 hereof.

No portion of the Construction Phase Work may be self-performed by the Construction Manager unless approved in advance in writing by Owner. If Owner authorizes the Construction Manager to self-perform portions of the Work, said Work shall be reimbursed at actual cost incurred based on documentation (direct personnel expense, including labor burden, materials, equipment, etc.) plus a fixed negotiated fee that shall not exceed _______percent ( %) of the cost of said Work. Self- Performed Work eligible for said fee shall only include labor, materials, and equipment provided directly by the Construction Manager and not by Subcontractors. Self-Performed Work eligible for said fee shall not include items furnished by the Construction Manager as General Condition Work.

2.7 Payment and Performance Bonds. Concurrent with the Notice to Proceed with the Construction Phase Work, the Construction Manager shall provide One Hundred Percent (100%) Payment and Performance Bonds for the amount of the Guaranteed Maximum Price (GMP) or Lump Sum Price, as applicable, and meeting the requirements set forth in the Contract Documents.

ARTICLE 3 FIXED LIMIT OF CONSTRUCTION COST

3.1 Amount of Fixed Limit. Until such time as the Lump Sum Price is agreed upon by Owner and the Construction Manager, the fixed limit of total construction cost for the Work is and 00/100 Dollars ($__________) (the “Fixed Limit”), which includes the Construction Manager’s Fee and the Preconstruction Services Fee. The Fixed Limit may only be increased in advance and in writing by Owner.

3.2 Fixed Limit as Ultimate Limitation. The scope of Work must at all times be within the Fixed Limit. Owner shall not be liable to the Construction Manager for any amount over the Fixed Limit. The Fixed Limit as stated herein may be modified in writing and in advance by Owner or as a result of the entitlement of the Construction Manager for additional monies in accordance with the procedures and substantive requirements of the Owner’s General Conditions and Contract

3.3 Fixed Limit Reasonable. By executing this Agreement and at the time of submittal of each Lump Sum proposal, the Construction Manager agrees that the Fixed Limit is a reasonable limit for the total cost of the Project.

ARTICLE 4 SUBCONTRACTORS

4.1 Subcontractors. Except for Preconstruction Services, General Condition Work, or Self-Performed Work, the Construction Manager shall not perform any of the on-site construction or installation activities of the Work with its own forces, such Work to be performed by Subcontractors selected in the manner provided in this Article 4. Subcontracts shall not include any Preconstruction Services or General Condition Work to be performed by the Construction Manager's own forces. Subcontractors shall be approved in advance by Owner in accordance with applicable requirements of this Agreement.

Unless otherwise agreed upon in writing by Owner and the Construction Manager, the Construction Manager shall prepare all necessary bidding information, bidding forms, general conditions, subcontracts, and invitations to bid, and conduct, after approval of the foregoing bidding documents by Owner, competitive bidding for the Work and the Construction Manager’s obligations related to bidding for the Work under this Section 4.1 shall be a part of the Preconstruction Services. Contracts with Subcontractors will be between such Subcontractors and the Construction Manager. Owner shall have no contractual relationship related to the Work with any Subcontractor, and shall have no responsibility for any of the Construction Manager’s obligations relating to any Subcontractor.

4.1.1 Bidding Process. Subcontractors for the construction of the Project, or any portion thereof, shall be the lowest responsible bidders based upon invitations to bid issued by the Construction Manager in accordance with laws applicable to Owner and in accordance with the requirements of Exhibit 2.2 hereof. Copies of all bids shall be promptly delivered to Owner. Bids shall be an offer to provide all necessary labor, equipment, and materials for the construction of the Work, or portion thereof, as specified in the invitation to bid, together with appropriate and customary guarantees, warranties, insurance, bonds, and sureties acceptable to Owner and the Construction Manager. Owner shall be notified by the Construction Manager of the location, date, and time of each bid opening and Owner shall have the right to be present and fully participate in such bid opening.

4.1.2 Bid Selection; Contract Documents. The Construction Manager shall have the right, without the consent of Owner, to reject any and all bids pursuant to the criteria set forth in this Section 4.1.2 and Exhibit 2.2 hereof, and, with the written consent of Owner, to accept bids, to waive irregularities in the bids and to accept alternative bids. The Construction Manager shall select bids (the “Bid Prices”) from the lowest responsible bidders in accordance with applicable law. Owner or the Construction Manager shall have the right to cancel the invitation for bids or reject all bids when in the best interest of Owner. This right shall be stated in the invitation for bids. In the event any part of the Contract Price to be paid to the Construction Manager exceeds the Owner’s estimate for such scope of Work as set forth in the Fixed Limit for such Work, at Owner’s request, the Construction Manager shall reject all bids and shall use reasonable and prompt efforts to: (a) rebid the Work or portion thereof deemed to be excessive by the Construction Manager or Owner, such rebidding to be conducted in accordance with the bidding requirements set forth in this Article 4; and/or (b) reasonably cooperate with Owner in revising, with Owner's prior written approval, the Project scope, design, and/or specifications as required to reduce the Bid Prices, including the revision of the construction documents as necessary to reflect such redesign. Owner shall have the absolute and unconditional right to reject any and all bids which cause the Contract Price to exceed Owner’s Fixed Limit for such Work. In making the determination to reject a particular bid, the Construction Manager shall take into consideration whether: (a) the bid when aggregated with other bids on the Project causes or will cause the Contract Price to exceed the Owner’s Fixed Limit for such Work; (b) all matters bearing on the responsibility of the bidder, including without limitation, errors in the bid, inattention to detail of the Contract Documents or bid requirements, reputation in the local building community, all pre-qualification criteria used in formulating the bid requests, capacity, availability, and any other matter which might affect the capability of the bidder to perform consistent with the Contract Documents; (c) the bids for the portion of the Project under consideration appear to be inflated or contrary to then current market conditions; and (d) any other matter permitted by law and bearing on the responsibility of the bidder.

By executing this Agreement, the Construction Manager acknowledges that the Owner’s Fixed Limit for such Work is reasonable.

4.2 Supervision and Responsibility for Subcontractors. The Construction Manager shall be responsible for the management of all Subcontractors and shall administer the construction and installation contracts for the Work using the Construction Manager's best skill and attention in consultation with Owner. The Construction Manager shall supervise and inspect the Work to the extent necessary to determine that the Work is being performed in accordance with the Contract Documents, all Subcontractors and Sub-Subcontractors are being timely paid, and no Claims have been filed. The Construction Manager shall give Owner prompt written notice of Defective Work and shall take all steps necessary to have the Subcontractors correct or remedy such fault or defect. Any problems with the Work which are brought to the attention of the Construction Manager by Owner shall be promptly addressed by the Construction Manager. A written summary of any action taken with respect to any such problems shall be submitted to Owner. The Construction Manager shall schedule and coordinate the work of all Subcontractors on the Project, review all applications for payment and certify such applications for payment to the Architect and Owner in accordance with the Contract Documents. The Construction Manager shall supervise the completion of punch list items by Subcontractors to ensure that such work is completed in a timely and acceptable fashion, and, in addition to its other rights and remedies hereunder, Owner shall have the right to hold any retainage hereunder of the Construction Manager’s Fee to assure such supervision. The Construction Manager shall be and remain primarily and directly liable to Owner for any Work so subcontracted. The Construction Manager shall not be allowed any schedule extension or recovery of any added costs due to any delay or default of any Subcontractor. No adjustments in the Contract Price shall be made which directly or indirectly compensates the Construction Manager or Subcontractors of any tier for any incremental cost increases incurred as a result of their delay.

4.3 Terms of Subcontracts. All contracts with Subcontractors, including all general conditions, shall: (a) be in writing; (b) be subject to the terms and conditions of the Contract Documents insofar as applicable; (c) include insurance, warranties, guaranties, and duties from such Subcontractors satisfactory to Owner; (d) provide that such warranties, guarantees, and duties shall be for the benefit of, and enforceable by, Owner; and (e) be in form and substance acceptable to Owner and the Construction Manager. Such contracts with approved Subcontractors are hereinafter referred to as “Subcontractor Contracts.”

4.4 Default by Subcontractor. In the event of a default or breach of warranty by any Subcontractor, the

Construction Manager shall promptly proceed, either separately or in conjunction with others, to pursue all available remedies against the Subcontractor so in default. The Construction Manager will promptly advise Owner of the steps it intends to take in connection with any such default. If the Construction Manager does not take such action, Owner, upon three (3) calendar days' prior written notice to the Construction Manager, may, at the expense and in the name of the Construction Manager or in its own name, take such action and any other reasonable action involving any such Subcontractor or surety which Owner deems reasonably necessary, and in such event the Construction Manager shall fully cooperate with Owner and shall reimburse Owner for all costs and expenses (including reasonable attorneys' fees and costs) incurred by Owner in so doing.

ARTICLE 5 COMPENSATION; PAYMENT

5.1 Preconstruction Compensation. Owner agrees to pay the Construction Manager for the proper performance of the Preconstruction Services in accordance with the Contract Documents, the amount of ___________________and 00/100 Dollars ($___________) (the “Preconstruction Compensation”). The Preconstruction Compensation shall fully compensate the Construction Manager for all Preconstruction Services, including, but not limited to, all bond premiums, overhead, General Condition Work, general and administrative expenses of any kind, and profit of the Construction Manager related to the Preconstruction Services.

5.2 Contract Price. Owner agrees to pay the Construction Manager for the proper performance of the Construction Phase Work in accordance with the Contract Documents the following amounts (collectively, the “Contract Price”):

5.2.1 the total amount stipulated in Subcontractor Contracts to be paid by the Construction Manager to

Subcontractors for the Subcontractors' proper performance of the Work required by such Subcontractor Contracts, to the extent actually paid by the Construction Manager (the “Subcontractor Sum”);

5.2.2 the cost of any Self-Performed Work for such agreed upon scope of Work, to the extent approved pursuant to Section 2.6 hereof;

5.2.3 actual cost to the Construction Manager of premiums for the bonds required by Sections 11.3(2) and 11.3(4) of the General Conditions based on the aggregate Subcontractor Sums and the cost of any Self- Performed Work, not to exceed the premium amount set forth in the Proposal Documents;

5.2.4 reimbursement of the Construction Manager’s expenses for General Condition Work (as defined in the General Conditions) in the amount of _____________________________and 00/100 Dollars ($_________) (the “General Condition Reimbursement”). Except to the extent specifically payable as a part of the Preconstruction Work, the General Condition Reimbursement is a negotiated fixed amount reimbursement for all of the General Condition Work. The Contractor's Breakout of General Conditions attached hereto as Exhibit 5.2.4 contains an itemization and detailed description of all fixed and variable cost components of the General Condition Reimbursement. Aside from the General Condition Reimbursement stated herein, the Contractor shall receive no additional reimbursement for overhead or general expenses of its field or home office; and

5.2.5 a fee equal to ______percent ( %) of the Subcontractor Sum (the "the Construction Manager’s Fee"). The Construction Manager’s Fee shall be deemed to include:

5.2.5.1 all overhead, general, and administrative expenses of any kind and profit of the Construction Manager related to the Construction Phase Work, including, but not limited to, general operating expenses of and salaries and other compensation of the Construction Manager's employees at the principal office and branch office other than the site of the Work office who will be managing the Project during bidding, construction, and closeout, including the warranty period;

5.2.5.2 employment taxes, insurance, workers compensation, as well as salaries and benefits for all personnel;

5.2.5.3 expenses related to maintaining and operating the Construction Manager's principal and branch offices;

5.2.5.4 any part of the Construction Manager's capital expenses, including interest on the

Construction Manager's capital employed for the Work;

5.2.5.5 incentive awards of any kind, unless approved in writing and in advance by Owner based on a showing of benefit to the Project;

5.2.5.6 training costs either associated or not associated with the Project, unless approved in writing and in advance by Owner based on a showing of benefit to the Project; and

5.2.5.7 costs, losses, and expenses, including legal and consultant expenses, to the extent they have resulted from the act, fault, or negligence of the Construction Manager, any Subcontractor or supplier at any tier or anyone for whom the Construction Manager may be liable, including but not limited to, any loss or expense related to securing the property as required by the Contract Documents or to prevent injury to persons, the correction of defective or nonconforming Work, disposal of materials and equipment wrongly supplied, or making good any damage to property.

The Construction Manager’s Fee does not include General Condition Work. Following the establishment of the Lump Sum Price, the Construction Manager change order markup described in Section 7.1 of this Agreement will compensate the Construction Manager for the additional overhead and profit associated with a change in scope of Work; however, a decrease in scope of Work and Contract Time, prior to or after the establishment of the Lump Sum Price, shall result in a decrease in the amount of the Construction Manager’s Fee at the effective percentage rate established in the original Proposed Documents, prorated for the amount of Contract Time that is reduced from the original schedule. The Construction Manager’s Fee shall not be increased due to an increase in cost of material, labor, General Condition Work, or site supervision.

5.3 Guaranteed Maximum Price . Within ten (10) days after written notice from Owner that the construction

Drawings and Specifications are at least eighty-five percent (85%) complete, Construction Manager shall submit to Owner for approval a guaranteed maximum price (the "Guaranteed Maximum Price" or “GMP”) proposal for the Construction Phase Work. Notwithstanding anything in the Contract Documents to the contrary, the Construction Manager guarantees that the Contract Price for the Construction Phase Work shall not exceed the Construction Manager’s GMP for such Work. Such proposal shall include a detailed schedule of values allocated to the major elements of the proposed Work and a detailed explanation of the method and manner of calculating the GMP for such Work. In no event shall the GMP for such Work exceed the Contract Price for such scope of Work plus a contingency in an amount to be agreed upon by Owner and Contractor, not in any event to exceed two percent (2%) of the estimated Subcontractor Costs, General Condition Work, and cost of any Self-Performed Work. If Owner accepts such GMP proposal, the GMP may only be increased by a Change Order for circumstances described in Article 7 of the General Conditions.

5.4 Lump Sum Price. Prior to the performance of any construction, Contractor shall submit to Owner for approval a lump sum price (the "Lump Sum Price") proposal for a specific scope of Construction Phase Work to be performed.

Notwithstanding anything in the Contract Documents to the contrary, the Construction Manager guarantees that the construction costs for the agreed scope of such Work shall not exceed the Construction Manager’s Lump Sum Price for such Work. Such proposal shall include a detailed schedule of values allocated to the major elements of the proposed Work and a detailed explanation of the method and manner of calculating the Lump Sum Price for such Work. In no event shall the Lump Sum Price for such Work exceed the Contract Price for such scope of Work. If Owner accepts such proposal: (a) such Lump Sum Price for such Work shall entirely replace and supersede the right of Contractor to receive any compensation provided for in Section 5.2 hereof with respect to such Work; (b) progress payments for such Work pursuant to Article 6 hereof shall be made on the same basis substituting such Lump Sum Price for the Subcontract Sum and using the Construction Manager’s schedule of values approved by Owner and the Architect; and (c) all references to Contract Price for such Work, shall be deemed to refer to the Lump Sum Price with respect to such Work. The Lump Sum Price may only be increased by a Change Order for circumstances described in Article 7 of the General Conditions.

5.5 Contract Price All-Inclusive. Notwithstanding anything in this Agreement to the contrary, Contractor agrees that the GMP and, Lump Sum Price, if applicable, includes all elements of the Construction Phase Work and the Preconstruction Compensation includes all elements of the Preconstruction Services and shall not be increased or adjusted except by written Modification as provided in the Contract Documents. In the event the cost of the Construction Phase Work exceeds the GMP or the Lump Sum Price, if applicable, or the cost of the Preconstruction Services exceeds the Preconstruction Compensation, the Construction Manager shall be solely responsible for such excess costs and shall not be entitled to any reimbursement or compensation from Owner, and Owner shall in no way be liable or responsible to Contractor or any third party, in any way whatsoever for such excess costs.

5.6 Contract Price / Lump Sum Price. A breakdown of the construction trades, Subcontractor Sum, Self-

Performed Work, General Condition Reimbursement, bond premiums, and Construction Manager’s Fee is attached hereto as Exhibit 5.6 and constitutes the All-Inclusive Contract Price and Lump Sum Price in the total amount of ___________________________ and 00/100 Dollars ($___________).

ARTICLE 6 PAYMENT

6.1 Payment. Owner shall pay the Construction Manager the Preconstruction Compensation within thirty (30) days after the Construction Manager has fully completed the Preconstruction Services in accordance with the Contract Documents and has provided written certification of the same to Owner. If Owner has terminated this Agreement as provided for in the Contract Documents prior to the completion of the Preconstruction Services, Owner shall pay the Construction Manager for that portion of the Preconstruction Services completed in accordance with the Contract Documents within thirty

(30) days after Owner terminates the Agreement.

6.2 Payment of the Contract Price. Based upon Applications for Payment submitted to the Architect by the

Construction Manager and Certificates for Payment issued by the Architect, Owner shall make progress payments on account of the Contract Price to the Construction Manager as provided in this Article 6 and in the General Conditions. As a precondition to receiving any payment from Owner, the Construction Manager shall have provided Owner the bonds and proof of insurance required by the Contract Documents.

6.2.1 Pay Period. The period covered by each Application for Payment shall be one calendar month ending on the last day of the month. Provided an Application for Payment is received by the Architect and Owner not later than the tenth (10th) day of a month, and the Architect has issued a Certificate for Payment as provided in the General Conditions, Owner shall make payment to the Construction Manager not later than the tenth (10th) day of the following month. If an Application for Payment is received by the Architect after the application date fixed above, and the Architect has issued a Certificate for Payment as provided in the General Conditions, payment shall be made by Owner not later than thirty (30) days after the Architect receives the Application for Payment.

6.2.2 Reconciliation of Cash Disbursement. With each Application for Payment, the Construction

Manager shall submit such evidence as may be required by Owner or the Architect to demonstrate that cash disbursements already made by the Construction Manager on account of the Subcontractor Contracts equal or exceed progress payments already received by the Construction Manager, less: (a) that portion of those payments attributable to the Construction Manager’s Fee; and (b) that portion of those payments attributable to the General Condition Reimbursement or the premiums provided for in Section 5.2.3 hereof. Applications for Payment shall show the portion of the Contract Price actually incurred by the Construction Manager through the end of the period covered by the Application for Payment and for which the Construction Manager has made or intends to make actual payment prior to the next Application for Payment. Submission of an Application for Payment shall be a certification that, to the best of the Construction Manager’s knowledge and belief, the costs and other data submitted are accurate, complete, and current as of the date of such Application of Payment.

6.2.3 Progress Payment Calculation. Subject to the other provisions of the Contract Documents, the amount of each progress payment shall be computed as follows:

(a) Take the amount of the Subcontractor Sum payable pursuant to Sections 6.2.4(a) and 6.2.4(b) hereof and add the General Condition Reimbursement and the Construction Manager’s Fee applicable to such amounts;

(b) Add the amount of due Construction Manager for Self-Performed Work, if any;

(c) Deduct five percent (5%) of such sum as retainage, as allowed by Utah law;

(d) Deduct the aggregate of previous payments made by Owner;

(e) Deduct the shortfall, if any, indicated by the Construction Manager in the documentation required by the Contract Documents or to substantiate prior Applications for Payment or resulting from errors subsequently discovered by Owner or the Architect in such documentation;

(f) Deduct amounts, if any, for which the Architect has withheld or withdrawn a Certificate of Payment as provided in the Contract Documents; and

(g) Deduct amounts, if any, in excess of the Guaranteed Maximum Price or the Lump Sum Price, if applicable.

6.2.4 Subcontractor Payment Calculation. Except with Owner's prior approval, payments to

Subcontractors included in the Construction Manager's Applications for Payment shall not exceed an amount for each Subcontractor calculated as follows:

(a) Take that portion of the Subcontract Sum properly allocable to completed Work as determined by multiplying the percentage completion of each portion of the Subcontractor's Work by the share of the total Subcontract Sum allocated to that portion of the Subcontractor's schedule of values, less retainage of five percent (5%) as allowed by Utah law. Pending final determination of amounts to be paid to the Subcontractor for changes in the Work, amounts not in dispute may be included as provided in the General Conditions even though the Subcontractor Sum has not yet been adjusted by Change Order;

(b) Add that portion of the Subcontract Sum properly allocable to materials and equipment delivered and suitably stored at the site for subsequent incorporation in the Work or, if approved in advance by Owner, suitably stored off the site at a location agreed upon in writing, less retainage of five percent (5%) as allowed by Utah law;

(c) Subtract the aggregate of previous payments made by the Construction Manager to such

Subcontractor; and

(d) Subtract amounts, if any, for which the Architect has withheld or nullified a Certificate for Payment by Owner to the Construction Manager for reasons which are the responsibility of such Subcontractor.

6.2.5 Final Payment. Unless an earlier payment is required by applicable law, final payment shall be made by Owner to the Construction Manager when: (a) the Agreement has been fully performed by the Construction Manager except for the Construction Manager's responsibility to correct nonconforming Work, as provided in the Contract Documents, and to satisfy other requirements, if any, which necessarily survive final payment; (b) a final Application for Payment and final accounting for the Contract Price have been submitted by the Construction Manager and reviewed by Owner's accountants; and (c) a final Certificate of Payment has then been issued by the Architect; such final payment shall be made by Owner not more than thirty (30) days after the issuance of the Architect's final Certificate of Payment. The amount of the final payment shall be calculated as follows:

(a) Take the total of the Subcontract Sum, as substantiated by the Construction Manager's final accounting, and add the General Conditions Reimbursement and the Construction Manager’s Fee;

(b) Add the total of all amounts due Construction Manager for Self-Performed Work, if any;

(c) Deduct amounts, if any, for which the Architect withheld, in whole or in part, a final

Certificate of Payment as provided in the General Conditions;

(d) Deduct the aggregate of previous payments made by Owner; and

(e) Deduct any amounts in excess of the Guaranteed Maximum Price or the Lump Sum Price, if applicable.

In the event Owner has accepted a Lump Sum Price, the amount provided for in the foregoing subpart (a) shall be the Lump Sum Price. If the aggregate of previous payments made by Owner exceeds the amount due the Construction Manager, the Construction Manager shall reimburse the difference to Owner within ten (10) business days after receipt of such accounting. Owner will review and report in writing on the Construction Manager's final accounting within thirty (30) days after delivery of the final accounting to the Architect by the Construction Manager. Based on such final accounting as Owner reports to be substantiated by the Construction Manager, and provided the other conditions of the Contract Documents have been met, the Architect will, within seven (7) days after receipt of the written report of Owner, either issue to Owner a final Certificate for Payment with a copy to the

Construction Manager, or notify the Construction Manager and Owner in writing of the Architect's reasons for withholding a certificate as provided in the General Conditions. Unless agreed otherwise, any Claim disputing the Architect's final Certificate for Payment must be made within forty-five (45) days after the issuance thereof or shall be deemed waived. Final payment to the Construction Manager shall not operate as approval and acceptance of the Work, or a release of the Construction Manager or its sureties from their obligations hereunder.

6.3 Offset. To the fullest extent allowed by law, Owner shall have the right to recoup or offset against obligations owed to the Construction Manager an amount sufficient to fully protect Owner from any and all actual or threatened loss, damage, or expense incurred by Owner as a result of the Construction Manager's fault, action or inaction, including, but not limited to, increased insurance costs and attorneys' fees. In addition, Owner may withhold from payment to Contractor such amount as, in Owner's judgment, may be necessary to pay pending or threatened Claims against the Construction Manager or any Subcontractor at any tier for labor and services rendered and materials furnished in and about the Work. Owner may apply such withheld amounts for the payment of such Claims in Owner's discretion. In so doing, Owner shall be deemed to be the agent of the Construction Manager and payment so made by Owner shall be considered to be payment made under this Agreement by Owner to the Construction Manager. Owner shall not be liable to the Construction Manager for any such payment made in good faith. Such payment may be made without prior determination of the validity of such Claims.

6.4 Application of Funds. The Construction Manager agrees and covenants that money received for the performance of this Agreement shall be used solely for the benefit of persons and entities supplying labor, equipment and materials for the Work in connection with this Agreement and that any such money shall immediately become and constitute a trust fund for the benefit of such persons and entities and shall not in any instance be diverted by the Construction Manager to any other purpose until all obligations and Claims arising hereunder have been fully discharged.

6.5 Cost Control. The Construction Manager shall develop and maintain an effective system of cost control for the Work. The Construction Manager shall prepare, update, and refine for Owner's approval a Work budget, incorporate approved changes as they occur, develop cash flow reports and forecasts as needed, and advise Owner whenever projected cost exceeds Project budgets or estimates. Such reports and forecasts shall identify variances between actual and budgeted or estimated costs.

ARTICLE 7 MODIFICATIONS

7.1 Modifications. Owner may, without invalidating this Agreement, at any time and from time to time by written order issued by Owner's authorized representative, and without notice to the Construction Manager's sureties, make changes in, additions to, and omissions from, the Work to be performed and materials to be furnished under the Contract Documents pursuant to a Modification, as provided in Article 7 of the General Conditions and the Construction Manager shall promptly proceed with performance as so changed. A Modification shall not in any event entitle the Construction Manager to an increase in the Contract Price or the Contract Time unless and only to the extent Modifications have caused an increase in cost to the Construction Manager of more than Six Hundred and 00/100 Dollars ($600.00) in the aggregate due to additional Work by the Construction Manager. Any increase or decrease in the Contract Price resulting from such Modification shall be agreed upon in advance in writing by the parties hereto; provided, however, that in no event shall the mark-up on the Modification exceed either: (a) a maximum of ten percent (10%) for First-Tier Subcontractors and a maximum of five percent (5%) for the Construction Manager, for First-Tier Subcontractor performed Work; (b) a maximum of five percent (5%) for Second-Tier Subcontractors and a maximum of five percent (5%) for the First-Tier Subcontractor and a maximum of five percent (5%) for the Construction Manager, for Second-Tier Subcontractor performed Work; or (c) a maximum of ten percent (10%) for the Construction Manager, for the Self-Performed Work. Except as provided in a Construction Change Directive, as defined in the General Conditions, no increase or decrease in the Contract Price shall be binding on Owner unless agreed upon in advance in writing. No alteration, change, addition, or omission shall be made in the Work or in the manner or method of performance of the same, except upon written Modification.

7.2 Justification for Modifications; Procedure. Prior to the issuance of a Modification, Owner may require the

Construction Manager to furnish to Owner a detailed breakdown showing the difference in value of the work, labor, services, equipment, and materials altered, added, omitted, or changed by the proposed Modification and the effect of such proposed Modification on the Contract Price and Contract Time. The failure of the Construction Manager to promptly commence performance of any Modification, when so directed in writing by Owner, whether or not all terms have been agreed upon, may be deemed by Owner to be a material breach and the Construction Manager may be held in default of this Agreement.

7.3 Effect of Modification. Any extension of time needed as a result of a proposed Modification shall be requested by the Construction Manager, in writing, prior to the issuance of the Modification. There shall be no other monetary or time allowance, direct or indirect, to the Construction Manager other than what is specifically written in the Modification, including, but not limited to, delays, suspensions, escalations, impact or other cost factors. Where unit prices are stipulated in the Agreement, all adjustments, whether increases or decreases, shall be made in accordance with said units. Said units shall be deemed to include all general and administrative expenses, overhead, profit, supervision, extended performance cost factors, and all other direct and indirect expenses. If Owner directs the Modification work to be done by the Construction Manager on a time and material basis, the Construction Manager shall prepare daily time and material invoices which shall be submitted to Owner on a daily basis. No payment shall be made by Owner for holiday or other non-working time, unless mandated by union agreement and approved in advance by Owner. The Construction Manager shall in no event be entitled to, nor shall it receive any compensation or allowance for any Modification in an amount greater than that which Owner actually approved by Modification. The issuance of any Modification and payment thereof, prior to completion and acceptance of the Project, shall not preclude Owner from questioning the validity thereof and recouping payment therefor, where, on final settlement, it appears that the Modification work was neither extra nor additional work under a proper interpretation of the Contract Documents. No Modification shall vary, abrogate, avoid, or otherwise affect the terms, conditions, and provisions of the Contract Documents except as specifically set forth in the Modification.

ARTICLE 8 PROGRESS AND PERFORMANCE

8.1 Time of Completion and Delay Remedy. Time is of the essence in the timely completion of the Work. The Construction Manager shall furnish all Work necessary for the performance of this Agreement in a timely, proper, efficient, and workmanlike manner. The Construction Manager shall proceed with each and every part of the Work in a prompt and diligent manner whenever such Work, or any part of it, becomes available, or at such other time or times as Owner may direct, using qualified workers so as to achieve Substantial Completion no later than . Final Completion of the Project shall be no later than . No extensions or delays shall for any cause be allowed, except as permitted by the General Conditions.

8.2 Project Schedule. No later than thirty (30) days after issuance of a Notice to Proceed to the Construction

Manager, the Construction Manager shall develop and submit for Owner's review and approval a detailed critical path performance schedule for the Work. The performance schedule shall utilize Primavera™ software or other software acceptable to Owner. The performance schedule shall allow Owner a reasonable time to review submissions for the Work as the Project progresses. The performance schedule shall be updated on a monthly basis to incorporate detailed construction operations for the Work, realistic activity sequences and durations, allocation of labor, equipment, and materials, processing of shop drawings and samples, and delivery of items requiring long lead-time default and other appropriate Project information. The updated schedule will be submitted with each Application for Payment.

8.3 Progress of the Work. The Construction Manager shall furnish sufficient forces to assure proper and timely performance of the Work, and each segment thereof, in strict compliance with the performance schedule. The Construction Manager shall, from time to time, on demand of Owner, give adequate evidence to Owner to substantiate the planned performance and progress of the Work and the various parts thereof. The Construction Manager shall promptly increase its work force, accelerate its performance, work overtime, work Saturdays, Sundays, and holidays if such work is necessary to maintain proper progress. No premium time, overtime, or double time will be acknowledged or paid by Owner unless pursuant to a prior written authorization by Owner. The Construction Manager will fully cooperate and coordinate its work with Owner and any other contractor or Subcontractor on the Project. In the event any other contractor or Subcontractor should damage the Construction Manager, the Construction Manager shall neither seek nor be entitled to any compensation from Owner, but will seek its damages directly from such other party.

8.4 Liquidated Damages. The Construction Manager acknowledges that the failure to achieve Substantial

Completion and/or Final Completion of the Project by the dates specified in Section 8.1 will result in incalculable and irreparable damage to Owner and that Owner has no adequate remedy at law for such breach. The parties hereto also recognize the delays, expense, and difficulties involved in proving in a legal proceeding the actual loss sustained by Owner if the Work is not completed on time.