4 - Owner's General Conditions - ATDM Building 2 General Construction Contractor (Ex B)(20591015.1).doc

EXHIBIT B

EXHIBIT B

Institute for Advanced Learning and Research

Accelerated Training in Defense Manufacturing Facility Building 2

General Construction Contract Invitation to Bid No. 57639

OWNER’S GENERAL CONDITIONS

These Owner’s General Conditions are intended to be read in conjunction with the Accelerated Training in Defense Manufacturing (“ATDM”) – Building 2 General Construction Contract and the other Contract Documents.

1.

CONDITION OF PREMISES

1.1 Contractor has evaluated and satisfied itself as to the conditions and limitations under which the Work is to be performed including, without limitation (1) the location, condition, layout and physical conditions of the Project site and surrounding area, (2) generally prevailing climatic conditions, (3) availability and cost of materials, tools and equipment, (4) geotechnical data, soil and subsurface conditions, (5) parking, traffic and logistics, and (6) other similar issues. Contractor shall not be entitled to any adjustment in the Contract Time or Contract Sum in connection with its failure to comply with the requirements of, or on account of the conditions of, this subsection.

2.

INDEMNITY PROVISIONS

2.1 Except as prohibited by Section 11-4.1 of the Code of Virginia (1950), as amended, the Contractor shall indemnify and hold harmless IALR and its officers, trustees, directors, employees, agents, consultants, and contractors (“IALR Parties”) from and against any and all liability, losses, damages, claims, causes of action, suits of any nature (including suits by IALR against the Contractor), costs, and expenses, including reasonable attorneys’ fees and consultants’ fees, resulting from or arising out of the Contractor’s or its agent’s, and/or subcontractor’s: (i) errors, acts, or omissions in the furnishing of labor, goods, materials, or services or performing Work under the Contract or any subcontract; (ii) any breaches of the Contract or any subcontract; or (iii) activities or omissions, negligent or otherwise, on the Owner’s property. This indemnity provision covers and includes, without limitation, fines and penalties for violations of federal, state or local laws or regulations; personal injury, wrongful death or property damage claims; breach of contract claims; indemnity claims; and other damages, losses and claims of any kind.

2.2 While on the IALR’s property and in its performance of this Contract, the Contractor shall not transport, dispose of or release any hazardous substance, material or waste, except as necessary in performance of its Work under this Contract. The Contractor shall comply with all federal, state and local laws, rules, regulations and ordinances controlling air, water, noise, solid wastes and other pollution, and relating to the storage, transport, release or disposal of hazardous materials, substances or waste.

2.3 Regardless of acquiescence by IALR, the Contractor shall indemnify, defend, and hold the IALR Parties harmless from all costs, liabilities, fines or penalties, including attorney’s fees, resulting from the Contractor’s violation of Section 2.2 and reimburse the Owner for all costs and expenses incurred by the Owner in eliminating or remedying such violations. The Contractor also agrees to indemnify and hold harmless the IALR Parties from any and all costs, expenses, attorney’s fees and all penalties or civil judgments obtained against any of the IALR Parties as a result of the Contractor’s use or release of any hazardous substance or waste onto the ground, or into the water or air from or upon the IALR’s premises.

2.4 The Contractor shall indemnify, defend and save the IALR Parties harmless from liability of any nature or kind, for use of any copyright, composition, secret process, patented or unpatented invention, goods, materials and/or services or appliances furnished or used in the performance of the Contract, or which the Contractor is not the patentee, assignee, or licensee, to the same extent as provided in the above Section.

2.5 The Contractor hereby waives any and all statutes of limitations and statutes of repose applicable to any controversy or dispute arising out of the preceding Sections (2.1, 2.2, 2.3 and 2.4) and the Contractor further covenants and agrees that it will not raise or plead a statute of limitations or statute of repose defense against the IALR Parties in any action arising out of the Contractor’s failure to comply with the preceding sections.

2.6 Nothing herein shall limit Contractor’s other indemnification obligations as stated in the other Contract Documents.

3.

PERMITS, LICENSES, AND REGULATIONS

3.1 The Contractor shall fully comply with all local, state and federal building and fire codes, ordinances, laws and regulations, including without limitation all applicable sections of the Occupational Safety and Health Act (OSHA), the Virginia Uniform Statewide Building Code and Chapter 11 of Title 54.1 of the Code of Virginia (1950), and obtain all required licenses and permits and pay all charges and expenses connected therewith. Contractor will be responsible for securing all necessary licenses, permits and permission from the City of Danville, Virginia and all other federal, state or local government bodies in connection with the Project.

3.2 The Contractor shall be responsible for arranging all inspections by federal, state and local authorities for compliance with all statutory requirements, ordinances and regulations.

4.

OWNER AND ARCHITECT

4.1 IALR’s Authorized Representative is Mr. Telly Tucker, President. Mr. Tucker has the sole responsibility and authority for negotiating, placing, and when necessary modifying each and every Invitation to Bid, Contract, Change Order, Change Directive, Modification, purchase order, or other award issued by IALR with respect to this Project. Any contracts or contract modifications contrary to this provision shall be void and IALR shall not be bound thereby. Mr. Tucker shall be the only agent of Owner with the authority to extend the Contract Time or increase the Contract Sum; provided, that any such changes will only be effective if made by a prior, written amendment to this Contract. No other IALR officer, agent or employee may extend the Contract Time or increase the Contract Sum. Mr. Tucker shall be the only agent of Owner to approve Change Orders or issue Change Directives. The Owner’s Authorized Representative may be changed at any time upon written notice to Contractor. The Owner’s Authorized Representative also may be referred to herein as the Contract Administrator.

4.2 The Architect’s authorized representative for is Mr. Larry Hasson. The Architect’s authorized representative cannot increase the Contract Sum or extend the Contract Time without the prior, written consent of the Owner’s Authorized Representative. The Architect’s authorized representative is the Initial Decision Maker.

4.3 Nothing in the Contract Documents shall alter the contractual relationship between the Architect and the Owner.

4.4 All written communications on the Project shall be directed to and include the Owner and all significant issues with respect to the Work and/or this Contract shall be communicated by Contractor directly to Owner in writing. Contractor shall copy the Architect on all such communications.

4.5 The Architect shall act as IALR’s representative during the Project. The Architect shall decide questions, which may arise as to quality and acceptability of materials furnished and Work performed. The Architect will make visits to the site and determine if the Work is proceeding in accordance with the Contract Documents.

4.6 The Contractor will be held strictly to the intent of the Contract Documents in regard to the quality of materials, workmanship and execution of the Work.

4.7 The Architect will not be responsible for the construction means, controls, techniques, sequences, procedures, or construction safety.

5.

PATENTS

5.1 The Contractor shall protect, indemnify, and hold harmless the IALR Parties from any and all demands for fees, claims, suits, actions or judgments based on the alleged infringement or violation of any patent, invention, article, arrangement or other apparatus that may be used in the performance of the Contract.

6.

FUNDING SOURCES

6.1 IALR’s funding for this Project is derived from an Other Transaction Authority (“OTA”) production agreement issued by the Department of Defense, Army Contracting Command (“funding sources”). The Contractor will comply with any terms, conditions, requirements, and covenants imposed by the funding sources including without implied limitation the purposes of the funding sources; any quality requirements of the funding sources; any clawback requirements of the funding sources; any recordkeeping, reporting, and audit requirements of the funding sources; any wage payment requirements of the funding sources; any mandatory flowdown contract provisions from the funding sources; and any funding limitations and restrictions in the funding sources.

7.

CONTRACT DOCUMENTS AND DRAWINGS

7.1 The general character and scope of the Work are illustrated by the Drawings and Specifications. The Contractor shall verify that all drawings and plans accurately reflect actual conditions. If the Contractor deems additional detail or information to be needed, it will be responsible for obtaining such detail or information. The Contractor shall carry out the Work in accordance with the Drawings and Specifications and any additional detail drawings and instructions.

7.2 Contractor acknowledges that prior to execution of this Agreement, Contractor has met with the Owner and Architect to review the design for the Work and to identify, address and resolve ambiguities, conflicts, issues and questions, if any, regarding the intended nature and scope of the Work. The description of the Work in further detail by the Architect or the Owner subsequent to the execution of this Agreement, shall entitle the Contractor to an increase in the Contract Sum or an extension of the Contract Time, only to the extent that such later description constitutes a “Material Change” in the Work, which is defined as any one of the following: (i) work of a materially different nature, character, scope or quality (other than refinement), than that set forth in and or reasonably inferable from the Contract Documents listed in this Agreement and/or identified to Contractor in the meetings and discussions involving the Contractor and Owner and/or Architect prior to the execution of this Agreement, as reflected in the meeting minutes or reports provided to or prepared in connection with such meeting; or (ii) a later description of the Work which involves work expressly excluded from the Contract Sum as set forth in the Contract Documents; or (iii) additional work that is required because of a change in applicable laws, codes or regulations enacted after the execution of this Agreement (except those scheduled to go into effect subsequent to the execution of this Agreement about which the Contractor has knowledge). The Contractor shall evaluate and assess the Drawings and Specifications and other descriptions of the Work prepared by the Architect as and when they are issued by the Architect and shall notify the Owner and Architect in writing, within fourteen (14) days of the receipt of the applicable design document if the Contractor believes that such design document includes a Material Change. As promptly as possible thereafter, the Contractor shall also identify to the Owner, in writing, the amount of the increase in the Contract Sum and/or Contract Time that the Contractor claims is needed as a result of the alleged Material Change and shall meet with and assist the Owner and Architect in evaluating the situation.

7.3 The apparent silence of these Specifications and any supplemental specifications as to any detail or the omission from the Specifications of a detailed description concerning any point shall be regarded as meaning that only the best commercial practices of the trade are to prevail and correct type, size and design are to be used. All interpretations of these Specifications shall be made on the basis of this statement.

7.4 The Contractor may be furnished additional instructions and detail drawings, by the Architect, as necessary to carry out the Work required by the Contract Documents. The additional drawings and instructions thus supplied will become a part of the Contract Documents. The Contractor shall carry out the Work in accordance with the additional detail drawings and instructions

7.5 The Contract Documents shall be interpreted and construed to call for finished code-compliant work, tested and ready for operation or use by Owner and its employees, agents, invitees, and licensees.

7.6 The entire Work provided for in the Specifications and other Contract Documents is to be accomplished even though every item and minor detail for the proper installation and successful operation of the entire Project may not be mentioned in the Specifications or shown on the Contract Documents. All work not specifically described in the Contract Documents, yet required to produce a fully functional and properly operating Project, shall be provided by Contractor even though every item or minor detail for the proper installation or successful operation of the entire Work is not mentioned in the Contract Documents.

7.7 All Contract Documents prepared and/or furnished by Contractor or Owner shall be the exclusive property of Owner and shall not be used for any other project(s).

8.

PERSONNEL

8.1 The Contractor shall assign to the Work and the Project a Superintendent and a Project Manager who shall be subject to the reasonable approval of the Owner and Architect. Once appointed and approved, no such individual shall be replaced on the Project or Work without the prior consent of the Owner’s Authorized Representative. The Contractor shall notify the Owner, in writing, of any proposed changes in the staffing for the Project or Work, including the reason(s) for proposing such change.

8.2 Only reliable workers shall be employed as laborers. Should any person employed on the Project by the Contractor appear to the Owner to be incompetent or disorderly, such person shall be removed from the Project immediately upon proper notice to the Contractor from the Owner. Such person shall not again be employed for this Contract.

8.3 Contractor shall be responsible for the errors, acts, and omissions of its employees and agents, and the employees and agents of any Subcontractors, while on IALR premises or performing any work associated with the contract. Contractor’s personnel will be required to comply with all rules and regulations governing the access to and use of IALR’s premises. Contractor shall provide an adequate staff of experienced personnel, capable of and devoted to the successful accomplishment of the work to be performed under the contract. It shall be Contractor’s responsibility to see that its employees use any equipment, materials and supplies in a safe and orderly manner and in accordance with the manufacturer’s instructions and guidelines and within all local, state and federal regulations. It shall be Contractor’s responsibility to ensure its employees and its Subcontractor’s employees know and obey all OSHA, VOSA, EPA and other regulatory requirements. Compliance with all regulatory requirements is the sole responsibility of Contractor and/or Subcontractors. The safety of Contractor’s and Subcontractor’s employees is the exclusive responsibility of Contractor and Subcontractors. IALR reserves the right to request the removal of any of Contractor’s employees or agents or any of subcontractor’s employees or agents from the construction site at any time for reasonable cause. Contractor or the Subcontractor shall have such employee leave the premises upon receipt of such request.

9.

PERFORMANCE

9.1 The Contractor shall be responsible for directing the Work with a high level of competence and efficiency. The Contractor is solely responsible to the Owner for ensuring that the finished Work complies with the Contract Documents. The Contractor shall be solely responsible for health and safety precautions and programs for workers, patrons, pedestrians and others in connection with the Work. No inspection by, knowledge on the part of, or acquiescence by the Owner, Architect, or any other person or entity whatsoever shall relieve the Contractor from its sole responsibility for compliance with the requirements of the Contract or responsibility for health and safety programs and precautions for patrons, pedestrians, workers and others.

9.2 Prior to beginning Work the Contractor shall submit a construction progress schedule showing the order in which the Contractor proposes to carry out the Work, including dates at which the Contractor will start the various parts of the Work and estimated date of completion of each part. The schedule must provide for Substantial Completion and Final Completion no later than the Substantial Completion Date and the Final Completion Date, respectively. The schedule is subject to IALR’s review and approval. In the event that the Contractor should ever determine during the course of the Project that its prosecution of the Work has fallen behind the current approved schedule, then it must prepare a recovery schedule to permit completion of the Project within the Contract Time. The Contractor shall devote all required labor, materials, and equipment to comply with the recovery schedule, including, if necessary, the employment of additional Subcontractors and/or manpower and the scheduling of additional shifts, overtime, and weekend Work, all at the Contractor’s sole expense. TIME IS OF THE ESSENCE.

9.3 Contractor shall also submit a schedule of payments anticipated to be earned during the course of the Work.

9.4 The Contractor is required to schedule and perform all Work on the Project in a manner that minimizes disruption of operations to the IALR campus.

9.5 The Contractor shall be responsible for determining the location of underground utilities. IALR does not make any representation with regard to their location. The Contractor assumes full responsibility for the location of all underground utilities.

9.6 The intent of the Drawings and Specifications is that the Contractor shall furnish all labor, materials, tools, equipment, and services necessary for the proper execution of the Work in accordance with the Contract Documents and all incidental work necessary to complete the Project in an acceptable manner, ready for use, occupancy or operation by the Owner. In case of conflict between Drawings and Specifications, the most stringent shall govern. Figure dimensions on Drawings shall govern over scale dimensions, and detailed Drawings shall govern over general Drawings. Any discrepancies found between the Drawings and Specifications and site conditions or any inconsistencies or ambiguities in the Drawings or Specifications shall be immediately reported to the Architect, in writing, who shall promptly correct such inconsistencies or ambiguities in writing. Work done by the Contractor after his discovery of such discrepancies, inconsistencies, or ambiguities shall be done at the Contractor’s risk.

9.7 It is understood that, except as otherwise specifically stated in the Contract Documents, the Contractor shall provide and pay for all materials, labor, tools, equipment, water, light, power, transportation, supervision, temporary construction of any nature, and all other services and facilities of any nature whatsoever necessary to execute, complete, and deliver the Work within the specified time.

9.8 All materials and equipment used in the construction of the Project shall be subject to adequate inspection and testing in accordance with generally accepted standards, as required and defined in the Contract Documents.

9.9 The Contractor shall provide at its expense the testing and inspection services required by the Contract Documents.

9.10 If the Contract Documents, laws, ordinances, rules, regulations, or orders of any public authority having jurisdiction require any Work to specifically be inspected, tested, or approved by someone other than the Contractor, the Contractor will give the Architect timely notice of readiness.

9.11 Inspections, tests, or approvals by the Architect or others shall not relieve the Contractor from his obligations to perform the Work in accordance with the requirements of the Contract Documents.

9.12 If any Work is covered contrary to the written instructions of the Architect, it must, if requested by the Architect, be uncovered for observation and replaced at the Contractor's expense.

9.13 If the Architect considers it necessary or advisable that covered Work be inspected or tested by others, the Contractor, at the Architect’s request, will uncover, expose, or otherwise make available for observation, inspection, or testing as the Architect may require, that portion of the Work in question, furnishing all necessary labor, materials, tools, and equipment. If it is found that such Work is defective, the Contractor will bear all the expenses of such uncovering, exposure, observation, inspection, and testing and of satisfactory reconstruction. If, however, such Work is not found to be defective, the Contractor will be allowed an increase in the Contract Sum or an extension of the Contract Time, or both, directly attributable to such uncovering, exposure, observation, inspection, testing, and reconstruction and an appropriate Change Order shall be issued.

9.14 The Contractor will be responsible for initiating, maintaining and supervising all safety precautions and programs in connection with the Work. The Contractor will take all necessary precautions for the safety of, and will protect the persons who may be affected thereby, protect all the Work and all materials or equipment to be incorporated therein, whether in storage on or off the site, and protect other property at the site adjacent thereto, including buildings, trees, shrubs, lawns, walks, pavements, roadways, structures, and utilities not designated for removal, relocation, or replacement in the course of construction.

9.15 Contractor shall remove and transport any construction waste or debris to a Contractor-provided dumpsite upon removal. No construction waste or debris shall be stockpiled on IALR’s premises.

9.16 After the completion of the Project, all property damaged by the Contractor’s actions shall be restored to the same condition or better at the time of the Notice to Proceed. Prior to any construction activities, it is the Contractor’s responsibility to document any existing damage or substandard conditions.

9.17 The Contractor shall provide adequate protection for all structures at the site. Any damage to IALR owned facilities by the Contractor shall be repaired or replaced at the Contractor’s expense and to the complete satisfaction of IALR.

9.18 Contractor shall clean the premises daily, including disposal of all waste. Contractor shall maintain the parking lots and sidewalks around the Project site in a reasonably clean condition and shall comply with all erosion control, stormwater runoff and dust control ordinances and regulations. Contractor shall remove all spillage arising from performance of the Work from such areas and shall establish a regular maintenance program to minimize accumulation of dirt and dust upon such areas.

9.19 On completion of the Work covered by any of the sections of this Project, the Contractor for said section shall clean up the entire premises occupied by his operations, and this area shall be left neat and clean of trash, debris, piles of earth, waste materials or equipment. All surplus materials and equipment, trash, debris, and other foreign matter shall be disposed of as directed by the Architect or Owner. The entire project or sections thereof shall be made ready for the Owner’s use, and the Contractor shall assist as may be necessary in placing any equipment furnished under the contract in proper operating condition.

9.20 Materials removed from the site shall be legally disposed of by the Contractor.

10.

SUBCONTRACTORS

10.1 The Contractor shall not be released from any part of its liabilities or obligations under the Contract should any Subcontractor fail to perform in a satisfactory manner the work undertaken by him.

10.2 The Contractor shall be responsible to the Owner for acts and omissions of the Contractor’s employees, and of all Subcontractors and their employees. The Contractor shall also be responsible for the coordination of the work of the Subcontractors and suppliers.

10.3 Before any portion of the services shall be subcontracted, the Contractor shall furnish IALR the names, qualifications and experience of their proposed Subcontractor. IALR must be afforded the right to refuse any Subcontractor that the Contractor has selected. The Contractor shall remain fully liable and responsible for the work to be done by its Subcontractor(s) and shall assure compliance with all requirements of the Contract.

10.4 The Contractor shall not change any Subcontractor, person or entity previously approved if IALR makes reasonable objection to such change.

10.5 If IALR accepts, or fails to object to, any proposed Subcontractor, person or entity proposed by Contractor, such acceptance or failure to object shall not constitute a guarantee of such Subcontractor’s, person’s, or entity’s performance by IALR, nor shall it alleviate Contractor of responsibility for Subcontractor’s actions in performance of the Work.

11.

SUBMITTALS AND SHOP DRAWINGS

11.1 Architect’s and/or Owner’s approval of Submittals and/or Shop Drawings shall not be construed as permitting any departure from Contract requirements, authorizing any increase in the Contract Sum or extension of the Contract Time, or relieving the Contractor of the responsibility for any error in details, dimensions or otherwise that may exist or for any deviation from the requirements of the Contract Documents in the performance of the Work. Submittals and Shop Drawings include: (i) all drawings, diagrams, illustrations, brochures, schedules, shop drawings, documents, samples, and other data required by the Contract Documents which are prepared by or for the Contractor, Subcontractor, or supplier, and submitted by the Contractor to illustrate the material, equipment or layouts, or some other portion of the Work; (ii) fabrication, erection and setting drawings, manufacturers’ standard drawings, schedules, descriptive literature, catalogs, brochures, performance and test results or data, and all other descriptive data pertaining to the materials and equipment as required to demonstrate compliance with the Contract requirements; and (iii) other materials related to or concerning Work identified in the Drawings and Specifications.

12.

CHANGES IN THE WORK

12.1 A Change Order shall be based upon agreement among the Owner and Contractor; a Change Directive may be issued by the Owner and may or may not be agreed to by the Contractor; an order for a minor change in the Work may be issued by the Architect alone.

12.2 Requests for Change Orders shall be evaluated by the Architect; provided, however, the Owner shall make the final determination on all Change Orders and Change Directives. Contractor shall comply with any Change Directives issued by the Owner.

12.3 The Owner may at any time, as the need arises, order changes within the scope of the Work without invalidating the Agreement. If such changes increase or decrease the amount due under the Contract Documents, or in the time required for performance of the Work, an equitable adjustment shall be authorized by Change Order or Change Directive.

12.4 No Change Order, Change Directive, or other Modification to any of the Contract Documents shall waive, modify, release or invalidate any condition or provision of the Contract or obligation of Contractor unless such waiver, modification, release or invalidation is expressly stated in the written Change Order, Change Directive, Modification, or other document modifying the Contract Documents.

12.5 No change increasing the Contract Sum or extending the Contract Time will be made without the prior, written approval of the Owner’s Authorized Representative.

13.

STOP WORK ORDER

13.1 Should the Contractor fail to follow the Contract Documents or perform the Work, the Contract Administrator may stop the Work at any time. The Contractor shall suspend work upon receiving a written “Stop Work Order” from the Contract Administrator. After the Contractor has received a written “Stop Work Order,” the Work and Contract Time shall not again be started until a written “Resume Work Order” is received by the Contractor.

14.

COMPLETION OF WORK; LIQUIDATED DAMAGES

14.1 All work shall be completed in accordance with the terms, timeframes and deadlines required by the Contract Documents, unless modified by Change Order or Change Directive. The Contractor will be liable for any and all damages sustained as a result of any breach of the Contract, including abandonment of the Contract and delayed Substantial or Final Completion of the Project. In the event that the Contractor has not Substantially Completed and Finally Completed the Project within the Contract Time, the Owner will assess liquidated damages pursuant to Section 14.3 below and (A) deduct such damage from retainage, Progress Payments, Performance Security or from any obligation then or subsequently due the Contractor or (B) issue a written notice to the Contractor reducing the Contract Sum by the amount of said damages, or both. In addition to liquidated damages for delay, the Contractor will also be liable for any and all actual damages sustained as a result of any breach of the Contract other than by delay, including abandonment of the Contract.

14.2 Should any neglect, unnecessary delay or failure to follow the Contract Documents occur which make it apparent that the Contractor will not complete the Work, the Owner may declare the Contract void and have the Work completed and charge the cost thereof to the Contractor.

14.3 The Owner and Contractor acknowledge and agree that time is of the essence and that the Owner will suffer significant financial loss and other damage if any delays occur in the Substantial Completion and/or Final Completion of the Project, and that the extent of such loss and other damages cannot be readily ascertained as of the date of this Contract. Because the exact amount of the Owner’s expenses and damages in the event the Work is not completed within the Contract Time cannot be readily ascertained as of the date of this Agreement, and because both the Owner and Contractor desire certainty with respect to their rights and their obligations in the event the Work is not completed by the Contract Time, the Owner and Contractor agree to the liquidated damage provisions in this Section. The parties acknowledge and agree that the liquidated damages provided in this Section are reasonable in amounts under all relevant circumstances, including the nature, dimension, scope, cost and scale of the Project as a whole. The parties agree and acknowledge that the liquidated damages specified in this section are not intended, designed or drafted to penalize the Contractor. Should the Contractor fail to achieve Substantial Completion of the Project by the Substantial Completion Date, the Contractor shall pay to the Owner as liquidated damages Two Thousand Two Hundred Fifty and 00/100 Dollars ($2,250.00) for each calendar day thereafter until the Project is Substantially Complete. Should the Contractor fail to achieve Final Completion of the Project by the Final Completion Date, the Contractor shall pay to the Owner as liquidated damages Two Thousand Two Hundred Fifty and 00/100 Dollars ($2,250.00) for each calendar day thereafter until the Project is Finally Complete. Contractor agrees that the Owner’s exercise of its option under this Contract to use and occupy all or any portion of the Work prior to its Substantial Completion or Final Completion shall not toll, waive or diminish in any way the liquidated damages for which Contractor shall be responsible under this Agreement. These liquidated damages provisions are not the Owner’s exclusive remedy against the Contractor. The liquidated damages set forth above apply only to damages resulting from the Contractor’s failure to achieve Substantial Completion or Final Completion of the Work by the applicable Contract Time and do not limit or preclude Owner from recovery of any damages of any kind, type or nature to the extent they result from any other breach of contract, negligence or other action or omission of Contractor or its Subcontractors, including, but not limited to, any defective, substandard or deficient Work. The Contractor waives any defenses to the validity of this liquidated damages provision including, but not limited to, on the grounds that such liquidated damages are void as penalties or are not reasonably related to actual damages.

15.

PAYMENT PROVISIONS

15.1.

This is a fixed price Contract. No increase in the Contract Sum shall be made except by a written amendment executed by Owner’s Authorized Representative and Contractor. The limitation on increases for fixed price contracts contained in Virginia Code § 2.2-4309 applies to this Contract.

15.2.

The Contractor represents and warrants that he has visited the site and become familiar with and is satisfied as to the general location and site conditions that may affect cost, progress, performance, furnishing, and completion of the Project. The Contractor represents and warrants that he is familiar with and will comply with all federal, state, and local laws and regulations that may affect cost, progress, performance, furnishing, and completion of the Project. The Contractor shall bear all costs resulting from the amount or character of the work being different, or because the nature of the premises on which the work is done is different from what was expected or on account of the weather, unknown conditions, or other similar or unexpected causes.

15.3 To insure proper performance of the Contract, IALR shall retain five percent (5%) of each progress payment until final acceptance of all Work covered by the Contract. The Contractor may request that this retainage be paid into an escrow account pursuant to Section 2.2-4334 of the Code of Virginia (1950), as amended.

15.4 Requests for progress payments will be submitted to the Architect for review. Owner will make any Architect-approved progress payments, less 5% retainage, to the Contractor approximately 30 days after the Contractor’s Application for Payment has been approved by the Architect.

15.5 Each Application for Payment shall be based on the most recent schedule of values submitted by the Contractor in accordance with the Contract Documents. The schedule of values shall allocate the entire Contract Sum among the various portions of the Work. The schedule of values shall be prepared in such form and supported by such data to substantiate its accuracy as the Architect or Owner may require. This schedule, unless objected to by the Architect or Owner, shall be used as a basis for reviewing the Contractor’s Applications for Payment and may not be revised without the prior written approval of the Owner and Architect. Applications for Payment also shall show the percentage of completion of each portion of the Work as of the end of the period covered by the Application for Payment.

15.6 In taking action on the Contractor’s Applications for Payment, the Architect shall be entitled to rely on the accuracy and completeness of the information furnished by the Contractor and shall not be deemed to represent that the Architect has made a detailed examination, audit or arithmetic verification of the documentation submitted or other supporting data; that the Architect has made exhaustive or continuous on-site inspections; or that the Architect has made examinations to ascertain how or for what purposes the Contractor has used amounts previously paid on account of the Contractor.

15.7 The Architect will perform no more than one (1) inspection to determine whether the Work or a designated portion thereof has attained Substantial Completion in accordance with the Contract Documents. Owner is entitled to reimbursement from Contractor for amounts paid to the Architect for any additional inspections.

15.8 The Architect will perform no more than one (1) inspection to determine whether the Work or designated portion thereof has attained Final Completion in accordance with the Contract Documents. Owner is entitled to reimbursement from Contractor for amounts paid to the Architect for any additional inspections.

16.

PAYMENTS TO SUBCONTRACTORS

16.1 Contractor shall be liable for the entire amount owed to any Subcontractor with which it subcontracts; provided, Contractor shall not be liable for amounts otherwise reducible due to the Subcontractor’s noncompliance with the terms of its subcontract. In the event that Contractor withholds all or a part of the amount promised to the Subcontractor under its subcontract, Contractor shall notify the Subcontractor, in writing, of its intention to withhold all or a part of the payment with the reason for nonpayment. Payment by the Owner to Contractor shall not be a condition precedent to payment to any lower-tier Subcontractor. Further, Contractor shall take one of the two following actions within seven (7) consecutive, calendar days after receiving amounts paid to the Contractor by the Owner for work performed by any Subcontractor under this Contract:

(i) Pay the Subcontractor for the proportionate share of the total payment received from IALR attributable to the work performed by the Subcontractor under that subcontract; or

(ii) Notify IALR and Subcontractor, in writing, of the Contractor's intention to withhold all or a part of the Subcontractor's payment and explain the reason for nonpayment.

16.2 Contractor shall pay interest at the rate of one (1) percent per month to the Subcontractor on all amounts owed by the Contractor that remain unpaid after seven (7) consecutive, calendar days following receipt by the Contractor of payment from IALR for work performed by the Subcontractor under that subcontract, except for amounts withheld as allowed in subsection (ii) above.

16.3 Contractor shall insert in each of its subcontracts a provision requiring each Subcontractor to include or otherwise be subject to the same payment and interest requirements with respect to each lower-tier Subcontractor.

16.4 Contractor’s obligation to pay an interest charge to a Subcontractor pursuant to this Section shall not be construed to be an obligation of the Owner. This Contract may not be modified for the purpose of providing reimbursement for such interest charge. A cost reimbursement claim may not include any amount for reimbursement for such interest charge.

16.5 The Contractor shall indemnify, defend and hold the IALR Parties harmless for any claims, demands, damages, losses and expenses, including, without limitation, reasonable attorneys’ fees, arising out of or resulting from the Contractor failure to pay as provided in the Contract Documents and/or required by applicable law, any Subcontractor or any other person with whom Contractor or any subcontractor has contracted or who is employed directly or indirectly by Contractor or subcontractor provided only that Owner has paid Contractor such amounts as are then actually due under this Contract for Work actually and properly performed as of the date when the claim was asserted. In the event of such claims, Owner may, after providing written notice to the Contractor, withhold from any progress and/or final payment the unpaid sum of money deemed sufficient to pay all lawful claims and associated costs in connection with the Contract.

16.6 The Contractor agrees that neither payment, final or otherwise, partial or entire occupancy of the premises by IALR, nor acceptance of the Work under this Contract shall be an acceptance of any Work which does not conform to the requirements of the Contract, nor shall such acceptance, occupancy, or payment relieve Contractor of any responsibility for any errors or omissions in connection with the Project, operate as a waiver of any rights under this Contract or of any cause of action arising out of the performance of this Contract, or operate to release Contractor from any obligation under the Contract.

17.

GUARANTEES AND WARRANTIES OF WORK

17.1 The Contractor’s workmanship and oversight of its Subcontractors shall be of the highest quality found in the construction trade or industry in every respect. All items of Work shall be done by workers skilled in the particular task to which they are assigned. In the acceptance or rejection of Work, no allowance will made for lack of skill on the part of workers. Poor or inferior workmanship (as determined by the Owner, Architect, or other inspecting authorities) shall be removed and replaced to conform to the highest quality standards of the trades concerned, or otherwise corrected to the satisfaction of the Contract Administrator, the Owner, or other inspecting authority, all at the Contractor’s sole expense.

17.2 The Contractor warrants and guarantees the Work against defects or deficiencies in all material and workmanship and shall maintain, repair or replace, at its expense any Work, material or part that is found by the Owner or the Architect to be defective, within a period of one (1) year from the date of final acceptance of the Project.

17.3 The Contractor warrants that, unless otherwise specified, all material and equipment incorporated in the Work under the Contract shall be new, in first class condition, and in strict accordance with the Contract Documents. The Contractor further warrants that all workmanship shall be of the highest quality found in the construction trade or industry and in strict accordance with the Contract Documents and shall be performed by persons highly qualified at their respective trades.

17.4 The Contractor shall review all materials and methods of construction specified or indicated in the Contract Documents, including those recommended by manufacturers, and shall advise the Owner (1) if the specified or indicated material or method deviates from good construction practice, (2) if employing such material or method will violate any warranties, or (3) if the Contractor has any other objection to such material or method. In such event, the Contractor shall propose alternative materials or methods for those which violate the warranties or to which the Contractor takes objection, submitting the names of substitute products and relevant data on which he can issue the specified warranty. Should the Contractor fail to notify the Owner of its objections prior to the execution of the Contract, it will be deemed to have agreed to warrant all work specified or shown.

17.5 Work not conforming to these warranties shall be considered defective.

17.6 These warranties and guarantees of material and workmanship are separate and independent from and in addition to any of the Contractor’s other guarantees or obligations that arise out of this Contract or any applicable law. In addition to the foregoing warranties and stipulations, the Contractor shall comply with all other warranties and guarantees noted in any portion of the Contract Documents, the more stringent requirement governing.

17.7 If, within any warranty or guarantee period, defects are noticed by the Owner, which require repairs or changes in connection with the guaranteed Work, those repairs or changes being in the opinion of the Owner rendered necessary as the result of the use of material, equipment, or workmanship which is defective, inferior, or not in accordance with the terms of the Contract, the Contractor shall, promptly upon receipt of notice from the Owner, (such notice being given not more than four (4) weeks after the expiration of any such guarantee period), and without any expense to the Owner:

a. Place in satisfactory condition in every particular all of such guaranteed work and correct all defects therein; and

b. Make good all damage to the structure, contents of the structure, site and equipment which in the opinion of the Owner is the result of the use of material, equipment, or workmanship which are inferior, defective, or not in accordance with the terms of the Contract; and

c. Make good any work or material or the equipment and contents of structures or the site disturbed in fulfilling any such guarantee.

17.8 In any case where in fulfilling the requirements of the Contract or any guarantee embraced in or required thereby, the Contractor disturbs any Work guaranteed under the Contract, it shall restore such Work to a condition satisfactory to the Owner and guarantee such restored Work to the same extent as it was guaranteed under such other Contract.

17.9 If the Contractor, after notice, fails to proceed promptly to comply with the terms of the guarantee, the Owner may have the defects corrected by the Owner or other contractor and the Contractor shall be liable for all costs and expenses incurred in doing so.

17.10 Nothing contained in this Section 17 shall be construed to shorten any applicable statutes of limitation with respect to any obligations which the Contractor has under the Contract Documents or the law of Virginia, including liability for defective Work.

17.11 All guarantees or warranties of equipment, systems or materials furnished to Contractor or Subcontractors by any manufacturer or supplier shall be deemed to run to the benefit of Owner and are (and shall be) assigned to Owner. These warranties are in addition to, not in lieu of, all other warranties and guarantees contained in or required by the Contract Documents.

18.

RECORDS AND INSPECTION

18.1 The Contractor shall maintain full and accurate records with respect to all matters covered under this Contract, including, without limitation, accounting records, written policies and procedures, time records, telephone records, and any other supporting evidence used to memorialize, reflect, and substantiate charges or fees related to this Contract. The Contractor’s records shall be open to inspection and subject to audit and/or reproduction, during normal working hours, by IALR and its employees, agents or authorized representatives after giving at least three (3) days’ notice to Contractor by IALR. IALR shall have access to such records from the effective date of this Contract, for the duration of the Contract, and for five (5) years after the date of final payment by IALR to the Contractor pursuant to this Contract or any renewal or extension of this Contract. IALR’s employees, agents or authorized representatives shall have access to the Contractor’s facilities, shall have access to all necessary records, and shall be provided adequate and appropriate work space, in order to conduct audits.

19.

CORRECTION OF WORK

19.1 The Contractor shall promptly remove from the premises all Work rejected by the Architect for failure to comply with the Contract Documents, whether incorporated in the construction or not, and the Contractor shall promptly replace and re-execute the Work in accordance with the Contract Documents and without expense to the Owner and shall bear the expense of making good all Work of other Contractors destroyed or damaged by such removal or replacement.

19.2 All removal and replacement Work shall be done at the Contractor’s expense. If the Contractor does not take action to remove such rejected Work within ten (10) days after receipt of Written Notice, the Owner may remove such Work and store the materials at the expense of the Contractor.

20.

ACCEPTANCE OF FINAL PAYMENT AS RELEASE BY CONTRACTOR

20.1 The acceptance by the Contractor of final payment shall be and shall operate as a release to the Owner of all claims and liability to the Contractor other than claims in stated amounts as may be specifically excepted by the Contractor for all things done or furnished in connection with this Work and for every act and neglect of the Owner and others relating to or arising out of this Work. Any payment, however, final or otherwise shall not release the Contractor or its sureties from any obligations under the Contract Documents or the Performance Bond and Labor and Material Payment Bond.

21.

CLAIMS; CONTRACT DISPUTES

21.1 Contractual claims by the Contractor, whether for money or other relief, shall be submitted by the Contractor in writing to the Owner no later than sixty (60) days after final payment. However, written notice of the Contractor’s intention to file such a claim must be given to the Owner’s Authorized Representative within ten (10) calendar days of the occurrence or beginning of the work upon which the claim is based. Such notice shall state that it is a “notice of intent to file a claim” and include a written statement describing the act or omission of IALR or its agents that allegedly caused or may cause damage to Contractor and the nature of the claimed damage. Failure to submit such notice of intent within the time and in the manner required shall be a conclusive waiver of the claim by Contractor. Contractor is not prevented from submitting claims during the pendency of the Work. Proposed or requested Change Orders, demands for money compensation or other relief, and correspondence and emails to IALR or its representatives, which do not comply with the requirements of this Section, shall not be considered claims under this Section. Contractor may not institute legal action prior to receipt of Owner’s decision on the claim unless the Owner fails to render such decision within ninety (90) days.