Attachment 2 - Articles for OT Agreement-DRAFT ONLY.docx

Table of Contents

STANDARD ARTICLES FOR PROGRESSIVE DESIGN-BUILD CONSTRUCTION OTHER TRANSACTION AGREEMENT

ARTICLE 1 – DEFINITIONS

ARTICLE 2: SCOPE OF THE AGREEMENT

ARTICLE 3: TERM OF AGREEMENT AND NOTICE TO PROCEED

ARTICLE 4: TERMINATION

ARTICLE 5: CHANGES TO THE AGREEMENT

ARTICLE 6: OBLIGATION AND PAYMENT

ARTICLE 7: BONDING REQUIREMENTS

ARTICLE 8: DISPUTE RESOLUTION

ARTICLE 9: CONFIDENTIAL AND PROPRIETARY INFORMATION

ARTICLE 10: DATA RIGHTS

ARTICLE 11: SECURITY

ARTICLE 12: TITLE TO AND DISPOSITION OF PROPERTY

ARTICLE 13: SAFEGUARDING CONTROLLED UNCLASSIFIED INFORMATION AND CYBER INCIDENT REPORTING

ARTICLE 14: GOVERNING LAW AND JURISDICTION

ARTICLE 15: STATUTORY AUTHORITY AND APPLICABLE LAW

ARTICLE 16: FORCE MAJEURE

ARTICLE 17: ASSIGNMENT

ARTICLE 18: ORDER OF PRECEDENCE

ARTICLE 19: SECURITY PROHIBITIONS AND EXCLUSIONS

ARTICLE 20: PROGRESSIVE DESIGN-BUILD RESPONSIBILITY

ARTICLE 21: DESIGN

ARTICLE 22: CONSTRUCTION

ARTICLE 23: RESPONSIBILITY AND INDEMNIFICATION

ARTICLE 24: COMPLIANCE WITH APPLICABLE LABOR LAWS

ARTICLE 25: LIQUIDATED DAMAGES FOR CONSTRUCTION

ARTICLE 26: SUSPENSION OF WORK

ARTICLE 27: BUY AMERICAN ACT REQUIREMENTS UNDER TRADE AGREEMENTS

ARTICLE 28: SMALL BUSINESS SUBCONTRACTORS

ARTICLE 29: SUBCONTRACTOR AGREEMENT

ARTICLE 30: CONGRESSIONAL AUTHORIZATION AND LIMITATION ON CONSTRUCTION

ARTICLE 31: NATIONAL DEFENSE PRIORITY RATING AND SPECIAL AUTHORITY

ARTICLE 32: MISCELLANEOUS

OPTIONAL ARTICLES FOR OTA TEMPLATE

ARTICLE XX: GOVERNMENT FURNISHED PROPERTY

ARTICLE XX: CYBERSECURITY REQUIREMENTS

ARTICLE XX: FOREIGN ACCESS TO TECHNOLOGY AND EXPORT CONTROL

ATTACHMENTS

STANDARD ARTICLES FOR PROGRESSIVE DESIGN-BUILD CONSTRUCTION OTHER TRANSACTION AGREEMENT

ARTICLE 1 – DEFINITIONS

1.1 A/E (Architect-Engineer) means the licensed professional, firm, or team responsible for planning, design, and preparation of technical drawings and specifications for the project.

1.2 Administrative Agreements Officer (AAO) means a warranted Agreements Officer delegated authority to administer delegated functions in support of the Agreement.

1.3 Adequate Security means protective measures commensurate with the consequences and probability of loss, misuse, unauthorized access to, or modification of information.

1.4 Agreement or OTA refers to the Other Transaction Agreement executed between the Government and the Design-Builder for the purpose of executing a Progressive Design-Build project. This Agreement is authorized under 10 U.S.C. 2808a. It is not a procurement contract, grant, or cooperative agreement and is not subject to the Federal Acquisition Regulation (FAR).

1.5 Agreements Officer (AO) is the warranted Government official with authority to enter into, administer, and/or terminate this Agreement.

1.6 Agreements Officer’s Representative (AOR) is the individual designated by the Government to monitor technical and administrative performance and provide oversight of the Agreement.

1.7 Confidential Information means information and materials determined by the Disclosing Party to be of a confidential, proprietary, or Trade Secret nature and is designated in writing as such prior to the time of their disclosure. Notwithstanding the foregoing, materials and other information which are orally, visually, or electronically disclosed by a Disclosing Party, or are disclosed in writing without an appropriate marking, shall constitute Confidential or proprietary Information or a Trade Secret if such Disclosing Party, within thirty calendar days after disclosure, notifies the Receiving Party in writing describing the material or information and indicating that it is confidential, proprietary, or a Trade Secret, provided that any disclosure of information by the Receiving Party prior to receipt of such notice shall not constitute a breach by the Receiving Party of its obligations. “Confidential Information” includes any information, and materials considered proprietary or a Trade Secret by the Design-Builder on its own behalf or on behalf of their subcontractors or suppliers.

1.8 Controlled Unclassified Information (CUI) is information that requires safeguarding, or dissemination controls pursuant to and consistent with applicable law, regulations, and Government-wide policies, but is not classified. Instructions for the use, marking, dissemination, and storage of CUI can be found in DoD Instruction 5200.48, “Controlled Unclassified Information (CUI).

1.9 Data means recorded information, regardless of form or method of recording, including technical data and software. Data does not include financial, administrative, cost, pricing, or management information.

1.10 Date of Completion is the date on which all work is completed or the date on which the period of performance ends.

1.11 Days means calendar days unless otherwise stated.

1.12 Deliverable Property includes the following described items acquired or produced by the Design-Builder that are or should be allocable or properly chargeable to this Agreement under sound and generally accepted accounting principles and practices:

(i) Parts, materials, inventories, and work in process;

(ii) Special tooling and special test equipment to which the Government is to acquire title;

(iii) Nondurable (i.e., noncapital) tools, jigs, dies, fixtures, molds, patterns, taps, gauges, test equipment and other similar manufacturing aids, title to which would not be obtained as special tooling under paragraph 1.12(ii) of this Article; and

(iv) Drawings and technical data, to the extent the Design-Builder or subcontractors are required to deliver them to the Government by other Articles of this Agreement.

1.13 Design-Builder means the Awardee of this Other Transaction Agreement.

1.14 Foreign Firm or Institution means a firm or organization organized under the laws of a country other than the United States, including entities owned or controlled by foreign governments, firms, or individuals.

1.15 Guaranteed Maximum Price (GMP): The maximum price payable to the Design-Builder for the complete performance of Phase 2 Services under this Agreement. The GMP constitutes a fixed, non-adjustable ceiling on the Government’s total financial liability for the defined project scope. The Design-Builder assumes all risk for costs, overhead, or expenses incurred in the performance of the work that exceed the GMP. The GMP includes all direct and indirect costs, fees, contingencies, and any potential allowances as required to complete the Project.

1.16 Government means the United States of America, acting through the U.S. Army Corps of Engineers (USACE).

1.17 Milestone means a defined and scheduled event signifying the completion of a major deliverable or a set of related deliverables as identified in the Statement of Services. For the construction portion of the agreement, Government shall make monthly payments as the work proceeds, on estimates of work accomplished which meets the standards of quality established under the agreement, as approved by the AO.

1.18 Off-Ramp refers to a contractual mechanism that allows the Government to discontinue the Progressive Design-Build relationship if a fair and reasonable GMP for construction cannot be achieved. Upon off-ramp, the Government retains rights to the completed design to continue the project through another delivery method or contractor.

1.19 Party means the Government or the Design-Builder.

1.20 Parties means the Government and the Design-Builder, collectively.

1.21 Progressive Design-Build (PDB) refers to a collaborative project delivery method where a single entity, the Design-Builder, is responsible for both design and construction. Under this delivery method, the project scope, design, and contract price are developed progressively with active owner (i.e. the Government) collaboration.

1.22 Property refers to tangible personal property used in performance of the Agreement, excluding items consumed during execution of the work.

1.23 System for Award Management (SAM) refers to the official U.S. Government system where entities register to do business with the Federal Government.

1.24 Sensitive Compartmented Information Facility (SCIF) is an accredited facility where sensitive compartmented information may be stored, processed, or discussed.

1.25 Scope of Services (SOS) refers to a Government-provided document outlining the tasks, requirements, and deliverables for specific phases of the project.

1.26 Termination for Convenience means the exercise of the Government’s right to completely or partially terminate performance of work under this Agreement when it is in the Government’s interest in accordance with Article 4.

1.27 Termination for Default means the exercise of the Government’s right to completely or partially terminate the Agreement in accordance with Article 4.

1.28 Trade Secret means all forms and types of financial, business, scientific, technical, economic, or engineering or otherwise proprietary information, including, but not limited to, patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if:

(i) The owner thereof has taken reasonable measures to keep such information secret; and

(ii) The information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public.

1.29 Unique Entity Identifier (UEI) is the 12-character alphanumeric identifier assigned to entities registered in SAM.

1.30 U.S. Army Corps of Engineers (USACE) is the Federal agency responsible for managing this solicitation and executing the Agreement.

1.31 Work includes, but is not limited to, materials, workmanship, and manufacture and fabrication of components.

ARTICLE 2: SCOPE OF THE AGREEMENT

2.1 Background

This requirement will be executed using a Progressive Design-Build (PDB) model under Other Transaction authority pursuant to 10 U.S.C. § 2808a which permits the Department of War to execute transactions for facility repair and construction projects, including all associated planning, design, and engineering efforts. An Other Transaction (OT) is a special acquisition instrument authorized by Congress.

As a transaction other than a standard contract, grant, or cooperative agreement, this OT is exempt from the Federal Acquisition Regulation (FAR), Revolutionary Federal Acquisition Regulation (RFO), and its supplements (e.g., DFARS). This flexible authority enables a more streamlined and collaborative approach to project execution. The award of the subject OT to the Design-Builder utilizing a qualifications-based selection (QBS) process shall constitute a competitive procedure allowing for the execution of two-phase Agreement. Phase 1 Design & Pre-Construction Services and Phase 2, a follow on - Final Design and Construction.

The Government intends to establish a collaborative, integrated team environment where the selected Design-Builder works closely with the Government to refine requirements, advance the design, and align scope, cost, and schedule within the established affordability constraints.

2.2 General Services

2.2.1 The Government shall provide the Design-Builder with Project Criteria describing program requirements and objectives for the Project. Project Criteria may include conceptual documents, design specifications, design performance specifications, and other technical materials and requirements prepared by or for Government use.

2.2.2 If Project Criteria have not been developed prior to the execution of this Agreement, the Design-Builder will assist in developing Project Criteria.

2.2.3 The Design-Builder shall review and prepare a written evaluation of such criteria, including recommendations for different and innovative approaches to the design and construction of the Project. The Parties shall meet to discuss written evaluation of Project Criteria and agree upon what revisions, if any, should be made to such criteria.

2.3 Agreement Structure – Phased Services

2.3.1 Phase 1 Services. Design-Builder shall perform the services of design, pricing, and other services for the Project based on Project Criteria, as may be revised in accordance with Section 2.2, as set forth in Attachment 1, Scope of Services (SOS). Design-Builder must perform such services to the level of completion required for the Parties to establish a Guaranteed Maximum Price (GMP) for award of the Phase 2 Agreement. The GMP for Phase 2 shall be developed during Phase 1 on an “open-book estimate” basis. Design-Builder’s compensation for Phase 1 Services is set forth in [Article 6: Obligation and Payment herein. The level of completion required for Phase 1 Services is defined in Attachment 1, SOS (see defined deliverables).

2.3.2 Phase 2 Services. Design-Builder’s Phase 2 services shall consist of the completion of design services for the Project, the procurement of all materials and equipment for the Project, the performance of construction services for the Project, the start-up, testing, and commissioning of the Project, and the provision of warranty services, all as further described in the Phase 2 agreement.

2.3.3 Pricing Structure and GMP. This Agreement is structured as a fixed-price OT utilizing milestone-based payments in support of the above-mentioned Phased services provided. Upon completion of the Phase 1 services, or as otherwise designated in the SOS, Design-Builder shall submit a GMP proposal for the completion of the Phase 2 design and construction. Upon negotiation of a fair and reasonable price for the GMP for Phase 2, and subject to the availability of funds, the Parties may execute the Phase 2 award.

(a) The Design-Builder guarantees that the total price to the Government for the complete execution of Phase 2 Services shall not exceed the established GMP. The specific documents used as a basis for the GMP shall be identified in the Phase 2 bilateral modification.

(b) The Design-Builder does not guarantee any specific line item provided as part of the GMP and has the sole discretion to apply savings due to underruns in one line item to cover overruns in any other line item.

(c) The Design-Builder will be responsible for completing the work and paying all costs of completion that may exceed the GMP at its own risk in accordance with this Agreement.

2.3.4 Transition from Phase 1 to Phase 2 is contingent upon mutual agreement of scope, schedule, and fixed pricing, and will be implemented through a bilateral modification. The Government reserves the right to not proceed to Phase 2. If the Parties cannot agree regarding the scope or price of Phase 2, or if the Government does not receive sufficient funding to execute a modification for Phase 2, the Parties will “off ramp” at the conclusion of Phase 1 services. If the Parties cannot agree on a GMP for construction by the time designated in the [SOS], the Parties will “off ramp” at such time.

2.3.5 Should unforeseen events or agreed-upon changes affect the construction timeline, a revised schedule shall be negotiated by the Parties. Any such revision requires a formal bilateral modification to this Agreement to become effective. Design-Builder shall be responsible for performance of the work set forth in the SOS. The Design-Builder shall provide all documentation required in accordance with the deliverables table set forth in the SOS.

2.4 Joint Risk Register

2.4.1 The Design-Builder shall develop and maintain a Joint Risk Register in close coordination with the Government. The purpose of the register is to proactively identify, analyze, and mitigate project risks throughout both Phase 1 and Phase 2. During Phase 1, the register shall serve as a foundational, open-book component for collaboratively developing and negotiating the Phase 2 GMP proposal. The Government shall have the right to review and approve the Risk Register and any substantive updates. The specific format, content, and review procedures shall be defined in the SOS.

ARTICLE 3: TERM OF AGREEMENT AND NOTICE TO PROCEED

3.1. Term of this Agreement

The term of this Agreement commences upon the effective date of the bilaterally executed SF 26 and continues as defined in the SOS. Provisions of this Agreement, which, by their express terms or by necessary implication, apply for periods of time other than specified herein, shall be given effect, notwithstanding this Article.

3.2. Notice to Proceed Authority

The AO will issue a written Notice to Proceed (NTP) to authorize the Design-Builder to commence performance under this Agreement. The NTP shall specify the scope of work, period of performance, and funding authorized. No work shall begin until the Design-Builder receives a written NTP executed by the AO.

3.3 Phased Performance Structure

Performance under this Agreement shall be executed in phases consistent with a PDB approach as identified in Article 2 above.

Authorization to proceed beyond each phase requires an Agreement modification executed by the AO and subsequent NTP.

ARTICLE 4: TERMINATION

4.1 Termination Provisions

4.1.2 The Government may terminate performance of work under this Agreement, in whole or in part, if the AO determines that a termination is in the Government’s interest (termination for convenience) or because of the contractor’s actual or anticipated failure to perform its obligations in accordance with 4.2 Termination for Default. The AO shall initiate termination by delivering a written Notice of Termination to the Design-Builder, specifying type of termination, the extent of the termination, and its effective date. The Parties will negotiate in good faith a reasonable and timely adjustment of all outstanding issues between the Parties as a result of termination, which may include non-cancelable commitments.

4.1.3 Upon receipt of a Notice of Termination, and unless otherwise directed by the AO, the Design-Builder shall immediately proceed with the following obligations:

(a) Stop work as specified in the notice and direct its subcontractors and suppliers to do the same.

(b) Place no further orders for materials, services, or facilities, except as may be necessary for completing any portion of the work not terminated.

(c) Terminate all subcontracts and orders to the extent they relate to the terminated work.

(d) Take any action necessary, or that the AO may direct, for the protection and preservation of the property related to this project in which the Government has or may acquire an interest.

(e) Complete performance of any work not terminated.

4.1.4 If the Government terminates this Agreement for convenience, it shall pay the Design-Builder for all work satisfactorily performed up to the date of termination, plus reasonable and documented demobilization costs and costs incurred to settle obligations with subcontractors and suppliers entered into prior to the Design-Builder’s receipt of the termination notice.

4.2 Termination for Default

(a) If the Design-Builder fails to prosecute the work or any separable part, with the diligence that will insure its completion within the time specified in this contract including any extension, or fails to complete the work within this time, or is otherwise in substantial breach of a provision in this Agreement, the Government may, by written notice to the Design-Builder, terminate the right to proceed with the work (or the separable part of the work) that has been delayed or impacted by the breach. In this event, the Government may take over the work and complete it by contract or otherwise, and may take possession of and use any materials, appliances, and plant on the work site necessary for completing the work. The Design-Builder and its sureties shall be liable for any damage to the Government resulting from the Design-Builder’s refusal or failure to complete the work within the specified time, whether or not the Design-Builder’s right to proceed with the work is terminated. This liability includes any increased costs incurred by the Government in completing the work.

(b) The Design-Builder’s right to proceed shall not be terminated nor the Design-Builder charged with damages under this clause, if the AO finds that delay in completing the work arises from unforeseeable causes beyond the control and without the fault or negligence of the Design-Builder, as identified in Article 16, Force Majeure, and the Design-Builder notifies the AO within 10 days from the beginning of such delay.

(c) If, after termination, it is determined that the Design-Builder was not in default, or that the delay was excusable, the rights and obligations of the parties will be the same as if the termination had been issued for the convenience of the Government.

(d) The rights and remedies of the Government in this Article are in addition to any other rights and remedies provided by law or under this Agreement.

4.2.3. Extending the Term

The Parties may extend, by mutual written agreement, the term of this Agreement if opportunities within the scope set forth in Article 2 reasonably warrant. Any extension shall be formalized through modification of the Agreement by the AO and the Design-Builder and in accordance with procedures outlined in Article 5, Changes

4.2.4. Special Termination

Representations and Covenants Regarding Foreign Ownership, Control, or Influence (FOCI)

(a) Representation. The Design-Builder represents that it is not under foreign ownership, control, or influence (as defined by 32 C.F.R. § 2004.40 and other applicable U.S. law) that would pose an unacceptable risk to U.S. national security.

(b) Duty to Disclose. The Design-Builder shall immediately provide written notification to the AO if it becomes aware of any actual or proposed change in its ownership or control, or that of any parent Design-Builder, that could result in a new foreign interest or a change in the level of existing foreign interest. This includes any transaction that could be subject to review by the Committee on Foreign Investment in the United States (CFIUS).

(c) Right to Terminate for National Security. If the Government determines, at its sole discretion, that a change in the Design-Builder's ownership, control, or influence status constitutes an unacceptable risk to national security, the Government may terminate this Agreement for cause. Such a termination will be initiated with a Notice of Termination and be effective immediately upon receipt.

ARTICLE 5: CHANGES TO THE AGREEMENT

(a) General. This Agreement may only be modified by a written instrument formally executed by the Government's AO.

(b) Bilateral Modifications. All substantive changes to this Agreement require the mutual written consent of both Parties. This includes, but is not limited to, changes to the SOS, period of performance, total fixed price, or milestone payment schedule.

Either Party may propose such a modification. The proposing Party shall provide a detailed justification outlining the technical, schedule, and financial impacts of the proposed change. Following review and negotiation, any agreed-upon modification will be formalized in a bilateral modification signed by both the AO and an authorized representative of the Design-Builder. The Government is not obligated to pay for any work beyond the existing scope or milestones until such a modification is executed.

(c) Unilateral Administrative Modifications. The AO may unilaterally issue administrative modifications that do not affect the substantive rights of the Parties. Such changes are limited to actions like correcting typographical errors, changing administrative data (e.g., paying office information), or updating the names of Government personnel assigned to the Agreement. These administrative modifications do not require the Design-Builder’s signature.

ARTICLE 6: OBLIGATION AND PAYMENT

6.1 Obligation

(a) The Government’s liability to make payments to the Design-Builder is limited to only those funds obligated under the Agreement or by modification to the Agreement. The Government is not obligated to reimburse Design-Builder for expenditures in excess of the amount of obligated funds allotted by the Government.

(b) If modification becomes necessary in performance of this Agreement, pursuant to Article 5, Changes to the Agreement, the Parties shall execute a revised Schedule of Milestones and Payment for prospective milestones within the agreed fixed-price structure.

6.2 Payments

(a) Basis for Payment. Payments shall be made in fixed amounts based on the successful completion and Government acceptance of the payable milestones defined in Schedule of Milestones and Payment. Each milestone payment represents the full and fair value received by the Government for the work accomplished.

(b) Phase 2 Cost-Loaded Schedule and Schedule of Values (SOV). For Phase 2 execution, progress payments shall be tied to a SOV derived from an approved cost-loaded and resource-loaded schedule. The Design-Builder maintains flexibility to invoice for actual costs that vary (more or less) from individual SOV line items without requiring a formal modification, provided the aggregate of all payments does not exceed the overall GMP.

(c) Allowances and Shared Savings. The Phase 2 SOV may include specific line items designated as Allowances.

1. Shared Savings: If the final actual costs of an Allowance item are less than the estimated line-item value, the realized savings shall be shared between the Government and the Design-Builder based on the percentage split negotiated in the Phase 2 bilateral modification.

2. Overruns: If actual costs exceed the estimated Allowance value, the Design-Builder shall absorb the overrun utilizing its internal line-item flexibility in the SOV. Allowance overruns shall never exceed the overall GMP.

(d) Invoicing and Payment Process.

· Progress Verification: The Design-Builder shall document progress against the milestones (and Phase 2 SOV) in the monthly Progress Report, as required by the SOS.

· Invoice Submission: Following the Agreements Officer's Representative (AOR)'s verification of a complete milestone or SOV progress, the Design-Builder shall submit a corresponding invoice through the Resident Management System (RMS) or the Construction Management Platform (CMP), whichever is in place at time of award and consistent with attached specifications.

· Payment: The USACE Finance Center will process payment within 14 calendar days of a properly submitted and accepted invoice in RMS or CMP. Detailed invoice submission procedures are specified https://rms.usace.army.mil/rms_manuals&help_files.html

(e) Funding Limitation. The Government’s total financial liability under this Agreement shall not exceed the amount of funds obligated.

6.3 Financial Accountability

The Design-Builder shall maintain records sufficient to demonstrate completion of milestones and deliverables required under this Agreement.

The Government retains the right to verify milestone completion, validate performance against the SOS, review documentation supporting deliverables. All payments are based solely on successful completion and acceptance of agreed milestones.

6.4 Prompt Payment Requirements

Payment is considered made on the date of an electronic funds transfer (EFT). All days referred to in this Article are calendar days, unless otherwise specified.

6.4.1 Invoices

(a) Types of invoice payments.

(i) Payment in accordance with the Schedule of Milestones and Payment. The Government will pay no later than 14 days after receipt of a proper invoice.

(ii) Final payments based on completion and acceptance of all work under the Agreement. Final payments will be made the later of the following two events:

(1) The 30th day after receipt of a proper invoice from the Design-Builder.

(2) The 30th day after Government acceptance of the work or services.

(b) A “proper invoice” includes items (i) through (xi) below:

(i) Name and address of the Design-Builder

(ii) Invoice date and invoice number.

(iii) Agreement number.

(iv) Description of work or services performed.

(v) Delivery and payment terms (e.g., discount for prompt payment terms).

(vi) Name and address of Design-Builder official to whom payment is to be sent (must be the same as that in the contract or in a proper notice of assignment).

(vii) Name (where practicable), title, phone number, and mailing address of person to notify in the event of a defective invoice.

(viii) For payments in accordance with the Schedule of Milestones and Payment, substantiation of the amounts requested.

(ix) Taxpayer Identification Number (TIN).

(x) Electronic funds transfer (EFT) banking information.

(xi) Any other information or documentation required by the Agreement.

(c) If the invoice does not comply with requirements 6.4.1(b)(i-xi) of this Article, the Government will notify the Design-Builder within 7 days after receipt and identify the invoice deficiencies. When computing any interest penalty owed, the Government will consider its timeliness in notifying the Design-Builder of an improper invoice.

(d) Interest penalty. The Government will automatically pay an interest penalty to the Design-Builder if payment is late and the conditions listed below are met. However, when the due date falls on a Saturday, Sunday, or legal holiday, the Government may make payment on the following working day without incurring a late payment interest penalty.

(i) The designated billing office received a proper invoice.

(ii) There was no disagreement over quantity, quality, Design-Builder compliance with any Agreement term, condition, or requested milestone payment amount.

(iii) In the case of a final invoice for any balance of funds due the Design-Builder for work or services performed, the amount was not subject to further Agreement settlement actions between the Government and the Design-Builder.

(e) Computing penalty amount. The Government will compute the interest penalty in accordance with the Office of Management and Budget prompt payment regulations at 5 CFR part 1315. The Government will not pay an interest penalty if payment delays are due to disagreement between the Parties over the payment amount or other issues involving Agreement compliance, or on amounts temporarily withheld or retained in accordance with the terms of the Agreement. The Parties will resolve claims involving disputes, and any interest that may be payable in accordance with Article 8, Disputes.

(f) Discounts for prompt payment. The Government will pay an interest penalty automatically if the Government improperly takes a discount for prompt payment. The interest penalty will be calculated in accordance with 5 CFR part 1315.

(g) Additional interest penalty. The Government will pay a penalty amount, calculated in accordance with 5 CFR part 1315 in addition to the interest penalty amount only if-

(i) The Government owes an interest penalty of $1 or more;

(ii) The designated payment office does not pay the interest penalty within 10 days after the date the invoice amount is paid; and

(iii) The Design-Builder makes a written demand to the Government for additional penalty payment within 40 days after the date the invoice amount is paid, and the demand specifically identifies that late payment interest is due under a specific invoice; requests payment of all overdue late payment interest penalty; attaches a copy of the invoice; and states that payment of the principal has been received, including the date of receipt.

6.4.2. Flow Down Requirements. The Design-Builder must include in each subcontract under this Agreement the following:

(a) Prompt payment for subcontractors. A payment Article that obligates the Design-Builder to pay the subcontractor for satisfactory performance within 7 days from when Design-Builder receives payment from the Government under this Agreement.

(b) Interest for subcontractors. An interest penalty Article that obligates the Design-Builder to pay to the subcontractor an interest penalty for each payment not timely made -

(i) For the period beginning on the day after the required payment date and ending on the date on which payment of the amount due is made; and

(ii) Computed at the Treasury-established rate from the day after the due date until paid.

(c) Subcontractor Article Flow Down. An Article requiring each subcontractor to include a payment and interest penalty article and require all lower tier subcontractors to do the same.

6.4.3 Subcontract Article interpretation. The Articles required by paragraph 6.4.2 of this Article shall not be construed to impair the right of the Design-Builder or a subcontractor at any tier to negotiate, and to include in their subcontract, provisions that-

(a) Enable the Design-Builder or any subcontractor to retain (without cause) a specified percentage for satisfactory work, otherwise due, without paying interest penalties, as long as it is agreed upon in the contract,

(b) Withhold all or part of a payment if the request doesn't comply with subcontract terms, or

(c) Permit such withholding without incurring any obligation to pay a late payment penalty if a formal notice is provided to the subcontractor and a copy to the AO, where the notice identified the amount to be withheld, the cause for withholding, and the remedial actions to be taken by contractor to receive payments on such amounts.

6.4.4 Subcontractor payment entitlement. The Design-Builder may not request payment from the Government of any amount withheld or retained in accordance with paragraph 6.4.3 of this Article until the Design-Builder has determined and certified to the Agreement’s Officer that the subcontractor is entitled to the payment of such amount.

6.4.5 Prime-subcontractor disputes. A dispute between the Design-Builder and subcontractor relating to the amount or entitlement of a subcontractor to a payment or a late payment interest penalty under an Article included in the subcontract pursuant to paragraph 6.4.3 of this Article does not constitute a dispute to which the Government is a party. The Government may not be interpleaded in any judicial or administrative proceeding involving such a dispute.

6.4.6 Preservation of prime-subcontractor rights. Except as provided in paragraph 6.4.5 of this Article, this Article shall not limit or impair any remedies otherwise available to the Design-Builder or a subcontractor in the event of a dispute involving late payment or nonpayment by the Design-Builder or deficient subcontract performance or nonperformance by a subcontractor.

6.4.7 Non-recourse for Design-Builder interest penalty. The Design-Builder’s obligation to pay an interest penalty to a subcontractor pursuant to the Articles included in a subcontract under paragraph 6.4.3 of this Article shall not be construed as an obligation of the Government for such interest penalty.

6.4.8 Overpayments. If the Design-Builder becomes aware of a duplicate invoice payment or that the Government has otherwise overpaid, the Design-Builder must remit the overpayment amount to the payment office cited in the Agreement, with a copy to the Agreement’s Officer, and identify the circumstances of the overpayment (e.g., duplicate payment, erroneous payment, liquidation errors, date(s) of overpayment); the affected Agreement number and milestone payment; and the Design-Builder point of contact.

ARTICLE 7: BONDING REQUIREMENTS

(a) Amount of required bonds. The Design-Builder must provide performance (Standard Form 25) and payment (Standard Form 25-A) bonds, or other Government-approved security, to the AO in the amount of 100% of the Phase 2 Agreement GMP amount as a condition for issuance of a Notice to Proceed (NTP). The Design-Builder must submit the required security within 10 days Phase 2 Agreement execution. Failure to do so may result in termination of the remainder of the Agreement. Bonds shall be issued by a surety acceptable to the Government and listed in U.S. Treasury Department Circular 570 or otherwise approved by the AO. The AO may approve alternative security (e.g., letter of credit or guarantee) and may reduce requirements as risk decreases.

(b) If the GMP is to be modified in an amount that increases the overall construction price by more than $50,000, a consent of surety must be obtained.

(c) Notice of Sub-Recipient waiver of protection (40 U.S.C. 3133(c)). Any waiver of the right to sue on the payment bond is void unless it is in writing, signed by the person whose right is waived, and executed after such person has first furnished labor or material for use in the performance of the Agreement.

ARTICLE 8: DISPUTE RESOLUTION

The Parties will communicate in good faith and cooperate to resolve any disagreement or claim arising under this Agreement in a timely and efficient manner. This Article provides the sole and exclusive procedure for resolving such disputes.

(a) Disputes Generally:

Each assertion by the Design-Builder that it is entitled to money against the Federal Government, not otherwise included in the GMP Agreement, relating to this Agreement must be submitted, in writing, to the AO for a decision. Each such assertion shall be submitted within 3 years after the underlying facts of the assertion have accrued. Each such assertion must include a sum certain for each legally or factually divisible assertion of government fault allegedly entitling the contractor to compensation.

(b) Fraudulent assertion:

This section does not authorize an AO to settle, compromise, pay, or otherwise adjust any assertion involving fraud. If an AO suspects fraud related to the Agreement, the AO need not issue a decision related to any assertion submitted under that Agreement.

(c) Issuance of a Decision:

The AO will issue a decision in writing on any submitted assertion within 180 days of receipt of a written request from the contractor.

(d) Appealing a Dispute in Federal Court:

Either Party may bring an action directly on the assertion in the United States Court of Federal Claims (“COFC”), notwithstanding any Agreement provision, regulation, or rule of law to the contrary. The aggrieved party shall have the right to pursue monetary remedies in the COFC pursuant to the Tucker Act, 28 U.S.C. § 1491(a)(1).

(e) Mediation The parties agree that it is in their mutual interest to solve things at the lowest and most efficient level. Either Party may request mediation at any time after receipt of the AO Decision, including before or after appeal to the COFC.

(f) Failure to agree to any adjustment shall be a dispute under the Disputes Article. The Design-Builder must proceed diligently with performance of this Agreement as directed by the AO, pending final resolution of any request for relief, claim, appeal, or action arising under the agreement.

ARTICLE 9: CONFIDENTIAL AND PROPRIETARY INFORMATION

(a) Exchange of Information. The Parties anticipate exchanging information they consider proprietary or confidential. This may include "Government Confidential Information" disclosed by the Government and "Trade Secrets" or "Confidential Information" disclosed by the Design-Builder (collectively, "Proprietary Information"). Neither Party is obligated to disclose any information unless it is required for the performance of this Agreement.

(b) Duty of Confidentiality. To the extent permitted by law, the Party receiving Proprietary Information (the "Receiving Party") agrees to protect it from unauthorized use or disclosure. The Receiving Party shall not disclose such information to any third party, except as expressly permitted herein. All Proprietary Information remains the property of the Party that disclosed it (the "Disclosing Party").

(c) Authorized Disclosures. A Receiving Party may disclose Proprietary Information only:

(i) To its employees, subcontractors, and consultants who have a need to know for the performance of this Agreement and who are bound by similar confidentiality obligations;

(ii) As required by law or a court order, provided that the Receiving Party gives the Disclosing Party prompt written notice to allow it to seek a protective order; or

(iii) With prior written authorization from the Disclosing Party.

(d) Exceptions. The duty of confidentiality does not apply to information that:

(i) Is or becomes publicly available through no fault of the Receiving Party;

(ii) Is identified with a suitable notice or legend indicating it is not confidential;

(iii) Was already in the Receiving Party's possession without restriction, as proven by written records;

(iv) Is lawfully received from a third party without an obligation of confidentiality; or

(v) Is independently developed by the Receiving Party without reference to the Disclosing Party's Proprietary Information, as proven by written records.

(e) Return of Information. Upon request, the Receiving Party shall promptly return all tangible copies of the Disclosing Party's Proprietary Information. However, one (1) copy may be retained for archival or audit purposes, subject to the continuing obligations of this Article.

(f) Term of Obligation. Except to the extent covered by and subject to other provisions of this Agreement, the obligations of the Receiving Party under this Article shall continue for a period of five (5) years after the expiration or termination of this Agreement.

(g) Flow-Down. Each Party shall flow down the requirements of this Article to all subcontracts and team member agreements where the exchange of Proprietary Information is anticipated.

ARTICLE 10: DATA RIGHTS

(a) “Unlimited rights” means the rights of the Federal Government to use, disclose, reproduce, prepare derivative works, distribute copies to the public, and perform publicly and display publicly, in any manner or form, and for any purpose, and to have or permit others to do so on its behalf.

(b) The Government shall have- Unlimited rights, in all drawings, designs, plans, specifications, notes, surveys, maps, and other works developed in the performance of this Agreement, including the right to use the same on any other Federal Government design or construction without additional compensation to the Design-Builder.

The Design-Builder hereby grants to the Government a paid-up license throughout the world to all such works to which he may assert or establish any claim under design or architectural or original works patent or copyright laws. The Contractor will assign such rights (with or without registration) to the Government upon the request of the Agreements Officer.

Except as otherwise specifically provided for in this Agreement, the Design-Builder shall not use, release, reproduce, distribute, or publish any data or works produced in the performance of this Agreement, nor authorize others to do so, without express written permission of the AO.

The Design-Builder for a period of three (3) years after completion of the Agreement agrees to furnish the original or copies of all such works on the request of the AO.

(c) Government Re-Use of Design. The Government will not ask for additional originals or copies of the design works after the Design-Builder provides all required design documentation and record drawing documentation under this Agreement. Further, if the Government uses the design for other projects without additional compensation to the Design-Builder for re-use, the Government releases the Design-Builder from liability in the design on the other projects, due to defects in the design that are not the result of fraud, gross mistake as amounts to fraud, gross negligence or intentional misrepresentation.

(d) Rights Upon Termination ("Off-Ramp") In the event this Agreement is terminated for any reason prior to completion, the Government's rights as specified in this Article shall apply to all Data created or generated up to the effective date of termination. This includes, but is not limited to, all design deliverables, drawings, specifications, calculations, and models. The Government shall have the full right to use, modify, and build upon such Designs to complete the project with a different entity. In such an event, Government releases the Contractor from liability in the design on the other projects, due to defects in the design that are not the result of fraud, gross mistake as amounts to fraud, gross negligence or intentional misrepresentation.

ARTICLE 11: SECURITY

(a) General Security Requirements The Design-Builder and all its personnel, including subcontractors, shall comply with all applicable security policies, procedures, and emergency management exercises for the Government installation or facility where work is performed.

Installation Access: All personnel must comply with local access control procedures, which may include background checks (e.g., NCIC-III), personal identity verification, vehicle searches, and the wearing of ID badges. The Design-Builder is responsible for providing all information necessary to facilitate these checks. Specific access requirements for Lackland Air Force Base will be provided by the AO's Representative (AOR).

Force Protection Conditions (FPCON): The Design-Builder must adjust its security posture as directed by the Government in response to changes in the FPCON level. During higher threat levels (e.g., FPCON Charlie/Delta), the Government may restrict or postpone site access and services, which will resume when the threat is reduced to an acceptable level.

(b) Information Security and Handling The Design-Builder shall be capable of handling and protecting unclassified information in accordance with all applicable standards.

Controlled Unclassified Information (CUI): All personnel must be capable of properly handling, receiving, storing, and transmitting CUI, including information marked as For Official Use Only (FOUO).

Secure Transmission: All CUI must be transmitted using a Government-approved, controlled means, such as encrypted email, the DoD SAFE (Safe Access File Exchange) website, or other methods as directed by the AOR.

(c) Required Training The Design-Builder shall ensure its personnel and all subcontractor personnel complete the following Government-mandated training. Certificates of completion for all required training shall be provided to the AOR within 14 days of completion.

Operations Security (OPSEC) Training: All personnel must complete initial OPSEC awareness training within 30 days of the Agreement award and annually thereafter. This training can be accessed at the Center for Development of Security Excellence (CDSE) website https://securityawareness.dcsa.mil/opsec/index.htm or as otherwise directed by the AOR.

Antiterrorism (AT) / iWATCH Training: All personnel assigned to a DoD installation must complete the local iWATCH / AT awareness training program within 45 days of the Agreement award and annually thereafter. This training provides guidance on identifying and reporting suspicious activity. Register on https://jkodirect.jten.mil/Atlas2/page/login/Login.jsf and select Non-Government Personnel / Sponsored Account Registration (the AAO or AOR will approve) title of the training is Level I Antiterrorism Awareness Training.

(d) Classified Information No work under this Agreement is expected to be classified. However, should a requirement for access to classified information arise, such access will be governed by the National Industrial Security Program Operating Manual (NISPOM), 32 C.F.R. Part 117 (https://www.dcsa.mil/Industrial-Security/National-Industrial-Security-Program-Oversight/32-CFR-Part-117-NISPOM-Rule/), and all applicable DoD security regulations.

ARTICLE 12: TITLE TO AND DISPOSITION OF PROPERTY

The Government will not take title to Design-Builder-acquired or Design-Builder-produced property, except property the Agreement identifies as Deliverable Property, unless the Parties agree otherwise. The Design-Builder shall be responsible for the maintenance, repair, protection, and preservation of all property at its own expense during the term of the Agreement.

ARTICLE 13: SAFEGUARDING CONTROLLED UNCLASSIFIED INFORMATION AND CYBER INCIDENT REPORTING

(a) Adequate Security Requirement The Design-Builder shall provide adequate security for all information systems that store, process, or transmit Covered Defense Information (CDI) or other Controlled Unclassified Information (CUI).

NIST SP 800-171: At a minimum, the Design-Builder must implement the security requirements of the National Institute of Standards and Technology (NIST) Special Publication 800-171, "Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations," as soon as practical.

Variances: Any request to vary from a NIST SP 800-171 requirement must be submitted in writing to the AO for consideration by the DoD Chief Information Officer (CIO).

Cloud Services: If using an external cloud service provider for CUI, the Design-Builder must ensure the provider meets security requirements equivalent to the FedRAMP "Moderate" baseline and complies with the cyber incident reporting duties of this Article.

(b) Cyber Incident Reporting

Definition: A "Cyber Incident" is an action that affects a covered information system, the CUI residing on it, or the Design-Builder’s ability to perform operationally critical work.

72-Hour Reporting Deadline: When the Design-Builder discovers a Cyber Incident, it shall rapidly report it to the DoD within 72 hours via the DIBNet portal: http://dibnet.dod.mil.

Required Certificate: To submit a report, the Design-Builder must have a DoD-approved medium assurance public key infrastructure (PKI) certificate.

Initial Review: Upon discovering an incident, the Design-Builder must immediately review its systems to identify the scope of the compromise, including what data, computers, and user accounts were affected.

(c) Post-Incident Actions and Cooperation

Malicious Software: If malicious software is discovered, it must be submitted to the DoD Cyber Crime Center (DC3) at https://www.dc3.mil/. Do not send it to the AO.

Media Preservation: The Design-Builder shall preserve and protect forensic images of all…