CAP2525_Construction_Contract.pdf

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Construction Contract

THIS Construction Contract is made this day of, , 20 , by and between the City of Royal Oak, a Michigan Municipal Corporation, with its principal office at 203 S. Troy Street, Royal Oak, MI 48067, (the “CITY”), and , with its principal office at, , (the “CONTRACTOR”). CITY and CONTRACTOR are herein collectively referred to as “Parties” and separately as “Party”.

WITNESSETH, the parties to these presents, each in consideration of the agreements on the other herein contained, have agreed and hereby agree to as follows:

Article 1: That the said CONTRACTOR has agreed and by these presents does agree with the said CITY for the consideration set forth in Article 5 of this Contract to build and/or construct for the said CITY the entire work as shown on the Plans and as described in the Specifications, Instructions to Bidders, Proposal, and other documents together with all appurtenances and appurtenant work, in the manner and time prescribed including the furnishing of all materials, tools, equipment, transportation, labor, supervision, and all else necessary therefor and incidental thereto.

The short title and description of this Contract shall be known and referred to as:

2025 Joint Sealing Improvements

Contract CAP2525

Article 2: That the CONTRACTOR agrees that he will prosecute the work under this Contract so as to bring it to full completion by June 28th of the calendar year the work is performed and he further agrees that the CITY is hereby authorized to deduct and retain out of monies that may be due or become due him under this Contract the sum of one thousand dollars ($1,000.00) for each and every working day that the work remains uncompleted beyond the time limit named above, as amended by such extension of time as may be as allowed under Article 3 of this Contract, and that, in view of the difficulty of ascertaining the loss which the CITY will suffer by reason of delay in the performance of the work hereunder, the deduction and retention of such sum is to be considered not a penalty but the payment of liquidated damages stipulated beforehand by the parties hereto as representing the cost of additional inspection and engineering and the loss to the CITY of the use of the said construction of facilities.

Article 3: That the parties hereto mutually agree that if the CONTRACTOR shall be obstructed or delayed in the prosecution of completion of his work by disastrous storms, or by acts of Providence, or by general strikes, or by Court Injunction, or by any neglect or delay on the part of the CITY, the CONTRACTOR shall have no claim for damages for such causes or delay, but he shall in such case be entitled to such extension of time limit specified herein for the completion of the work as the Engineer shall adjudge to be just and reasonable provided, however, that formal claim for such extension be made in writing by the CONTRACTOR within a week after the time when such alleged cause of delay shall have occurred.

Contract CAP2525 – Continued

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Article 4: That the parties hereto mutually agree to the following stipulations as setting forth certain conditions which shall be taken to exist between the said parties and the conditions under which the work is to be done:

1. Definition of Forms: Whenever in the Contract the following terms, or pronouns in place of them, are used, their intent and meaning shall be interpreted as follows:

"Contract" The agreement covering the performance of the work hereinafter defined and the payments therefor; including Advertisement, Instructions to Bidders, Form of Proposal, Executed Contract, Contract Bonds, Insurance, Specifications, Plans, Supplementary Agreements which may be entered into, all of which documents are to be treated as one instrument whether or not set forth at length in the Form of Contract.

"City" The City of Royal Oak, Michigan, or the properly authorized agents or representatives.

"Engineer" The City Engineer of the City of Royal Oak, Michigan, or his duly authorized agents, assistants, or representatives, limited to the specific duties assigned or entrusted to them.

"Contractor" The party of the second part, contracting to perform the work covered by this Contract, or any part of it, his successor, assigns, or his duly authorized agents or legal representatives.

"City Clerk" The Clerk or Treasurer or Attorney of the City of Royal Oak, "City Treasurer" Michigan "City Attorney"

2. Plans: The location, depth and dimensions, structural details, and construction requirements of the work to be done are shown in a set of drawings adopted by the CITY and on file at the office of the City Engineer entitled:

2025 Joint Sealing Improvements

Contract CAP2525

When the figures or dimensions are given on the drawings, they are to have precedence over dimensions taken by scaling. During the progress of the work, the CITY may furnish drawings explanatory of those mentioned herein, which shall thereupon become a part hereof.

The CITY shall have the right to make reasonable modifications of Plans, if it is to its best interest to do so, and the CONTRACTOR shall be paid for the work as it is actually done.

The CONTRACTOR shall furnish, wherever required, drawings showing in detail the materials and construction of any part of the work for which the Engineer does not issue detail drawings. No time will be allowed for delays caused by the CONTRACTOR in submitting drawings that are not in accordance with the specifications. The CONTRACTOR shall check all dimensions and quantities on the drawings and he shall notify the Engineer of all errors, which he may discover.

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3. Specifications: A set of technical specifications explaining in detail how the work under this Contract is to be done and describing the character and quality of the various materials employed therein is attached to this Contract and is made expressly a part of it.

4. Plans and Specifications Cooperative: The plans and specifications are intended to be cooperative. They shall be construed as supplementary and explanatory each to the other, and any work called for on the plans and not particularly shown on the plans is to be as included under this Contract the same as is set forth in the specifications and exhibited on the plans.

5. The Engineer to Decide: In case of any conflict between the specifications and the plans, or in case the meaning of either or both should be obscure or uncertain or in dispute, the Engineer shall decide as to the true intent, and his decisions shall be binding and final.

6. Supervision of Work: All work shall be done under the supervision of and subject to the approval of the Engineer who shall have authority to make all inspections and direct it and determine the amount, quality, acceptability, and fitness of any labor, material, or construction which in his opinion does not fully meet the requirements of the specifications.

7. Suitable Tools and Equipment: It is mutually understood that the workmanship furnished under this Contract shall be first class. To the end that a good substantial and workmanlike job may be produced, the CONTRACTOR shall furnish suitable tools and equipment. Any tools or equipment that shall not, in the judgment of the Engineer, be suitable or sufficient to produce this result may be ordered from the work by him and such tools or equipment shall be substituted therefor by the CONTRACTOR as will meet with the approval of the Engineer.

8. Requirements for Materials: It is mutually understood that all materials furnished by the CONTRACTOR to be used in this work shall be of first quality in every respect and material so furnished which may not, in the judgment of the Engineer, be equal to the requirements of the specifications may be rejected by the Engineer, and such rejected materials must not be used and must immediately be removed by the CONTRACTOR from the site of the work.

The presence of the inspector or Engineer on the project shall in no way relieve the CONTRACTOR of his obligations to both provide materials and perform the work in full conformity to the specifications. Work found to be unsatisfactory prior to the expiration date of the maintenance clause of the Performance Bond shall be replaced at no cost to the CITY regardless of whether or not the inspector or Engineer was present at the time the work was originally performed.

9. Trade Names and Patents: Whenever an article of any class or materials or equipment is specified by the trade name of any particular patentee, manufacturer, or dealer, or by reference to the catalog of any such manufacturer or dealer, it shall be taken to mean and specify the article or articles or materials described or equal thereto in quality, finish, and durability and equally serviceable for the purpose for which it is or they are intended. The Engineer shall make the decision as to whether the materials or equipment offered are equal to those specified and his decision shall be final.

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10. Patent and Patent Rights: The CONTRACTOR shall protect and save the CITY harmless against all claims and actions brought against the CITY by reason of any actual infringement upon patent rights in any material, process, machine, or appliances used by him in the work.

11. Right-of-Way: The necessary rights-of-way for any construction to be done across or in private property will be obtained by the CITY. The CONTRACTOR shall take due and proper precautions against any injury to adjacent structures and shall hold himself strictly within the rights secured to him by the CITY in prosecuting the work on private property.

12. Sanitary Regulations: The CONTRACTOR at all times shall provide for the employees an abundant supply of pure drinking water and shall give orders against the use for drinking purpose of any water in the neighborhood known to be injurious to the health of the workers.

The CONTRACTOR shall provide at convenient points approved by the Engineer, properly secluded from public observations, necessary sanitary conveniences for the use of the employees. These shall be maintained in a manner, which will meet with the approval of the Engineer, and the CONTRACTOR shall vigorously enforce their use.

13. Labor Laws and Ordinances: The CONTRACTOR shall obey and abide by all the laws of the State of Michigan relating to the employment of labor and public work and all ordinances and requirements of the CITY regulating or applying to public improvements.

The CONTRACTOR agrees not to discriminate against any employee or applicant for employment, to be employed in the performance of the Contract, with respect to hire, tenure, terms, conditions, or privileges of employment, of any matter directly or indirectly related to employment, because of age or sex, except where based on a bona fide occupational qualification, or race, color, religion, national origin, or ancestry. The CONTRACTOR further agrees that every subcontract entered into for the performance of the Contract will contain a provision requiring non-discrimination in employment, as herein specified, binding upon each subcontractor. Breach of this covenant may be regarded as a material breach of the Contract.

14. Local Sources for Labor and Materials: All labor employed upon the work of this Contract shall be obtained from residents of the CITY insofar as this is available. All supplies, equipment, and materials shall be obtained from sources and dealers in the CITY insofar as is practicable.

15. Assignment or Subletting of Contract: In the execution of the Contract it may be necessary for the CONTRACTOR to sublet part of the work to others; however, the CONTRACTOR shall not award any work to any subcontractor without prior written approval of the CITY, which approval shall not be given until the CONTRACTOR submits to the CITY a written statement concerning the proposed award to the subcontractor, which statement shall contain such information as the CITY may require.

The CONTRACTOR shall be fully responsible to the CITY for the acts and omissions of his subcontractors and of persons either directly or indirectly employed by them, C 5 as he is for the acts and omissions of persons directly employed by him. Nothing contained in this Contract shall create any contractual relation between any subcontractor and the CITY.

The CONTRACTOR shall not assign, transfer, convey, or otherwise dispose of this Contract, of any part thereof, or his right, title, or interest in the same or any part thereof, without the previous consent in writing of the CITY. The CONTRACTOR shall not assign by power-of-attorney or otherwise any of the monies due or to become due and payable under this Contract without the previous consent in writing of the CITY.

16. Contractor Insurance Requirements: The CONTRACTOR, and any and all of their subcontractors, shall not commence work under this contract until they have obtained the insurance required under this paragraph, and shall keep such insurance in force during the entire life of this contract. All coverage shall be with insurance companies licensed and admitted to do business in the State of Michigan and acceptable to City of Royal Oak, Michigan. The requirements below should not be interpreted to limit the liability of the CONTRACTOR. All deductibles and SIRs are the responsibility of the CONTRACTOR.

The CONTRACTOR shall procure and maintain the following insurance coverage:

A. Workers’ Compensation Insurance, including Employers’ Liability Coverage, in accordance with all applicable statutes of the State of Michigan.

B. Commercial General Liability Insurance on an “Occurrence Basis” with limits of liability not less than $1,000,000 per occurrence and aggregate.

Coverage shall include, but not limited to, the following: (A) Contractual Liability; (B) Products and Completed Operations; (C) Independent Contractors Coverage; (D) Broad Form General Liability Extensions or equivalent; (E) Explosion, Collapse, and Underground, if applicable.

C. Automobile Liability, including Michigan No-Fault Coverages, with limits of liability not less than $1,000,000 per occurrence combined single limit for Bodily Injury, and Property Damage. Coverage shall include all owned vehicles, all non-owned vehicles, and all hired vehicles.

D. Commercial General Liability and Automobile Liability Required liability limits may be obtained by using an Excess/Umbrella Liability policy in addition to the primary liability policy(ies). If coverage limits are satisfied by an Excess and/or Umbrella policy, coverage must follow form of the primary liability policy(ies), including but not limited to additional insured and primary/non-contributory coverage.

E. Additional Insured: Commercial General Liability Insurance shall include an endorsement stating the following shall be Additional Insureds: The City of Royal Oak, all elected and appointed officials, all employees and volunteers, agents, all boards, commissions, and/or authorities and board members, including employees and volunteers thereof. It is understood and agreed by naming the City of Royal Oak as additional insured, coverage afforded is

C 6 considered to be primary and any other insurance the City of Royal Oak may have in effect shall be considered secondary and/or excess.

F. Owners’ and Contractors’ Protective Liability: A separate Owners’ and

Contractors’ Protective Liability Policy with limits of liability not less than $1,000,000 per occurrence and aggregate. The City of Royal Oak shall be “Named Insured” on said coverage.

G. Cancellation Notice: Policy(ies), as described above, shall be endorsed to state the following: It is understood and agreed Thirty (30) days, Ten (10) days for non-payment of premium, Advance Written Notice of Cancellation or Non- Renewal shall be sent to the Certificate Holder: City Engineer, City Hall, 203 South Troy Street, P.O. Box 64, Royal Oak, Michigan 48068-0064

H. Proof of Insurance Coverage: The CONTRACTOR shall provide the City of

Royal Oak at the time the contracts are returned by him/her for execution a Certificate of Insurance as well as the required endorsements. In lieu of required endorsements, a copy of the policy sections, where coverage is provided for additional insured and cancellation notice, may be acceptable.

Copies of all policies mentioned above shall be furnished, if so requested.

I. If any of the above coverages expire during the term of this contract, the

CONTRACTOR shall deliver renewal certificates, endorsements, and/or policies to City of Royal Oak at least ten (10) days prior to the expiration date.

J. The Hold Harmless Agreement (Page HHA-1) of this Contract shall be executed by the CONTRACTOR.

17. Insufficiency of Sureties: Should the CITY at any time deem the Sureties under the Contract to be unsatisfactory, and they so notify the CONTRACTOR, the CONTRACTOR shall furnish forthwith the substitution new Sureties acceptable to the CITY. No further payment shall be deemed due or shall be made until the new Sureties shall qualify and be accepted by the CITY.

18. Service of Notice: The address given by the CONTRACTOR in the Proposal is hereby designated as the place where all notices including letters and other communications shall be served, mailed, or delivered. This place may be changed at any time by the CONTRACTOR by written notice to the Engineer. Nothing herein contained shall preclude or render inoperative service of any notice upon the CONTRACTOR by delivering it to him personally or by serving notice to the agents or representatives in charge of any part of the work. In addition, where the CONTRACTOR is a corporation, such notice may be delivered to any of its officers or directors.

19. Default of Contract: When, in the opinion of the Engineer, the work or any part of the work to be done under this Contract has been abandoned, is unnecessarily delayed, or cannot be completed at the rate of progress or within the time specified, or the CONTRACTOR is willfully violating any of the covenants of this Contract or is carrying it out in bad faith, or has been adjudged as bankrupt, or if he should make a general assignment for the benefit of his creditors, then the Engineer shall so certify in writing to the CITY and the CITY, in writing, may declare the CONTRACTOR in default and so notify him to discontinue the work. The CITY may then call upon the Sureties to

C 7 complete the work or may complete it by other means. The CITY may take over and use materials and equipment at the site of the work and other materials and equipment used elsewhere for the work at the time of default and may procure other materials, equipment, and all else necessary for the completion of the work. The CITY may recover the cost of completing the work by deducting the amount thereof from any monies due or which may become due the CONTRACTOR under this Contract, and when such monies are insufficient to pay said cost, the amount of said cost in excess of such monies shall be paid by the CONTRACTOR or by the Surety.

20. Progress Payments and Estimates: At the end of each month or at such other time intervals as may be mutually agreeable, the Engineer will make an estimate of the quantity and value of the work done by the CONTRACTOR since the date of the previous estimate and, as soon as practicable thereafter, the CITY will pay the CONTRACTOR, as a partial payment, except that the CITY may at any time retain from such partial payments a sum sufficient to meet any undischarged indebtedness of the CONTRACTOR in connection with the work performed.

To assure proper performance of a construction contract by the contractor, the City shall retain a portion of each progress payment otherwise due as provided in this section.

A. The retainage shall be limited to the following:

i. Not more than 10% of the dollar value of all work in place until work is

50% in place.

ii. After the work is 50% in place, additional retainage shall not be withheld unless the city determines that the contractor is not making satisfactory progress, or for other specific cause relating to the contractor's performance under the contract. If the city so determines, the city may retain not more than 10% of the dollar value of work more than 50% in place.

B. The retained funds shall not exceed the pro rata share of the City's matching requirement under the construction contract, if any, and shall not be commingled with other funds of the City and shall be deposited in an interest bearing account in a regulated financial institution in this state wherein all such retained funds are kept by City which shall account for both retainage and interest on each construction contract separately. A City is not required to deposit retained funds in an interest bearing account if the retained funds are to be provided under a state or federal grant and the retained funds have not been paid to the City.

C. Except as provided below, retainage and interest earned on retainage shall be released to a contractor together with the final progress payment.

D. At any time after 94% of work under the contract is in place and at the request of the original contractor, the City shall release the retainage plus interest to the original contractor only if the original contractor provides to the city an irrevocable letter of credit in the amount of the retainage plus interest, issued by a bank authorized to do business in this state, containing terms mutually acceptable to the contractor and the City.

21. Final Estimate and Payment: As soon as practicable after completion of all the work included in this Contract and after all known defects and deficiencies have been

C 8 remedied, the Engineer will make a final inspection of said work and prepare a final estimate of the amount of money due to the CONTRACTOR. The CONTRACTOR shall file with the Engineer, as a condition precedent to final payment, an affidavit that all payrolls, material bills, and all other indebtedness incurred by him in connection with the work have been paid or an affidavit showing in detail the nature and amount of any such indebtedness that is unpaid. The CITY shall hold from final payment an amount of money sufficient to meet any such undischarged indebtedness of the CONTRACTOR until an affidavit that any such indebtedness is paid is filed with the Engineer.

Article 5: That the said CITY, in consideration of the faithful and entire performance by the CONTRACTOR of his obligations under this Contract, hereby agrees to pay to the said CONTRACTOR, at the time and in the manner stipulated in Sections 20 and 21 of Article 4, the sum as determined by multiplying the actual quantities of authorized and approved work done under said item schedule in the Proposal by the respective unit prices bid therefore on the Proposal. A copy of the Proposal follows this Article.

Article 6: It is mutually agreed to by the parties hereto that any extra work not specifically mentioned in the Contract but which is obviously necessary to the complete performance of the Contract and which may be fairly implied as included will be considered so included and will be performed by the CONTRACTOR without extra charge therefore.

It is further agreed that if the CONTRACTOR shall do any extra work for which no price has been agreed upon beforehand, the price to be paid shall be actual cost to the CONTRACTOR of the labor and materials expended in such work plus fifteen percent (15%) of such cost for superintendence, overhead expense, insurance, and for the use of tools and plant. No claim for extra work will be allowed unless such work has been previously ordered in writing by the Engineer and unless such claim has been presented for payment as soon as practicable after such work was done and before making up of the final estimate.

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IN WITNESS WHEREOF, the parties hereto have set their hands and seals in triplicate this day of , 20 .

CITY OF ROYAL OAK

Michael Fournier, Mayor

Melanie Halas, City Clerk

WITNESS: CONTRACTOR

Signature

Company and Title

Approved as to Form:

Niccolas Grochowski, City Attorney