CMGC_Track_OCS_Construction_Contract_INDUSTRY_REVIEW_DRAFT.pdf

Request for Proposals for Construction Manager/General Contractor (CM/GC) for

Track and OCS

RFP No.:

Construction Contract

DRAFT SUBJECT TO CHANGE AND

AUTHORITY BOARD APPROVAL

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Table of Contents

1.0 OVERVIEW; RESPONSIBILITIES; APPROACH TO THE WORK

1.1 Contract Overview and Purpose

1.2 Contractor’s General Obligations

1.3 Authority’s General Obligations

1.4 CM/GC Approach

1.5 Facilitated Partnering for the Construction Contract

1.6 Co-Location and Meeting Space

2.0 DEFINITIONS; INTERPRETATION; CONSTRUCTION CONTRACT

DOCUMENTS; ORDER OF PRECEDENCE

2.1 Definitions and Acronyms

2.2 Interpretation

2.3 Order of Precedence

2.4 Reference Materials

3.0 COMMENCEMENT OF CONSTRUCTION WORK

3.1 Notices to Proceed

3.2 Project Schedule

3.3 Recovery Schedule

3.4 Time of the Essence

3.5 Liquidated Damages for Delay

4.0 Contractor Obligations

4.1 General Obligations Applying to the Construction Work

4.2 Design Submittals

4.3 Meetings

4.4 Governmental Approvals; Authority-Provided Approvals

4.5 Standards

4.6 Licenses

4.7 Installation Drawings

4.8 Maintenance and Security of Site; Protection of Persons and Property;

Safety

4.9 Covering of Work

4.10 Inspections and Tests by Contractor

4.11 Correction of Defects

4.12 Environmental Requirements

4.13 Sustainability Requirements

4.14 Clean Up

5.0 COOPERATION AND GOVERNANCE; INTEGRATION REQUIREMENTS

5.1 Cooperation and Governance

5.2 Integration Requirements

5.3 Communications with Track/OCS Design Services Consultant

6.0 AUTHORITY RIGHTS AND OBLIGATIONS

6.1 Inspection of Construction Work

6.2 Contractor Site Access

6.3 Types of Authority Review

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6.4 Standard of Review

6.5 Contractor not Relieved of its Obligation

7.0 COMPENSATION

7.1 Work Package Price

7.2 Payment

7.3 Non-Appropriation; Non-Payment

8.0 SECURITY AND BONDS

8.1 General

8.2 Surety Requirements

8.3 Guaranties

8.4 Material Change

8.5 Relationship between Construction with Preconstruction Contracts

9.0 REPRESENTATIONS, WARRANTIES AND COVENANTS; ORGANIZATION

9.1 Contractor Representations, Warranties and Covenants

9.2 Organization

10.0 SUBCONTRACTS; CONTRACTOR PERSONNEL

10.1 Subcontractor Selection; Assignment of Subcontracts to Authority

10.2 Responsibility for Subcontracts

10.3 Listed Subcontractors; Subcontract Modifications; Substitution of

Subcontractors

10.4 Subcontract Requirements

10.5 Requirements Applicable to Major Subcontracts

10.6 Other Requirements

10.7 Key Personnel

10.8 Contractor-Related Entities

10.9 Standards of Conduct

11.0 SITE CONDITIONS; ALLOCATION OF CERTAIN RISKS

11.1 Contractor’s Obligation to Provide Access to Authority

11.2 Process to Follow upon Discovery of Certain Site Conditions

11.3 Differing Site Conditions

11.4 Hazardous Materials; Historical, Archaeological, Paleontological and

Scientific Discoveries

11.5 Utilities and Third Parties

11.6 Force Majeure

12.0 CHANGES

12.1 Change Orders Generally

12.2 Directive Letters

12.3 Authority Changes

12.4 Authority Right to Price Deduction

12.5 Contractor Right to Request Time Extension and Price Increase

12.6 Delivery of Notice

12.7 Change Order Proposal

12.8 Importance of Timely Notice

12.9 Waiver

12.10 Change Order Processing; Pricing

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12.11 Failure to Agree on Change Order

12.12 Release of Claims

12.13 Change Order Accounting

12.14 Time and Materials Change Order

12.15 Change in Applicable Laws and Applicable Standards

12.16 Force Majeure Events

12.17 Governmental Approvals

12.18 Suspension of the Construction Work

12.19 Hazardous Materials

12.20 Differing Site Conditions

12.21 Utility Relocations

12.22 Cost and Pricing Data

12.23 Interfacing Contractors

13.0 HIGH-SPEED RAIL SMALL BUSINESS PROGRAM

14.0 INDEMNIFICATION; INSURANCE

14.1 Indemnification

14.2 Indemnification Under Railroad Contracts

14.3 Limitation of Liability

14.4 Consequential Damages

14.5 Risk of Loss

14.6 Insurance

15.0 INTELLECTUAL PROPERTY; OWNERSHIP; LICENSES

15.1 Developed IP Ownership

15.2 Pre-Existing IP License

15.3 Title

16.0 CONFIDENTIALITY; AUDIT; RECORDS

16.1 Confidentiality

16.2 Public Records Act

16.3 Audit; Records

17.0 DEFAULTS AND REMEDIES

17.1 Preservation of Rights

17.2 Breach and Event of Default

17.3 Remedies

18.0 COMPLETION

18.1 Passage of Title

18.2 Work Package Completion

18.3 Work Package Acceptance

18.4 Substantial Completion

[Substantial Completion of the Construction Work to be provided]

18.5 Final Acceptance

[Final Acceptance of the Construction Work to be provided]

19.0 WARRANTIES

19.1 Warranty

19.2 Warranty Period; Extension of Warranty Period

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19.3 Remedy

19.4 Permits and Costs

20.0 MAINTENANCE OPTIONS

[To be provided]

21.0 TERMINATION; SUSPENSION

21.1 Termination for Cause

21.2 Termination for Convenience

21.3 Obligations upon Termination

21.4 Suspension for Cause

21.5 Suspension for Convenience

21.6 Obligations upon Suspension

22.0 DISPUTES

23.0 ADDITIONAL REQUIREMENTS UNDER STATE LAW

24.0 REQUIREMENTS UNDER FEDERAL LAW

25.0 MISCELLANEOUS

25.1 Amendments

25.2 Third Party Beneficiaries

25.3 Joint and Several Liability

25.4 Governing Law; Jurisdiction

25.5 Rights and Remedies; No Waiver

25.6 Successors and Assigns

25.7 Notices

25.8 Conflict of Interest

25.9 Authority/Contractor Relationship

25.10 Contingent Fee

25.11 California Environmental Quality Act

25.12 Severability

25.13 Entire Agreement; Integration with Preconstruction Contract

25.14 Survival

25.15 Counterparts

Exhibits

Exhibit A Definitions and Acronyms Exhibit B Scope of Work Exhibit C Key Personnel and Additional Expertise [to be provided] Exhibit D Form of Construction Supplement [to be provided] Exhibit E Insurance Requirements

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CM/GC CONSTRUCTION CONTRACT

For Track and Overhead Contact Systems

General Provisions

1.0 OVERVIEW; RESPONSIBILITIES; APPROACH TO THE WORK

1.1 Contract Overview and Purpose

The Construction Contract is for construction manager/general contractor (CM/GC) Construction Work for the Project following and/or concurrent with Contractor’s performance of the Preconstruction Services under the Preconstruction Contract.

The Construction Contract covers Construction Work (including procurement of Long-Lead Items) for critical portions—primarily track and overhead contact system elements—of Authority’s 171-mile Early Operating Segment of the high-speed rail System in the Central Valley from Merced to Bakersfield. A description of the Construction Work and the requirements related thereto is set forth in the Construction Contract, including Section 4 (Contractor Obligations) and Exhibit B (Scope of Work).

The Parties recognize that the CM/GC delivery method aims to facilitate the timely delivery of the Preconstruction Services and Construction Work in a collaborative environment to encourage flexibility, efficiencies, risk mitigation, innovation and value opportunities, schedule and cost savings, an increased degree of certainty that the Construction Work is within budget, schedule certainty and control, and the reduction of Change Orders.

1.2 Contractor’s General Obligations

Contractor shall perform and complete the Construction Work in accordance with Good Industry Practice and in an expeditious and economical manner consistent with the interests of Authority.

Contractor shall fully collaborate and cooperate with Authority and Interfacing Contractors (including Track/OCS Design Services Consultant, Systems Contractor(s), Trainset Contractor, Facilities and Stations Design Consultant(s), Facilities and Stations Contractor(s)).

1.3 Authority’s General Obligations

Authority shall promote collaboration and cooperation among Authority, Contractor, Track/OCS Design Services Consultant, other Interfacing Contractors, and other Persons employed by Authority for the Project.

1.4 CM/GC Approach

Pursuant to the Preconstruction Contract, Contractor will submit a Work Package Proposal for various Work Packages. Following review of any Work Package Proposal in the manner described in the Preconstruction Contract, if Authority approves the Work Package Proposal and the Parties agree to the required terms, the Parties shall execute a Construction Supplement for the Work Package, and Authority will issue an NTP for such Work Package, as described in Section 3.1 (Notice to Proceed), authorizing Contractor to perform the Construction Work for the Work Package. In this respect, the Preconstruction Services and Construction Work are contemplated to be performed concurrently, following execution of the first Work Package and the Construction Contract, rather than in entirely separate phases. Each Work

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Package shall be subject to the terms and conditions of the Construction Contract and any terms specified in the Construction Supplement for such Work Package.

1.5 Facilitated Partnering for the Construction Contract

1.5.1 Within 30 days after the initial NTP, Authority, Contractor and facilitator retained under the Preconstruction Contract shall meet for a follow-up partnering workshop (see Scope of Work Section [ ]) to review and update their facilitated partnering process and Partnering Charter developed under the Preconstruction Contract.

1.6 Co-Location and Meeting Space

1.6.1 As described in the Preconstruction Contract, Contractor shall maintain all co-located Key Personnel at or near Authority’s Sacramento headquarters during the Construction Term or until otherwise mutually agreed upon by the Parties. Authority may require such co-location to occur at or within a close distance to the shared meeting space utilized by the Interfacing Contractors.

1.6.1.1 Individuals filling Additional Expertise roles shall be readily available for same-day notice, in-person meetings at the request of Authority.

1.6.1.2 During performance of the Construction Work, Authority may require certain Key Personnel and/or individuals filling Additional Expertise roles to be located in the geographical area of the EOS, including the possible establishment of a physical office space, for a period of time mutually agreed upon by the Parties.

2.0 DEFINITIONS; INTERPRETATION; CONSTRUCTION CONTRACT DOCUMENTS;

ORDER OF PRECEDENCE

2.1 Definitions and Acronyms

Unless the context otherwise requires, capitalized terms and acronyms used in the Construction Contract have the meanings given in Exhibit A (Definitions and Acronyms).

2.2 Interpretation

2.2.1 As used in the Construction Contract, unless the context otherwise requires, the singular shall include the plural, and the masculine gender shall include the feminine and neutral genders and vice versa. References to statutes or regulations include all statutory or regulatory provisions consolidating, amending, or replacing the statute or regulation. The words “including,” “includes,” and “include” shall be deemed to be followed by the words “without limitation.” Words such as “herein,” “hereof,” and “hereunder” refer to the entire document in which they are contained and not to any particular clause, provision, section, or Article. Words not otherwise defined that have well-known technical or construction industry meanings are used in accordance with such recognized meanings. References to Persons include their respective permitted successors and assigns and, in the case of Governmental Persons, Persons succeeding to their respective functions and capacities. Unless otherwise specified, lists contained in the Construction Contract defining the Construction Work shall not be deemed all-inclusive; and unless otherwise specified, references to clauses and Articles include all sub-clauses and sub-Articles and references to

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/2 clauses, paragraphs, Articles, sections, appendices, attachments, schedules, and exhibits are to the document which contains such references. In sentences using the imperative, unless otherwise specifically stated, the subject “Contractor” is implied and it is understood that Contractor shall perform such work, comply with the requirements of, furnish such material or take such action.

2.2.2 The Construction Contract documents are intended to be complementary and interpreted in harmony so as to avoid conflict, with words and phrases not otherwise defined in the Construction Contract interpreted consistently with industry standards.

Notwithstanding the order of precedence set forth in Section 2.3 (Contract Documents; Order of Precedence), in the event of any conflict, ambiguity or inconsistency between or among any of the provisions in the Construction Contract, the provisions that establish the higher quality, manner or method of performing the Construction Work, or use more stringent standards will prevail. Additional details in a lower priority document shall be given effect except to the extent they irreconcilably conflict with requirements, provisions and practices contained in the higher priority document. In the event of any conflict among any standards, specifications, criteria, requirements, conditions, procedures, or other provisions applicable to the Construction Work established by reference to a described manual or publication within the Construction Contract, the standard, specification, criterion, requirement, condition, procedure, or other provision offering higher quality or better performance will apply, unless Authority in its sole discretion approves otherwise in writing.

2.2.3 The headings are for convenience and shall not constitute a part of the Construction Contract nor be considered interpretative hereof.

2.2.4 A reference to “$” is to U.S. dollars, and all monetary amounts and obligations in the Construction Contract are expressed and payable in U.S. dollars.

2.2.5 Requirements contained in the Construction Contract relating to actions to be taken in the event of an emergency and other requirements for which it is clear that performance is intended to occur on a non-Business Day, shall be performed as specified, even though the date in question may fall on a non-Business Day.

2.2.6 Contractor shall not take advantage of any apparent Defect in the Construction Contract. Should it appear that the Construction Work to be done or any matter thereto is not sufficiently explained in the Construction Contract or there is a Defect in the Construction Contract, Contractor shall promptly notify Authority in writing of the insufficient explanation or Defect, shall obtain specific instructions in writing from Authority before proceeding with the Construction Work affected thereby, and shall conform to the instructions provided.

2.2.7 With respect to any provision of the Construction Contract which provides for Authority’s approval, consent, agreement, or authorization, such approval, consent, agreement, or authorization, as applicable, shall not be effective unless it is in writing and executed by Authority’s Contract Manager or Authority’s Contract Manager’s authorized designee.

2.2.8 Contractor acknowledges and agrees that it had the opportunity and obligation, prior to submission of its Proposal, to review the Construction Contract and to bring to Authority’s attention any apparent conflicts or ambiguities contained therein.

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Contractor further acknowledges and agrees that it has independently reviewed the Construction Contract with legal counsel, and that it has the requisite experience and sophistication to understand, interpret and agree to the particular language of the Construction Contract. Accordingly, in the event of an ambiguity in or Dispute regarding the interpretation of the Construction Contract, the Construction Contract shall not be construed against the Person that prepared it and shall be considered as drafted by both Parties. Authority answers to questions and proposer inquiries provided during the solicitation shall in no event be deemed part of the Construction Contract. They shall not be relevant in interpreting the Construction Contract except as they may clarify provisions otherwise considered ambiguous.

2.3 Order of Precedence

The Construction Contract is comprised of the following documents. Any inconsistencies in the Construction Contract shall be resolved by giving precedence in the following order unless otherwise noted, provided that Change Orders shall have priority just above the document that is being amended:

(a) Construction Supplements;

(b) Terms contained in the Signature Document and Signature Document Exhibits A through [X];

(c) General Provisions and General Provisions Exhibits A through D;

(d) NTPs;

(e) Detailed Designs; and

(f) Contractor’s Proposal (provided that any commitments approved by Authority in its sole discretion are the highest order of precedence).

2.4 Reference Materials

2.4.1 The Reference Materials are not part of the Construction Contract. Contractor is not entitled to rely on the Reference Materials.

2.4.2 Contractor understands and agrees that Authority shall not be responsible or liable in any respect for any loss, damage, injury, liability, cost or cause of action whatsoever suffered by any Contractor-Related Entity, by reason of any use of any information contained in the Reference Materials, or any action or forbearance in reliance thereon. Contractor further acknowledges and agrees that (a) if and to the extent Contractor or anyone on Contractor’s behalf uses any of said information in any way, such use is made on the basis that Contractor, not Authority, has approved and is responsible for said information, and (b) Contractor is capable of conducting and obligated hereunder to conduct any and all studies, analyses and investigations as it deems advisable to verify or supplement said information, and that any use of said information is entirely at Contractor’s own risk and at its own discretion.

2.4.3 AUTHORITY DOES NOT REPRESENT OR WARRANT THAT THE INFORMATION

CONTAINED IN THE REFERENCE MATERIALS IS EITHER COMPLETE OR

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ACCURATE OR THAT SUCH INFORMATION IS IN CONFORMITY WITH THE

REQUIREMENTS OF THE CONSTRUCTION CONTRACT.

3.0 COMMENCEMENT OF CONSTRUCTION WORK

3.1 Notices to Proceed

3.1.1 Contractor shall not perform or permit performance of any Construction Work for a Work Package unless Authority, in its sole discretion, issues a Notice to Proceed (NTP) for such Work Package. Any Construction Work for any Work Package performed by Contractor prior to issuance of a Notice to Proceed for such Work Package is at Contractor’s sole risk and expense and subject to the terms of the Construction Contract except those terms inconsistent with Contractor’s assumption of such risk and expenses.

3.1.2 Authority anticipates issuing an NTP for each Work Package approved in accordance with the Preconstruction Contract.

3.1.3 Contractor shall satisfy the following conditions before Authority will issue a Notice to Proceed:

(a) all Governmental Approvals necessary for the Construction Work within the Work Package have been obtained and all conditions of such Governmental Approvals that are a prerequisite to the commencement of such Construction Work have been performed;

(b) unless otherwise provided in Section 14.6 (Insurance), all insurance policies or other documentation required under the Construction Contract for the Work Package to be delivered to Authority for the Work Package Construction Work have been submitted and approved as applicable and such insurance shall remain in full force and effect;

(c) All Payment and Performance Bonds required for performance of the Construction Work for the Work Package have been delivered to Authority in accordance with Section 8.1 (Construction Bonds);

(d) All rights of access necessary for commencement of Construction Work for the Work Package have been obtained;

(e) All applicable pre-construction requirements contained in any Governmental Approvals for the Work Package have been satisfied;

(f) All applicable pre-construction requirements contained in the Preconstruction Contract for the Work Package have been satisfied;

(g) Contractor has, in accordance with Good Industry Practice:

(i) reviewed all of the applicable information provided in the Construction Contract and the Reference Materials;

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(ii) inspected and evaluated the Site and surrounding locations to the extent Contractor deems necessary or advisable for performing the Construction Work for the Work Package, and otherwise in accordance with the requirements of the Construction Contract, including inspecting and evaluating:

(1) constraints related to the design criteria requirements of the Construction Work;

(2) the character, quality, and quantity of surface and subsurface materials or obstacles to be encountered insofar as this information is reasonably ascertainable from an inspection of the Site, including review of the Construction Contract and the Construction Supplement;

(3) conditions affecting transportation, disposal, handling, and storage of materials, and Equipment;

(4) the availability of labor, water, electric power, and roads;

(5) uncertainties of weather or physical conditions at the Site;

(6) the conformation and conditions of the ground;

(7) the character of Equipment and facilities needed for the performance of the Construction Work for the Work Package; and

(8) conditions affecting security and protection of material, Equipment, and Construction Work in progress; and

(iii) is familiar with and accepts the physical requirements of the Construction Work for the purposes of performing the Construction Work for the Work Package;

(h) Contractor is not in breach of the Preconstruction Contract or the Construction Contract and if Contractor has received any notice of an Event of Default from Authority under the Preconstruction Contract or the Construction Contract, such breach or Event of Default has been cured;

(i) all representations and warranties of Contractor under the Construction Contract shall be and remain true and correct in all material respects, and Contractor has delivered to Authority a certificate certifying to the same; and

(j) Contractor’s completion of any other conditions precedent to the issuance of the NTP set forth in the applicable Construction Supplement.

3.1.4 Contractor acknowledges and agrees that Authority has no obligation to issue any

NTP.

3.1.5 Upon Authority’s issuance of NTP for a Work Package, Contractor shall:

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(a) promptly commence to plan and perform the Construction Work for such Work Package in consultation with Authority and Track/OCS Design Services Consultant and in accordance with the Construction Contract;

(b) take all practicable steps to achieve Work Package Completion and Work Package Acceptance by the applicable Completion Deadlines; and

(c) provide Authority with such other assistance as Authority may require in connection with the Project Assets before Work Package Acceptance.

3.2 Project Schedule

3.2.1 Contractor shall undertake and complete the Construction Work in accordance with the Project Schedule developed under the Preconstruction Contract and shall take all practicable steps to achieve each Work Package Completion, each Work Package Acceptance, Substantial Completion and Final Acceptance by the applicable Completion Deadline.

3.2.2 Contractor shall:

(a) update and maintain the Project Schedule on a monthly basis in accordance with the requirements of the Construction Contract;

(b) update the Project Schedule to include each applicable Work Package Completion Deadline and Work Package Acceptance Deadline for each Work Package from each Construction Supplement;

(c) include sufficient time to obtain Governmental Approvals before they are required to commence the applicable Work Package;

(d) obtain Authority’s prior written approval for each Project Schedule update, and once so approved, only revise the Project Schedule with the prior written approval of Authority; and

(e) update the Project Schedule as required in Section 3.2.2(a) and at least within 14 days of any of the following:

(i) changes to the Project Schedule;

(ii) issuance of a Construction Supplement; or

(iii) delays (including Change Orders) which may have occurred, and submit that schedule to Authority for approval.

3.2.3 Contractor’s failure to incorporate all elements of the Construction Work required for the performance of the Construction Work or any other inaccuracy in the Project Schedule shall not excuse Contractor from performing all Work (and all portions of the Construction Work) within the applicable times specified under the Construction Contract.

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3.2.4 Authority may rely on the Project Schedule in planning and conducting ongoing operations and other work at the Site.

3.2.5 Contractor acknowledges and agrees that if Contractor fails to timely provide Authority with any updated and accurate Project Schedule when due, Authority will withhold 10% from any payment otherwise due to Contractor until Authority receives that updated and accurate Project Schedule. Once Authority has approved the Project Schedule, Contractor may submit an invoice for, and will be entitled to payment of, the amount previously withheld under this Section 3.2.5. Any failure or delay in the submittal or approval of a Project Schedule shall not result in any time extension or increase in any Work Package Price.

3.2.6 Authority’s approval of a Project Schedule update shall not:

(a) imply Authority’s acceptance of any particular performance or construction methods, or relieve Contractor from its responsibility to provide sufficient materials, equipment and labor to guarantee completion of the Construction Work (or any portion thereof) in accordance with the Construction Contract;

(b) attest to the validity of assumptions, activities, relationships, sequences, resource allocations or any other aspect of the applicable Project Schedule;

(c) imply that Contractor is entitled to any Change Order extending any Completion Deadline or adjusting any Work Package Price or portion thereof;

or

(d) modify the Construction Contract.

3.2.7 Contractor’s failure to include any element of the Work Package required by the Construction Contract in the applicable Project Schedule shall not relieve Contractor’s responsibility to perform that element of the Work Package.

3.3 Recovery Schedule

3.3.1 Without limiting Contractor’s obligations to update the Project Schedule in accordance with the Construction Contract, if at any time, the Construction Work is delayed for a period that exceeds either:

(a) 10 days in the aggregate; or

(b) a number of days in the aggregate that is equal to or greater than 5% of the days remaining until a Work Package Completion Deadline, then, within five days after Contractor first becomes aware of such delay or otherwise at the request of Authority, Contractor shall prepare and submit a Recovery Schedule to Authority for review and approval.

3.3.2 Within five days after receipt of a Recovery Schedule, Authority shall notify Contractor whether the Recovery Schedule is approved or rejected. Within five days after Authority’s rejection of a Recovery Schedule, Contractor shall resubmit a revised Recovery Schedule incorporating Authority’s comments.

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3.3.3 Within five days after Authority’s approval of a Recovery Schedule, Contractor shall incorporate and fully include such Recovery Schedule into the Project Schedule, and perform the Construction Work so as to achieve the Recovery Schedule.

3.3.4 If:

(a) Contractor fails to provide Authority with an acceptable Recovery Schedule;

and

(b) the delay does not relate to a Change Order, then, within 30 days after Contractor’s receipt of written notice of its failure to obtain Authority’s approval of a Recovery Schedule, Authority may withhold up to 10% from each payment owing to Contractor thereafter until Contractor prepares and Authority reviews and approves a Recovery Schedule.

3.4 Time of the Essence

3.4.1 The Authority and Contractor mutually agree that time is of the essence with respect to the dates and times specified in the Construction Contract.

3.5 Liquidated Damages for Delay

3.5.1 If Contractor fails to achieve Work Package Completion for a Work Package by the applicable Work Package Completion Deadline, Contractor acknowledges that Authority will suffer, as a result of such failure, substantial damages which are both extremely difficult to fix and impracticable to ascertain. Therefore, if Contractor fails to achieve Work Package Completion for a Work Package by the applicable Work Package Completion Deadline, Contractor agrees to pay Authority as liquidated damages (and not as a penalty) and as a reasonable estimate of the amount of damages that Authority will suffer for such delay the amounts of liquidated damages listed in the Construction Supplement for such Work Package.

3.5.2 Contractor’s liability for the liquidated damages described in this Section 3.5 shall not exceed [10] percent of the applicable Work Package Price(s). The liquidated damages in this Section 3.5 are the sole and exclusive remedy for compensation of any monetary damages as a result of any delay, but shall not preclude Authority from exercising non-monetary remedies as allowed by the Construction Contract or Applicable Law. Notwithstanding anything herein to the contrary, Authority and Contractor acknowledge and agree that the liquidated damages provision set forth in this Section 3.5 shall only apply to damages caused by Contractor’s failure to achieve Work Package Completion for a Work Package by the applicable Work Package Completion Deadline, and nothing herein shall limit Authority’s rights under the Construction Contract to terminate, prosecute the Construction Work, or to exercise any other remedy available to Authority (excluding seeking damages caused solely by Contractor’s failure to achieve Work Package Completion by the applicable Work Package Completion Deadline). The Parties further acknowledge and agree that Authority shall be entitled to any and all legal and equitable remedies Authority may have where Authority’s damages are caused by any reason other than such failure.

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3.5.3 Liquidated damages payable by Contractor pursuant to this Section 3.5 may be retained by Authority from, and may be offset by, Authority against, monies due or to become due to Contractor and, if none, or at Authority’s election, Contractor agrees to pay to Authority each amount that has become due as liquidated damages, and has not been retained by Authority, within 30 days after the date on which such amount became due. The payment of such liquidated damages shall not relieve Contractor from its other obligations under the Construction Contract.

4.0 Contractor Obligations

4.1 General Obligations Applying to the Construction Work

4.1.1 Contractor shall supervise and direct the Construction Work.

4.1.2 Contractor shall perform the Construction Work and deliver each Work Package:

(a) in accordance with all Applicable Laws and Governmental Approvals;

(b) so that all Construction Work shall be performed as set out in the Construction Contract, suitable for its intended purpose (as set forth in the California Streets and Highways Code, Chapter 20, Article 2, section 2704.09 (except with Rolling Stock operation speeds of up to 220 mph)), be free from Defects and conform to Good Industry Practice;

(c) so as to achieve Work Package Completion and Work Package Acceptance meeting the requirements of the Construction Contract;

(d) such that all materials furnished in connection with the Construction Work shall be of good quality and new, unless otherwise specified in the Construction Contract, when installed; and

(e) so as to ensure that adequate materials, equipment, and resources are available to ensure uninterrupted progress of the Construction Work and compliance with the requirements of the Construction Contract under normal conditions.

4.1.3 If any Construction Work performed contains Defects or otherwise does not comply with the Construction Contract requirements, Contractor shall correct or replace the defective Construction Work at Contractor’s sole expense.

4.1.4 Contractor acknowledges that Authority is relying upon the expert advice, skill, and judgment of Contractor in carrying out its obligations under the Construction Contract and would not have entered into the Construction Contract but for Contractor’s expertise in that regard.

4.1.5 Contractor shall control, coordinate, administer and direct all activities necessary to plan, design, commence, construct, commission / start up, complete and hand over the Work Package.

4.1.6 Contractor shall comply with all applicable requirements in any third party agreement between Authority and any Governmental Person related to the Construction Work.

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4.2 Design Submittals

4.2.1 Contractor shall use the Design Submittals solely with respect to the Construction Work. No Contractor-Related Entity shall use the Design Submittals for any use outside the scope of the Construction Work, without the specific prior written approval of Authority. Contractor warrants that, immediately after completing its use of Authority’s materials provided in connection with the Construction Contract, it shall return all of the materials. Contractor authorizes Authority to inspect and verify Contractor’s compliance with this requirement. Contractor shall include, with the returned materials, a letter attesting to the return of all materials. Upon entering into the Construction Contract, Contractor shall identify to Authority the individual to whom Contractor has assigned the responsibility of performing the obligations described in this Section 4.2.1. Any copies of Design Submittals made by Contractor, pursuant to prior written approval of Authority, shall bear a confidentiality notice.

4.3 Meetings

4.3.1 Contractor’s Contract Manager shall meet with Authority’s Contract Manager as needed to discuss progress on the Construction Work.

4.3.2 Contractor shall attend meetings as required by the facilitated partnering process described in Section 1.5 (Facilitated Partnering for the Construction Contract) and as required by the Governance Framework.

4.4 Governmental Approvals; Authority-Provided Approvals

4.4.1 Contractor shall:

(a) apply for, obtain and maintain all Governmental Approvals (excluding the Authority-Provided Approvals) that were not obtained under the Preconstruction Contract;

(b) promptly give Authority copies of all documents (including Governmental Approvals and other notices) that any authority, body or organization having jurisdiction over the Project Assets issues to Contractor.

4.4.2 Authority will obtain, at no cost to Contractor, all Authority-Provided Approvals.

Contractor shall provide such information, documentation, and assistance as Authority may require, and shall take such actions as are reasonably required by Authority in order for Authority to obtain all Authority-Provided Approvals.

4.4.3 Contractor shall comply with all conditions imposed by and undertake all actions required by and all actions necessary to maintain in full force and effect, all Governmental Approvals, except to the extent that such responsibility is expressly assigned in the Construction Contract to another Person.

4.4.4 For any Governmental Approvals required to be obtained by Contractor, Contractor shall, subject to Authority approval, prepare all information, analyses and materials, and otherwise undertake all efforts to obtain such Governmental Approvals, including execution and delivery of appropriate applications and other documentation in a form

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/2 approved by Authority. Authority shall reasonably cooperate with Contractor in obtaining any such Governmental Approvals. For Governmental Approvals that are the responsibility of Contractor but are required to be issued in Authority’s name, Contractor shall undertake all actions required by and all actions necessary to obtain and maintain in full force and effect, such Governmental Approvals. Authority shall reasonably cooperate with Contractor in obtaining and maintaining such Governmental Approvals. Contractor shall assist Authority in obtaining any Governmental Approvals that Authority may be obligated to obtain, including providing information requested by Authority and participating in meetings regarding such Governmental Approvals.

4.4.5 Contractor shall promptly give Authority copies of all documents (including Governmental Approvals and other notices) that any Governmental Person having jurisdiction over the Construction Work issues to Contractor.

4.5 Standards

If the Construction Contract references a specific version or date for a standard, that version shall apply to the Construction Work. Otherwise, for each Work Package, the version in place on or before the date that is [30] days prior to the [date of NTP for such Work Package] shall apply.

4.6 Licenses

4.6.1 Contractor shall be in good standing and qualified to always conduct business in the State and during the Construction Term. Contractor shall obtain, at its sole expense, all license(s), certification(s), registration(s), and permit(s) required by law, to accomplish the Construction Work, including professional licenses, registrations, and Certificates of Status/Good Standing. Contractor shall provide said documentation upon request by Authority.

4.6.2 If Contractor is located within the State, a business license or tax payment confirmation from the city/county in which Contractor is headquartered is necessary if so required to conduct business in that city/county. A copy of the entity documents filed with the California Secretary of State's Office and a Certificate of Good Status/Standing shall be provided to Authority upon request. If Contractor’s headquarters are located outside of the State, Authority requires a copy of a Certificate of Good Standing (or that state’s equivalent documentation) from the entity’s state of formation showing that the entity is in good standing in that state, and a Certificate of Good Status/Standing from the California Secretary of State as proof of registration as a foreign corporation qualified to do business in California.

4.6.3 In the event that any license(s), certification(s), registration(s), and/or permit(s) required by law to accomplish the Construction Work expire at any time during the Construction Term, Contractor shall provide to Authority a copy of the renewed license(s), registrations(s), certifications(s), and/or permit(s) upon request. In the event Contractor fails to keep in effect at all times all required license(s), certification(s), registration(s), and permit(s), Authority may, in addition to any other remedies it may have, terminate the Construction Contract upon occurrence of such event.

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4.6.4 All Subcontractors shall be appropriately licensed for the Construction Work they are conducting.

4.7 Installation Drawings

4.7.1 Installation drawings are not part of the Construction Contract. The purpose of their submittal is to demonstrate (for those portions of the Construction Work for which submittals are required) the manner (i.e., means and methods) that Contractor proposes to perform the Construction Work to conform to the information given and the design concept expressed in the Construction Contract.

4.7.2 Contractor shall review, approve, stamp, and submit to Authority the installation drawings required by the Construction Contract in accordance with the Authority-accepted submittal schedule. Submittals made by Contractor that are not required by the Construction Contract may be returned without action.

4.7.3 By approving and submitting installation drawings, Contractor represents that it has determined and verified materials, field measurements, and field construction criteria related thereto, and has checked and coordinated the information contained within such submittals for conformance to the Construction Contract and for coordination of the Construction Work indicated in the submittal and with adjacent work.

4.7.4 Contractor shall not perform any portion of the Construction Work that requires review submittal and review of installation drawings until the respective submittal has been received, review, and accepted by Authority and returned to Contractor. Such Construction Work shall be in accordance with approved/accepted submittals.

Contractor is solely responsible for delays or disruptions to the Construction Work caused by inadequate, uncoordinated, incorrect, or late submittals.

4.7.5 Installation drawings shall be furnished to Authority for approval, and any Construction Work for which submittals are required that Contractor executes before receipt of Authority approval, shall be at Contractor’s risk.

4.7.6 The review and approval of said submittals by Authority or Authority design consultants will refer to general design only, and will not relieve Contractor from responsibility for errors contained therein, or from the necessity of furnishing such Construction Work and materials as may be required by the Detailed Design, or otherwise necessary for the proper execution of the Construction Work intended, whether or not indicated on the submittals when approved.

4.7.7 Where an installation drawing is required by the Construction Contract, related Construction Work performed prior to Authority's review and approval of the pertinent submittal shall be at the sole expense, risk, and responsibility of Contractor.

4.7.8 Contractor shall not be relieved of responsibility for errors or omissions in installation drawings by Authority's approval thereof.

4.8 Maintenance and Security of Site; Protection of Persons and Property; Safety

4.8.1 Following issuance of NTP for any Work Package, Contractor shall be responsible for ensuring safety and security at the Work Package Site, and for initiating, C M

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/2 maintaining and supervising all safety precautions and programs in connection with the performance of the Construction Work.

4.8.2 Contractor shall take all reasonable precautions for the safety of, and shall provide all reasonable protection to prevent damage, injury or loss to:

(a) all employees involved in the Construction Work and all other persons who may be affected thereby;

(b) all the Construction Work and all materials and equipment to be incorporated therein, whether in storage on or off the Site or under the care or custody of Subcontractors; and

(c) other property at the Site(s) or adjacent thereto, including trees, shrubs, lawns, walks, pavements, roadways, structures, utilities, and other facilities not designated for removal, relocation, or replacement in the course of Construction Work.

4.8.3 Contractor shall comply with all Applicable Laws for the safety of persons or property or to protect them from damage, injury or loss. Contractor shall erect and maintain, as required by existing conditions and progress of the Construction Work, all reasonable safeguards for safety and protection, including posting danger signs and other warnings against hazards and notifying owners and users of adjacent utilities and other facilities.

4.8.4 Use or storage of explosive or other Hazardous Materials shall not be permitted without Authority’s written approval. If use or storage of such materials is approved, Contractor shall exercise the utmost care in such use or storage and shall carry on such activities under the supervision of properly qualified personnel.

4.8.5 Contractor shall immediately notify Authority and affected third parties of any damage or loss arising out of the Construction Work.

4.8.6 All damage or loss to any property referred to in this Section 4.8 caused in whole or in part by Contractor or any Contractor-Related Entity, or by anyone for whose acts any of them may be liable shall be remedied by Contractor. All damages to property shall be rebuilt, repaired, replaced or otherwise remedied to the same condition they were in immediately prior to the occurrence of such damage or loss, or to such other condition as may be approved by Authority, in its sole discretion; provided, however that any damaged property of third parties shall be rebuilt, repaired or replaced to any better or different condition to the extent required by Applicable Laws or by any preexisting third party agreement between the property owner and Authority.

Contractor shall either perform such rebuild, repair or replacement itself, or the affected property owner may elect to rebuild, repair or replace at Contractor’s expense. Should Contractor not rebuild, repair or replace such damaged or lost items (or not reimburse a property owner electing to do its own rebuild, repair or replacement), Authority may take corrective measures and may deduct the amount of such costs from any sums owed by Authority to Contractor pursuant to the Construction Contract and/or obtain reimbursement from Contractor for such costs.

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4.8.7 Contractor shall designate a responsible member of its organization at the Site(s) whose duty shall be the prevention of accidents. This person shall be Contractor’s Contract Manager unless otherwise approved in writing by Authority.

4.8.8 Contractor shall not load or permit any part of the Construction Work to be loaded so as to endanger personnel and/or property.

4.8.9 When working in and around Authority property, all personnel employed by Contractor or its Subcontractors shall abide by the applicable safety policies and procedures for the respective property.

4.8.10 Contractor, its employees and Subcontractors shall attend all required safety meetings and seminars as directed by Authority.

4.8.11 Contractor must comply with all Authority safety rules and operating rules.

4.8.12 Contractor shall comply with and ensure that all Contractor-Related Entities comply with, Authority’s Safety and Security Management Plan and all safety and security requirements set forth in the Construction Contract.

4.8.13 Authority may take any action necessary to protect the Construction Work, other property, or the environment, or to prevent or minimize risks to the health and safety of persons, which Contractor is required to, but does not take.

4.8.14 Any Losses suffered or incurred by Authority in taking such action will be a debt due from Contractor to Authority.

4.9 Covering of Work

4.9.1 Before covering any part of the Project Assets, Contractor shall provide written notice to Authority. After receipt of such notice, Authority shall have [10] days to notify Contractor that inspection and/or testing of such part of the Project Assets is required before it is covered. If Authority provides such notice, Contractor shall provide Authority and any other Persons designated by Authority a full and adequate opportunity to inspect and test such part of the Project Assets before it is covered.

Notwithstanding the foregoing, at all times during the Construction Term, Contractor shall remove or uncover such portions of the finished or covered Project Assets as directed by Authority for inspection and/or testing by Authority and any other Persons designated by Authority.

(a) If, after such inspection and/or testing, the Project Assets exposed or examined are found to not be in accordance with the Construction Contract:

(i) Contractor shall rebuild, repair or replace the Project Assets in accordance with the Construction Contract; and

(ii) recovery of any delay occasioned by such examination shall be at Contractor’s cost.

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(b) If, after such inspection and/or testing, the Project Assets exposed or examined are found to be in accordance with the Construction Contract, Section 4.10.2 shall apply.

4.9.2 If Contractor fails to provide the notice and opportunity to inspect and test required under Section 4.13.1, then Authority may order any Construction Work done or materials used to be uncovered, removed, repaired, restored, or replaced by Authority at Contractor’s cost and without an entitlement to a Claim, even if the Construction Work proves to be in compliance with the Construction Contract after uncovering.

4.10 Inspections and Tests by Contractor

4.10.1 Contractor shall carry out all inspections and tests of the Project Assets required by the Construction Contract or as directed by Authority.

4.10.2 If Authority directs Contractor to carry out an inspection or test of the Project Assets which:

(a) either:

(i) is not otherwise required by the Construction Contract; or

(ii) does not relate to a Defect for which Authority gave an instruction under Section 4.10.1, and

(b) the results of the inspection or test show the Project Asset is in accordance with the Construction Contract, then the applicable Work Package Price shall be increased pursuant to a Change Order in an amount of the extra Cost of the Work reasonably incurred by Contractor which arise directly from Authority’s inspection or test, as determined by Authority in accordance with Section [ ] (Valuation of Change Order).

4.11 Correction of Defects

4.11.1 Defects

4.11.1.1 Subject to Section 4.11.1.2(b), Contractor shall correct all Defects.

4.11.1.2 If, at any point after issuance of NTP and prior to the expiration of the…