Construction_Contract_Only_(Local_funds_12.2024).docx

CONSTRUCTION CONTRACT

THIS CONTRACT made on [DATE], by and between the CITY OF WEST SACRAMENTO (“City”), and [CONTRACTOR]., hereinafter “Contractor”. The City and Contractor may be collectively referred to as the “parties”.

The parties have mutually covenanted and agreed as follows:

1. THE CONTRACT DOCUMENTS:

The complete Contract consists of the following documents (“Contract Documents”):

Construction Contract (See Part 2) Payment Bond to accompany Contract (See Part 2) Performance Bond to accompany Contract (See Part 2) Contractor’s Certification Regarding Workers’ Compensation (See Part 2) General Conditions (See Part 3) Supplemental Conditions (Special Provisions) (See Part 4) Drawings Technical Specifications (See Part 4) Change Orders City of West Sacramento Standard Specifications 2002, with Amendments #1 & #2 State of California Department of Transportation (Caltrans) Standard Specifications 2015 Contractor’s Emergency Invoice (Accepted Bid)

THE WORK:

The Contractor agrees to furnish all tools, equipment, apparatus, facilities, labor, transportation, and material necessary to perform and complete in a good and workmanlike manner, the [PROJECT NAME] “Project” as called for, and in the manner designated in, and in strict conformity with, the Contract Documents. It is understood and agreed that the tools, equipment, apparatus, facilities, labor, transportation, and material shall be furnished and the work performed and completed as required in the Drawings and Specifications under the sole direction and control of the Contractor, and subject to inspection and approval of the City, or its representatives. The City hereby designates as its representative for the purpose of this Contract the following named person: [CONTACT]

CONTRACT PRICE:

The City agrees to pay and the Contractor agrees to accept, in full payment for the work above agreed to be done, the sum of [AMOUNT] for he Project subject to additions and deductions as provided in the Contract Documents.

COMPLETION DATE:

The Project shall be commenced on the date specified in the Notice to Proceed. The total project will be completed within one hundred eighty (180) working days, as defined in the General Conditions, after the date stated in the Notice to Proceed.

NOTICE AND SERVICE THEREOF:

Any notice from one party to the other under the Contract shall be in writing and shall be dated and signed by the party giving such notice or by a duly authorized representative of such party. Any such notice shall not be effective for any purpose whatsoever unless served in the following manner, namely:

(a) If the notice is given to the City, by personal delivery thereof to the Director of Capital Projects, or by depositing the same in the United States mail, enclosed in a sealed envelope, postage prepaid, and certified; addressed to the City at:

City of West Sacramento Ariana Adame, Director of Capital Projects 1110 West Capitol Avenue, 1st Floor West Sacramento, CA 95691

(b) If the notice is given to the Contractor, by personal delivery thereof to said Contractor or to its duly authorized representative at the site of the project, or by depositing the same in the United States mail, enclosed in a sealed envelope, postage prepaid, and certified; addressed to the Contractor at:

(c) If the notice is given to the surety or any other person, by personal delivery to such surety or other person, or by depositing the same in the United States mail, enclosed in a sealed envelope, addressed to such surety or other person, as the case may be, at the address of such surety or person last communicated by it to the party giving the notice, postage prepaid and certified.

LIQUIDATED DAMAGES:

Liquidated damages as provided for in the General Conditions of the Contract shall be in the sum of One Thousand Dollars ($1000.00) for each and every day as defined therein for each different scope of work as defined by the Base Bid and each change order except as otherwise specified in the Supplemental Conditions.

PREVAILING WAGE:

Copies of the prevailing rate of per diem wages as determined by the Director of the Department of Industrial Relations in accordance with Labor Code section 1773.2 are on file at the City, and copies are available for inspection at that office to any interested party on request. Bidders shall be responsible for verifying with the Director of the Department of Industrial Relations that all such copies of the prevailing rate provided by the City are current and accurate. The requirement to pay the wage rate so specified is further detailed in the General Conditions.

CONTRACTOR REGISTRATION

By the execution of this Contract, Contractor hereby certifies that it is registered with the California Department of Industrial Relations as required pursuant to Labor Code section 1725.5 (Contractor registration).

IN WITNESS WHEREOF, four (4) identical counterparts of this Contract, each of which shall for all purposes be deemed an original, have been duly executed by the above-named parties, on the date noted on the first page of this Contract.

ELECTRONIC TRANSMISSION OF CONTRACT AND SIGNATURE. By electronically signing this document in electronic form, Parties agree that this Agreement may be transmitted and signed electronically by all Parties, and that such signatures shall have the same force and effect as original signatures, in accordance with California law and regulations, including but not limited to Civil Code Section 1633.7

Date

[CONTRACTOR]

Date

Amanda Berlin, Assistant City Manager

Approved as to form:

Jeffrey Mitchell, City Attorney

Attest:

Jennifer Cusmir, City Clerk

PAYMENT BOND

The CITY OF WEST SACRAMENTO, hereinafter “City,” has awarded to [CONTRACTOR] Inc., hereinafter “Contractor,” a Contract for the work described as follows:

[PROJECT NAME HERE]

WHEREAS, the Contractor is required by the Contract and by the provisions of Third Division, Part 4, Title 15, Chapter 7 of the Civil Code to furnish a bond in connection with the Contract, as hereinafter set forth.

NOW, THEREFORE, we, [CONTRACTOR], the undersigned Contractor, as Principal, and _______________, a corporation organized and existing under the laws of the State of _______________ duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the _______________ in the sum of [AMOUNT], said sum being not less than one hundred (100) percent of the total Contract amount payable by the City, under the terms of the Contract, for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly and severally, firmly by these presents.

THE CONDITION OF THIS OBLIGATION IS SUCH, THAT, if the Contractor, its heirs, executors, administrators, successors, and assigns or Subcontractors shall fail to pay for any materials, provisions, provender or other supplies or teams, implements or machinery used in, upon, for or about the performance of the work contracted to be done, or shall fail to pay for any work or labor thereon of any kind, or shall fail to pay any persons named in Civil Code section 9100, or shall fail to pay for amounts due under the Unemployment Insurance Code with respect to such work or labor thereon of any kind, or shall fail to pay for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the Contractor and Subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work or labor, and provided that the claimant shall have complied with the provisions of that code, the Surety or Sureties hereon will pay for the same in an amount not exceeding the sum specified in the Contract; otherwise, the above obligation shall be void. In case suit is brought upon this bond, the Surety will pay reasonable attorneys’ fees to the prevailing party to be fixed by the court.

This bond shall insure to the benefit of any and all persons, companies and corporations entitled to file claims under Section 9100 of the Civil Code, so as to give a right of action to them or to their assigns in any suit brought upon this bond.

It is further stipulated that the Surety of this bond shall not be exonerated or released from the obligation of the bond by any change, extension of time for performance, addition, alteration, or modification in, to, or of any contract, plans, specifications, or agreement pertaining or relating to any scheme or work of improvement described above or pertaining or relating to the furnishing of labor, materials, or equipment therefor, nor by any change or modification of any terms of payment or extension of the time for any payment pertaining or relating to any scheme or work of improvement described above, nor by any rescission or attempted rescission of the Contract, agreement, or bond, nor by any conditions precedent or subsequent in the bond attempting to limit the right of recovery of claimants otherwise entitled to recover under any such contract or agreement or under the bond, nor by any fraud practiced by any person other than the claimant seeking to recover on the bond, and that this bond be construed most strongly against the Surety and in favor of all persons for whose benefit such bond is given, and under no circumstances shall Surety be released from liability to those for whose benefit such bond has been given, by reason of any breach of contract between the City and original Contractor or on the party of the obligee named in such bond, but the sole conditions of recovery shall be that claimant is a person described in Section 8400 and 8402 of the California Civil Code and has not been paid the full amount of its claim and that Surety does hereby waive notice of any such change, extension of time, addition, alteration, or modification.

IN WITNESS WHEREOF, we have hereunto set our hands and seals this _________ day of ___________________________, 20___.

(Contractor as Principal)

NOTE: If Contractor is a Partnership, all partners should execute Bond.

IMPORTANT: Surety companies executing Bonds must appear on the Treasury Department’s most current list (Circular 570 as amended) and be authorized to transact business in California.

PERFORMANCE BOND

The CITY OF WEST SACRAMENTO, hereinafter “City,” entered into a Contract dated [Insert Date Here] with [CONTRACTOR] hereinafter “Contractor,” for the work described as follows:

[PROJECT NAME HERE]

WHEREAS, said Contractor is required under terms of said Contract to furnish a bond for the faithful performance of said Contract; and

WHEREAS, the Contract is by reference made a part hereof.

NOW, THEREFORE, we, , the undersigned Contractor, as Principal, and (corporate surety), a corporation organized and existing under the laws of the State of , and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City in the penal sum of [WRITTEN NUMBER] [(NUMBER)], lawful money of the United States, said sum being not less than one hundred percent (100%) of the total Contract amount, for the payment of which sum be made, we bind ourselves, our heirs, executors, administrators, and successors, jointly and severally, firmly by these presents.

THE CONDITION OF THIS OBLIGATION IS SUCH, THAT, if the above-bounded Contractor, its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and perform the covenants, conditions, and agreements in said Contract and any alterations thereof made as therein provided, on its part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless the City, its officers and agents, as therein stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and virtue.

As a condition precedent to the satisfactory completion of said Contract, the above obligation in said amount shall hold good for a period of one (1) year after the completion and Acceptance of said work, during which time if the above-bounded Contractor, its heirs, executors, administrators, successors or assigns shall fail to make full, complete, and satisfactory repair and replacements or totally protect the City from loss or damage made evident during said period of one (1) year from the date of Acceptance of said work, and resulting from or caused by defective materials or faulty workmanship in the prosecution of the work done, the above obligation in said sum shall remain in full force and effect. However, anything in this paragraph to the contrary notwithstanding, the obligation of the Surety hereunder shall continue so long as any obligation of the Contractor remains.

And the Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract or to the work to be performed thereunder or the specifications accompanying the same shall, in any way, affect its obligations on this bond and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the Contract or to the work or the specifications. Said Surety hereby waives the provisions of Sections 2819 and 2845 of the Civil Code of the State of California.

In the event suit is brought upon this bond by the City and judgment is recovered, the Surety shall pay all costs incurred by the City in such suit, including reasonable attorneys’ fees to be fixed by the Court.

IN WITNESS WHEREOF, we have hereunto set our hands and seals this day of , 20 .

(Contractor as Principal)

NOTE: If Contractor is a Partnership, all parties must execute the Bond.

IMPORTANT: Surety companies executing Bonds must appear on the Treasury Department’s most current list (Circular 570 as amended) and be authorized to transact business in California.

CONTRACTOR’S CERTIFICATE REGARDING WORKER’S COMPENSATION

TO: Ariana Adame, Director of Capital Projects City of West Sacramento 1110 West Capitol Avenue, 1st Floor West Sacramento, CA 95691 I am aware of the provisions of Section 3700 of the Labor Code of the State of California which require every employer to be insured against liability for Workers’ Compensation or to undertake self-insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this Contract.

(Contractor)

By

(Business Address)

(Place of Residence)

Vendor Name Contract Number - Project Name Expires on mm/dd/yy

1795423.1 7203-038

[PROJECT NAME AND PROJECT NUMBER]

PART 2: GENERAL CONDITIONS

1.

DEFINITIONS AND TERMS

GENERAL

Wherever the following abbreviations and terms, or pronouns in place of them, are used in these Conditions and other Contract Documents of which these Conditions are a part, the intent and meaning shall be interpreted as provided below.

ABBREVIATIONS

The following abbreviations may be used in the Contract Documents:

DEFINITIONS

The intent and meaning of the following, wherever they appear in the Contract Documents, shall be interpreted as follows:

Acceptance - The formal Acceptance by the Engineer of the entire Contract, which has been completed in all respects in accordance with the Specifications and any, approved modifications.

Addenda - Any written change, clarification or supplement to documents issued for bidding, issued by the City or its Engineer prior to bid.

As Approved - The words “as approved”, unless otherwise qualified, shall be understood to be followed by the words “by the Engineer”.

As Shown, and As Indicated - The words “as shown” and “as indicated” shall be understood to be followed by the words “on the Plans”.

Award - The decision of the City Council to accept the proposal of the lowest responsible Bidder for the Work, subject to the execution and approval of a satisfactory contract therefore and bond to secure the performance thereof and to such other conditions as may be specified or required by law.

Bid - The offer of the Bidder for the Work when made out and submitted on the prescribed Bid form, properly signed and guaranteed. A Bid is also known as a Proposal.

Bid Security - The cash, cashier’s check, certified check, or bidder’s bond accompanying the Bid submitted by the bidder, as a guarantee that the Bidder will enter into a Contract with the City for the performance of Work herein described.

Bidder - Any individual, firm, partnership or corporation submitting a Bid for the Work contemplated, and acting directly or through a duly authorized representative.

Bureau - United States Bureau of Reclamation.

Calendar Day - Each day shown on the calendar.

Change Order - Written order issued by the Engineer to the Contractor covering changes in the Contract and establishing the bases of compensation and time adjustments for work affected by the changes.

City - The City of West Sacramento, also referred to as the Owner.

City Council or Council - The City Council of the City of West Sacramento.

City Standard Details - The standard details contained in the City Standard Specifications as modified.

City Standard Specifications - 2002 edition of the City of West Sacramento Standard Specifications and Details as amended to date of Bid submittal.

Claim - A separate demand by the Contractor for (i) a time extension, (ii) payment of money or damages arising from work done by or on behalf of the Contractor pursuant to the contract for a public work and payment of which is not otherwise expressly provided for or the claimant is not otherwise entitled to, or (iii) an amount the payment of which is disputed by the City.

Contract - The written agreement covering the performance of the work and the furnishing of labor, materials, tools and equipment in the construction of the Work. The Contract shall include all Contract Documents and supplemental agreements amending or extending the work contemplated which may be required to complete the Work in a substantial and acceptable manner. Supplemental agreements are written agreements covering alterations, amendments, or extensions to the contract and include Addenda and change orders.

Contract Documents - Contract Documents is the collective term for all of the following documents and any other document incorporated therein by reference: Invitation to Bid, Accepted Bid (and all accompanying documents), Designation of Subcontractors, Construction Contract, Payment Bond to Accompany Contract, Performance Bond to Accompany Contract, General Conditions, Supplementary and Special Conditions, (if any), Drawings (and Specifications), Addenda, Change Orders, City of West Sacramento Standard Specifications, State of California Department of Transportation (Caltrans) Standard Specifications 2015, Contractor’s Certification Regarding Workers’ Compensation.

Contractor - The person or persons, firm, partnership or corporation or other entity who has entered into the Contract with the City to perform the Work.

County - County of Yolo, California.

Date of Completion - Date of filing of the Notice of Completion with the Yolo County Clerk-Recorder’s Office.

Date of Execution of the Contract - The date on which the Contract is signed by the City’s authorized representative.

Datum - The Figures given in the Specifications or upon the drawings after the word “Elevation” or an abbreviation of it, shall mean U.S.G.S. datum, unless otherwise noted.

Days - Unless otherwise designated, days as used in the Contract Documents shall mean calendar days.

Elevation - The figures given on the Plans or in the other Contract Documents after the word “elevation” or abbreviation of it shall mean the distance in feet above the standard datum used by the City.

Engineer - The City Engineer, or the person designated by the City as its engineering representative during the course of construction, acting either directly or through properly authorized agents, such agents acting within the scope of the particular duties delegated to them.

Extra Work - Work other than that required either expressly or implied by the Contract in its executed form.

Notice of Completion - notice of completion is the recorded project completion document filed with the Yolo County Clerk.

Or Equal - The term “or equal” shall be understood to indicate that the “equal” product be the equivalent or better than the product named in function, performance, reliability, quality, and general configuration. Determination of equality in reference to the project design requirements will be made by the Engineer.

Plans or Specification Drawings - The term “Plans” or “Specification Drawings” refers to the official plans, profiles, cross sections, elevations, details, and other Working Drawings and supplementary drawings, or reproductions thereof, signed by the Engineer, which show the location, character, dimensions, and details of the work to be performed. Plans may either be bound in the same book as the balance of the Contract Documents or bound in separate sets. Regardless of the method of binding, Plans shall be part of the Contract Documents.

Plant - All physical, resources, facilities, machinery, equipment, staging, tools, work and storage space other than provided by the Contract, together with subsidiary essentials and necessary maintenance for proper construction and acceptable completion of the project.

Project - The entire Work to be completed under the Contract.

Project Manager - The person designated by the City as its project management representative during the course of construction, acting either directly or through properly authorized agents, such agents acting within the scope of the particular duties delegated to them. The Project Manager will be the City Engineer unless the City designates a separate Project Manager. When a Project Manager is used for a project, the Project Manager has full authority to act as the City Engineer unless the designation specifically states otherwise.

Shop Drawings - Drawings prepared by the fabricator or supplier showing the layout and details of components fabricated in a shop for inclusion in the permanent facility (e.g., structural steel, reinforcing steel, railings).

Site - The area upon or in which the Contractor’s operations are carried on and such other areas adjacent thereto as may be designated by the Engineer.

Specifications - The term “specifications” refers to the terms, provisions, and requirements contained herein. Where reference specifications, such as those of “ASTM”, “AASHTO”, etc. have been referred to, the applicable portions of such standard specifications shall become a part of these Contract Documents.

State - State of California.

State Standard Specifications - Standard Specifications issued by the State of California Department of Transportation, dated 2015, and as amended Bid in the supplemental conditions.

Subcontractor - The term “Subcontractor”, as employed herein, includes only those having a direct contract with the Contractor and it includes one who furnishes material worked to a special design according to the plans or specifications of this work, but does not include one who merely furnishes material not so worked and would be considered a supplier only.

Supplementary & Special Conditions Provisions - Additions, revisions, special directions, and requirements peculiar to a project and not otherwise thoroughly set forth in General and/or Specifications.

Time Limits - All time limits stated in the Contract Documents are of the essence of the Contract.

Work - All the work specified, indicated, shown or contemplated in the Contract Documents to construct the improvements, including all alterations, amendments or extensions thereto made by Change Order or other written orders of the Engineer.

Working Days - A Working day is defined as any day, except Saturdays, Sundays and legal holidays of the City.

Working Drawings - Drawings furnished by the Contractor showing the layout and details of temporary construction procedures and methods of construction, and data for construction equipment which are to be employed in the construction of the permanent facility (e.g., form drawings, erection drawings, load test pile procedures, pile hammer data, etc.).

Written Notice - “Written Notice” shall be deemed to have been duly served when delivered in person to the individual or to a member of the firm or to an officer of the corporation for whom it is intended, or if delivered at or sent by certified U.S. mail to the last business address known to the party who gives the notice as specified in the Contract.

Whenever in the Specifications or upon the drawings the words “directed”, “required”, “permitted”, “ordered”, “designated”, “prescribed”, or words of like import are used, it shall be understood that the direction, requirement, permission, order, designation or prescription of the Engineer is intended, and similarly the words “approved”, “acceptable”, “satisfactory”, or words of like import, shall mean approved or acceptable to, or satisfactory to the Engineer, unless otherwise expressly stated.

Updated 2/17/23

SCOPE OF WORK

INTENT OF CONTRACT DOCUMENTS

The intent of the Contract Documents is to prescribe the details for the construction and completion of the Work, which the Contractor undertakes to perform in accordance with the terms of the Contract. These General Conditions are meant to replace Division I of the State Standard Specifications for all City public works contracts which incorporate these General Conditions by reference.

Where the Specifications and Plans describe portions of the Work in general terms, but not in complete detail, it is understood that only the best general practice is to prevail and that only materials and workmanship of the first quality are to be used. Unless otherwise specified, the Contractor shall furnish all labor, materials, tools, equipment and incidentals and do all the Work involved in performing the Contract in a satisfactory and workmanlike manner.

The technical provisions are presented in sections for convenience. However, this presentation does not necessarily delineate trades or limits of responsibility. All sections of the Specifications and Plans are interdependent and applicable to the Project as a whole.

The Contract Documents are complementary, and what is called for in any one shall be as binding as if called for in all. Anything shown on the Drawings and not mentioned in the Specifications or mentioned in the Specifications and not shown on the Drawings shall have the same effect as if shown or mentioned respectively in both. Any work shown on one Drawing shall be construed to be shown in all Drawings and the Contractor will coordinate the Work and the Drawings.

If any portion of the Contract Documents shall be in conflict with any other portion, the various documents comprising the Contract Documents shall govern in the following order of precedence: Change Orders; Addenda; Shop Drawings, Drawings, Supplementary and Special Conditions; Designation of Subcontractors; Construction Contract; General Conditions; City of West Sacramento Standard Specifications; State of California Department of Transportation (Caltrans) Standard Specifications 2015.

Detail Drawings take precedence over General Drawings. As between schedules and other information given on Drawings, the Schedules shall govern. If an item is shown on any Drawing and not specifically included in Technical Specifications specific to this project, the Drawing shall govern. Any conflict or inconsistency between or in the drawings shall be submitted to the Engineer for clarification as soon as the Contractor becomes aware of such inconsistency.

CONTRACTOR’S UNDERSTANDING

It is understood and agreed that the Contractor has, by careful examination, satisfied itself as to the nature and location of the Work, the conformation of the ground, the character, quality and quantity of the materials to be encountered, the character of equipment and facilities needed preliminary to and during the prosecution of the Work, the general and local conditions, and all other matters which can in any way affect the Work under this Contract. No verbal agreement or conversation with any officer, agent or employee of the City, either before or after the execution of this Contract, shall affect or modify any of the terms or obligations contained herein.

CHANGES IN THE WORK

(a) The City may, at any time, by written order, make changes in the Work as deemed necessary by the Engineer. Such changes include, but are not limited to:

(1) In the Specifications or Plans;

(2) In the sequence, method or manner of performance of the Work;

(3) In the owner-furnished facilities, equipment, materials, services or site; and

(4) Directing acceleration of the Work.

(b) If such changes cause an increase or decrease in the Contractor’s cost of, or time required for, performance of the Contract, an equitable adjustment will be made and the Contract modified in writing accordingly.

(1) Change Orders A change pursuant to this section will be in the form of a Change Order, which will set forth the work to be done or the method by which the change and cost adjustment, if any, will be determined, and the time of completion of the work.

Upon receipt of a Change Order, the Contractor shall proceed with the ordered work. If ordered in writing by the Engineer, the Contractor shall proceed with the work so ordered prior to actual receipt of a Change Order. A Change Order executed by the Contractor and approved by the Engineer is an executed Change Order as that term is used throughout this section.

(2) Change Order Protests A Change Order may be issued to the Contractor at any time. Should the Contractor disagree with any terms or conditions set forth in a Change Order, which he has not executed, he shall submit a written protest to the Engineer within fifteen (15) days after the receipt of such Change Order. The protest shall state the points of disagreement and, if possible, the quantities and cost involved.

If a written protest is not submitted, payment will be made as set forth in the Change Order. Such payment shall constitute full compensation for all work included therein or required thereby. Such unprotested Change Orders shall be considered as executed Change Orders.

Where the protest concerning a Change Order relates to compensation, the compensation payable for all work specified or required by said Change Order to which such protest relates will be determined in the same manner as provided in Section 2.04 of this section. The Contractor shall keep full and complete records of the cost of such work and shall permit the Engineer to have such access thereto as may be necessary to assist in the determination of the compensation payable for such work. Where the protest concerning a Change Order relates to the adjustment of time and for completion of the Work, the time to be allowed therefor will be determined as provided in this section.

The consent of the Contractor’s sureties shall not be required as to any change or Extra Work, and the liability of the Contractor’s Bonds shall be increased or decreased accordingly without notice to the sureties.

PROCEDURES AND ALLOWABLE COSTS ON CHANGES AND ADDITIONS TO WORK

(c) Forms of Payment If the change in, or addition to, the Work will result in an increase in the contract sum, the City shall have the right to require the performance thereof. The compensation to be paid for any such work shall, in the City’s sole discretion, be determined in one or more of the following ways:

(1) By extension of agreed unit prices, if unit prices are required by the City’s Bid form and provided with Contractor ‘s bid;

(2) By revision of unit prices;

(3) By proposal and Acceptance of an agreed upon lump sum; and

(4) On a force account basis.

Until one of the above methods is agreed on, or if the Work is to be paid for on a time and materials basis, the Contractor shall keep full and complete records of the cost of such work in the form and manner prescribed by the Engineer and shall permit the Engineer to have access to such records as may be necessary to assist in the determination of the compensation payable for such work.

(d) Lump Sum Payment The City, in its sole and absolute discretion, may request a lump sum proposal by Contractor to perform the change in, or addition to, the Work performed. Such lump sum proposal shall be submitted by the Contractor within ten (10) days of the City’s request therefor. Request for a lump sum proposal by City shall not be deemed an election by City to have the Work performed on a lump sum basis. Costs of preparing the proposal shall not be compensable.

(1) Contents of Lump Sum Proposal

(2) The Contractor’s proposal shall be itemized and segregated by labor and materials for the various components of the change (no aggregate labor total will be acceptable). The proposal shall be accompanied by signed proposals of any Subcontractors, which will perform any portion of the change, and of any persons who will furnish materials or equipment for incorporation therein. The proposal shall also include the Contractor’s estimate of the time required to perform said changes or additional work.

(3) Computation of Labor Costs The portion of the proposal relating to labor, whether by the Contractor’s forces or the forces of any of its Subcontractors, may include the projected wages of the reasonably anticipated Site labor, including foremen, who will be directly involved in the change in the Work. These projected wages shall not include charges for assistant superintendents, superintendents, office personnel, timekeepers and maintenance mechanics.

Labor costs may also include Contractor’s overhead and profit which shall be computed by adding to the labor costs either up to fifteen percent (15%) of the projected wages, but not payroll costs, or the labor surcharge set forth in the California Department of Transportation publication entitled Labor Surcharge And Equipment Rental Rates, which is in effect on the date upon which the Work is accomplished and which is a part of the Contract. The method of computing the overhead and profit shall be solely within the discretion of the City.

The labor surcharge, if used, shall constitute full compensation for all payments imposed by State and Federal laws and for all other payments made to, or on behalf of, the workmen, other than actual wages as defined above. No time or charges will be allowed except when the workers are actually engaged in the proper, efficient and diligent performance or completion of the extra work as authorized. Overtime shall not be worked without prior approval of the Engineer.

(4) Computation of Equipment and Materials Costs The portion of the proposal relating to materials may include the reasonably anticipated direct costs to the Contractor or to any of its Subcontractors of materials to be purchased for incorporation in the change in the Work. This portion of the proposal may also include transportation and applicable sales or use taxes. Up to fifteen percent (15%) of these direct costs may be included as overhead and profit for the Contractor or any such Subcontractor (such overhead and profit to include all small tools).

This portion of the proposal may further include the Contractor’s and any of its Subcontractors’ reasonably anticipated costs for the rental and operation of prime construction and automotive equipment furnished and used in connection with the change in the Work. The equipment rental and operation rates used shall be the latest edition of the Department of Transportation, Division of Construction, Equipment Rental Rates. These costs shall not include charges for listed equipment or major tools with a new cost of five hundred dollars ($500.00) or less. No time charges shall be allowed except for equipment actually used for the proper and efficient performance or completion of the authorized change in the Work.

(5) Subcontractors The lump sum proposal may include up to five percent (5%) of the amount, which the Contractor will pay to any of its Subcontractors for the change in the Work as allowable overhead and profit to the Contractor.

(6) Failure to Submit Lump Sum Proposal In the event that the Contractor fails to submit its proposal within the designated period, the Engineer may direct the Contractor to proceed with the change or addition to the Work and the Contractor shall so proceed. The Engineer shall unilaterally determine the reasonable costs and time to perform the work in question, which determination shall be final and binding upon the Contractor.

(7) Failure to Agree on Lump Sum Amount In the event that the parties are unable to agree as to the reasonable costs and time to perform the change in or addition to the Work based upon the Contractor’s proposal and the Engineer and City do not elect to have the change in the Work performed on a time and material basis, the Engineer and City shall make a unilateral determination of the reasonable cost and time to perform the change in the Work, based upon their own estimates, the Contractor’s submission or combination thereof. In such instances, a Change Order shall be issued for the amount of costs and time determined by the Engineer and the City and shall become binding upon the Contractor unless the Contractor submits its protest in writing to the City within thirty (30) days of the issuance of the Change Order. The City has the right to direct the Contractor in writing to perform the change in the Work, which is the subject of the Change Order. Failure of the parties to reach agreement regarding the costs and time of performing the change in the Work and/or any pending protest shall not relieve the Contractor from performing the change in the Work promptly and expeditiously.

(e) Payment by Unit Prices If any of the items included in the lump sum proposal are covered by unit prices contained in the contract document, the City may, if it requires the change in the Work to be performed on a lump sum basis, elect to use these unit prices in lieu of the similar items included in the lump sum proposal in which event an appropriate deduction will be made in the lump sum amount prior to the application of any allowed overhead and profit percentages. No overhead and profit shall be applied to any unit prices.

(f) Payment on a Force Account Basis If the City elects to have the change or addition to the Work performed on a force account basis, the Work shall be performed, whether by the Contractor’s forces or the forces of any of its Subcontractors or Sub-Subcontractors, and payment shall be made subject to the following provision. The Contractor will be paid the direct costs of the labor, equipment and materials used in performing the force account work determined as hereinafter provided.

(1) For labor, the Contractor will be paid the cost of labor for the workers (including foremen when authorized by the Engineer or Project Manager) used in the actual and direct performance of the work. The cost of labor, whether the employer is the Contractor or any or any Subcontractor of any tier, shall be actual wages, including basic hourly wage, health and welfare payments and pension payments incurred in performing the force account work, plus any travel and subsistence payments for the workers performing such work and made necessary thereby. To the actual wages shall be added a labor surcharge as set forth in the State Department of Transportation publication entitled “Labor Surcharge and Equipment Rental Rates”, as in effect on the date the work is performed. The labor surcharge shall be deemed to encompass the City’s entire liability to reimburse the Contractor for workers compensation insurance payments, social security payments, Medicare payments, federal unemployment insurance payments, state unemployment insurance payments and state training taxes, made necessary by the force account work.

(2) For equipment, the Contractor will be paid for the use of equipment at the rental rates listed for that equipment in the State Department of Transportation publication entitled “Labor Surcharge and Equipment Rental Rates”, which is in effect on the date the work is performed, regardless of ownership or any rental agreement entered into by Contractor for such equipment. The rental rate paid in accord with said publication shall be deemed to include the cost of fuel, oil, lubrication, supplies, small tools, attachments, repairs and maintenance, depreciation, storage and insurance for said equipment. Rental time will not be paid when equipment is inoperable due to breakdowns, repairs or maintenance. Payment for loading, transporting and unloading time will be in accordance with the State Standard Specifications applicable to loading, transporting and unloading equipment for force account work, as applicable as of the date the equipment is loaded, transported or unloaded.

(3) For materials used in the work, the City will pay for materials furnished by the Contractor and necessarily used in the force account work. Prior to markups as set forth below, the amount paid shall be the price paid by the actual purchaser to the actual supplier plus any necessary actual costs of handling the materials.

Contractor may add fifteen percent (15%) to the total labor, equipment and material charges as the total overhead and profit to the entity or entities actually performing the force account work. If the entity or entities actually performing the work are Subcontractors or Sub-Subcontractors, the Contractor shall be allowed five percent (5%) of the total charge of the performing entity or entities (including mark- up) as Contractor’s mark-up. No other mark-ups shall be allowed hereunder.

The Contractor shall submit to the City daily work and material tickets, to include the identification number assigned to the change in the Work, the location and description of the change in the Work, the classification of labor employed (and names and social security numbers), hours expended, the material used, the equipment rented (not tools) and such other evidence of cost as the City may require. The City may require authentication of all time and material tickets and invoices by persons designated by the City for such purpose. The failure of the Contractor to secure any required authentication shall, if the City elects to treat it as such, constitute a waiver by the Contractor of any claim for the cost of that portion of the Change in the Work covered by a non-authenticated ticket or invoice; provided, however, that the authentication of any such ticket or invoice by the City shall not constitute an acknowledgment by the City that the items thereon were reasonably required for the Change in the Work.

(g) Limitations on Changes The Contractor shall not be entitled to any amount for indirect costs, damages or expenses of any nature, including, but not limited to, so-called “impact” costs, labor inefficiency, wage, material or other escalations beyond the prices upon which the proposal is based and to which the parties have agreed pursuant to the provisions of this section, and which the Contractor, its Subcontractors and Sub-Subcontractors or any other person may incur as a result of delays, interferences, suspensions, changes in sequence or the like, for whatever cause, whether reasonable or unreasonable, foreseeable or unforeseeable, or avoidable or unavoidable, arising from the performance of any and all changes in the work performed pursuant to this section. It is understood and agreed that the Contractor’s sole and exclusive remedy in such event shall be recovery of its direct costs as compensable hereunder and an extension of the time of the Contract, but only in accordance with the provisions of the Contract Documents.

It is expressly agreed that Contractor shall not be entitled to claim damages for anticipated profits on any portion of the Work that may be deleted.

The amount of any adjustment for work deleted shall be estimated at the time deletion of work is ordered and the estimated adjustment will be deducted for the subsequent monthly pay estimates. The City reserves its rights under Section 3.20 to audit Contractor’s as-Bid profit in connection with any deductive change, to arrive at a final adjustment. Contractor’s as-Bid profit shall be reduced pro rata according to the proportion of the original contract value less as-Bid profit, represented by the work deleted.

The City reserves the right to contract with any person or firm other than the Contractor for any or all Extra Work.

UNILATERAL CHANGE IN OR ADDITION TO THE WORK

Notwithstanding the above, the City, directly or through the Engineer, may direct the Contractor in writing to perform changes in or additions to the scope of the Contract. The Contractor shall perform such work and the parties shall proceed pursuant to the provisions of Section 2.04.

DIFFERING SITE CONDITIONS

The Contractor shall promptly, and before the following conditions are disturbed, notify the City in writing of any:

(h) Material that the Contractor believes may be material that is hazardous waste, as defined in Section 25110.02 of the Health and Safety Code, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law; or

(i) Subsurface or latent physical conditions at the Site differing from those indicated in the Contract Documents; or

(j) Unknown conditions at the Site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the Contract.

The Engineer shall thereupon promptly investigate the conditions. If the Engineer finds that they do involve hazardous waste, or do materially differ and cause an decrease or increase in the Contractor’s cost or time of performance, the Engineer will issue a change order as appropriate. Any increase or decrease of cost resulting from such changes shall be adjusted in the manner provided in Section 2.04 for adjustments as to extra and/or additional work and changes. In the event that a dispute arises between the City and the Contractor, whether the conditions materially differ, or involve hazardous waste, or cause and decrease or increase the Contractor’s cost of, or time required for, performance of any part of the Work, the Contractor shall not be excused from any scheduled completion date provided by the Contract, but shall proceed with all work to be performed under the Contract, the procedures applicable to claims for extra costs shall then apply.

CLAIMS FOR EXTRA COSTS

(k) Notice of Potential Claims

(1) It is hereby mutually agreed that the Contractor shall not be entitled to the payment of any additional compensation for any cause, including any act, or failure to act, by the Engineer, or the happening of any event, thing or occurrence, unless the Contractor provides the Engineer with written notice of the potential claims as hereinafter specified. Compliance with this section, however, shall not be a prerequisite as to matters within the scope of the protest provisions in Section 2.03.

The written notice of potential claims shall set forth the reasons for which the Contractor believes additional compensation will or may be due, the nature of the costs involved, and, insofar as possible, the…