DC-117.pdf

DC-117 THE AGREEMENT

OAKLAND COUNTY WATER RESOURCES COMMISSIONER

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This Agreement, hereinafter referenced as “Agreement” or "Contract," is made and entered into this _____ day of ________________, 20____ by and between Evergreen-Farmington Sanitary Drainage District, by and through its Drainage Board, pursuant Chapter 20 of the Public Act 40 of the Public Acts of 1956, as amended, hereinafter called “Owner”, and ___________________________________ , a (Michigan Corporation/Limited Liability Company/ Partnership) whose address is __________________ ___________________________________ , Michigan, hereinafter referred to as “Contractor." In this Contract, either Owner and/or Contractor may also be referred to individually as a "Party" or jointly as "Parties.”

WITNESSETH

WHEREAS Owner and Contractor, for the considerations hereinafter named, agree as follows:

1. THE WORK

A. Contractor shall perform and complete every one of the obligations required by the Contract Documents, including, without limitation, furnishing all labor, materials, goods, services, and equipment necessary to complete the Project in strict accordance with the Contract Documents. Contractor shall perform all Work shown and called for on the Contract Documents entitled Walnut Lake No. 1 Pump Station Conveyance Corrective Action Plan Phase 2, prepared by FK Engineering Associates, Inc., who is the Engineer. Contractor acknowledges that there may be items of Work for which Contractor is responsible to furnish or perform under the Contract Documents that are not shown or specified in the Contract Documents but are necessary for the proper execution, operation, and completion of the Work and which are reasonably inferable from the Contract Documents and/or which are required to achieve a fully functional Project.

Contractor shall provide all such items of Work as part of the Work without delay in its progress and without any increase in the Contract Times or Contract Sum. The Contract Documents are defined in the General Conditions. Terms used in this Agreement shall have the same meaning as those terms defined and used in the General Conditions, which are attached hereto and incorporated herein by reference as if fully restated herein. The priority of Contract Documents is set forth in Article 1 [Contract Documents] of the General Conditions.

B. To induce Owner to enter into this Agreement, Contractor makes the following material representations:

a. Contractor has carefully considered all material aspects of the Contract Documents, including without limitation, the Drawings and Specifications, Work locality, access routes, availability of materials and equipment, labor, market and environmental conditions resulting from a health crisis regardless of whether an infectious disease, epidemic, pandemic or isolated to areas from which such labor and materials are supplied and all local conditions and federal, state, local laws and regulations in effect as of the date of this Agreement that may affect the cost, progress, performance, or furnishing of the Work;

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b. Contractor has carefully studied the Project, all real property encompassing and surrounding the Project, all reports of investigations and tests of subsurface and latent physical conditions at the Project or otherwise affecting the cost, progress, or performance of the Work;

c. Contractor has made or caused to be made all examinations, analyses, schedules, investigations and tests, borings and studies as it deems necessary for the performance of the Work for the Contract Price, within the Contract Times and in accordance with the other terms and conditions of the Contract Documents; and no additional examinations, investigations, tests, borings, reports or similar data are required by Contractor for such purposes;

d. Based on Engineer’s submittal matrix, Contractor has prepared a Submittal Schedule and confirmed with its Subcontractors and suppliers that the necessary equipment and materials to complete the Work are available and will be delivered to the Site to timely complete the Work; submission of a Submittal Schedule shall not relieve Contractor of any of its obligations pertaining to Submittals as provided in the Contract Documents;

e. Contractor acknowledges and agrees that the Contract Times and Contract Price are sufficient in all respects to allow the Contractor to complete the Work in strict accordance with the Contract Documents, including any work inferred therefrom;

f. Contractor has examined and checked all Drawings and Specifications furnished by Owner for dimensions, quantities, types of materials, and coordination with other parts of the Work on this or related contracts and has given Engineer written notice of all conflicts, errors, omissions and/or discrepancies that it has discovered, or reasonably should have discovered, in the Contract Documents and the written resolution thereof by Engineer, is or will be acceptable to Contractor; Contractor acknowledges that it assumes full responsibility for any such known errors or omissions that it fails to bring to Owner’s attention and by starting Work, or any portion thereof, Contractor shall be deemed to have waived any objections to such errors or omissions in the Contract Documents;

g. Contractor acknowledges that the Work, construction, reconstruction, and services will occur during all seasons of the year, including winter and wet weather months and under winter and wet weather conditions; notwithstanding these conditions, Contractor acknowledges that it has informed itself of the weather history of the area of the Site, including without limitation, conditions documented by the National Oceanic and Atmospheric Administration (N.O.A.A.) for a 100-year history, and agrees to complete the Work and the Project within the Contract Times without exceeding the Contract Sum; and

h. Contractor’s Bid is true and accurate in all respects and includes all Work necessary to complete the Project within the Contract Times and without exceeding the Contract Price.

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2. THE TIME

A. Contractor shall be prepared to begin the Work within ten (10) consecutive calendar days of the execution of the Agreement. Notwithstanding anything to the contrary herein, Contractor shall not begin the Work unless and until Owner issues a written notice to proceed (“Notice to Proceed”). The above requirement shall not constitute a representation or guarantee of the date that Owner will issue a Notice to Proceed. Owner shall have 120 calendar days following the execution of this Agreement to issue the Notice to Proceed, during which time Contractor shall not be entitled to any increase in or change to the Contract Times or Contract Price. The Parties agree the Contract Times are considered essential elements of the Agreement.

B. Contractor agrees to achieve Substantial Completion of the Work within 550 calendar days of the Notice to Proceed and Final Completion of the Work within 600 calendar days of the Notice to Proceed. Specific interim completion deadlines are addressed in the Contract Documents.

C. If Contractor is delayed by a Force Majeure Event, as defined in the Contract Documents, and if such delay affects Work on the Critical Path of the Construction Schedule, then only the approved Construction Schedule and the Contract Times shall be adjusted, subject to and in strict conformance with the requirements of the Contract Documents, and only to the extent necessary to address such delay (but the total extension of all Critical Path Activities may not exceed the period of time required by Contractor, using its best efforts, to mitigate the effect of the delay). An extension of time shall be Contractor’s sole remedy for any delay caused by a Force Majeure Event. Contractor shall use its best efforts to mitigate the effects of any delay, whether or not it is caused by a Force Majeure Event.

Such best efforts shall not include the obligation to accelerate the Work. Acceleration of the Work is addressed separately in the Contract Documents.

D. Immediately upon (and not more than seventy two (72) hours following the commencement of the occurrence of a Force Majeure Event and not more than seventy two (72) hours following the commencement of the occurrence of an Owner Delay, as that term is defined in the Contract Documents, Contractor shall notify Owner and Engineer in writing, setting forth the cause of the delay, a description of the portions of the Work affected, and additional relevant details. Contractor’s failure to submit such required notices shall constitute a waiver of any claim for an extension of time by Contractor. In the case of a continuing delay caused by a Force Majeure Event, only one notice is necessary.

E. No adjustments shall be made to the Construction Schedule for any suspension, delay or interruption to the extent that performance would have been so suspended, delayed or interrupted by any other cause, including the fault or negligence of Contractor, to the extent the delay could have been mitigated by Contractor; or for which an equitable adjustment is provided or excluded under any other provision of the Contract Documents.

Owner’s exercise of any of its rights under the Contract Documents or Owner’s requirement of correction or re-execution of any Defective Work shall not, under any circumstances, be construed as interference with Contractor’s performance of the Work.

F. The remedies provided in Article 2 [The Time] of this Agreement and the General

Conditions, respectively, shall be the sole and exclusive remedies (in lieu of all other remedies whatsoever) of Contractor for any delay, interference, or hindrances in the performance of the Work, loss of productivity, impact damages and similar claims and

Page A-4 of A-19 4-23-2024 damages, whether or not contemplated by the Parties. In no event shall Contractor be entitled to any compensation or recovery of any damages in connection with any delay, including, without limitation, all direct costs, indirect costs, overhead costs (including field or home office overhead, using Eichleay formula or otherwise), taxes, interest, general and administrative expenses, profit and all effects, direct, indirect and consequential resulting from the delay including acceleration (actual or constructive), hindrance, disruption, interference, diminished bonding capacity, loss of productivity, impairment, manpower inefficiencies, lost opportunity, and “ripple effects,” impact damages or other similar remuneration (collectively “Delay Damages”). Except only for time extensions for a delay caused by a Force Majeure Event and as specifically provided in the Contract Documents, or for specified recoverable costs in cases of an Owner Delay (as that term is defined in the Contract Documents), Contractor hereby expressly waives, covenants and agrees not to assert any claims against Owner for Delay Damages which it or any Subcontractor or Supplier may incur as a result of any of the foregoing causes, delays, interferences, suspensions, rescheduling, changes in sequences, congestion, disruptions, or the like arising from, out of or in connection with any Force Majeure Event or any act or omission of Owner, its representatives or agents, it being understood and agreed that their sole and exclusive remedies shall be those set forth herein and in the Contract Documents.

3. LIQUIDATED DAMAGES

A. Contractor and Owner agree that all time limits stated in the Contract Documents are essential conditions of the Agreement, and Contractor’s performance (strictly, not substantially) in accordance with the Construction Schedule is the essence of this Agreement and therefore are material terms.

a. Contractor acknowledges and recognizes that Owner is entitled to full and beneficial use of the completed Work following expiration of the Contract Times, and Owner has scheduled the commencement of its activities based upon Contractor achieving certain Work by intermediate milestone dates and Substantial and Final Completion of all the Work within the Contract Times.

B. Contractor further acknowledges and agrees that if Contractor fails to complete certain

Work by specified milestone dates and/or fails to achieve Substantial Completion or Final Completion of any portion of the Work within the Contract Times, Owner will sustain extensive damages and serious loss because of such failures that may be difficult to calculate. Accordingly, Owner and Contractor agree Owner shall be entitled to retain or recover from Contractor, as liquidated damages, and not as a penalty, the sum of Three Thousand Dollars ($3,000) per day commencing upon the day following the expiration of a required milestone date and/or the date of Substantial Completion and the sum of One Thousand Dollars ($1,000) per day commencing upon the day following the expiration of the Final Completion Date and continuing until the required Work for any of the foregoing deadlines is completed. Liquidated damages in the amount as stated above also shall apply to any failure to open a road on time as outlined in the Summary of Work.

C. Because of the impracticality and difficulty of ascertaining and calculating Owner’s actual damages, such liquidated damages are hereby agreed to be a reasonable pre-estimate of and reasonable just compensation for the damages Owner will incur because of the delayed completion of the Work. Owner may deduct liquidated damages from any unpaid amounts then and thereafter due to the Contractor under this Agreement. Any liquidated

Page A-5 of A-19 4-23-2024 damages not so deducted from any unpaid amounts due to Contractor shall be payable to Owner by the date specified by Owner, but in no event less than fourteen (14) days from the date of Owner’s demand. Interest shall begin to accrue on the date such liquidated damages are due until paid and shall thereafter accrue at seven percent (7%) per annum. Contractor and Owner agree that the foregoing liquidated damages are intended to compensate Owner only for damages due to the late delivery of the Work and not for any damages that Owner may suffer because of other Contractor defaults.

Contractor’s payment (or deduction) of liquidated damages shall in no way restrict or limit Owner’s ability to recover (or Contractor’s liability for) damages suffered or incurred by Owner because of Contractor’s defaults unrelated to the late delivery of the Work under the Contract Documents.

D. Owner and Contractor explicitly agree and intend that the provisions of this Article 3 shall be fully enforceable by any tribunal exercising jurisdiction over any dispute between the parties arising under this Agreement. Each party hereby irrevocably waives any defenses available to it under law or equity relating to the enforceability of the liquidated damages provisions set forth in this Article 3. If for any reason Contractor’s obligation to pay any liquidated damages as set forth herein is deemed unenforceable, Owner shall be entitled to receive its actual damages sustained (notwithstanding anything in Article 52 [Waiver of Consequential Damages] of the General Conditions to the contrary) because of any circumstance entitling Owner to liquidated damages under this Article 3 [Liquidated Damages]. However, in no event shall the amount paid to Owner as actual damages exceed the amount that would have been calculated and paid as liquidated damages for delay to Owner.

E. Contractor shall not, on account of the liquidated damages set forth in this Article directly or indirectly or wholly or in part increase (or permit any increase in) the Contract Sum, or any fee or compensation it may be entitled to receive beyond what would have otherwise been charged in the absence of such a provision.

4. ASSIGNMENT OF CONTRACT

Contractor agrees that it shall not assign or transfer this Contract except with the Owner’s written consent. Contractor shall not assign either legally or equitably, any of the monies payable to it under this Agreement, or its claim thereto, except with the written consent of Owner. Owner may withhold such consent in Owner’s sole and absolute discretion.

5. THE CONTRACT PRICE

A. The Contract Price shall be the total of all lump sum amounts together with any Unit Price amounts based on the initial estimated quantities identified in the Contractor’s Bid.

B. The Contract Price shall be increased because of changes in scope and actual quantity determinations as provided under the provisions of the Contract Documents and reduced by such sums as Owner may lawfully deduct and retain, including without limitation, liquidated damages under the provisions of Article 3 [Liquidated Damages] of this Agreement.

C. Upon completion of the Work, Owner will issue a Change Order adjusting the Unit Price quantities to reflect the actual quantities of the Work performed under the Contract Documents and adjusting the total Contract Price accordingly. Payments shall be made in

Page A-6 of A-19 4-23-2024 accordance with the provisions of Articles 6 [Payment Procedures] and 7 [Substantial Completion].

6. PAYMENT PROCEDURES

A. Schedule of Values

a. Within ten (10) calendar days of the Notice to Proceed, Contractor shall prepare and submit to Engineer, a schedule of values for all of the Work (“Schedule of Values”) which includes quantities and prices of items which, when added together, equal the Contract Price and subdivides the Work into component parts in sufficient detail to serve as a basis for determining the proper amount of progress payments during performance of the Work. Such prices will include an appropriate amount of overhead and profit applicable to each item of Work. The Schedule of Values shall conform to all requirements of the Contract Documents. Upon completing its review, Engineer will return the Schedule of Values to Contractor identifying any exceptions to the form or content of the proposed Schedule of Values. Contractor shall promptly revise and resubmit the Schedule of Values to address any exceptions noted by Engineer. As the Work progresses, Contractor shall modify the Schedule of Values to include any credits or approved change orders, or as otherwise required or allowed by Engineer. Contractor will modify the Schedule of Values to conform to any requirements requested by Engineer regardless of whether Contractor agrees or disagrees with the requested modification. Contractor shall incorporate the Schedule of Values into a form of Application for Payment acceptable to Engineer. Progress payments on account of Unit Price Work will be based on the quantities completed.

B. Applications for Payments

a. Pursuant to the Construction Contract Retainage Act, Act No. 524, Michigan Public

Acts of 1980, as amended, MCL 125.1561 et seq., Owner hereby designates Engineer as the person to whom Applications for Payment shall be submitted.

Contractor hereby designates __________________________________________ as the person who will submit Applications for Payment to Owner.

b. No payment will be made for materials furnished which are not incorporated in the finished Work, unless otherwise agreed to in writing by Owner. If payment is requested on the basis of materials and equipment not incorporated in the Work but delivered and suitably stored, insured and secured at the Site or at another location agreed to in writing, the Application for Payment also shall be accompanied by a bill of sale, invoice, or other documentation warranting that Owner has received the materials and equipment free and clear of all Liens and evidence that the materials and equipment are covered by appropriate property insurance or other arrangements to protect Owner’s interest therein, all of which must be satisfactory to Owner.

c. Materials that may be considered for payment as stored material must be located on Owner’s property and/or within the State of Michigan. Contractor also must submit the request for payment for stored materials to Owner while the Schedule of Values is submitted to Engineer.

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d. Materials that that are not eligible for payment as stored materials include the following:

i. Perishable materials (example: cement, epoxy, etc.).

ii. Electronic hardware and/or software.

iii. Raw materials (un-fabricated steel, piping, etc.).

iv. Materials to be incorporated into the work in less than thirty (30) days or beyond one hundred, eighty (180) days.

v. Contractor’s equipment (formwork, shoring, etc.).

e. As an aid to Owner in evaluating estimates for progress payments, Contractor may be required to submit to Owner for approval a breakdown of some or all contract unit prices into their essential component parts. The sum of the component parts shall not exceed the total Contract Price on a per unit basis as established in the Bid.

f. Each month, following the Notice to Proceed, Contractor shall prepare and submit to Engineer for review a draft Application for Payment using AIA Documents G- 702 and G-703 or such other forms as Owner may allow, which shall be certified with a reference to the Federal False Claims Act. The Application for Payment shall reflect all Work completed since the prior Application (if any) and shall meet all other requirements of the Contract Documents. Each Application for Payment must strictly comply with and include all the following:

i. a notarized Contractor’s Declaration (on a form provided by Owner) declaring that it has not performed any Work, furnished any material, sustained any loss, damage or delay, for any reasons, including soil conditions encountered or created, or otherwise done anything for which it will ask, demand, sue for, or claim compensation from Owner other than as indicated on Contractor’s Declaration;

ii. receipts or other vouchers showing Contractor’s payments for materials and labor, including payments to Subcontractors;

iii. a current, properly completed notarized Sworn Statement, on the Michigan statutory form, listing each Subcontractor, supplier and laborer having a contract with Contractor in the current aggregate amount (including adjustments that have been issued as of that date) (Owner reserves the right to require Sworn Statements from Contractor’s Subcontractors);

iv. Partial Unconditional Lien Waivers and Releases in the form provided by

Owner from each subcontractor, supplier and labor identified on Contractor’s Sworn Statement, or Subcontractor’s Sworn Statement, if requested;

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v. written consent of Contractor’s surety;

vi. a copy of the then current Construction Schedule Update as returned by

Engineer with “No Exceptions”;

vii. certified payroll reports if, when and as required by Michigan law, and in a form reasonably acceptable to Owner;

viii. Daily Reports for each day covered by the time period relating to the

Application for Payment and in the form required by the Contract Documents; and

ix. such other evidence requested by Owner to satisfy Owner that the Work for which payment is requested has been completed in conformance with the Contract Documents, and that all amounts which have previously been paid for Work performed have been properly distributed to the various Subcontractors, Sub-Subcontractors, laborer, and suppliers.

x. Contractor’s failure to include the documents and information set forth in items above shall render Contractor’s Application for Payment as invalid and of no effect, until such time as all the Contract requirements for making the application are fully complied with by Contractor.

g. Each month, Contractor, Owner, and Engineer shall meet to review and discuss

Contractor’s draft Application for Payment. Contractor is responsible for submitting the draft Application for Payment and scheduling the monthly pay application meeting. Following this meeting, Contractor shall revise its draft Application for Payment in accordance with the comments of Owner and Engineer.

h. Contractor shall submit the revised Application for Payment to Engineer, together with all other documents required to be submitted with an Application for Payment, covering all Work performed since the proceeding Application for Payment (if any).

Contractor must timely invoice for its Work. Contractor shall submit Application for Payment no later than fourteen (14) days before a scheduled meeting of Owner’s Drainage Board if the Work is being conducted for a Drain Board.

i. The Application for Payment shall include all accompanying documents and approvals required by the Contract Documents. If Contractor is not known to be in default of any of its obligations under the Contract Documents, the Application for Payment will be certified and presented by Engineer to Owner with a recommendation for approval of the payment. If the Application for Payment is untimely, incomplete, incorrect, fails to include the required documentation, schedules, or certifications, or otherwise fails to conform to the requirements of the Contract Documents, it will not be submitted for approval by Owner.

C. Payment Dates

a. Owner shall pay the Application for Payment within one of the following time periods, whichever is later, as provided by MCL 125.1562(3):

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i. Thirty (30) days after Engineer has certified the Application for Payment for payment.

ii. Fifteen (15) days after Owner has received the funds from the applicable department or agency of the federal or state government providing financing for the Project, if any funds are to come from either of those sources.

iii. Fifteen (15) days following the scheduled Drainage Board meeting and approval by the Drainage Board.

b. Contractor’s failure to submit a complete and accurate Application for Payment acceptable to Engineer may delay payment on the Application for Payment.

D. Conditions of Payment

a. Owner’s payment (partial or final) shall not be considered as approval or acceptance of the Work or any portion thereof, or of the completeness or accuracy of the Application for Payment.

b. If an estimate in an Application for Payment is found to be excessive, future estimates in pay applications shall be adjusted downward to reflect the actual completion status of the Work.

E. Withholding of Payment

a. Owner may withhold payment or, because of subsequently discovered evidence or subsequent review of the Work or Contractor’s Applications for Payment, invoice detail and/or submittals, may nullify the whole or any part of any payment previously made, to such extent as may be necessary in its opinion to protect Owner from loss or expense due to any of the following:

i. Contractor fails to properly respond to notices issued by Owner pursuant to the Contract Documents;

ii. Contractor is in default of any of its obligations under this Agreement or under any of the Contract Documents, and/or is otherwise in default of any other agreement or contract with Owner, whether or not related to this Contract;

iii. Any part of such payment that is attributable to Work which is Defective, as determined by Engineer; provided, however, such payment shall be made as to the part thereof attributable to Work which is performed in accordance with the Drawings and Specifications and is not Defective, reserving, however, such amount as Engineer shall determine necessary to protect Owner with respect to Defective Work;

iv. Contractor has failed, within ten (10) calendar days of receipt of payment from Owner, to make payments not in dispute promptly to Contractor’s subcontractors, sub-subcontractors, laborers, or suppliers or for material, Page A-10 of A-19 4-23-2024 labor or services used in the Work; Contractor promptly shall notify Owner if any such dispute exists;

v. Any part of such payment is attributable to Work that Owner has been notified of a claim or dispute or has received reasonable evidence indicating the existence of such a claim or dispute, unless Contractor provides reasonable evidence of its ability to resolve the dispute and pay any amount owed;

vi. Owner has a reasonable belief the Work will not be completed within the

Contract Times established under the Contract Documents;

vii. Owner reasonably believes that the portion of the Contract Price then remaining unpaid will not be sufficient to pay for Work not completed to date or to complete the Work in accordance with the Contract Documents;

viii. An Application for Payment is not in the exact form required by the Contract

Documents;

ix. Contractor has failed to submit and obtain approval for a Schedule, Schedule update, make-up schedule or other documents required in the Contract Documents required for a complete and valid Application for Payment;

x. Contractor’s Payment and/or Performance Bond Surety provides Owner with a notice to withhold further funds according to the terms of the Surety Bonds and/or indemnity agreement with Contractor;

xi. At the written direction of Contractor’s bond company; and

xii. Owner is otherwise entitled to a setoff against Contractor.

b. If Owner elects to withhold a portion of a payment otherwise due to Contractor for any of the reasons identified above, Owner shall submit a written statement to Contractor describing the disputed items and shall have the right to require Contractor to prepare and submit to Owner a revised Application For Payment, as directed by Owner, to facilitate payment of the undisputed amount, if any, otherwise due to Contractor. Alternatively, Owner shall have the right (but not the obligation) to revise Contractor’s Application for Payment to show the amount withheld by the Owner.

c. Whenever Owner reasonably determines, after notice to Contractor, that there is a basis for concern that payments properly owing to any subcontractor, supplier, surety, or laborer are not being made on a timely basis, Owner may elect, but shall not be obligated to make, payments to the joint order of Contractor and such subcontractor, supplier, or laborer, with any such payments satisfying any payment obligation otherwise owing by Owner to Contractor. Alternatively, Owner may, but is under no obligation to make, direct payment to any subcontractor, supplier, or laborer of Contractor, and such amounts directly paid shall otherwise satisfy any payment obligation owing by Owner to Contractor for the Work. Owner’s option to withhold payment from Contractor, or to make joint payments or direct payments

Page A-11 of A-19 4-23-2024 shall not create an intended third beneficiary relationship with any other person or entity, it being agreed and understood Owner has the right to withhold payment, or to make such joint and direct payments but is not otherwise obligated (nor may it be compelled) to make such joint and/or direct payments.

d. Owner also may elect at any time to require payments be made through a construction escrow, in which event Contractor shall supply all customary forms and indemnities as may be required to satisfy the conditions to disbursement established by the applicable escrow agent.

F. Retainage from Payments

a. Each payment from Owner to Contractor shall cover the amount due to Contractor for Work completed through the date of the Application for Payment; provided, however, retainage in the amount of ten percent (10%) of each payment made or due from Owner to Contractor (“Retainage”) shall be withheld from each payment until the Work on the Project is fifty percent (50%) complete as determined by the dollar amount of approved Applications for Payment. No further Retainage will be withheld once the Work is fifty percent (50%) complete unless Owner determines that Contractor is not making satisfactory progress, or for other specific cause relating to Contractor’s performance under the Contract. Retainage shall be withheld in compliance with MCL 125.1563. The provisions of MCL 125.1563 shall govern over any provisions contained herein that are found to conflict with the provisions of the statute.

b. Owner’s right to withhold Retainage is in addition to Owner’s right to withhold payment under the Contract Documents to protect Owner from specific identified problems and claims and other costs for which Contractor is responsible. Owner is not required to use Retainage amounts to protect Owner from the costs and liability arising from claims and other problems caused by Contractor or for which Owner may make deductions under the Contract Documents.

c. Owner shall have the right, but not the obligation, to release Retainage related to a subcontractor who achieves Final Completion of its subcontracted portion of the Work under the subcontract substantially earlier than Final Completion of the entire Work, but only upon the written recommendation of Contractor that such Retainage should be released. This option is entirely discretionary and shall create no obligation for Owner, nor is this option intended to create any benefit to third parties.

d. At the time of Substantial Completion of the Work, Contractor may make written application for a partial release of Retainage held by Owner. Owner shall have no obligation to approve such application but may do so in its sole discretion. Should Owner agree to such request, considering Contractor’s performance, the performance of Contractor’s subcontractors, and other factors as determined by Owner in its sole and absolute discretion, the amount retained to the date of the request may be reduced by Owner to a lower lump sum amount. Owner’s agreement to such partial release of Retainage shall not change the percentage retained from future Applications for Payment, if any, after the date of the partial release, if Owner has elected to continue withholding Retainage from Contractor’s Applications for Payment.

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e. All retained amounts and interest earned on retainage not otherwise disbursed will be paid with Contractor’s Final Payment. Contractor shall provide Owner with consent from the Surety for any release of retention. In the event of a dispute as described in MCL 125.1564(3), the parties shall abide by the provisions of said statute and agree to submit the dispute to Engineer to determine the rights of the parties to retained funds and interest earned thereon. Engineer shall follow the dispute resolution process provided in the statute and its decision shall comport with the requirements therein. This dispute resolution process is not intended to alter, abrogate, or limit any rights with respect to remedies that are available to enforce or compel performance of the terms of the Contract by either party.

7. SUBSTANTIAL COMPLETION

A. When Contractor considers that the Work or any portion of the Work is ready for its intended use, Contractor shall submit a written certification to Engineer and Owner that the Work, or designated portion of the Work, is substantially complete. Such certification shall include (1) a list of major items to be completed or corrected and (2) a request that Engineer issue a Certificate of Substantial Completion.

B. Within ten (10) days of receipt of Contractor’s certificate, the Engineer will inspect together with Owner and Contractor to determine whether the Work is substantially completed.

Should the Engineer consider the Work or designated portion of the Work substantially complete, the Engineer shall prepare and submit to Engineer and Contractor a tentative Certificate of Substantial Completion together with a list of items to be completed or corrected as determined by the inspection, i.e., the Punch List.

C. If the Engineer determines that the Work is not substantially complete, it will issue written notice to Contractor stating the reasons why the Work is not ready for its intended use.

After the Contractor completes the Work in the original notice, it shall send a second written notice to Engineer certifying that the Project, or designated portion of the Project, is substantially complete.

D. If following the reinspection of the Work the Engineer determines that the Work is substantially complete, it will issue a definitive certificate of Substantial Completion to Owner, Engineer and Contractor that establishes the date of Substantial Completion; the responsibilities of Owner and Contractor for security, maintenance, heat, utilities, damage to the Work and insurance, as applicable; identifies the estimated cost to complete the Punch List items; and fixes the time within which Contractor shall finish all Punch List items (but within the date required for Final Completion). Warranties required by Article 47 [Warranty-Guarantee] of the General Conditions shall commence on the date of Final Completion of the Work or designated portion thereof unless otherwise provided elsewhere in the Contract Documents or in the Certificate of Substantial Completion.

8. FINAL PAYMENT

A. Neither Final Payment nor any remaining Retainage shall become due until Contractor has completed all of the Work on the Project, including any Punch List items, as acknowledged by Owner and Engineer, Owner and Engineer have issued written acknowledgement of Final Completion on Owner’s approved Certificate of Final Completion, and Contractor has completed and/or submitted to Owner all of the following:

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(1) Contractor’s Final Declaration and Contractor’s Affidavit (on a form provided by Owner) that payrolls, bills for materials and equipment, and other indebtedness connected with the Work have been paid or otherwise satisfied; (2) consent of all sureties to Final Payment; (3) final record Drawings, including record Drawings marked by the Contractor with record information set forth in the Contract Documents and Contractor’s coordination drawings; (4) the final versions of all manufacturers’ warranties; (5) a final sworn statement from Contractor in the form set forth in the Michigan Construction Lien Act duly executed and notarized showing all of Contractor’s subcontractors, suppliers and laborers to be fully paid; (6) Full Unconditional Lien Waivers and Releases in the form provided by Owner from all subcontractors, suppliers and laborers identified on the final Sworn Statements submitted by Contractor and Subcontractors, if required; (7) releases of all required permits; and (8) an approved Maintenance and Guarantee Bond, and (9) all other conditions set forth in the Contract Documents.

B. Contractor shall submit an Application for Final Payment when all Work is finally complete in accordance with Contractor’s obligations under the Contract Documents. Contractor’s Application for Final Payment shall include a request for payment of the Retainage held by Owner if Retainage otherwise has not been released at an earlier point in time.

C. Contractor’s Application for Final Payment shall itemize all timely asserted claims and disputed amounts that remain unresolved at the time of submission. All claims or disputed amounts shall include the designation of the amount that remains in dispute and a reference by date and correspondence number to the specific Notice of Claim and substantiation of the claim submitted by Contractor in accordance with the Contract Documents. The Final Application for Payment shall indicate only the amount that remains in dispute for each disputed claim and shall not include original claim amounts where a portion of the claim or disputed amount has been resolved.

D. The acceptance of the Final Payment (in whole or in part) by Contractor shall constitute a full and final release of Owner and waiver of all claims against Owner arising out of or in connection with the Project and/or Contract Documents, except only those specific claims of Contractor timely made in writing as required by the Contract Documents and itemized in the attachment to Contractor’s Final Application for Payment. Notwithstanding anything to the contrary herein, Contractor’s written itemization of reserved claims may not revive claims which were waived by Contractor because of its failure to timely assert such claims accordance with the Contract Documents.

9. DISPUTE RESOLUTION

A. Notwithstanding anything to the contrary herein, and assuming the Parties have completed the Disputed Work procedure in the General Conditions, or Owner has waived any such requirements, any remaining unresolved claims by Contractor against Owner or Owner against Contractor first shall be resolved through a meeting between Contractor’s highest officer familiar with the Project and Owner’s highest level staff member, and such meeting shall occur no earlier than thirty (30) days after Final Completion. At Owner’s option, this meeting may be conducted by a facilitator mutually acceptable to the Parties, or, in the event the Parties are unable to agree on a facilitator, the Parties shall select a facilitator according to the American Arbitration Association Construction Industry Rules for Mediation. The meeting between Contractor’s highest officer and Owner’s highest official is a condition precedent to Contractor initiating litigation or demanding arbitration (if elected by Owner). Contractor agrees to participate in the facilitative mediation with all

Page A-14 of A-19 4-23-2024 third parties Owner believes necessary to resolve the dispute, such as the Engineer or an insurer.

B. Claims and disputes between Owner and Contractor shall be resolved by litigation in the

Circuit Court for Oakland County, Michigan (a court Contractor agrees has personal jurisdiction over it and is a convenient venue) unless Owner, at its sole option, elects to have the Claim or dispute resolved in a different venue (such as the Michigan Court of Claims) or by arbitration. Contractor shall be bound by Owner’s election, and any litigation already commenced at the election of Owner shall be transferred to Owner’s chosen venue, dismissed without prejudice, or stayed pending the conclusion of the arbitration proceedings if Owner elects to have the Claim or dispute resolved by arbitration.

C. If Owner elects arbitration, the proceeding, unless the parties agree otherwise, shall be conducted in accordance with the American Arbitration Association’s Construction Industry Arbitration Rules then in effect. Owner, at its sole discretion, may consolidate an arbitration conducted under this provision with any other arbitration to which it is a party, provided the arbitrations to be consolidated involve common questions of law or fact.

Owner may also, at its sole discretion, include by joinder persons or entities involved in a dispute with a common question of law or fact such as the Engineer or an insurer. This agreement to arbitrate with Owner and others shall be specifically enforceable in any court having jurisdiction. The award rendered by the arbitrator or arbitrators shall be final, and judgment may be entered upon it in accordance with applicable law in any court having jurisdiction.

D. Waiver of Jury Trial. If the dispute is litigated in Oakland County Circuit Court, EACH

PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE

LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY

PROCEEDING BROUGHT UNDER THIS AGREEMENT. Each party (a) certifies that no representative of the other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce the foregoing waiver and (b) acknowledges that it and the other party has been induced to enter into this Agreement by, among other things, the mutual waivers and certifications in this Article 8.

E. Notwithstanding anything to the contrary herein, to the fullest extent permitted by law, Owner’s total liability to Contractor in any action, proceeding, arbitration or judgment shall not exceed the Contract Price adjusted in accordance with the Contract Documents.

Contractor waives all claims for damages more than the Contract Price. Further, in no event shall Owner, or any director, officer, employee, agent, successor or assign of Owner, be liable to Contractor, or anyone claiming through or related to Contractor, whether based on contract, tort, negligence, warranty, indemnity, strict liability, delay, error or omission, other otherwise, for any consequential, special, incidental, indirect, punitive, exemplary or multiple damage or damages arising from or in connection with loss of use or loss of revenue or profit, actual or anticipated, on this or other projects, increased expense of manufacturing or operation, loss of bonding capacity, or cost of capitals, including any consequential damages due to its termination, and Contractor hereby releases Owner, and any director, officer, employee, agent, successor or assign of Owner, from all such liability. Any action resulting from any alleged breach of contract or claim of negligence of Owner must be commenced within one year of the date of Substantial Completion (and documented as required by the Contract Documents) or Contractor will be deemed to have irrevocably waived any such cause of action.

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F. The pendency or possibility of a dispute between Owner and Contractor shall not interfere with the progress of the Work by Contractor, nor shall Contractor be permitted to suspend the Work, slow the performance of the Work, and/or terminate the Work except as specifically provided for in the Contract Documents.

G. The parties acknowledge and agree that during the Project, claims may arise from time to time which have a small dollar value and that it would not be an efficient use of the parties’ respective resources to litigate or arbitrate each such claim individually. Therefore, notwithstanding anything to the contrary in this Article 9 or elsewhere in this Agreement, Contractor shall not have the right, prior to Final Completion or the earlier termination of this Agreement, to initiate the dispute resolution proceedings in the Contract Documents against Owner unless the aggregate amount of Contractor’s claim(s) against Owner is at least ten percent (10%) of the Contract Price and only as to those claims that have gone through the six-step Disputed Work procedure in the General Conditions.

H. Notwithstanding anything to the contrary herein, Contractor shall pay Owner its costs and attorneys’ fees to obtain the dismissal of any improper action filed by Contractor in breach of its obligations in Articles 9.A. and/or 9.G.

10. MISCELLANEOUS

A. Contractor acknowledges that it has not received or relied upon any representations or warranties of any nature whatsoever from Owner or Engineer, or their respective agents or employees, not set forth in the Contract Documents and that this Contract is entered into solely upon Contractor’s own investigations, careful deliberations, and independent business judgment.

B. If any article, paragraph, sentence, clause, or phrase of these Contract Documents shall be held invalid, the same shall not affect any other part of these Contract Documents.

C. Contractor will not replace its key people assigned to the Project without the prior written approval of Owner, which will not be unreasonably withheld.

D. Contractor shall not make any public presentation or public relations communication regarding the Project without the express written consent of Owner.

E. Contractor understands the Project may be subject to Federal, State of Michigan, or local requirements for such things as prompt payment and equal opportunity in employment.

Contractor will ascertain the applicability of any such requirement and comply with it.

11. GOVERNING LAW

This Agreement is made and entered into in the State of Michigan and shall in all respects be interpreted, enforced, and governed under the laws of the State of Michigan. The language of all parts of this Agreement is intended to and, in all cases, shall be construed as a whole, according to its fair meaning, and not construed strictly for or against any Party. As used in this Agreement, the singular or plural number, possessive or non-possessive shall be deemed to include the other whenever the context so suggests or requires.

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12. INTERPRETATION OF CONTRACT

The language of all parts of this Contract is intended to and, in all cases, shall be construed according to its fair meaning, and not construed strictly for or against any party. If any article, paragraph, sentence, clause, or phrase of these Contract Documents shall be held invalid, the same shall not affect any other part of these Contract Documents. As used in this Contract, the singular or plural number, possessive or non-possessive shall be deemed to include the other whenever the context so suggests or requires.

13. NO RELIANCE

Contractor acknowledges that he has not received or relied upon any representations or warranties of any nature whatsoever from Owner or Engineer, or their respective agents or employees, and that this Contract is entered into solely upon Contractor’s own investigations, careful deliberations, and independent business judgment.

14. CAPTIONS

The article headings or titles and/or all article numbers contained in this Agreement are intended for the convenience of the reader and not intended to have any substantive meaning and are not to be interpreted as part of this Agreement.

15. SEVERABILITY

Each portion of this Agreement and the Contract Documents shall be deemed severable to the extent practical while maintaining the enforceability and intent of this Agreement. Any portion of this Agreement held to be unenforceable shall be severed from the Agreement with the remaining provisions continuing in full force and effect.

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16. NOTICES

All notices required or permitted to be given by one Party to the other under the Contract Documents shall be in writing and sent to that Party at the address specified below by certified U.S. Mail, return receipt requested, or recognized overnight courier service, or shall be hand-delivered or transmitted by facsimile that retains a record of transmission. Notices shall be effective upon the earlier of actual receipt or two (2) business days after posting or delivery to a courier.